How to Use Strategic Planning

 
 
By Michael Jude  |  Posted 2008-07-10
 
 
 

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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