Developing the Strategic Plan

So far, we have accomplished two important steps: OrganizingProcess and Assessing Situation. We are now ready to translate our critical issues into a formal plan. We can think of a strategic plan in terms of layers, working down fromtop. Mission Statement is the top ofladder or pyramid. next layer is the strategic objectives oforganization followed by strategic goals. Next, we move down to specific action steps for meeting the strategic goals. level of detail tends to increase as we move downpyramid of the Strategic Plan:



We need to develop a set of strategic objectives that will addresssignificant critical issues of the future. Although critical issues aremain determinant of strategic objectives, the following criteria also need to be considered:

1. Strengths, Weaknesses, Opportunities, and Threats (SWOT). This is a good place to start if you are not sure how to address critical issues. Remember you are trying to maintain a good fit with all elements fromplanning process.

2. Available resources that will affect what you can do. Strategic objectives should be developed based onbest use of resources.

3. Tradeoffs between upper and lower management. Upper-level management will set ambitious objectives that are difficult for lower-level managers to meet. Therefore, a negotiation needs to take place between upper and lower management on final strategic objectives.

4. Past performance adjusted for future trends should fit with strategic objectives. Once again, we are trying to findright fit based on what we are capable of doing. Past performance is a good indicator of capabilities. In addition to the above criteria, strategic objectives should attempt to meetfollowing tests:

1. Strategic objectives clearly supportMission Statement by moving the organization in the right direction.

2. Strategic objectives are realistic and achievable based on available resources, existing competition, management styles, etc.

3. Strategic objectives are acceptable to those who have to implementobjectives in terms of costs, time, staffing, and other requirements.

4. Strategic objectives are not rigid and allow for change given unplanned events.

5. Strategic objectives are specific enough to allow for measuring progress.

6. Strategic objectives are simple, easy to understand, and convey responsibilities to specific areas.

EXAMPLE 6 - Strategic Objective No.4 for Appalachian Tree Growers

Our objective is to increase market share in Western Europe by 10% overnext three years.

One ofmost common approaches to setting strategic objectives is the critical issues approach; i.e. looking at critical performance areas such as market share, product profitability, production efficiencies, employment practices, public responsibility, etc. However, we can also take three other approaches, scenario playing, organizational alignment and goals approach.

Scenario Playing: Under scenario playing, several different alternatives are developed based on what could happen. What willorganization look like if this happens or this happens? This approach selects the preferred scenario based on the merits of each. Scenario playing is a better approach then the critical issue's approach when the organization has several different directions to choose from. Onother hand, scenario playing is not a good approach iforganization is simply trying to fine-tune or adjust its strategic plan.

Organizational Alignment: Under this approach, you are trying to get all parts oforganization to work together. This is required before you attempt to address critical issues with strategic objectives. Organizational alignment determines what is working and what is not working. What parts are holdingorganization back? Strategic objectives are developed to re-align the organization so that everything is working properly.

Strategic goals are the next layer withinStrategic Plan. Some organizations prefer to set goals rather than objectives, which leads us to a third approach, Goals Approach. Goals Approach is straightforward. It focuses on goals since most people are very familiar with goal setting. A goals approach works well for larger organizations that have multiple business units or divisions. Iforganization is small and/oroperating environment is rapidly changing, then a goals approach may not work.

EXAMPLE 7 - Strategic Goal No.2 for Appalachian Tree Growers

Marketing Department will submit a promotional program by September 30th targeted at France, Germany, and Spain.

key elements of a strategic plan are now in place - Mission, Objective, and Goals. It is time to pull all ofelements together and draftStrategic Plan. In order to makeplan complete, additional sections will be added. These sections include:

1. Executive Summary: A one or two page summary ofStrategic Plan which touches on main components, such as mission, objectives, and current situation.

2. Principles: beliefs and values oforganization can help add substance toStrategic Plan.

3. History: A brief summary aboutorganization. How did it get started? What significant events changeddirection oforganization?

4. Profile: Some basic facts aboutorganization, such as markets served, size of organization, major product lines, etc.

5. Situational Analysis: A brief summary ofstrengths, weaknesses, opportunities, and threats now confrontingorganization.

circulation of a draft strategic plan will sometimes prompt new ideas, new issues, and new objectives. Therefore, one ofcritical steps in strategic planning is to refine and adjustdraft plan. Get everyone to agree onmajor objectives and goals since this will direct whatorganization will do innext year or two. You must have a clear and concise strategic plan for easy translation into action steps. This isnext major step inprocess - developing an Operating Plan. And don't forget to evaluateprocess so you can improvenext planning session.

EXAMPLE 8 - Evaluation ofStrategic Planning Process

1. Do you believestrategic planning process was useful?

2. DidStrategic Plan produceright results in regards to: Mission, Strengths, Weaknesses, Opportunities, Threats, Critical Issues, Identification of Competition, and Goals.

3. Do you believe strategic planning improvesmanagement oforganization?

4. Does strategic planning fit withinorganization?

5. Do you believe strategic planning improved how assets are deployed?

6. Do you believe that key groups affected byPlan had sufficient opportunities for input intoPlan?

7. Do you believetime spent on strategic planning was appropriate?

8. Did strategic planning follow a set of efficient steps?

9. Did strategic planning facilitate new ideas?