The ubiquity of change – social, economic, political, technological and
attitudinal–and the accelerated pace by which it is occurring demand a serious
and imaginative response on the part of business if they want to thrive over the
next several years, let alone the next decade or 100 years. Strategic planning
is highly selective, sets priorities, and does not constitute a comprehensive
review of the organization's activities (Eadie, 1993; Shea, 1997). It does
identify the strategic issues facing the organization. Strategic planning should
be a constructive, consensus building activity that focuses on the health of the
organization. If no strategic plan is adopted the disadvantages are: · Loss of
competitive edge. · Crisis management - reactive rather than proactive. ·
Diverse directions and redundancy. · At the mercy of outside influences.
Strategic planning begins with the definition or analysis of mission, and cannot
proceed until there is mission consensus among all planning participants.
Mission analysis identifies the spectrum of customers the organization will
serve, the broad categories of products and services it will produce, and the
way it will measure success. Once a customer base is defined, the next step in
strategic planning is to develop a clear understanding of the characteristics of
the groups or classes of customers in this customer base. Once this
understanding is established, the organization can then define potential
customer requirements extending over the planning horizon. Leading organizations
have found that it is wise to include customers in the planning process to
increase the confidence level of the strategic plan. The best organizations have
extended the strategic planning process to include all major supplier
organizations as well. When suppliers and customers are included in the planning
process, the concept of value-chain management becomes viable. The value-chain
is a series of value-added activities and processes that begin within suppliers'
organizations and extends through to customers' organizations. An organization
exists within, and must successfully operate within, an external environment
over which it has little or no control. Strategic planning attempts to
understand the current environment by collecting and analysing data; and then to
describe a potential future environment by reasoning techniques, plotting trend
lines, searching for potential paradigm shifts, and utilizing simulation
techniques.
Usually, the future environment is described as a series of
potential scenarios that will be obtained if certain specified conditions occur.
Given a well-developed scenario, it is possible for strategic planners to
develop a recommended organizational response for that scenario and thus,
provide planning guidance that can be used to develop annual business plans. The
annual business plans will then have the effect of moving the organization in
the desired direction. Given enough time and resources, the organization can
develop multiple scenarios and planned response packages for each potential
scenario. Then, as events unfold, the organization is prepared for the
appropriate response based on the scenario that seems to be best describing
reality. It is important to realize that more than half the value of a strategic
plan is in the preparation of it. The act of producing a strategic plan
sensitises managers to look forward in their thinking so that they can be more
proactive, rather than reactive, in their management practices. It trains their
minds to look for clues, events, and trends in the environment that may affect
or shape the way in which they manage the business. It prepares them to seize
opportunities that may dramatically influence the way in which they can meet
customer requirements. This is why it is important to perform strategic planning
at several levels in the organization, and why it is critical that operating or
line managers do their own planning rather than receiving from the directors.
