Organizing the Process

Our first step within strategic planning begins with organizingprocess. Before we start to organize the process, we need to make sureorganization is ready for strategic planning. For example, if strategic planning is new to the organization, then we want to proceed slowly. Maybe too much is happening withinorganization and thus, strategic planning should be postponed. It is important to recognize that strategic planning works best when:

1. organization has good management.
2. organization has good channels of communication.
3. organization is open to new ideas.
4. organization is not buried in rules and bureaucracy.

Since there is no "right" process, you have to determine if strategic planning fits within your organization. Is the timing right? Is management committed toprocess? Do we have the right mind-set? For example, iforganization is dominated by operating people who think short-term, then you may want to proceed cautiously with strategic planning. You also need to be sold onbenefits of strategic planning. As previously indicated, strategic planning is a process whereby you prepare forfuture by looking at your choices.

Start Organizing

Strategic planning starts by planning for the plan; i.e. we have to outlineprocess before we begin the process. There are several questions that need to be addressed for organizing the process:

• Who will dostrategic plan?
• What are we suppose to do?
• How will we do it?

Specifically, organizingstrategic planning process includes the following steps:

1. Determine what is expected and communicate this to everyone who will be involved in developing the Strategic Plan. What issues shouldplan address? Obtain a definitive statement from the Chief Executive Officer or President stating what he or she expects out of the Strategic Plan. Circulate an outline to all major participants inprocess.

2. Gather preliminary information for the plan, such ascurrent mission of the organization, major goals in progress, and other plans already implemented. Survey key managers and determine critical issues offuture.

3. Determine the scope of the strategic plan. What isplanning period? Generally, the planning period should cover enough time to shift the direction of the organization towards a desired situation. What is the organizational scope ofplan? Will the plan cover the entire organization or maybe certain divisions or units?

4. Reach consensus from essential participants on howplanning process will work. Also, determine how different stakeholder groups will be involved in the process. Prepare a sequence of steps which will guideprocess.

5. Finalizeformation of a planning committee. Who will be involved? Who will manage the process? Assign responsibilities and determine resource requirements.

EXAMPLE 1 - Preliminary Checklist to Organize the Process

1. Based on the concerns of key managers andpossible benefits of strategic planning, we should: ____ Proceed to Develop a Strategic Plan , ____ Go Slow , ___ Not Now, too much going on


2. A Strategic Plan should be developed for: ____ Entire Organization, ____Part of Organization, ____Project, ____Other

3. planning period will cover: ___ 1 Year / ___ 2 Years / ___ 3 Years / ____Other__

4. planning process will be directed by: ___Group Leader, ___Planning Committee, ___Consultant, ____Other__________

5. Strategic Plan will be developed with participation by: (check all that apply): ____Board of Directors / ___Executive Management / ___Key Staff Groups_______________________________________ / ___Key Stakeholder Groups_______________________________________

6. Strategic Plan is expected to be submitted for approval by: ________________________

approach used for strategic planning will depend uponorganization and management. If upper-level management has been unsuccessful in the past with strategic planning, then a more bottom-up approach is needed. Iforganization is small, then a team approach may work well. Larger organizations tend to favor a more formal process. However, too much formality can lower creative thinking and new ideas. process should be open and not ritualistic.

objective of organizingprocess is to ensure that you end-up producing a good strategic plan. By staying focused on critical issues and alternatives, good planning will emerge. Do not be afraid to use some judgements and move quickly. A drawn-out process can wander and become outdated by a rapidly changing environment.

EXAMPLE 2 - Napa Distributors Inc - Outline for Strategic Planning

1. Select a steering committee to direct the strategic planning process.
2. Select an outside consultant to assist withprocess.
3. Get agreement onplanning steps, responsibilities, timeline, etc. Review agreement with Board of Directors.
4. Gather information from key management personnel on strength's, weaknesses, opportunities, threats, and critical issues.
5. Summarize current plans and mission. Review past successes and failures for last three years.
6. Review history with committee and board members. Determine recent progress and status.
7. Summarize prior meetings and draft a basic plan.
8. Review draft plan with focus groups, board, and key management personnel. Make revisions and finalize a complete strategic plan.
9. Final review by various groups.
10. Obtain approval of Strategic Plan.
11. ImplementStrategic Plan.
12. Review progress after six months and revise plan.

Finally, recognize that each organization is different andplanning process will vary. Start simple and match the capabilities oforganization with a process that is workable. first step for three different companies is illustrated below:

Excaliber Corporation - Determine what kind of company we want to be - company has not changed in over ten years.

PPC Software - Outline the basic tasks for a strategic plan anddesired results. Allow the process to flow from this outline.

Alliston Trucking Company - Initiate a learning program for management on strategic planning.

Asset Management Ratios

Once you have organizedprocess, the next step in the process is to assess your current situation. organization needs to take a hard look at itself - Where are we going? Where are we now? What are our choices? In order to assess your current situation, you will need to collect information so that everyone understandscurrent situation. This will involve a review of past history, a critique ofcurrent mission statement, analysis of organizational strength's, weaknesses, opportunities, and threats. You also need to understandexternal environment - current competition, customer trends, technology trends, demographic changes, etc.

Information can be collected through surveys, questionnaires, interviews, and other analytical techniques. planning team will conduct situational analysis by following a series of steps, such asfollowing:

1. Collect background information to assess the situation. Start with a history oforganization, current mission, significant changes, stages of growth, etc. Have someone give a presentation on the history of the organization. Reach consensus on how successful the organization has been inpast few years.

2. Assess the strengths and weaknesses oforganization. Confine your list to the most significant strengths and weaknesses. Reach agreement on a good list. This list will help indevelopment of strategic objectives.

3. Next, develop a list of significant opportunities and threats facingorganization's future. You will need to gather information about external forces - customers, competition, social trends, technology, political, etc. Ifplanning team comes up with a long list, ask everyone to listmost significant eight and reach consensus on a list of eight opportunities and threats.

4. Now that you have identified strengths, weaknesses, opportunities, and threats, you need to review the mission statement. Does it fit? Should it be broader or more narrowly focused? A good mission statement should captureessence of why your organization exists. A good mission statement includes the following characteristics:

- Provides overall direction and vision fororganization.
- Conveys an image of success for addressing the future.
- Defines the competitive boundaries oforganization.
- Usually is expressed in relation to marketplace served and products / services.
- Avoids being too specific so as to allow room for change.

EXAMPLE 3 - PPC Software - Strengths and Weaknesses Strengths:
Research & Development is finding new product innovations.
Customer loyalty is strong - high repeat customers.
Good reputation for quality software programs.
Weaknesses:
Organization is top heavy with Managers.
Market share is declining from new competition.
Internal production facilities need upgrading.

EXAMPLE 4 - Excaliber Corporation - Opportunities and Threats

Customers:
Customers are demanding a personal level of service in several areas - technology, consulting, planning, etc.
Competition:
Larger organizations have more resources for providing a better diversity of services to customers.
Technology:
Internet will become a major channel for distributing services.

main output from situational analysis is to compile a list of critical issues. A list of six to eight critical issues isbasis for preparing a formal strategic plan. It is helpful to categorize critical issues in relation to significance and probability of occurrence. table below categorizes four different critical issues:



(1) diversity of products we offer is not wide enough to meetdemands of customers.
(2) Overseas competition can produce similar products at much lower costs.
(3) Customers are seeking fabrication services in addition to products only.
(4) There is a shortage of highly skilled operating personnel.

Situational Audits

One way to assess a situation is to conduct a situational audit. Situational audits represent an analysis of past, present, and future aspects oforganization - production, marketing, financial, competition, etc. objective of a situational audit is to identify key trends and events that will impactorganization. Situational audits also provide a way of discussing major issues. This can help jump-startcreative process when there is internal resistance.

Just like situational analysis, situational audits gather basic information for preparingStrategic Plan - Mission Statement, Strengths, Weaknesses, Opportunities, Threats, and Critical Issues. Situational audits also includeexpectations of stakeholder groups - executive management, operating personnel, investors, employees, customers, etc. Past performance is reviewed - sales, market share, product profitability, customer trends, etc. Situational Audit is similar to situational analysis except that it is more formal and structured. Outside consultants are sometimes used to conduct situational audits.

Making Situational Analysis Work

Atheart of situational analysis isneed to better understand what is going on and to properly account for what is happening. This look inside and outsideorganization leads to a list of 6 to 8 critical issues. Before we proceed to develop a strategic plan for dealing with these critical issues, it is imperative that we find some degree of overlap or matching with:

- What it is you are trying to accomplish (Mission)
- What are you capable of doing (Strengths and Weaknesses)
- What is required and possible (Opportunities and Threats)

If there is no overlap between these three elements of strategic planning, then you should not proceed to develop a formal strategic plan. For example, suppose your organization has following mission statement:

We want to beglobal leader inmanufacture of automotive spark plugs.
However, your resources are limited to production and distribution in North America and certain parts of Europe. This lack of overlap or fit precludes a strategic plan. You need to go back and findright fit before moving tonext phase inprocess - developingstrategic plan.