the benefits of strategic planning
DESCRIPTION
The benefits of strategic planning v the time and effort required.TRANSCRIPT
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The benefits of 5 year strategicplanning to non-financial managers
versus their time andeffort that this requires.
John Mayfield 1
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John Mayfield 2
Content of the presentation
1.Definition -what is strategic planning
2.The benefits of strategic planning3.Time & effort required4.Feedback5.Improving the process6.Conclusion
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What is strategic planning?
John Mayfield 3
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The benefits of strategic planning
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• Purpose of the organisation more clearly defined
• Improved Communication of goals & objectives to stakeholders
• Greater ownership, commitment & retention among employees
• Resource utilisation is improved• A baseline from which progress can be
measured
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Benefits of strategic planning (1)
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Measureable output:• Actions and goals to be achieved• Resources needed to achieve goals• Funding needed to obtain resources• Links to budget & financial/operating targets
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Benefits of strategic planning (2)
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• Environment. Improved understanding of the competitive, legal, political etc. environment
• Awareness. Greater awareness of strengths & weaknesses – capabilities and obstacles to exploit opportunities, react to threats
• Stimulates change – better prepared for the future• A more proactive business• Survival of the organisation. • Happier stakeholders & superior performance• Failing to plan is planning to fail
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Benefits of strategic planning (3)
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The time & effort required
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Time & effort required (1)
• Significant. 1 month+.. /people/depth• Greater effort for the first time• Time and effort depends on frequency, which
is greater where products, services & environment are changing rapidly
• Process repeated every 18-36 mo (‘a cycle’)• Implementation is key / quarterly review
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Time & effort required (2)
• The planning process can become long, drawn out & frustrating
• Interference with day to day operations• Rigid & routine? Need for a true debate about
where the organisation should be heading• Good input = better quality output/results
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User feedback
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Feedback
• Mckinsey survey: X Only 45% satisfied with the process;However the process sets operational &
financial targets & identifies priorities for the management team
Can the process be improved? Probably
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Suggestions to improve the strategic planning process
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Improving the strategic planning process
Management: • Make better use of time – advance availability
of important financial & operational info’• Team mix: knowledgeable, with skill set• Traffic coding /rotation system to ID those
units to undergo full planning process• Honest, open discussion of difficult issues
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Improving the strategic planning process
Measurement:• Track strategic decisions not only by financial
targets (lagging indicator), but KPIs – eg. new product revenue, retention rates
• Compensation linked to progress of new initiatives – motivates and will identify any problems early on.
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Conclusion
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Conclusion• Failing to plan is planning to fail• Results in a clearer message, a sense of purpose &
future direction• Better use of resourcesFor better return on time & effort:• Discuss difficult issues, sacred cows• Measurement of decisions & outputs• integrate strategic planning process with HR
processes – evaluation & compensation
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