Sunday, May 5, 2013

Can Strategic Planning be Standardized across Industries?

 The strategy is not about solving a single problem, but rather a concerted solution to a multi-faceted strategic set of problems.

Some strategy consultants think 80% of all strategic planning processes are similar - Across industries! However, reinventing the wheel seems to be a common practice among sectors. Can strategic planning be standardized across industries? Shall we develop a set of common practice in developing strategic planning, if so, what’s the benefit; if not, why so?

1. Common Core Elements of Strategic Planning across all Businesses

No matter what industry companies are in, the strategic planning processes tend to look very much the same, even to a point where they could be standardized. All businesses need to observe and analyze their competitors, their market environments, and trends that may affect their performance. They need to develop strategic objectives, derive and implement effective measures, and review the implementation process using common performance measurement tools, such as the balanced scorecard.

  • Possibilities for having a simple common agenda as a basis for strategy formulation should not cause big problems. There are some core elements of the strategic planning process that appear to be common across all businesses. The outputs as one has eloquently put does become a communication tool for the leader to convey the direction of the organization or company so the stakeholders have an understanding of where the company intends to head in the future. 
  • A basic procedure for the formulation of Strategy may look something like this                        (This Agenda aim to be a logical approach to a process ensuring work is not getting sidetracked so waste of time and effort is avoided).
1) Start by defining Mission, Vision and Values – especially "Basic Beliefs”,  that have a direct influence on the choice of strategy.
              2) Choice of Driving Force: Market Needs, Products offered or a given capability ...Where the organization belongs in these two dimensions of environment: Simple & Complex; Dynamic vs. Stable, Futuristic vs. Historical, Creative vs. Systematic,
(3) Select Product respective Service/Market Mix in the light of Opportunities and Threads via SWOT analysis
            (4) Identify requirements to Key Capabilities seen in relation to the actual situation and Strengths and Weaknesses.
(5) Define some Goals coherent categories
(6) Break down Goals to operational Objectives
(7) Make Strategic Action plans and Budgets within a given time frame.
(These must be seen as  iterative processes –depending on the circumstances, there could be a return to earlier points in the agenda.)

  • "Simplexity" of strategic planning.  Keep it simple to adapt to complex business dynamic. Strategic planning is perhaps one of the last processes which are not guided by methods or software. Things may change. There are strategic planning process models in use which are the foundation of strategic analysis, choice and implementation for all businesses. There are standards, it is important to have reliable, consistent and well-structured strategic information. However,  the discussions, arguments, analysis and choices which these models help to develop are by no means standard nor could they be subject to standardization. Finally, it’s also about data structure - even in the strategic planning process. Based on the data/information,  you can create individual presentations, special reports, and documentations. 

2. The Uniqueness of Each Strategy

Though there’re quite a few common elements in strategic planning, Strategic Planning is a good place to start with respect to creating a universally accepted framework for strategic thinking and planning. What makes each situation unique is the lens that the players bring into the planning process, and how you use that to facilitate the process itself and the outputs and, of course, we can never get away from tailoring solutions to different companies.

1)  The strategy is not about solving a single problem, but rather a concerted solution to a multi-faceted strategic set of problems - a solution that results in formulated strategy and approach for the long-term action plan. The strategic planning is a problem-solving process, but setting strategy and vision is a leadership and communication problem. The strategy is produced by people. Therefore, it MUST be comprehensive. The strategy has never ever been produced by analysis only, but by people ! The analysis is an INPUT into synthesis. Tools should help teams to guide their thinking along frameworks to provide answers. Before using any tool, the question to be answered should be relevant, worthwhile to answer and clear to all. Therefore, realized activities within the frame of the agenda, as well as the results of these activities presumably, are very different from one organization to another. Due to different organizational and environmental conditions from organization to organization, the strategy comes to different focus as no surprise.

2)  Strategy development and delivery process as iterative and diagnostic: From that perspective,  you could say that 80% of the steps are similar but the DNA of organizations and markets are so variable that there is a strong element of qualitative "art" along with the science piece. This includes the "art" of bringing the team along to support and execute as well as the "art" of understanding the internal and external environments as they continue to evolve. A good strategic plan is paradoxically stable and adaptive.

3)  It is important to think about the flexibility in designing these standard procedures and to offer the user the possibility to customize the content & context for its own purpose. Many will enjoy having a simple tool to pull down basic SWOT statements, that everyone in a particular industry is facing, and then you need to adapt it to your own specific position in the market. It is in the nuance of these discussions that you can help to crystallize a strategy that addresses both the common things that anyone in the industry must do to thrive in the future and what is uniquely different about what you intend to do to differentiate yourself from your competitors.

4)  The process is universal, but the tools and techniques can be picked from a 'menu' to suit the market/situation. And the choice of tools and techniques to develop them is totally dependent on the industry, environment and rate of change required by the organization. If businesses were offered a standardized set of tools, they could choose the ones which best fit their needs, bring them in an individual order, and link them together. In this way, they could quickly establish a process structure which then only needs to be filled with—of course, individual—content. The most noticeable variable across industries is the pace at which the process is applied; the selection of the right techniques depends on the maturity phase of business, the culture styles and the identity of the company. It would be really great to create a fit between the state of the firm and its environment with the appropriate toolkit. Analysis, synthesis, opportunities, objectives, strategies tactics and measures follow from that. 

5)  Every Business is unique, thus, every strategy is unique: There are quite a few things can be standardized at certain level such as, the criteria of good strategy, the resource/tools being used to make good strategy, leadership/talent team who co-develop strategy, as well the process to bridge strategy planning and execution, and standardization avoids to reinvent wheel. However, every business is at a different position of the business cycle, and execution is part of the good strategy. Of course, the strategy is not just about the wheel, it's also a GPS to lead the entire enterprise vehicle towards the right destination. 

6)  Every business is better suited to a specific Planning Model. The most common approach is STP (Situation-Target-Proposal), but there is also the Draw-See-Think-Plan approach.  The Business Strategy Tools are coupled according to selected Planning Model. Rather than focusing on Stages and Tools in Planning Model, Stakeholders are truly interested in a major change in Business Performance in the short, medium and long term. Further, all industries have more or less their own distinctive business cycles. It follows that strategies always have to be flexible and fleet-footed as the business environment undergoes a major change. The strategy has to necessarily be tinkered with - to ensure that business goals are met.

7)  The Success of a Strategy is not the Method, it is Execution. Understanding competitive forces and its root cause is required for effective strategy, along with the understanding of the structure of industries. So main templates may be the same across the industry but rest will vary. It is more about looking at your strength and core and then formulate a pro-active strategy.,. Every strategy making process will come to the point where resources need to be committed to implementation.

Therefore, a strategic planning process has to be stable and can be standardized with a well-known set of specific strategic planning topics like competitive environment, SWOT, trend analysis, goals and measures, market evaluation. However, a strategic planning process needs to be adaptive because an organization has to think about non-standard topics like possible game changes in its business model and its unique circumstances. And, it is important to think about the inter-relation between stableness and adaptation, standard and creativity, sequence and iteration; and importantly, the success of the strategy is people and execution.


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