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Strategic Planning
Strategic planning should begin by asking
'What is the purpose of this organization?'

When done effectively, strategic planning is among the most potent competitive weapons a company can have. Planning helps everyone better understand the departmental and company wide objectives they're developing, while the plan itself keeps everyone on track. If you don't have a plan, employees won’t know where they’re going, let alone how they’re supposed to get there. Here's a round-up of definitions, tips, and techniques to help you get the most out of your strategic-planning efforts:

Goals and strategic planning.
No doubt your company has long-term goals. You aspire to be #1 in your market, or the quality leader, or the low-cost provider. You seek 20% sales growth or 10% earnings growth every year. You want to make the Fortune 500—or the Inc. 500. The strategic plan shows how you’re going to get there over the long haul. It positions the company in the marketplace and establishes a context for the annual plan.


Checkpoint #1:
Are your goals and strategic positioning public? Are they out where everyone can see them? When Patrick Kelly set out to build PSS/World Medical (Jacksonville, Fla.) into the first national physician-supply company, he put big banners announcing the goal in every one of the company’s offices and warehouses. People need to know not just the destination but the route— the competitive advantage that will get the company where it’s going. In PSS’s case, the company was able to deliver a higher level of service than its competitors—and every employee could tell you exactly how it did so.

Annual planning. The annual plan maps out this year’s objectives. The process followed by Interroll Corp. is pretty typical. Managers gather for all-day sessions. They review the previous year and assess the external environment. They examine the company’s strengths, weaknesses, threats, and opportunities (SWOT analysis) and map out five strategic objectives. Then comes the nitty gritty: detailed sales forecasts, account by account and month by month. Marketing plans and budgets. Budgets for cost centers. All the numbers get assembled into what district manager Martin Clark terms a “planned P&L by product class for each month”—in other words, a month-by-month picture of what’s supposed to happen during the year.

Checkpoints #2 and #3:
A plan is good only if it’s accurate. Those sales forecasts—where do they come from? How detailed is the data behind them, and are salespeople willing to commit to them? And those budgets: were the people affected involved in helping to determine them? “Every single person gets involved in our planning process,” says CFO Andrea Spears of The Lamb Group Companies (Chicago). “We ask teams to tackle different areas of the budget. They have to ask themselves what it’s going to cost to realize our goals.” The more participation, the more learning—and the more buy-in.

Using the annual plan. Don’t let it gather dust. The point of planning is to get everybody reading from the same page— which means they'd better be looking at that page week after week and month after month.

Checkpoint #4:
Do you ask people to compare weekly and monthly performance to plan on a regular basis? Can they explain variances? The point of a plan is not to constrain a company’s actions; there are always unforeseen threats and opportunities, and companies must often decide to make mid-course corrections. Rather, the plan serves as a point of reference—a benchmark that helps you understand what you didn’t foresee and how you’ll have to change if you move off-plan.

Limitations

Universities may encounter a multitude of problems as they go forward with their strategic planning process. This section discusses several of these difficulties and offers ways to minimize or avoid them.

POTENTIAL PROBLEMS

 Strategic planning is an involved, intricate, and complex process that takes an organization into the uncharted territory. It does not provide a ready to use prescription for success; instead, it takes the organization through a journey and helps develop a framework and context within which the answers will emerge. Literature and research has documented extensively the possible problems that may arise during the process. Being aware of these issues and prepared to address them is essential to success: organization's strategic planning effort may fail if these potential pitfalls are ignored. To increase universities' awareness, this section reviews some of these limitations.

Commitment

     One of the major challenges of strategic planning is ensuring commitment at the top, because in some ways, strategic planning reduces executive decision-making power. It encourages involvement throughout the organization, and "empowers" people to make decisions within the framework defined by the strategic planning process. As a result, this shifts some of the decision making from the executive office to the participants.

     Commitment of the people throughout the university "grows out of a sense of ownership of the project" (Mintzberg, 1994, p. 172). Such commitment is essential to success. Strategic planning implies organization-wide participation, which can only be achieved if people believe that their involvement counts, and that they will benefit from the process.

Inflexibility of plans and planning

     Strategic planning might inhibit changes, and discourage the organization from considering disruptive alternatives (Mintzberg, 1994, p. 178). Planning might inhibit creativity, and "does not easily handle truly creative ideas" (Mintzberg, 1994, p. 180). A conflict lies with a desire to "retain the stability that planning brings to an organization ... while enabling it to respond quickly to external changes in the environment" (Mintzberg, 1994, p. 184).

Control

     Strategic planning, if misused, might become a tool for gaining control over decisions, strategies, present, future, actions, management, employees, markets, and customers (Mintzberg, 1994, pp. 201-202), rather than a comprehensive and integrated instrument for bringing the organization to its desired future.

Public relations

     Strategic planning may be used as a tool to "impress" "influential outsiders" (Mintzberg, 1994, p. 214), or to comply with requirements for strategic planning imposed from the outside, such as accreditation requirements.

Objectivity

     Strategic planning dismisses intuition and favors readily available, interpretable "hard" data (Mintzberg, 1994, p. 191), and assumes that all goals are "reconcilable in a single statement of objectives" (Mintzberg, 1994, p. 193).

Politics

     Strategic planning might increase "political activity among participants" (i.e. faculty and administration, or individual participants), by increasing conflict within the organization, reinforcing a notion of centralized hierarchy, and challenging formal channels of authority (Mintzberg, 1994, pp.197, 200).

AVOIDING LIMITATIONS

"Opportunistic planning"

     Opportunistic planning allows organizations to be flexible and open to making changes to the strategic planning process, if it becomes necessary in the face of unexpected events and changes in the initial assumptions. "Organizations need a good combination of formal and opportunistic planning. "Organizations that rely exclusively on formal planning could trap themselves in unbearable rigidities." Those who's decision-making capability is entirely opportunistic will be constantly reacting to external forces, without a clear sense of direction" (Hax & Majluf, 1996, p. 35-36).

Planners as facilitators

     "Planners should not plan, but serve as" facilitators, "catalysts, inquirers, educators, and synthesizers to guide the planning process effectively" (Hax & Majluf, 1996, p. 34).

Participation

     Organizations should encourage active participation of as many people as possible, including the faculty, administration, students, and alumni), engaging them in the ongoing dialogue, and involving them in the strategic planning process, to generate a feeling of ownership of the process and the outcomes throughout the organization.

Creativity

Using "a series of incremental steps that build strategies" and integrating them into the entire organization will help to adjusting the course of action of strategic planning with overall organizational vision and strategic issues, while allowing for creativity and flexibility for change (Hax & Majluf, 1996, p. 35).

Flexibility

     Strategic tasks should be interpreted "not as rigid hierarchical sequences of actions, but as a useful conceptual framework" for addressing issues essential to the successful operation of the organization (Hax & Majluf, 1996, p. 36).

instrument for bringing the organization to its desired future.

Public relations

     Strategic planning may be used as a tool to "impress" "influential outsiders" (Mintzberg, 1994, p. 214), or to comply with requirements for strategic planning imposed from the outside, such as accreditation requirements.

Objectivity

     Strategic planning dismisses intuition and favors readily available, interpretable "hard" data (Mintzberg, 1994, p. 191), and assumes that all goals are "reconcilable in a single statement of objectives" (Mintzberg, 1994, p. 193).

Politics

    Strategic planning might increase "political activity among participants" (i.e. faculty and administration, or individual participants), by increasing conflict within the organization, reinforcing a notion of centralized hierarchy, and challenging formal channels of authority (Mintzberg, 1994, pp.197, 200).**