Organizational Culture and Strategic Planning Tools

One application of the sociology of organizations is strategic planning.

Strategic planning is a process of envisioning the future and developing an integrated set of priorities and procedures to achieve that future. The outcome is a thoughtful, imaginative answer to the basic question: “What should our business be?” Strategic planning has a tangible output: a planning document–The Strategic Plan. It’s pretty easy to judge the quality of the plan.  It has to answer certain questions, focus and organize the resources of the organization and provide a basis for accountability (strategic management).

OVERVIEW OF STRATEGIC PLANNING

Management has no choice but to anticipate the future, to attempt to mold it, and to balance short-range and long-range goals. It is not given to mortals to do well any of these things. Peter F. Drucker

Strategic planning is a process of envisioning the future and developing an integrated set of priorities and procedures to achieve that future.  The outcome is a thoughtful, imaginative answer to the basic question: “What should our business be?”

The Process of Strategic Planning

Strategic planning has a tangible output: a planning document–The Strategic Plan. It’s pretty easy to judge the quality of the plan.  It has to answer certain questions, focus and organize the resources of the organization and provide a basis for accountability (strategic management).

Of crucial importance to the production of the Plan is the process that people go through to produce it.

The three key characteristics of a strategic planning process are vision, learning, and action.
1. Vision. A meaningful strategic planning process should generate new ideas, new opportunities, new possibilities for what the organization can be and do. Vision should flow both from the top down and the bottom up. In fact, a visionary dialogue between top and bottom is likely to produce the most useful and feasible results. Vision is a source of energy and commitment.

2. Learning. Everyone in the organization should learn as much as possible from customers, suppliers, other key stakeholders and from people within the organization. The strategic planning process must be open, with no secrets. Input must not be confidential but it can be anonymous. Details are very important and must be gathered, recorded and reported. “The real purpose of effective planning is not to make plans but to change…the mental models…that decision makers carry in their heads.” Arie de Geus.
There’s an axiom that people support that which they create. Participation does generate commitment. I think the process must reinforce for the participants that they are important as individuals, that each person has a personal vision, and that they are important as a team, that together we can accomplish things we could not accomplish individually. “Strategies take on value only as committed people infuse them with energy.”  Henry Mintzberg, HBR, 1994.

3. Action. Vision and learning must be translated into real action, into change, into services and programs with the required resources to deliver   customer satisfaction. People may have to change what they are doing and how they are doing it.

The process usually consists of the following tasks:
1. Identify and make explicit the organization’s mission.
2. Decide how far into the future you wish to plan.
3. Determine the outside forces or changes that may significantly affect the organization.  Collect relevant data about these changes.
4. Appraise the organization’s strengths and weaknesses, including its ability to manage change.  Collect relevant data.
5. Identify major strategic opportunities and threats.
6. List key factors that will make-or-break the organization.
7. Develop various options to meet these opportunities and threats.  Foreseeing the organization meeting various combinations of threats and opportunities in the future is scenario building.  In the case of long-range, very complex, or far-reaching change, it can be useful to build scenarios in which you may operate.
8. Evaluate options and select the one that best balances the organization’s potential with the challenges of changing conditions, while taking its values into account.
9. Gain acceptance of the strategy with significant stakeholders.
10. Prepare long-range and short-range plans to support and carry out the strategy.
11. Implement and evaluate the strategy and plans.

Strategic plans usually contain several basic elements:
• Organizational mission;

• Strategic analysis;

• Strategy statement;

• Long-term objectives;

•Integrated programs;

• Financial projections;

• An executive summary.

Sometimes the long-term objectives, financial projections and integrated programs are included in sub-unit level long-range plans.  The organization’s strategic planning document may then consist of the mission statement, future directions (usually in the form of strategic goals), summary of strategic issues, and the executive summary.  A companion document, the strategic analysis consists of a fairly detailed SWOT analysis or scenario descriptions, and more on the critical issues that affect the organization.

Initial working sessions address each of these questions.  After discussion, clarification and consensus-building, the responses are used to formulate a mission statement and to identify questions that require further analysis and broader participation.

Detailed Planning Process

I. ASSESSMENT

A. ASSESS EXTERNAL ENVIRONMENT

1. Who are our principal customers, clients and users?

2. What are our principal market segments, present and in the future?

3. What are our principle outlets and distribution channels, present and in the future?

4. What are our principle economic concerns and how are they measured?

B. ASSESS INTERNAL ENVIRONMENT

Appraise the organization’s strengths and weaknesses, including its ability to manage change.  Identify major strategic opportunities and threats/constraints, including key factors that will make-or-break the organization.
1. Why do we exist as an organization – what is our basic purpose?

2. What is unique and distinctive about our organization?

3. What are our principal products, services and functions at present and in the future?

4. What is different about our business from what it was between three and five  years ago?

5. What is likely to be different about our business three to five years in the future?

6. What philosophical issues are important to our organization’s future?

C. BUILD SCENARIOS AND ANALYZE STRATEGIES

Foreseeing the organization meeting various combinations of threats and opportunities in the future is scenario building.  In the case of long-range, very complex, or far-reaching change, it can be useful to build scenarios in which you may operate.
Evaluate options and select the one that best balances the organization’s potential with the challenges of changing conditions, while taking its values into account.

II. CREATE MISSION STATEMENTIn a sentence or two, say what the organization is.  Write 3 to 5 statements about what the organization will do and for whom.

III. SET ORGANIZATIONAL GOALS

IV. SET OBJECTIVES

SMART Goals and Objectives
Specific
Measurable
Agreed upon
Realistic
Time-framed

V. PROGRAM DEVELOPMENT

VI. RESOURCE REQUIREMENTS

VII. IMPLEMENTATION

VIII. EVALUATION

 

Defining the Mission Statement
The mission statement clearly charts the future direction of the organization and establishes a basis for the on-going organizational decision making.  Effective mission statements answer three questions:
1. What function does the organization perform?2. For whom does the organization perform this function?3. How does the organization go about filling this function?
1. What function does the organization perform?  This is a clear statement about what “business” the organization is in.  An organization should define its mission in terms of the customer or client needs that the organization is attempting to meet.  Ideally this client-oriented mission statement should be future oriented, and not just related to the historical or current activities of the organization.  The major issue to be decided in the mission formulation is how broadly or narrowly to answer this “what” question.
2. For whom does the organization perform this function?  Who are our customers or clients?  An effective mission statement will clearly identify the segment of the population/market the organization seeks to target.
3. How does the organization go about filling this function?  The answer involves specific strategies that the organization will attempt in order to achieve the desired targets.  An effective mission statement should provide guidance as to how resources will be allocated to the different demands within the organization.

Example 1.
The mission of the South Carolina Tax Commission is to administer the South Carolina tax laws and to collect taxes due the state in a manner that insures public confidence in our integrity, effectiveness and fairness.  The following methods will be used to insure that our mission is accomplished:
• Achieve the highest possible degree of voluntary compliance;

• Recruit, develop and retain a competent staff;

• Assist and advise local government and increase taxpayer awareness and knowledge;

• Maintain a timely and effective information system utilizing state-of-the-art technology;

• Increase effective use of audit and enforcement techniques.

Example 2.
The mission of the South Carolina Department of Health and Environmental Control is to protect the public’s health and environment.  As the principle advisor to the state on public health, the Department has the responsibility and the authority to prevent, abate and control pollution and health problems.

In support of this mission, the Department serves the state’s clients by:
• Protecting and promoting health and environmental quality through prevention, education, advocacy, regulation and services;

• Assuring the provision of health care services to the public by promoting the participation of private sector providers and by delivering services directly;

• Developing state policies for health and environmental protection;

• Monitoring the public health and environmental status of the state;

• Expanding knowledge through epidemiology and applied research on health and environmental issues;

The Department’s programs and services are targeted to the general public, the regulated community and specific groups according to health needs, age and economic status.  The Department provides health and environment services through its state, district and county offices.

Strategic Planning And Performance Measurement Definitions

Mission–A statement of what the organization does, why they do it, and for whom they do it, their reason for existence.

Vision–A statement of the organization we aspire to become.

Values–The beliefs we hold to be important for the conduct of the organization as we carry out our mission.

Goals–The general ends towards which the organization directs its efforts.

Objectives–The clear targets for specific action that quantify progress toward meeting a particular goal.

Programs or Strategies–The methods by which the organization seeks to accomplish its goals and objectives.

Outputs–The goods and services produced by an organization.

Output Measures–The tools, or indicators, to count the goods and services provided by the organization, especially the quantity of services that meet a certain quality requirement.

Outcomes–The quantified results, or impacts, of organizational action.  Outcomes are the effects–both intended and unintended–of the organization’s outputs on a particular population or problem area.

Outcome Measures–The tools, or indicators, to assess the actual impact of the organization’s actions, especially measuring how the public is benefited.  An outcome measure is a means for quantified comparison between the actual result and the intended result.