Companies across all sectors and markets are expecting the new economy to be even more competitive than

the old over the next two years, according to our survey of 1,400 executives from around the world.
The increased competitive pressure extends across the value chain for labor, input materials and capital. And those from emerging markets expect competitiveness to increase the most, as companies from developed markets enter and local players intensify their focus. Competition in the new economy is dynamic and being shaped by four macroeconomic factors which, while not new, have a significantly more pronounced importance than before.

Market variation has increased

Emerging markets are growing, but there is a significant variation in performance across them. Similarly, some developed markets are doing better than expected, whereas others are struggling or continuing to decline. The same variation in performance and forecast is true for market segments. There is a general re-emergence of increasingly costconscious buyers, but some luxury segments continue to thrive. Old purchase patterns are under pressure. Boundaries between buyer groups overlap and change, challenging the go-to-market assumptions of even the most established players.

The market is more volatile

Product life cycles continue to shorten as innovation is increased. Economic forecasts are being changed and measurements corrected on a quarterly basis across almost all markets. This volatility is placing increased pressure on the supply chain, which must now accommodate rapid change.

There is pressure on margins

Expectations of price increases in the future are currently low almost 60% of respondents expect a price rise that either only matches inflation or is below inflation. At the same time, many executives are experiencing both price erosion in their market and increased costs for input and labor in their production, raising on-going questions about their financial viability.

Stakeholders are nervous

Attracting and retaining talent remains a problem with vastly divergent approaches to staffing levels, both through the downturn and in the emergence of the new economy. Capital seems limited and there is caution about the risks that are faced, the new regulation that is almost certain to come and the fiscal retrenchment that is being implemented. There are growing demands for greater transparency and improved governance. While companies may choose to focus on particular aspects of this competitive agenda as the basis of their strategy, we believe the four to be linked. A balanced approach is required and the ultimate competitive position is found when all are optimized.

Competing for growth framework

Our research shows that high-performing companies are significantly ahead of their competitors in four critical areas.

How Companies Can Make Better Decisions

Here is an interesting video from HBR that explores decision-effectiveness within companies. Marcia Blenko is a co-author of Decide and Deliver: Five Steps to Breakthrough Performance in Your Organization and she shares the framework of some concepts in the book in this video. In particular, there is a 4-point framework to measuring companies on decision-making skills: 1. Quality decision making 2. Quick/timely decision making 3. Executing decisions 4. Effort spent on decision-making and execution Most of our course is about decision-making and it really is what separates the winners from the losers in the real world. Too many companies focus on decision-making as an afterthought or a necessary evil rather than an opportunity to excel. Setting up the corporate culture to foster strong decision-making and execution is important to long-term success. Many companies focus on big decisions but the cumulative effect of all of the daily decisions is probably a bigger place to focus and effectiveness in this area needs to just happen as the result of systems encouraging it.
Introduction Porter (2002) states that root of the problem lies in the lack of distinguishing between operation effectiveness and strategy. The expedition for productivity, quality and speed has resulted in management tools and techniques, total quality management benchmarking, time based competition, outsourcing, partnering, reengineering, change management. In any organization, strategy management is the key to its success. There are many theories based on this assumption that without a proper strategy and planning, it is difficult for any industry to survive irrespective of its size. It is necessary to understand here that all the major corporate organizations have established themselves, thanks to superior strategic planning and implementation. The retail industry is making news everywhere with not only the traditional industries increasing their outlets but some major corporate industries also intruding into this industry like Fresh @ Reliance of Reliance Industries, More of Aditya Birla Group in India. WalMart, a US based retail industry, which is known as the giant in the retail industry has survived and is still the huge enterprise in the world which deals with almost all the F&B products, apparels, etc. It is not only the largest company in world but also the largest company in the history of world.(Fishman, 2006) The present paper is divided into four sections to understand and answer as what makes Wal-Mart the best in the industry, 1) retailing industry at the time of Wal-Mart's innings, 2) Wal-Mart's Competitive advantage and key components, 3) WalMart's Strategy and 4) Sustainable growth of Wal-Mart.

I. Retail Industry Wal-Mart says Hello! Strategic decisions are ones that are aimed at differentiating an organization from its competitors in a way that is sustainable in the future. (Porter, 2002) Porter strongly advocates that decisions in business can be classified as strategic if they involve some innovation and difference that results in sustainable advantage. According to Patrick Hayden et al (2002) the retailing industry adopted the style of discounting on its merchandise after the Second World War. It is learnt that discount retailing was not the strategy at the time Kmart, Target and Wal-Mart first started operating their business. Frank (2006) states that when Sam Walton was franchising for Ben Franklin's variety store, invented an idea of passing on the savings to his customers and earning his profits through volume. Prior to Wal-Mart's entry into the market, Sidney and Hebert from Harrison founded Two Guys discount store in the year 1946 which dealt in hardware, automotive parts and later on groceries. Two Guys was the forerunner as compared to today's retailers like Super Target, Wal-Mart which succumbed to the economic recession. Another discount store set up by Eugene as E.J. Korvette, which is often cited as first discount store which did not raise from 5 & 10 cents roots and eventually declared bankruptcy due to inability to compete with the new entrants. Porter (2002) states that combination of operational effectiveness and strategy is essential for superior performance which is the primary goal of any organization. He also says that a company can perform its rivals only if it can operate in different ways which are not in practice. Much emphasis had been laid on strategic positioning like variety based positioning, needs based positioning and access based positioning. Along with Wal-Mart, other stores that started operating were Target, Woolworth (Woolco) and K-Mart. However, Target has been functioning successfully, courtesy Wal-Mart, but other two failed in their operations and filed bankruptcy.( Michael Bergdahl, 2004) Porters five forces model explains what strategic decisions should be made and on what basis. The model explains the basic strategies to be considered while starting a business like bargaining power of suppliers. While franchising of Franklin he always looked for cheaper deals and thought of passing his savings to the customers and earning through the margin on volume of bulk purchases. Through the way of discount stores, shoppers were given the cheapest price as compared to any other store. In regard to threats of new entrants, Wal-Mart has been constantly in the news for acquisition of other small retail shops in view of its expansion. But nevertheless it has stiff competition from likes of Super Target, Tesco, etc. it is the world's biggest retail industry. II. Key Components of Wal-Mart Business Model Wal-Mart is the leader in retailing industry with fiscal revenue of $244.52 billion in 2003 making it the world's largest corporation. Mike reports that Wal-Mart as of 2002 had 1,283,000 employees growing at 11.2%. The above data explains that strategy of Wal-Mart is extraordinary which manages and operates over 4150 retail facilities globally.The key components of Wal-Mart (The Value Chain), which offers cheap prices than its competitors includes firm infrastructure like frugal culture, no regional offices and pleasant environment to work. Managements take lots of visits and it is learnt there are no rehearsals before any meeting which is usually scheduled on every Saturday. In any organization, human resource is the key to development and Wal-Mart efficiently manages its sources. Wal-Mart terms its employees as associates. Manager compensation is linked to the profit of store operated by him, within promotions, compensation offered to associates depending on company's profits and also offered some incentives on their performances. The workforce at Wal-Mart is not unionized as the company takes all the measures of their benefits and provides them training on related issues. Technology plays a vital role in development of the organization and Wal-Mart is well equipped with technological innovations like POS, store performance tracking, real time market research, satellite system and UPC. Wal-Mart procurement measures like hard-nosed negotiations, partnerships with some vendors, centralized buying, planning packets, etc. helps at large the cause of providing the goods and services on cheap prices. The other factors that increase the margin of profit for Wal-Mart are inbound logistics with frequent replenishment, automated DCs cross docking, pick to flight, EDI, hub and spoke system. Wal-Mart strategy of operation is innovative with big stores in small towns with monopoly in the market at low rental costs, local prices, concentric expansion, merchandising in brand name, private labels, little space for inventory, store within store, etc. In relation to marketing and sales, merchandising is tailored from locals, spent less on advertising and the prices are fixed low and it depends on the store manager to fix the latitude of pricing. All the above factors combined together form the key components of Wal-Mart which not only increase

the margin of profits through bulk sales but also boost the confidence of the customers with services like point of sale information system and everyday low prices. III. Wal-Mart Strategy Wal-Mart dominates the American retailing industry due to number of factors like its business model which is still a mystery and its effectiveness in not letting the rivals let know about the weaknesses. Wal-Mart made strategic attempts in the its formulation to dominate the retail market where it has its presence, growth by expansion in the US and Internationally, create widespread name recognition and customer satisfaction in relation to brand name Wal-Mart and branching into new sectors of retailing. It is learnt that Wal-Mart strives on three generic strategies consisting of Focus Strategy, the Differentiation Strategy and overall cost leadership. Managers strive hard to make their organizations unique, distinctive and identify key success factors that will drive the customers to buy their products.Thus, firm specific resources and capabilities are crucial in explaining the firm's performance. The Resource Based View (RBV) explains competitive heterogeneity based on the premise that close competitors differ in their resources and capabilities in important and durable ways. The company's capability can be found through its functionality, reliable performance, like WalMart superior logistics. (Helfat, 2002) Wal-Mart has firm infrastructure, well equipped in human resource with management professionals and technologically too. Any organizations thrive hard to be successful for which it needs to have better resources and superior capabilities. Wal-Mart has strong RBV with economically and financially very strong enough to stand still in the time of crisis. Pereira states that dominating the retail market is its key strategy. Wal-Mart operates on low price strategy which is operated as every day low prices (EDLP) which builds trust among the customers.(Brunn, 2006)The strategy lies in purchasing the goods at lower prices and selling the goods to customer at much lower prices, cutting the price as far as possible and increasing the profit by increasing the number of sales. This ferociously increases the competition in the market and Wal-Mart competes with all its competitors till it is dominant it the market. Wal-Mart is expanding seriously and rapidly which is also its strategic goal. Wal-Mart employs over 1.3 associates, owns over 4000 stores out of which 3000 are in US and serves around 100 million customers weekly. Wal-Mart has acquired many international stores and merged with some super stores like ASDA in UK. Wal-Mart far flung network of retail outlets has ensured that Wal-Mart interacts with and has impact on virtually every locality within US. (Helfat, 2002) The expanded strategy has led the hunger of Wal-Mart to many European Countries. It is learnt that three countries with no Wal-Mart stores became part of corporation's international presence wherein the domestic retail chains were taken over by Wal-Mart including 122 Woolco stores in Canada, 21 Wertkauf stores in Germany and 229 ASDA units in United Kingdom. The takeover strategy by Wal-Mart keeps the company at forefront when entering into the new market and the number of competitors is also minimized. The strategies have helped the Wal-Mart to rein in number one position in international countries making it the largest retailer in the world. It is seen that Wal-Mart has significantly the Porters five force model wherein through proper strategic planning and strategic implementation has led to removal of barrier entry, rivalry from competitors and pricing norms. In regard to substitutes, Wal-Mart in order to achieve its aim of customer satisfaction has selling goods under its own legal brand. Wal-Mart's big box phenomenon has changed the retailing industry in the United States which is often considered as discount stores and makes profit through high volume of purchases and low markup on profits.(Parnell, 2008)Wal-Mart with its low cost and ever expanding strategy has made a dramatic impact since 1962 when Sam Walton first started his business. With this strategy, Wal-Mart has now over 4000 stores and outlets in US and other countries through acquisition and mergers. IV. Sustainability in Discount Retailing Wal-Mart According to Porter, (2002) operational effectiveness and efficiency are the key elements of success in any organization. A company can outperform its rivals or competitors in the market only with superior management and efficient control creating a difference from the others which eventually attracts customers. Porter defines operational effectiveness as performance of similar activities as its rivals but better than them. In a study, it is stated the Wal-Mart is expert in manipulating perceptions. It is termed that low price is not the strategy of WalMart but the advertisement manipulates the consumer perceptions by making them think that its prices are lower than its competitors' price using price spin'. Wal-Mart makes the consumer addicted coming to its stores by

convincing them the prices are lower than in the other stores by selling itself cheaper by advertising that we have lower prices than anyone else' and placing a opening price point'. The opening price point' is the lowest price in the store which is kept at high visibility which makes consumer believes that the products in this store are really cheaper. (Race Cowgill, 2005) The SWOT analysis of Wal-Mart reveals that it is most powerful retail brand, reputation for money, value, commitment, and provides wide range of products. It is growing at a brisk pace with expanding its horizon to other parts of world through acquisition and merger. Wal-Mart has good opportunities in markets of Europe and China and focuses on acquiring the market through acquisition of smaller stores and merger with leaders in the specific markets. Wal-Mart is always under threat to sustain its top position in market nationally and internationally. Global leader in the industry leaves the organization vulnerable to many socioeconomic and political problems of the country. Sustainability at the top place is the most important job that makes its managers strives hard to frame the policies and strategy to compete with its rivals in the market. Slack, Imitation, Substitution and Hold-up are some of the threats to any organization in retail industry. However, Wal-Mart with its visionary goal of attaining zero waste status and reaching 100% renewable energy has planned to launch number of sustainability initiatives. (GreenBiz, 2008) Imitation increase profits by increasing the supply. But imitation puts reputation, relationship at stake. James Hall reports that Wal-Mart is planning to open convenience stores as Tesco has started and operating in US called Fresh & Easy Neighborhood Markets. (James, 2008) Such tactics will create mixed response among the consumers while degrading the reputation of the leader in market. Substitution reduces the demand for what a firm uniquely provides by shifting the demand elsewhere due to changes in technology. The threats of substitution can be subtle and unexpected like minimizing expenses through videoconferencing instead of air flights to long distance meetings with its managers of other stores, etc. Therefore, substation is an especially effective way of attacking dominant rivals in the market. Substitution offers mixed responses after identifying and understanding the threats. The organization should fight the threat and merging with them, switching to different options of substitution to be in the market. Hold-up diverts the value to customers, suppliers or complementors who have some bargaining leverage which results in tough negotiations, contractual agreements and vertical integration. Wal-Mart is having great network with almost over 7800 stores and Sam's Club locations in 16 markets worldwide. It employs more than 2 million associates and serves more than 100 million customers every year. According to Fishman (2006) Americans spend $26 million every hour at Wal-Mart which makes it believable that Wal-Mart is financially very strong and is capable of combating any threat from its rivals in the market. WalMart is ever expanding its boundaries by way of acquisition and mergers. Thus Wal-Mart with such a vast network of stores and alliances in the forms of ASDA, Target and many other stores is well protected enough to sustain its top position in the retail industry.

Strategic Planning (in nonprofit or for-profit organizations)

Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC, experts in strategic planning.

Sections of This Topic Include:

Understanding Strategic Planning
Introduction -- What is Strategic Planning? - - - Some Basic Descriptions of Strategic Planning -- and a Comparison to Business Planning - - - Some Different Models of Strategic Planning - - - For-Profit Versus Nonprofit Strategic Planning Benefits of Strategic Planning When Should Strategic Planning Be Done? Various Overviews of Strategic Planning Process - - - Samples of Plans

Conducting Strategic Planning

Preparation for Strategic Planning - - - Guidelines to Keep Perspective During Planning - - - Useful Skills to Have When Planning - - - Need Consultant or Facilitator to Help You With Planning? - - - Who Should Be Involved in Planning? - - - How Many Planning Meetings Will We Need? Always First Do "Plan for a Plan" Strategic Analyses - - - Taking Wide Look Around the Outside of Organization (Opportunities and Threats) - - - Looking Around Inside the Organization (Strengths and Weaknesses) Setting Strategic Direction - - - Strategizing (identifying goals and methods to achieve them) - - - - - - Guidelines to Do Planning to Ensure Organizational Sustainability - - - - - - Do a SWOT Analysis of Results of Looking Outside and Inside the Organization? - - - - - - Other Guidelines to Identify Strategic Goals and Methods/Strategies to Achieve Goals - - - Developing/Updating Mission Statement (the purpose of the organization) - - - Developing/Updating Vision Statement (depiction of future state of organization and customers) - - - Developing/Updating Values Statement (overall priorities in how organization operates) Action Planning (who will do what and by when) Writing and Communicating the Plan Implementing, Monitoring, Evaluating and Deviating from the Plan -- and Managing Change - - - How Do We Ensure Implementation of Our New Plan? - - - Monitoring Implementation, Evaluating Implementation -- and Deviating from Plan, If Necessary - - - Changing the Plan as Necessary During Implementation - - - Guidelines to Manage Organizational Change While Implementing the Plan

General Resources
General Resources

Also See the Librarys Blogs Related to this Topic

In addition to the articles on this current page, see the following blogs which have posts related to this topic. Scan down the blog's page to see various posts. Also see the section Recent Blog Posts in the sidebar of the blog or click on next near the bottom of a post in the blog. Library's Library's Library's Library's Business Planning Blog Leadership Blog Project Management Blog Strategic Planning Blog

Understanding Strategic Planning

Introduction -- What is Strategic Planning?

There Are Various Different Views and Models -- and the Process You Use Depends Simply put, strategic planning determines where an organization is going over the next year or more, how it's going to get there and how it'll know if it got there or not. The focus of a strategic plan is usually on the entire organization, while the focus of a business plan is usually on a particular product, service or program. There are a variety of perspectives, models and approaches used in strategic planning. The way that a strategic plan is developed depends on the nature of the organization's leadership, culture of the organization, complexity of the organization's environment, size of the organization, expertise of planners, etc. For example, there are a variety of strategic planning models, including goals-based, issues-based, organic, scenario (some would assert that scenario planning is more of a technique than model), etc. 1) Goals-based planning is probably the most common and starts with focus on the organization's mission (and vision and/or values), goals to work toward the mission, strategies to achieve the goals, and action planning (who will do what and by when). 2) Issues-based strategic planning often starts by examining issues facing the organization, strategies to address those issues and action plans. 3) Organic strategic planning might start by articulating the organization's vision and values, and then action plans to achieve the vision while adhering to those values. Some planners prefer a particular approach to planning, eg, appreciative inquiry. Some plans are scoped to one year, many to three years, and some to five to ten years into the future. Some plans include only top-level information and no action plans. Some plans are five to eight pages long, while others can be considerably longer. Quite often, an organization's strategic planners already know much of what will go into a strategic plan (this is true for business planning, too). However, development of the strategic plan greatly helps to clarify the organization's plans and ensure that key leaders are all "on the same script". Far more important than the strategic plan document, is the strategic planning process itself. Also, in addition to the size of the organization, differences in how organizations carry out the planning activities are more of a matter of the nature of the participants in the organization -- than its forprofit/nonprofit status. For example, detail-oriented people may prefer a linear, top-down, general-tospecific approach to planning. On the other hand, rather artistic and highly reflective people may favor of a highly divergent and "organic" approach to planning. Some Basic Descriptions of Strategic Planning -- and a Comparison to Business Planning What is Strategic Planning? (presented in the context of a nonprofit) What is Strategic Planning? Are You Doing Strategic Planning Already? (Probably ...) Strategic Planning or Business Planning? (a comparison of the two) The Difference Between Strategic Planning & Financial Planning Metaphors Be With You: The Strategist as Poet Some Different Models of Strategic Planning Basic Overview of Various Strategic Planning Models Should I Use Goals-Based or Issues-Based Planning? The Organic Model of Strategic Planning

NOTE: Much of the following information is in regard to goals-based strategic planning, probably the most common form of strategic planning. However, issues-based planning is also a very popular approach to strategic planning -- an approach still too-often forgotten. For-Profit Versus Nonprofit Strategic Planning Major differences in how organizations carry out the various steps and associated activities in the strategic planning process are more of a matter of the size of the organization -- than its for-profit/nonprofit status. Small nonprofits and small for-profits tend to conduct somewhat similar planning activities that are different from those conducted in large organizations. On the other hand, large nonprofits and large for-profits tend to conduct somewhat similar planning activities that are different from those conducted in small organizations. (The focus of the planning activities is often different between for-profits and nonprofits. Nonprofits tend to focus more on matters of board development, fundraising and volunteer management. For-profits tend to focus more on activities to maximize profit.) Therefore, the reader is encouraged to review a variety of the materials linked from this page, whether he or she is from a nonprofit or for-profit organization. Items below are marked as "nonprofit" in case the reader still prefers to focus on information presented in the context of nonprofit planning. (An upcoming section includes numerous overviews of the overall strategic planning process Various Overviews )

Benefits of Strategic Planning

Strategic planning serves a variety of purposes in organizations, including to: 1. Clearly define the purpose of the organization and to establish realistic goals and objectives consistent with that mission in a defined time frame within the organizations capacity for implementation. 2. Communicate those goals and objectives to the organizations constituents. 3. Develop a sense of ownership of the plan. 4. Ensure the most effective use is made of the organizations resources by focusing the resources on the key priorities. 5. Provide a base from which progress can be measured and establish a mechanism for informed change when needed. 6. Listen to everyones opinions in order to build consensus about where the organization is going. Other reasons include that strategic planning: 7. Provides clearer focus for the organization, thereby producing more efficiency and effectiveness. 8. Bridges staff/employees and the board of directors (in the case of corporations). 9. Builds strong teams in the board and in the staff/employees (in the case of corporations). 10. Provides the glue that keeps the board members together (in the case of corporations). 11.Produces great satisfaction and meaning among planners, especially around a common vision. 12. Increases productivity from increased efficiency and effectiveness. 13. Solves major problems in the organization.

When Should Strategic Planning Be Done?

The scheduling for the strategic planning process depends on the nature and needs of the organization and the its immediate external environment. For example, planning should be carried out frequently in an organization whose products and services are in an industry that is changing rapidly . In this situation, planning might be carried out once or even twice a year and done in a very comprehensive and detailed fashion (that is, with attention to mission, vision, values, environmental scan, issues, goals, strategies, objectives, responsibilities, time lines, budgets, etc). On the other hand, if the organization has been around for many years and is in a fairly stable marketplace, then planning might be carried out once a year and

only certain parts of the planning process, for example, action planning (objectives, responsibilities, time lines, budgets, etc) are updated each year. Consider the following guidelines: 1. Strategic planning should be done when an organization is just getting started. (The strategic plan is usually part of an overall business plan, along with a marketing plan, financial plan and operational/management plan.) 2. Strategic planning should also be done in preparation for a new major venture, for example, developing a new department, division, major new product or line of products, etc. 3. Strategic planning should also be conducted at least once a year in order to be ready for the coming fiscal year (the financial management of an organization is usually based on a year-to-year, or fiscal year, basis). In this case, strategic planning should be conducted in time to identify the organizational goals to be achieved at least over the coming fiscal year, resources needed to achieve those goals, and funded needed to obtain the resources. These funds are included in budget planning for the coming fiscal year. However, not all phases of strategic planning need be fully completed each year. The full strategic planning process should be conducted at least once every three years. As noted above, these activities should be conducted every year if the organization is experiencing tremendous change. 4. Each year, action plans should be updated. 5. Note that, during implementation of the plan, the progress of the implementation should be reviewed at least on a quarterly basis by the board. Again, the frequency of review depends on the extent of the rate of change in and around the organization.

Various Overviews of Strategic Planning Processes and Samples of Strategic Planning Process
NOTE: Although there are separate sections listed below for many of the major activities in strategic planning (for example, the sections "Developing a Mission", "Developing a Vision", etc.), this section "Various Overviews of Strategic Planning" also includes information about those activities as well. The reader might scan 8-10 of the articles to get a basic feel for strategic planning processes and the diversity of views on the processes. Basic Description of Strategic Planning (including key terms to know) Strategic Planning: A Ten-Step Guide Strategic Planning Tools (touches on various phases of planning) Planning for Change and Technology (includes excellent overview of aspects of planning) Alliance for Nonprofit Management (go to the section "Answers" and then select the topic "Strategic Planning" from the menu next to the "Open Sesame" button.) National Endowment for the Arts Why Traditional Strategic Planning Isn't Strategic 12 Reasons Why Planning is More Critical in Challenging Times 10-Day Strategic Plan Your Strategic Plan in 7 Days Does Your Strategic Planning Suffer from ADD? The Strategic Planning Process Strategic Planning (Wikipedia) Strategic Planning (overview) Is Your Strategy at Risk? Guiding Principles to Successful Strategic Planning Strategic Planning Process Strategic Alignment 3 Confessions About Strategic Planning Introduction to Strategic Planning How NOT to Do Strategic Planning! Strategic Planning and Management Strategic Planning an Oxymoron

Samples of Plans Strategic plans come in a wide variety of formats, depending on the nature and needs of the organization. sample plan Sample Strategic Plan sample strategic plan worksheet

CONDUCTING STRATEGIC PLANNING

Preparation for Strategic Planning

Guidelines to Keep Perspective During Planning
Many managers spend most of their time "fighting fires" in the workplace. -- their time is spent realizing and reacting to problems. For these managers -- and probably for many of us -- it can be very difficult to stand back and take a hard look at what we want to accomplish and how we want to accomplish it. We're too buy doing what we think is making progress. However, one of the major differences between new and experienced managers is the skill to see the broad perspective, to take the long view on what we want to do and how we're going to do it. One of the best ways to develop this skill is through ongoing experience in strategic planning. The following guidelines may help you to get the most out of your strategic planning experience. 1. The real benefit of the strategic planning process is the process, not the plan document. 2. There is no "perfect" plan. There's doing your best at strategic thinking and implementation, and learning from what you're doing to enhance what you're doing the next time around. 3. The strategic planning process is usually not an "aha!" experience. It's like the management process itself -- it's a series of small moves that together keep the organization doing things right as it heads in the right direction. 4. In planning, things usually aren't as bad as you fear nor as good as you'd like. 5. Start simple, but start! Stacking the Deck in Favor of a Successful Strategic Planning Effort How NOT to Do Strategic Planning!

Useful Skills to Have When Strategic Planning

It's best to have a team of planners conduct strategic planning. Therefore, it's important to have skills in developing and facilitating groups. Committees (for example, may have committees do environmental scan, get input from others)Conflict Management in Groups Conflict Management (this topic provides basics in managing conflict in groups)] Consultants (you may want to use a consultant to help you plan and carry out strategic planning) Creative Thinking (very important when setting goals and how they will be reached) Innovation (very important when designing strategies, or methods to reach goals) Decision Making (useful when selecting which goals and strategies to follow) Facilitating in Face-to-Face Groups (these skills are very important when helping a group come to consensus)

Facilitating Online Groups (virtual communities; sometimes planners work via phone, Web, etc.) Focus Groups (get input from internal & external customers to identify issues, goals, methods) Group-Based Problem Solving and Decision Making (these activities are at the core of strategic planning) Meeting Management (planners make decisions in meetings; these skills will be very useful) Problem Solving (this is helpful, especially when tackling difficult decisions) Valuing Diversity (it's best to get a wide variety of perspectives when planning)

Need Consultant or Facilitator to Help You With Planning?

You may want to consider using a facilitator from outside of your organization if: 1. Your organization has not conducted strategic planning before. 2. For a variety of reasons, previous strategic planning was not deemed to be successful. 3. There appears to be a wide range of ideas and/or concerns among organization members about strategic planning and current organizational issues to be addressed in the plan. 4. There is no one in the organization who members feel has sufficient facilitation skills. 5. No one in the organization feels committed to facilitating strategic planning for the organization. 6. Leaders believe that an inside facilitator will either inhibit participation from others or will not have the opportunity to fully participate in planning themselves. 7. Leaders want an objective voice, i.e., someone who is not likely to have strong predispositions about the organization's strategic issues and ideas. (Also see Consultants (using).)

Who Should Be Involved in Planning?

Strategic planning should be conducted by a planning team. Consider the following guidelines when developing the team. (Note that reference to boards of directors is in regard to organizations that are corporations.) 1. The chief executive and board chair should be included in the planning group, and should drive development and implementation of the plan. 2. Establish clear guidelines for membership, for example, those directly involved in planning, those who will provide key information to the process, those who will review the plan document, those who will authorize the document, etc. 3. A primary responsibility of a board of directors is strategic planning to effectively lead the organization. Therefore, insist that the board be strongly involved in planning, often including assigning a planning committee (often, the same as the executive committee). 4. Ask if the board membership is representative of the organizations clientele and community, and if they are not, the organization may want to involve more representation in planning. If the board chair or chief executive balks at including more of the board members in planning, then the chief executive and/or board chair needs to seriously consider how serious the organization is about strategic planning! 5. Always include in the group, at least one person who ultimately has authority to make strategic decisions, for example, to select which goals will be achieved and how. 6. Ensure that as many stakeholders as possible are involved in the planning process. 7. Involve at least those who are responsible for composing and implementing the plan. 8. Involve someone to administrate the process, including arranging meetings, helping to record key information, helping with flipcharts, monitoring status of prework, etc. 9. Consider having the above administrator record the major steps in the planning process to help the organization conduct its own planning when the plan is next updated. Note the following considerations: 10. Different types of members may be needed more at different times in the planning process, for example, strong board involvement in determining the organizations strategic direction (mission, vision, and values), and then more staff involvement in determining the organizations strategic analysis to determine its current issues and goals, and then primarily the staff to determine the strategies needed to address the issues and

meet the goals. 11. In general, where there's any doubt about whether a certain someone should be involved in planning, it's best to involve them. It's worse to exclude someone useful then it is to have one or two extra people in planning -- this is true in particular with organizations where board members often do not have extensive expertise about the organization and its products or services. 12. Therefore, an organization may be better off to involve board and staff planners as much as possible in all phases of planning. Mixing the board and staff during planning helps board members understand the dayto-day issues of the organization, and helps the staff to understand the top-level issues of the organization. People to Invite to Your Non-Profit Strategic Planning Session

How Many Planning Meetings Will We Need?

Number and Duration of Planning Meetings 1. New planners usually want to know how many meetings will be needed and what is needed for each meeting, i.e., they want a procedure for strategic planning. The number of meetings depends on whether the organization has done planning before, how many strategic issues and goals the organization faces, whether the culture of the organization prefers short or long meetings, and how much time the organization is willing to commit to strategic planning. 2. Attempt to complete strategic planning in at most two to three months, or momentum will be lost and the planning effort may fall apart. Scheduling of Meetings 1. Have each meeting at most two to three weeks apart when planning. It's too easy to lose momentum otherwise. 2. The most important factor in accomplishing complete attendance to planning meetings is evidence of strong support from executives. Therefore, ensure that executives a) issue clear direction that they strongly support and value the strategic planning process, and b) are visibly involved in the planning process. An Example Planning Process and Design of Meetings One example of a brief planning process is the following which includes four planning meetings and develops a top-level strategic plan which is later translated into a yearly operating plan by the staff: 1. Planning starts with a half-day or all-day board retreat and includes introductions by the board chair and/or chief executive, their explanations of the organization's benefits from strategic planning and the organization's commitment to the planning process, the facilitator's overview of the planning process, and the board chairs and/or chief executives explanation of who will be involved in the planning process. In the retreat, the organization may then begin the next step in planning, whether this be visiting their mission, vision, values, etc. or identifying current issues and goals to which strategies will need to be developed. (Goals are often reworded issues.) Planners are asked to think about strategies before the next meeting. 2. The next meeting focuses on finalizing strategies to deal with each issue. Before the next meeting, a subcommittee is charged to draft the planning document, which includes updated mission, vision, and values, and also finalized strategic issues, goals, strategies. This document is distributed before the next meeting. 3. In the next meeting, planners exchange feedback about the content and format of the planning document. Feedback is incorporated in the document and it is distributed before the next meeting. 4. The next meeting does not require entire attention to the plan, e.g., the document is authorized by the board during a regular board meeting. 5. Note that in the above example, various subcommittees might be charged to gather additional information and distribute it before the next planning meeting. 6 Note, too, that the staff may take this document and establish a yearly operating plan which details what

strategies will be implemented over the next year, who will do them, and by when. 7. No matter how serious organizations are about strategic planning, they usually have strong concerns about being able to find time to attend frequent meetings. This concern can be addressed by ensuring meetings are well managed, having short meetings as needed rather than having fewer but longer meetings, and having realistic expectations from the planning project.

Always First Do "Plan for a Plan"

Too often, planners jump into the planning process by reviewing the organization's mission or then establishing a vision and goals to achieve in the future. Instead, planners should always start by doing a "plan for a plan." When planner skip this step, they too often produce a plan that is not relevant to the organization, unrealistic to apply, and inflexible to the culture and limitations of the organization. How How How How How to to to to to Start Start Start Start Start Strategic Strategic Strategic Strategic Strategic Planning Planning Planning Planning Planning Plan Plan Plan Plan Plan for for for for for a a a a a Plan Plan Plan Plan Plan -Part 1 of 5 - Part 2 of 5 - Part 3 of 5 - Part 4 of 5 - Part 5 of 5

Strategic Analyses -- Analyzing External and Internal Environments

(Many planners prefer to start strategic planning by clarifying the mission, vision and/or values of the organization. Other planners prefer to start by taking a wide look around the external environment of the organization and also the inside of the organization, and then clarifying/strategizing what the organization should do as a result of what the planners find. If you prefer to address the mission, vision and/or values next, then skip to those sections later on below.) A frequent complaint about strategic plans is that they are merely "to-do" lists of what to accomplish over the next few years. Or, others complain that strategic planning never seems to come in handy when the organization is faced with having to make a difficult, major decision. Or, other complain that strategic planning really doesn't help the organization face the future. These complaints arise because organizations fail to conduct a thorough strategic analysis as part of their strategic planning process. Instead, planners decide to plan only from what they know now. This makes the planning process much less strategic and a lot more guesswork. Strategic analysis is the heart of the strategic planning process and should not be ignored.

Taking a Wide Look Around the Outside of the Organization to Identify Opportunities and Threats
An external analysis usually includes looking at various trends, including political, economic, societal, technological and ecological. What is an Environmental Scan? Environmental Scanning Consider These Diving Force Impacts Taking Stock (very basic overview of environmental scanning) Look Out! Environmental Scanning for Associations Also consider the needs and wants of stakeholders -- do a stakeholder analysis.: Stakeholder Analysis Stakeholder Analysis Stakeholder Consultations

Looking Around Inside of Organization to Identify Strengths and Weaknesses

The following assessments might be useful in helping you to take a look around the inside of your organization -- to assess the quality of all of its operations. Organizational Assessments for For-profits Organizational Assessments for Nonprofit

Setting Strategic Direction

Strategizing - Establishing Strategic Goals and Methods/Strategies to Achieve them
Guidelines to Do Planning to Ensure Organizational Sustainability One of the most important reasons that organizations do strategic planning is to ensure that they remain sustainable -- that they not only survive, but that they thrive well into the future. So it's important to understand what makes an organization sustainable -- it's not just getting enough money. See Organizational Sustainability Do a SWOT Analysis of Results of Looking Outside and Inside the Organization? Now that you've identified opportunities (O) and threats (T) and also strengths (S) and weaknesses (W), you could to do a SWOT analysis in order to identify important priorities to address and how to address them, i.e., identify strategic goals and methods/strategies to achieve them. Note that the next section below, "Other Guidelines ...", also gives ideas about how analyze results of your strategic analyses. How to do a SWOT analysis Basics of Identifying Strategic Issues and Goals SWOT Analysis: A Powerful and Underutilized Tool Some Questions to Ask During a SWOT Analysis Here are some examples of SWOT analyses: Example of a SWOT analysis another example another example Other Guidelines to Identify Strategic Goals and Methods/Strategies to Achieve Goals In addition to a SWOT analysis, or you choose not to do one, consider the guidelines in the following articles. Each might give ideas for how to identify the best approaches to selecting the best goals and methods/strategies to achieve those goals. Basics of Strategizing (during strategic planning) Strategy Is ... Growing Your Organization Strategy: Definitions and Meaning Three Forms of Strategy The Strategic Advantage of the Upstart Competitor Strategizing How to Develop a Training Strategy When Strategizing, Use "Sanity Solution"

Five Essentials of an Effective Strategy Strategic Thinking - A Task for All Employees A Key Strategic Choice: When to Outsource Work Strategic Thinking and the Law of Nemesis Business Principles We Learn from Warren Buffett Business Principles We Learn From Jeff Bezos Founder of Amazon Making Your Strategy Work on the Frontline When You Think the Strategy is Wrong How to audit your business strategy Decentralized Organization Structures Empower and Energize What is a Strategic Decision? Strategy Are You Implementing Your Strategy Or Studying It? Being Strategic and Creating Strategy Arent the Same Thing Also Consider These Topics The following topics in the Library can be useful when thinking of creative approaches to address priorities found in planning: Creative Thinking (useful when strategizing new ideas) Innovation (also use when strategizing new ideas)

Developing/Updating a Mission Statement

(As mentioned above, many planners prefer to start strategic planning by clarifying the mission, vision and/or values of the organization. Other planners prefer to start by taking a wide look around the external environment of the organization and also the inside, and then clarifying/strategizing what the organization should do as a result of what the planners find. If you prefer first to do those analyses, then see the Strategic Analysis section above.) Basics in Developing a Mission Statement Pillars of Planning Mission, Vision and Values Mission / Vision Exercise What's Real Purpose of Word-Smithing Mission Statements? What should our mission statement say?(presented in context of nonprofits) Mission Impossible? How to Write Your Mission Statement Suggestion: Use your browser to do a search for "mission statements". This likely will result in numerous links to a wide variety of organization's mission statements that you can review as samples of mission statements.

Developing/Updating a Vision Statement

Creating an Organization's Vision Basics in Developing a Vision Statement Strategic Visioning Process Creating a Vision Building a Visionary Organization is a Do-It-Yourself Project Vision and Strategic Plans-- Who Needs Them Why Should Anyone Trust Your Vision? How to Write a Compelling Change Vision Statement Suggestion: Use your browser to do a search for "vision statements". This likely will result in numerous

links to a wide variety of organization's vision statements that you can review as samples of vision statements.

Developing/Updating a Values Statement

Basics in Developing a Values Statement What is a Values Statement? Developing Ethics Code and Statements of Values Use Grand Vision or Strategic Vision When Strategic Planning? Suggestion: Use your browser to do a search for "values statements". This likely will result in numerous links to a wide variety of organization's values statements that you can review as samples of values statements.

Action Planning (who will do what and by when)

Strategic planning can be exhilarating when coming up with new visions and missions and values, talking about long-standing issues in the workplace and coming up with new and exciting opportunities. But without careful action planning -- and diligently ensuring actions are carried out -- the plan ends up collecting dust on a shelf. Many organizations develop action plans for the first year of a multi-year strategic plan and refer to that action plan as an "operational plan." Basics of Action Planning (as part of strategic planning) The Goals Grid -- A Tool for Clarifying Goals & Objectives Setting Goals and Objectives How to Write Power Action Plans Business Strategic Planning (about operational planning) (Part 1) Business Strategic Planning (about operational planning) (Part 2) Business Strategic Planning (about operational planning) (Part 3) Also See These Library Topics Setting Employee Goals Management-by-Objectives (specifics about aligning goals throughout org.) Project Management (guidelines for thorough planning and tracking to reach goals)

Writing and Communicating the Plan

I've you've followed the guidelines, so far, throughout this Library topic, then writing your plan will be fairly straightforward. A frequent mistake at this point is not communicating the plan to enough people, including external stakeholders. The following link will be useful to you now. Basics of Writing and Communicating Your Plan

Implementing, Monitoring, Evaluating and Deviating from the Plan -- and Managing Change
How Do We Ensure Implementation of Our New Plan?
A frequent complaint about the strategic planning process is that it produces a document that ends up collecting dust on a shelf -- the organization ignores the precious information depicted in the document.

The following guidelines will help ensure that the plan is implemented. (Note that reference to boards of directors is in regard to organizations that are corporations. 1. When conducting the planning process, involve the people who will be responsible for implementing the plan. Use a cross-functional team (representatives from each of the major organizations products or service) to ensure the plan is realistic and collaborative. 2. Ensure the plan is realistic. Continue asking planning participants Is this realistic? Can you really do this? 3. Organize the overall strategic plan into smaller action plans, often including an action plan (or work plan) for each committee on the board. 4. In the overall planning document, specify who is doing what and by when (action plans are often referenced in the implementation section of the overall strategic plan). Some organizations may elect to include the action plans in a separate document from the strategic plan, which would include only the mission, vision, values, key issues and goals, and strategies. This approach carries some risk that the board will lose focus on the action plans. 5. In an implementation section in the plan, specify and clarify the plans implementation roles and responsibilities. Be sure to detail particularly the first 90 days of the implementation of the plan. Build in regular reviews of status of the implementation of the plan. 6. Translate the strategic plans actions into job descriptions and personnel performance reviews. 7. Communicate the role of follow-ups to the plan. If people know the action plans will be regularly reviewed, implementers tend to do their jobs before theyre checked on. 8. Be sure to document and distribute the plan, including inviting review input from all. 9. Be sure that one internal person has ultimate responsibility that the plan is enacted in a timely fashion. 10. The chief executives support of the plan is a major driver to the plans implementation. Integrate the plans goals and objectives into the chief executives performance reviews. 11. Place huge emphasis on feedback to the boards executive committee from the planning participants. Consider all or some of the following to ensure the plan is implemented. 12. Have designated rotating checkers to verify, e.g., every quarter, if each implementer completed their assigned tasks. 13. Have pairs of people be responsible for tasks. Have each partner commit to helping the other to finish the others tasks on time.

Monitoring Implementation, Evaluating Implementation -- and Deviating from Plan, If Necessary

As stated several times throughout this library topics (and in materials linked from it), too many strategic plans end up collecting dust on a shelf. Monitoring and evaluating the planning activities and status of implementation of the plan is -- for many organizations -- as important as identifying strategic issues and goals. One advantage of monitoring and evaluation is to ensure that the organization is following the direction established during strategic planning. That advantage is obvious. However, another major advantage is that the management can learn a great deal about the organization and how to manage it by continuing to monitor and evaluate the planning activities and the status of the implementation of the plan. Note that plans are guidelines. They aren't rules. Basics of Monitoring and Evaluating and Deviating from the Strategic Plan

Changing the Plan As Necessary During Implementation

It's OK to deviate from a plan. But planners should understand the reason for the deviations and update the plan to reflect the new direction. How to Change Your Strategic Plan The following links are to major topics in the Library that are all about guiding change in your organization:

Guidelines to Manage Organizational Change While Implementing the Plan

As you are implementing your Plan, you will likely be making significant changes within your organization, whether changes to strategy, structure or policies. These should be done carefully. The following links are to resources to help you accomplish successful change. Organizational Change and Development (useful for guidelines to manage change, during implementation) Organizational Performance Management (useful for different methods to manage implementation plan) Management-by-Objectives (guidelines about aligning goals throughout organization) Project Management (guidelines for thorough planning and tracking to achieve goals) Change Checkpoints and Improvement Milestones Change Management Can Lead to Rigidity and Resistance to Change

Handy Tool to Guarantee Plans Are Implemented

It's one thing to develop a plan. It's another to actually implement the plan. Far too many plans sit untouched on shelves. A low-cost, straightforward approach to share ongoing support and accountabilities to implement a plan is to use peer coaching groups. That approach is brought to you by Authenticity Consulting, LLC -- the same company that brings you this Free Management Library.