Strategic Planning
The outcome of strategic planning includes:
The establishment of a unique far-reaching vision Addressing critical issues
The development of focused and clear strategies Differentiation from competitors
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The achievement of tangible benefits
The process of strategic planning involves:
Pre-planning activities
Encouraging effective participation
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Thinking strategically Managing implementation Managing strategically
An Appropriate Approach
4.5 The way that a strategic plan is developed depends on the nature of the organisation's leadership, its culture, complexity of its operating environment, size, expertise of its planners, etc.
Strategic pla ns could cover a time span of one to ten years. Some plans include only top-level information and no action plans. Some plans are five to eight pages long, while others can be considerably longer. There exist a wide variety of models and approaches used in strategic planning.
4.6 Goals-based planning is probably the most common and starts with focus on the organisation's mission (and vision and /or values), goals to work toward the mission, strategies to achieve the goals, and action planning (who will do what and by when).
4.7 Issues-based planning often starts by examining issues facing the organisation, strategies to address those issues, and action plans.
4.8 Organic planning might start by articulating the organisation's vision and values and then action plans to achieve the vision while adhering to those values.
Understand the Environment
4.9 The first step in strategic planning is to understand the external environment at a macro level, to develop a basic understanding of the trends and issues that would significantly influence the organisation. A good understanding of the expectations and needs of various sta ke holde rs will a ssist the bo a rd with evaluating its strategic direction, strategies and objectives and aligning them with the established mission and vision.
Implement the Strategy
4.10 It is important to communicate the strategy to all levels of the organisation and to translate the strategy into actual business plans for implementation.
B EST P RACTICE
Components of Strategic Planning 1. Where are we now?
(a) Conduct internal/external assessments via:
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a Situation Inventory, which assesses the organisation’s current internal strengths and weaknesses; and
an Environmental Scan, which analyses key external elements along with the opportunities and threats in the environment in which the organisation operates.
(b) Prepare a Mission Statement to define the organisation’s unique reason for existence.
(c) Outline the Core Values, which describe how the organisation should conduct itself when carrying out its mission.
2. Where do we want to be?
(a) Write a Vision Statement, which forms a compelling and vivid conceptual image of the organisation’s desired future.
(b) Prepare Goals for achieving the desired end results (generally this would encompass three or more years).
3. How do we get there?
(a) Draft an Action Plan or detailed description of the key strategies to be used to implement each objective.
4. How do we measure the progress?
Formulate and implement:
(a) P e rforman ce Mea s ures to capture results and e nsure accountability.
(b) Monitoring and Tracking Systems, which monitor progress, compile management information, and keep plans on course.
(c) Systems for Resource Allocation, which are necessary for carrying out the desired strategies and achieving prioritised objectives.
Source: Adapted from California State Department of Finance 13
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B EST P RACTICE
Communicate the strategy. Organisations need to translate the strategy into objectives and measures that will influence individual and team priorities. Three suggested mechanisms include:
Communication and education programmes: Educate the organisation on the components of the strategy and reinforce this with feedback on actual performance.
Goal-setting programmes: Translate the high-level strategic objectives into personal and team goals.
Reward system: Link the organisation’s incentive and reward systems to individual/team success in achieving the strategy.
Establish plans and targets; measure and reward performance. Middle management must translate strategic initiatives into smaller, digestible action plans and goals at the team and individual levels.
Develop a plan that defines how financial, human and other resources must be spent, to close the gap between the current performance and the targets to be achieved.
Organisations should continually test their strategies and how they are being implemented. This should involve the formulation of specific short-term targets, or milestones.
Maintain strategic flexibility. Strategies cannot be linear or stable:
Strategies are incremental and emerge over time.
Intended strategies can be superseded.
Strategy formulation and implementation are intertwined.
Strategic ideas can arise throughout the organisation.
An effective strategic learning process needs to be developed to maintain strategic flexibility. This can involve:
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A strategic framework that allows each participant to see how their activities contribute to the overall strategy.
Feedback that collects performance data about the strategy.
A team problem-solving process that analyses the performance data and adapts the strategy to emerging conditions.
Source: Adapted from Hong Kong Institute of Directors14
Strategic Planning
Inadequacies
The Audit conducted a review of a group of subvented organisations providing public services of a similar nature. One of them had prepared a vision statement but had no formal strategic plan for realising that vision. Some of the other subvented organisations had prepared strategic plans but did not have operational plans to implement the strategic plans, nor provided regular updates to report progress to their boards or public.
Audit recommended that the subvented organisations should – Expedite action to prepare strategic plans to set out strategic objectives, operational goals and strategic actions for achieving the goals; annual operational plans to set out clear targets and annual progress reports to present the extent of achieving those targets; and
Publish those plans and reports on their websites.
Improvements made
The subvented organisation that did not have a formal strategic plan developed one, uploaded it onto its website and undertook to update it regularly. Those that had only prepared strategic plans also developed operational plans and compiled progress reports, and uploaded them to their websites to facilitate monitoring of performance.