Question

Write a 3-4-page academic paper that analyzes the key components of a strategic planning framework, assesses the value of using a strategic planning framework, and explains the role of leadership in the strategic planning process.

Answer 1

INTRODUCTION: THE STRATEGIC ANALYSIS FRAMEWORK

This paper presents the basic framework for comprehensive strategic analysis. The basic purpose of

strategic analysis is to help analyze how the firm can generate returns in excess of the firm’s

opportunity costs (these are rents) by engaging in a more effective corporate strategy and, at the

business level, more effective competitive strategy (Porter, 1996).

The framework describes and briefly explains the major components of a strategic analysis,

and outlines the major components of strategic analysis and the order they should be covered in a

project write-up. It consists, therefore, of a coherent “skeleton” of a comprehensive strategic

analysis. Of course, it is only a generic guide. A project should be adapted to the specific needs (i.e.,

the project specification) of the client. Corporate-level analysis for firms with multiple business units

is more complex than an analysis of firms in a single line of business. Some projects are more

oriented to an industry analysis (a potential client for this type of analysis might be a firm

considering entering the industry).

The logic of a comprehensive strategic analysis is simple: describe and explain the

issue/problem, assess it, try to solve it. Of course, we actually analyze problems in a much more non-

linear manner than this in practice, but writing-up an analysis in this linear, “rational” mode is the

only way to make the analysis understandable to the client. Therefore, usually, a written

comprehensive strategic analysis contains three major parts, in the following order: analysis of the

current situation, assessment of the current situation (fulcrum) and solution analysis.

1. A Vision

No surprises here – we need to start off by defining our vision for the organization (the destination). Your vision will help you to:

• Bring alignment to your organization, where people will unify their efforts towards a common goal, driving increased efficiency
• Create goals which are cohesive and focused
• Inspire employees, investors and other stakeholders to invest in your business both emotionally and commercially

2. Core Values

Values really don’t get the credit they deserve! People often see them as throw-away and vacuous – more aimed at marketing the organization than guiding its true internal behaviors. But a well crafted set of values can be the difference between success and failure for your strategic plan.

The values that should go into your strategic plan are not the usual sickly-sweet values you’ll see in corporate marketing videosaimed at customers. Instead they need to be a frank self-assessment of how you want your organization to behave as it goes about delivering against its vision and mission / focus areas. They should ideally reflect the values of your very best people, and the values that have helped you to succeed the most in your journey to date.

3. Clearly Defined Outcomes

A strategic plan is nothing without a set of clearly defined outcomes. Visions, missions and focus areas are a great starting point – but no-one will take your plan seriously unless you can clearly articulate what steps you are going to take to get there – and what success looks like for each of those steps.

4. Accountability

This is such a small detail, but it is also one of the key elements of a strategic plan that so many organizations fail to implement. A lack of accountability will absolutely destroy your strategy execution. Lacking or confusing accountability results in:

• Outcomes not being delivered because no-one knew who was in charge
• Conflicting interpretations of what the business should be working on
• Increased ‘finger pointing’ and hearsay when things don’t go to plan
• No-one taking any satisfaction or pride in the outcomes delivered by their team

5. KPIs

OK, I’ll admit it – creating KPIs is probably the hardest of all the key elements of a strategic plan. But without KPIs, you won’t know until it’s too late about whether or not you’re succeeding as you head towards your vision.

The Six Roles of Strategic Planning

1. Setting Organizational Direction
The assumption is that organizations ought to plan for the future and set out a path on which to travel. Direction answers the questions: Where do we want to go? What do we want to be in the future? This function is often manifested in the saying "doing the right thing". There is a certain intuitive logic than an organization must have some idea of where it is going or where it wants to be in order to provide direction for daily decision making.

2. Concentration of Effort
An organization needs a means of prioritizing effort and resources. Different decisions lead to different outcomes, which may or may not support the direction that has been chosen. A set of focus guidelines must come from a strategy. Priorities must be developed; otherwise, planning becomes a long wish list.

3. Understanding the Organization
We need to develop an understanding of the culture and history of the organization. A strategy is a window into the organization, both for outsiders and insiders. Organizations are large and complex, even for insiders. Of course, there is sometimes a problem with the over-simplification of complex systems, but we need a model of behaviour that can be understood. Mintzberg talks about the "clarification" of organizations. Jensen talks about the "crystallization" of the organization. We cannot transform an organization without understanding it. Simple tools such as a SWOT analysis help develop insight.

4. Understanding the External Environment
An organization cannot exist without paying attention to the outside world. The phrase "managing from the outside in" sums up the process. The impact of competitors and other external forces needs to be understood; they form the basis of the longer run strategy of any organization. Strategy has been envisaged as a fit of organizational resources and the external environment, where programs, products, and services are matched to the external environment. Strategic planning is the vehicle for organizational adaptation.

5. Keeper, Seeker, Disseminator of Information and Values
Information and feedback is at the root of developing learning communities within organizations.

6. Springboard for Action
Whether it is reinventing the organization or introducing a new product or service, you need a platform to base the action on and to support it.