Dear Participant,

With current economic challenges and instabilities, long-term business sustainability and the greatest competitive edge will only be experienced by those organizations that not only offer superior products and services to their customers or clients, but that also take a strategic approach to managing every facet of their business operations.

Being able to apply critical strategic and systems thinking on a daily basis, and acquiring the knowledge, skills and attitudes necessary to successfully lead the organization strategically, is of vital importance to every organization’s senior management team and future leaders.

As a strategic leader in your organization, your thinking, the decisions you make today, and the plans you put in place for the future will ultimately determine the strategic success or failure of your organization.

This Systems Thinking Approach to Strategic Planning program is designed to help you acquire the invaluable practical skills of Strategic Planning, that will enable you to be an outstanding strategic leader in your organization. 

Welcome, and enjoy the journey.

Warmest greetings, from your instructor and coach for this program

Stephen Lin

Introduction to the Course (Video)

About Strategic Planning (Article)

Strategy vs. Strategic Planning

Strategic planning in an organization is vital to build and expand the organization to new heights. For strategic planning to be carried out effectively in the organization, competency in strategic planning needs to be acquired on many levels; at the corporate leadership and senior management level, the business unit, and key functional areas level, at the sub-unit levels, and at the strategic planning internal consultant level to guide and facilitate the rest of the organization through the process. While the depth of planning may be different at the various levels, they need to follow a common process so that strategic planning gets cascaded and aligned throughout the organization.

To begin, however, we need to understand that “Strategy” and “Strategic Planning” are two very different terms and should be well defined for every strategic planning department and senior management team. Everyone concerned needs to be clear on their roles in strategy and strategic planning; therefore they should understand how each fits with the other. Once this is accomplished, senior management, as well as all subordinates within the organization, will be on the same page and working together towards the same goals, engineering success on all fronts.

Strategy, in the corporate world, is often used to define the long-term plan of action, which when put into effect, achieves a goal, set of goals, or objectives for the company or business. It is the game plan with which the company will increase its performance as an organization, particularly in relation to its competitors.

Strategic planning is about taking the devised strategy for the organization, developing the concepts, laying them out in an organized fashion (in a strategic plan), and then successfully implementing each step of the plan to reach the goals and objectives outlined.

The definition of “strategy” is often vague and confusing. Different management consultants and the media use different definitions and ideologies for this important concept. However, if in a discussion, you can always ask for clarification of what the person means when using the term.

Your Organization’s Mission as Relates to Strategy And Strategic Planning

The desired outcome of strategic planning is your organization’s mission and vision coming to fruition. The strategies (different from Strategy) you use in putting together your strategic plan are the primary means to achieve your “ideal future vision.” Basically, these strategies are the “how-to” in accomplishing your future goals and objectives. They are the coherent, unifying, integrating, and organizing business glue that holds an organization together.

When you conceive of your organization’s mission, you are conceiving of an outcome. You can also term this “vision,” “results,” or “ends.” So strategies are the major methods, means, or approaches that bridge the gap from where you sit today in your company or enterprise to the point you can say you have now accomplished your mission, reached your ideal future vision.

To define or identify your desired outcomes and strategies, you use the process of strategic planning. Since the time of Alfred Sloan and the beginning of General Motors, the old axiom has been: “Mission leads to strategies leads to structure.” This axiom still remains the same today— only the terminology has changed.

Where is Your Organization Heading?

In the important process of strategic planning, the first step in any size organization will be to determine your overall ideal future vision. As you begin your planning, you will work out the direction your organization is headed, the path to get there, and measurable signs indicating that you have or have not arrived.

While many strategic thinkers may already have an idea of what will go into their official strategic plan, developing your specific plan helps to clarify the organization’s goals and ensures that all key senior and collective management are on the same page. The plan should reflect the consensus and understanding of senior and collective management, or it will not be successfully implemented.

So...How Do You Really Do This?

Trying to come up with one cohesive set of strategies you can use for your particular business, however, is daunting. What are the best strategies? How can you tailor a generalized strategy to your particular organizational environment? Are there management and strategic gurus who offer the best proposition for producing sustained business excellence and superior results?

No individual can really tell you how to come up with your own vision and the mission for your unit or organization. This is for you to work out – a vision that best fits with what you want to accomplish in your particular sphere.

If you consider that the main purpose of strategic planning is to gain an edge in the marketplace, this can assist you in coming up with your own effective plan. What distinguishes strategic planning from other kinds of planning, is that it gives you a competitive advantage, or higher positioning in the marketplace.

Strategic planning is also about helping you meet your customers’ needs as well as remaining relevant to society or your community in the changing external environment – as in the case of social services and some government services.

For example, Whole Foods Market is a dynamic leader in the quality food business. They do not have a myopic focus on the bottom line or share price but are committed to a vision that emphasizes more far-reaching aspirations. Their motto — Whole Foods, Whole People, Whole Planet — emphasizes their vision. They actually want to change the part of the world in which they operate. Even though they don't obsess over the bottom line, their earnings growth rate is triple that of others in the industry in which they operate.

Another example is Costco, the seventh-largest retailer in the world, with its membership warehouse club chain. The Chief Financial Officer Richard Galanti explained, “From day one, we've run the company with the philosophy that if we pay better than average, provide a salary people can live on, have a positive environment and good benefits, we’ll be able to hire better people, they'll stay longer and be more efficient.” This strategy has panned out in that Costco’s rate of turnover is one-third the industry average. A study run also confirmed that Costco’s well-compensated employees are more productive.

Let’s Break it Down Further

Strategies can also be thought of as:

• The criteria or basic approaches we use to guide individual team and organizational behaviors toward the achievement of our organization’s vision.
• The collective set of keyways, methods, and groups of activities we use to guide us in “bridging the gap” over the life of a strategic plan – getting from the current state of your organization to its ideal future vision.
• The “how-to’s” or major methods we will use to get there – to the attainment of our vision and organization’s mission.

It is important to note that strategies should be few in number, generally two to seven maximally. These could be called and should be your core strategies.

There are two types of strategies to achieve your competitive advantage:

1. Deliberate strategies: The proactive allocation of resources to achieve specific business goals or outcomes. These strategies are created in response to anticipated trends or changes in the market environment – ones that can be predicted early enough for creating an effective strategy.
2. Emergent strategies: Actions taken in response to changes in the market environment and within the business. These actions are ad-hoc as opposed to deliberately planned. The market environment may have experienced changes that were not predicted in earlier trends. Strategies, therefore, need to emerge to deal with them rather than wait for the planning cycle.

Both deliberate and emergent streams of strategies are continually at work, both at the organizational and at the business unit level. However, here we cover only strategic planning with deliberate strategies. Dealing with emergent strategies requires the application of complex adaptive organizational theory beyond the subject matter of this book.

Deliberate strategies can be broken down into two kinds:

1. External strategies dealing with the marketplace vs. competition (customers and products)
2. Internal strategies dealing with organizational culture, competencies, capacity, infrastructure, etc.

These strategies (and all related tactics or actions implementing them) must be living, breathing, and changing – as necessary.

Now we look at the four levels of strategies:

1. Corporate strategies – Here, you are looking organization-wide, defining what business you are in. It also includes portfolio management (buying and selling assets) and restructuring assets.
2. Strategic Business Unit (SBU) strategies or competitive strategies – Here, you address your competitive advantage. The following are all taken into consideration:
3. Market
4. Product
5. Financial
6. Employee
7. Manufacturing
8. Miscellaneous
9. Functional strategies – Here, you are learning to be efficient within all departments and staff units. It includes all functions, tactical planning and operational planning.
10. Strategic Management – This is where you develop and make strategies that work, covering strategic planning, operations planning, implementation, and change. The things that come into play here are leadership, persistence, details, fit, design, and energizing forces.

Based on these four levels, you are looking at this final breakdown:

Strategic Planning Levels

1. Organization-wide strategic planning: You need an organization-wide, 3-, 5-, or 10-year strategic plan, defining the organization’s vision, mission, core values, and key success factors, along with the core strategies for achieving them.
2. Business Unit strategic planning: This is often called a 3-year business plan. You need 3-year business plans for each Business Unit, Major Program Area (MPA in government), and Key Functional Area within the organization.

Annual Plans, Goals, and Objectives

1. Annual plans for all departments, functional, and line units: annual action plans over the next 12 months are needed (and budgets, too) for all parts of the organization.
2. Individual plans, tasks, and objectives: Individual plans are needed to show how each employee intends to accomplish and the goals they must meet in order to carry out the organization-wide strategic plan. You also need to revise your performance appraisals, basing them on core strategies (results) and core values (behaviors).

Summing Up

Strategies are much more than just a concept. Strategies are a way to think and plan strategically. The more you learn about the field of strategy, the more you begin to understand what strategies are viable, why you must formulate them, and how to implement them. You must go into this activity with a full range of knowledge of strategic concepts. You are about to become a strategic thinker!