In today's highly competitive business environment, budget-oriented planning or forecast-based planning methods are insufficient for a corporation to survive and prosper. Businesses must engage in strategic planning that clearly defines objectives and assesses both the internal and external state of the client entity to formulate strategy, implement the strategy, evaluate the progress, and make adjustments as necessary to stay on track. Draper & Associates five-step approach to assisting clients with their strategic planning needs entails establishing, and implementation of, strategies that will effectively meet the client's goals, and completing an evaluation of the process.
A simplified view of the strategic planning process is as follows:
I. Mission/Goals and Objectives
Draper begins the strategic planning approach with the development of the mission/goals and objectives. The mission statement describes the client's business vision, including the unchanging values and purpose of the firm and forward-looking visionary goals that guide the pursuit of future opportunities.
Guided by this business vision, Draper then assists its client's in defining measurable financial and strategic objectives. Financial objectives involve measures such as sales targets and earnings growth. Strategic objectives relate to the firm's business position, and may include measures such as market share and reputation.
II. Environmental Review
Draper's approach to the environmental review includes the following components:
- Internal analysis of the client
- Analysis of the client's industry (task environment)
- External analysis
The internal analysis can identify the firm's strengths and weaknesses and the external analysis reveals opportunities and threats. A profile of the strengths, weaknesses, opportunities, and threats is generated by means of a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats).
An industry analysis can be performed using a framework that evaluates such things as market and product barriers, staffing, customers, product, and industry competition.
III. Strategy Formulation
With the information obtained in the environmental review, Draper then assists the client in matching its strengths to the opportunities and goals that it has identified as wanting to achieve, while addressing its weaknesses and external threats.
To assist the client in attaining its goals, Draper seeks to help the client in formulating strategic methods that are based on a competitive advantage via cost or differentiation.
IV. Strategy Implementation
Draper then assists the client in implementing the selected strategies by means of programs, budgets, and procedures. Implementation involves organization of the firm's resources and motivation of the staff to achieve objectives.
The way in which the strategy is implemented can have a significant impact on whether it will be successful. For most organizations, those who implement the strategy likely will be different people from those who formulated it. For this reason, care must be taken to communicate the strategy and the reasoning behind it. Otherwise, the implementation might not succeed if the strategy is misunderstood or if staff resists its implementation because they do not understand why the particular strategy was selected. Draper takes great care in coordinating group facilitation that communicates not only the goals of the client, but the strategies for achieving those goals and the implementation process necessary to bring the goals to fruition. Each stakeholder in the process receives a thorough review of the processes need to take place to eliminate miscommunications or misunderstanding regarding client strategies.
V. Evaluation & Control
One of the most important aspects of a strategic plan is the evaluation of the implementation of the strategic goals. All strategic processes must be monitored and adjustments made as needed.
Evaluation and control consists of the following steps:
- Define parameters to be measured
- Define target values for those parameters
- Perform measurements
- Compare measured results to the pre-defined standard
- Make necessary changes