Don Wehby, Contributor
WEHBY
STRATEGIC PLANNING is a disciplined effort to produce fundamental decisions and actions that shape and guide what an organisation is, what it does, and why it does it, with a focus on the future.
Strategic planning began in the military. According to Webster's New World Dictionary, strategy is "the science of planning and directing large-scale military operations, of manoeuvring forces into the most advantageous positions prior to actual engagement with the enemy." Although our understanding of strategy as applied to management has been transformed, one element remains key and that is, we must aim to achieve competitive advantage.
Newer models of strategic planning are focused on adaptability to change, flexibility, and importance of strategic thinking and organisational learning. "Strategic agility" is becoming more important than the strategy itself, because the organisation's ability to succeed "has more to do with its ability to transform itself, continuously, than whether it has the right strategy. Being strategically agile enables organisations to transform their strategy depending on the changes in their environment" (Gouillart, 1995)
Strategic planning is a management tool. As with any management tool, it is used for one purpose only: to help an organisation to do a better job - to focus its energy, to ensure that members of the organisation are working toward the same goals, to assess and adjust the organisation's direction in response to a changing environment.
In today's highly competitive business environment, budget-oriented planning or forecast- based planning methods are insufficient for a large organisation to survive and prosper. Therefore, the organisation must engage in strategic planning that clearly defines objectives and assesses both the internal and external situation to formulate strategy, implement the strategy, evaluate the progress, and make adjustments as necessary to stay on track.
The following diagram shows a simplified view of the strategic planning process:
The Strategic Planning Process
Strategic planning is only useful if it supports strategic thinking and leads to strategic management - the basis for an effective organisation. Strategic thinking means asking, "Are we doing the right thing?" It entails attention to the "big picture" and the willingness to adapt to changing circumstances, and consists of the following three elements:
* Formulation of the organisation's future mission in light of changing external factors such as regulation, competition, technology, and customers
* Development of a competitive strategy to achieve the mission
* Creation of an organisational structure which will deploy resources to successfully carry out its competitive strategy.
Strategic management is adaptive and keeps an organisation relevant. In these dynamic times it is more likely to succeed than the traditional approach of "if it ain't broke, don't fix it."
The implementation of the strategy must be monitored and adjustments made as needed.
Evaluation and control consist of the following steps:
* Define parameters to be measured
* Define target values for those parameters
* Perform measurements
* Compare measured results to the predefined standard
* Make necessary changes.
Strategic planning involves anticipating the future environment, however, decisions are made in the present. This means that over time, the organisation must stay abreast of changes in order to make the best decisions it can at any given point. It must manage, as well as plan strategically. Strategic planning is also a creative process, therefore individuals must be open to new ideas. Inevitably, the process will move forward and back several times before arriving at the final decision.
Strategic planning is not only a private sector management tool, but should also be used by governments and non-profit organisations. It is therefore, my opinion that Jamaica as a whole could benefit immensely from effective strategic planning.
Don Wehby is the GraceKennedy Limited Chief Financial Officer
