Most executives know that strategic planning is important to their business. But remarkably few of them know how to go about it, from figuring out a strategy to implementing a strategic plan. Here, Nova Amber's Michael Jude tells you how to get started.
One fad of the late '90s was strategic planning. Many enterprises embraced
strategic planning in a big way-only to eliminate departments devoted to such
planning when measurable results weren't immediately forthcoming. Since then,
strategic planning as a concept has been relegated to the dustbins of
management theory, along with such notions as "embracing chaos" and
"re-engineering."
Yet, strategic planning does have its place. The issue is not whether
long-range planning should be done at all; rather, it's what constitutes
an appropriate planning horizon. Today, the market moves to the tempo of
Moore's Law. If you can't execute
within 18 months, then it probably isn't worth attempting to do so, since by
the time you get something done, the situation you were responding to will
almost certainly have changed.
Strategic planning, or what Martha Young and I call "Business
Strategy" in our new book,
"iExec
Enterprise Essentials Companion Guide," is fundamental to business
success. Businesses that are not actively assessing the market and their
competitors, suppliers and customers will quickly be outmaneuvered by the
competition.
Situation analysis is the first step
Business strategy begins with a situation analysis, where a company assesses
its strengths, weaknesses, opportunities and threats. This is nothing more than
the old SWOT Analysis with a twist. Modern businesses must also factor into
this analysis the technical capabilities necessary to capitalize on any
strengths or opportunities.
It is often not enough to have a good idea if there is no way to leverage
that idea. Frequently, this requires automated solutions of one sort or another.
Knowing what you have, and knowing what is required to convert that into
leverageable advantages, is critical to success.
As we point out in our book, matching data processing and communications
technology to business processes can be complex. One effective way to do this
is to map out key business processes in terms of tasks that must be done to
convert inputs to outputs. Key business processes are usually tied to the
production of revenue.
Identify tasks needing improvement
Once the key processes are mapped, and the tasks necessary to carry them out
are known, it is relatively easy to identify the tasks that are most easily
improved through data processing or communications. These are typically ones
where there is heavy interaction between different groups of people, or between
people and data.
Key tasks can be telemetered to assess the capability and throughput that
each can achieve. These metrics form the basis for defining process
inefficiencies that need to be addressed in any strategy. For example, suppose
a particular task is to assess a customer need and then make recommendations
for improvements. Further suppose that this task takes a week. One way to
improve it could be to cut the time it takes down to just a day, through the
use of collaboration applications over the Internet. Any strategy should
include the deployment of such applications.
Articulate a vision statement
Armed with a complete SWOT and technology opportunities, the last step is to
articulate the strategy in terms of a vision statement for each section of the
SWOT. Under "Strengths," for example, might be your company's ability
to offer personalized service. This is threatened by large retailers' bulk
buyers discount and credit programs. The strategic response is to develop an online
order tracking tool for company retailers to track their orders to retain
customer loyalty. The overall strategy becomes the collection of all of the
responses to threats and opportunities.
In the final analysis, building a strategy is nothing more than inventorying
the critical business processes, key business strengths and weaknesses, and
technology assets necessary (or lacking) to enable revenue generation in the
future. Most businesses do this, but most do not do it well. The key is to use
a structured approach combined with good market telemetry and a strong business
process focus.
Michael Jude, Ph.D., is a partner in Nova Amber.
Michael has more than 20 years of experience in telecommunications. He is the
co-author of the book "iExec
Enterprise Essentials Companion Guide" from Cisco Press. He has a
Ph.D. in Decision Science from Walden University, a Master of Engineering in Engineering Management
and a B.S. in Electrical Engineering from the University of Colorado. He can be reached at mjude@novaamber.com.
Michael Jude and Martha Young co-wrote
the book,
"iExec
Enterprise Essentials Companion Guide," which was published by Cisco
Press. ISBN-10: 1587132192, U.S. SRP: $49.95.
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