THE STRATEGIC PLANNING PROCESS:


A Bare-Bones Summary
by General Informatics LLC






The elements of the strategic planning process are shown below. Click to detailed descriptions of each element, or read this page in sequence.
 
 

PARENT COMPANY'S
MISSION
MISSION
VISION
(optional) 
GOAL
VALUES
(optional)
STATUS
ANALYSIS
GAP
ANALYSIS
OBJECTIVES
VALUE PROPOSITION/
BUSINESS MODEL
PROGRAMS

Begin your discussion and planning with "mission" and proceed downward. Statements adopted at each level must support the level above, and may bring up feasibility issues that "feed back" to modify the level above.  The mission-goal-objectives-programs sequence in the center column are the core of your strategic plan.  The items in the right and left columns support that core.
 
 
Mission This is what the organization does. The fewer words, the better.

It may be a one-shot mission like "to land a man on the moon and return him safely to earth before the end of the decade." It may be a long-term mission like "to explore new planets and new civilizations." A typical corporate mission would be "to create and exploit new markets for micro-widgets."

Refer upward to make sure the mission is compatible with the parent organization's mission and expectations. If not, consider revision of mission or secession from parent.
 
Vision  Why you have adopted your mission. "To boldly go where none have gone before." "To increase our customers’ enjoyment of life by creating affordable entertainment appliances using micro-widgets." The vision is a human or social context for the mission.

A vision is optional because the organization can get by with "Ours is not to reason why, ours is but to do (the mission) or die." Also, a mission can be executed effectively even by a group of people with vastly differing motivations.
 
Values  Things the top managers believe - and want employees to believe - about the company, the workplace, the market, and about getting along with each other. My academic department (the "MST" Department)'s latest strategic plan lists these values:

 
We believe these things about education, business and society:
  • Better management education will increase people's and companies' opportunities for success, and decrease waste and ethical lapses.
  • Fast technological and social change requires managing across boundaries, via:
    • Interdisciplinary research 
    • Cross-sectoral alliances
    • Teamwork across corporate departments and across companies
    • Finding opportunities and effectively teaming and negotiating across national borders.
  • Technology drives economic development, first at the regional level, and then at national and international levels. Regions can and should take charge of their own transformation by making choices about technology-based economic development. 
We believe these things about how MST should be managed:
  • Alliances increase our customer base, our access to resources, our research quality, our flexibility, and our level of collegiality.
  • In making and fulfilling moral contracts. 
  • In management by objectives, with each faculty member making an annual agreement with the department head.
  • In leverage and synergies. Economies are only achieved if we talk with each other about programs we are managing; so we must also believe in communication.
  • In selling and in market research. Every external contact is an opportunity to present MST's programs to a potential customer or friend of the department. Every external contact is an opportunity to ask what curriculum would best serve that contact’s firm and industry. We always take these opportunities.
  • In being responsive, rigorous, and relevant.
  • Responsive. Convenient classes, flexible scheduling, and excellent customer service.
    •
  • Rigorous. Small classes with great instructors at a highly reputed research institution, producing graduates who are responsible, ethical, capable, and committed to learning.
    •
  • Relevant. Tight focus on technology industries. Faculty with industry experience and academic credentials. 
    •


    Values are optional because it's not always clear what "value" values have, or whether announcing them changes anything operationally. However, it does seem pretty clear that things wouldn’t have gone so wrong at Enron if everyone had signed onto a values statement. The value statement in the box above will, we believe, influence the way our department chooses curriculum directions and allocates resources.

    Then too, if you don't spell out your values explicitly and test your programs for compatibility with your values, customers will look beneath your programs to make guesses about what your values are - and then judge you on these supposed values. Both Microsoft and Apple, for example, used slogans that suggested underlying values. Microsoft's "A PC on every desk, and Microsoft programs on every PC" was totally about quantity, and not at all about quality. Apple's "Insanely great products" tagline was about quality - but essentially said, "Hey, look at me!" Neither slogan reflected caring about the customer, and the results have manifested through anti-trust suits and sinking market share
    Goal Goals are signals about how you know you are fulfilling the mission. Examples: "To enjoy a 15% profit on $5 billion/year in micro-widget revenues by 2005." "To be in the top three car rental companies in market share by 2005."

    Obviously, you'll have to make a new plan in 2005 and replace the goal. A single goal is best. A few are OK if absolutely necessary. If you have too many goals, perhaps you are confusing goals with objectives.
     
    StatusAnalysis Analyzing status and environment usually involves a combination of market research and SWOT. The plan must exploit market opportunities. It is a fine line between matching market opportunities with internal talents, and simply letting internal talents drive the plan. The latter is a formula for failure.

    Market research can be guidance from boards of advisors; literature searches and other secondary research; and primary research (original customer surveys, etc.) A combination of all three is best.

    There are 4 elements of SWOT. Strengths and Weaknesses are internally-oriented considerations. What are you good at? Not so good at? Opportunities and Threats should be written in terms of the external environment, which includes competitors' actions, resources and intentions; trends in the economy; demographics and spending power of the target customers; and everything else external, including traffic and global warming, if relevant.

    SWOT is almost worthless, but do it anyway. 

    Why worthless? The internal/external distinction is silly; you can only have strengths relative to others’ strengths. Also, your strength is your weakness. If you focus on your current strengths and fail to develop new ones, or if you become too proud of your strengths, then your focus and your pride become weaknesses that competitors can exploit. And threats... are opportunities!

    Why do it anyway? Just because it's worthwhile to write down the major driving forces in your organization and your market, and discuss them - even if they’re written in the wrong quadrant of your SWOT. SWOT clarifies the current status of the organization, and you need this to do gap analysis.
     
    Gap Analysis  Simply write down the difference between the current status and the goal. This analysis shows how far you must travel to reach the goal - perhaps along several dimensions. Very simple-minded, but clarifies for everyone how much growth and change is needed in what interval of time.
    Objectives Specific steps that support the goal. There may be several. "Introduce at least three new micro-widget based products every year." "Achieve the best repeat-customer rates and customer loyalty rates in the car rental industry."

    Choose the objectives so they are both necessary and sufficient to meet the goal.
     
    Value Proposition/ 
    BusinessModel    		 What are you offering your customers that is worth the asking price and better than they can get elsewhere? What are they paying you for? What will you deliver, when will you deliver it, and in what kind of package? 

    When and how will the customers pay? On ordering, on delivery, 60 days net, by subscription? Added charges for technical support etc.? How will you lock customers in (via proprietary standards? Long-term contracts?) The model must support the objectives!!
     
    Programs Sets of tasks that drive the organization toward the objectives and are consistent with the business model. "Put a micro-widget driven lawn mower costing less than $150 on the market before Christmas, 2003." "Collect 20,000 qualified leads from response cards inserted in July magazines."

    In strategic planning, do not ask, "What do we want to be?" This question violates the "market-driven" principle, because it is about you, not about your customers. The goal statement in a strategic plan is not about what you want to be, it is about what you must be in order to fulfill the mission.

    Instead, ask, "What does the market demand now and in the future, and how can we deliver it in a satisfying and economically viable fashion?"

    A strategic plan should focus the organization. Its purpose is to allow some programs, and exclude other programs. During the planning discussion, test the mission, goal and objective statements by seeing whether real or hypothetical programs would be allowed under the objective or goal. If every proposed program sounds acceptable, then the mission, goal and objective statements are too broad; go back and modify them. By the end of the process, the plan must constitute a mechanism for approving or denying real program ideas based on how well the program ideas fit the objectives.

    ©2002, General Informatics LLC

    A GENERAL INFORMATICS CONSULTANT CAN FACILITATE YOUR COMPANY'S STRATEGIC PLANNING PROCESS.  Inquire by email.
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