Strategic Planning

A well formulated strategy helps marshal and allocate an organisation’s resources into a unique and viable posture based on its relative internal competencies and short comings, anticipated change in the environment and contingent moves by intelligent opponents.

What is a strategy?

There is no single, universally accepted definition. Mintyberg and Quinn in their book “The Strategy Process” define a strategy as “the pattern or plan that integrates an organisation’s major goals, policies and action sequences into a cohesive whole. A well formulated strategy helps marshal and allocate an organisation’s resources into a unique and viable posture based on its relative internal competencies and short comings, anticipated change in the environment and contingent moves by intelligent opponents”.

Dimensions of strategies

Strategies have the following four dimensions:

1. Effective formal strategies contain three essential elements:
   
   • goals (objectives) to be achieved
     
   • policies guiding or limiting actions
     
   • actions sequence or programs
   
   
2. Effective strategies develop around a few key concepts and thrusts, which give them cohesion, balance and focus.
   
   
3. Strategy deals not just with the unpredictable but also the unknown.
   
   
4. Strategies require systematic testing to ensure they are well developed strategies. Within organisations strategies are mutually supporting.

Strategies must

• Have clear and decisive objectives;
  
  
• Maintain the initiative;
  
  
• Concentrate the focus of the organisation;
  
  
• Have flexibility within the dimensions or the organisation;
  
  
• Be co-ordinated and have the commitment of the organisation’s leadership;
  
  
• Have an element of surprise against competitors;
  
  
• Secure the organisation's resource base and operative procedures.

Types of strategies

Planned Strategies – highly deliberate, precisely intentional, formally anticipated and formally controlled.

Entrepreneurial Strategies – unarticulated vision of the organisation’s owner. Adaptable to new opportunities.

Ideological Strategies – collective vision of all the members of an organisation, strong shared norms.

Umbrella Strategies – defined strategies are within boundaries within which others must act.

Process Strategy – strategies that controls the process aspect of the strategy.

Disconnected Strategy – strategies not connected to a central theme or strategy.

Consensus Strategy – mutually agreed strategies.

Imposed Strategy – strategies directed by external bodies, environment etc.

The strategic process

Strategic planning is an exciting process for identifying where the organisation is NOW and where the owner wants to be at some FUTURE point in time.

The purpose of strategic planning is to transform the organisation.

Strategic plan versus business plan

A strategic plan is different from a business plan because:

• a strategic plan is an internal document designed to communicate business priorities;
  
  
• a business plan is an external document designed to evaluate the viability of the business;
  
  
• the main strategies of the strategic plan are often incorporated into the business plan;
  
  
• the strategic plan is the foundation for the business planning process

Strategic planning outputs and outcomes

An organisation can expect the following outputs and outcomes from its investment in strategic planning.

Outputs	Outcomes
a vision a mission guiding principles goals strategies objectives	team building organisation alignment consensus of the leadership focus for the future

Philip Herbert, Associate – Bentleys MRI Melbourne. Reprinted with permission of chartered accountants and business advisors, Bentleys MRI. For more information about this article or for further information on the Strategic Planning process, or assistance to develop your strategic plan, please visit www.bentleys.com.au.
First published: 16 February 2005.
Last updated: 30 May 2006.