Applied strategic planning is making strategy in a way that improves the chances of sound execution.
Often there can be a loss of momentum towards the end of the strategic planning process. The plans are in effect ‘thrown over the wall’ to the middle management teams to implement. Because these managers have often not been engaged in the planning process, they find it hard to commit to the plans dropped out of the ivory tower, from on high.
This lack of engagement of those responsible for plan implementation violates the first of the five essentials of any applied form of strategic planning.
Any system of planning should use formal, clearly documented and communicated, simple steps for these five essential components of strategic planning.
Pick the right people at the beginning. Engage other appropriate people though other stages of the process. This improves the quality of information and insight brought into the planning process.
In practical strategic planning, this engagement of the affected people through stages of the process also builds the necessary understanding, and commitment required, to execute the strategic decisions.
Include those you need to rely on to manage the carrying out of the strategic decisions.
An organization can find itself with a strategy that is good in theory, and of little value in practice, through over reliance on external consultants.
Strategic planning is a process that uses available and relevant information on the organization, and its environment. The executives of the entity doing the planning need to own the process. . However, they are more often useful as facilitators of a process owned by the organization’s own managers.
External consultants can help in understanding what is happening across a number of enterprises.
In surveys conducted by Bain and Company over a few years, strategic planning comes out at or near the top of all management tools studied. The performance of organizations does seem to benefit by the use of a formal set of procedures for deciding the top few decisions about the future of the organization. See Importance of Strategic Planning for more on this.
Despite its usefulness, McKinsey & Co. studies in 2006 suggested that less than half of the top executives polled were happy with the strategic planning processes of their own organizations.
Another disturbing finding was that, although three-quarters of these executives indicated that their organizations engaged in strategic planning, less than a quarter of these executives reported that their organizations used the results of the planning process in making important organizational decisions. It appears that in some enterprises planning is more theoretical than practical.
When asked about how things might be improved, the executives argued for improved alignment of the enterprise with its corporate strategy, and the development of better methods for monitoring the results from executing the strategic plan.
The same McKinsey studies show that only about half of the top managers surveyed believed their strategic plans were evidence-based. In other words, they acknowledged that their strategic plans did not focus on the most important strategic issues facing the organization. Moreover, the plans lacked an agreed understanding of the forces at work in the external environment faced by the organization.
Too many plans are dreaming. Others follow some fashionable trends in strategy. Vague aspiration is no substitute for systematic practical strategic planning.
Finally, these executives raised concerns about how their organizations communicated their strategies to those who had to carry out the plans.
The above findings suggest many organizations do not practice applied strategic planning. For many, strategic planning is a low value pursuit.
One approach, which addresses these concerns, is actually Applied Strategic Planning!
This model of strategic planning by Goodstein, Nolan, and Pfeiffer (GNP Applied Strategic Planning), combines the process of managing strategy execution with strategy making.
The GNP model of Applied Strategic Planning requires that the enterprise formulates a strategic plan, and at the same time engineers a strategic management process, one that ensures that efficient and effective execution.
Here is an outline of steps in the GNP Applied Strategic Planning model.
Return from here to Definition of Strategic Planning.
Return from Applied Strategic Planning to Simply Strategic Planning Home Page.
Sign up for our Newsletter -
StratXtra provides updates on what is happening here at the website, and comment on current issues in strategic planning.