The article series began with recognition of the ongoing quest business executives endure trying to improve their company’s performance by laying out a better business plan and strategy. This segment is part five of an series that describes the components of a comprehensive business strategic plan and provides a checklist for evaluating strategic planning process effectiveness. Last Saturday’s post (part 4 of this article series) began a continued exploration of the layers of the strategic planning model ecosystem analysis. This model (shown again below for your convenience) was introduced several weeks ago and depicts a graphical representation of the key elements of strategic planning. In this week’s edition, we will continue examining those layers of the graphical model relating to the “business ecosystem”.
A Graphical Depiction of the Elements of Strategic Planning – Revisited
The graphic below (first introduced early in this article series) shows the inputs into a well-formed strategic planning process, in the context of the environmental and structural current state of the organization.
Those final to dimensions are:
- Socioeconomic Conditions
- Scenarios & Contingencies
In this instance, as it relates to strategic planning, socioeconomic conditions refers to the social impact of some sort of economic change on our customer base and how that may affect patterns of consumption and the distribution of incomes and wealth in terms of purchase decisions. The overall strength of the organization’s value proposition is critically important to sustain sales and market share in poor socioeconomic conditions and boost morale and confidence internally.
Scenarios & Contingencies
Scenario or contingency planning is an extremely important aspect of a strategic planning model. Contingency plans include specific strategies and actions to deal with particular variances to the strategic plan’s assumptions. If any of the scenarios or variances do occur, they will likely result in a problem affecting the execution of plan goals and their outcomes. A thorough contingency plan should be developed to correspond with each scenario that is considered likely or severe enough to be detrimental to the otherwise normal execution of the plan. Each contingency plan should include a monitoring process to alert executives of “triggers” for initiating planned contingency actions.
Moving On To The Next Part of the Model
As shown in the model graphic below, each of the dimensions just discussed:
- value creation
- value proposition,
- brand equity / sales and marketing,
- industry direction / momentum,
- market transitions,
- organizational competencies,
- employee competencies,
- socioeconomic conditions, and
- scenarios & contingencies
should be addressed in terms of the following:
Risk management refers to the identification of potential threats to an objective and the defined actions to mitigate those threats. In the context of strategic planning, the risks to be managed are the threats to the organization’s strategy being successfully accomplished.
Transform is a component of the model related to planning changes to business process, perhaps for the absorption of another entity or to reorganization. Strategic goals often require transformation; therefore this element of the planning process is an essential component and a prerequisite to the next major element, “Change & Communicate”.
Change & Communicate
Change management and communication sub-strategies are far too often underestimated in terms of their importance and impact to strategy implementation.
To effect change in the desired manner, one must understand some fundamentals of human behavior. This knowledge is imperative, at least at a high level, before delving into a large-scale change program.
Join again next week to continue the discussion.