Business Journal Op-Ed

Strategic Planning

For business and nonprofit organizations, a strategic plan can offer hope and new beginnings.  What is strategic planning?  According to J.M. Bryson in Strategic Planning for Public and Nonprofit Organizations, it is a “disciplined effort to produce fundamental decisions and actions that shape and guide what an organization is, what it does, and why it does it.” The plan contains a mission, core values, goals and objectives, the programs and policies needed to attain them and assignment of responsibilities for implementation.

The purpose of a strategic plan is to respond effectively to an array of environmental forces, challenges and opportunities.  It involves a series of complex choices about where the organization should be headed out of an almost limitless number of possibilities. Winston Churchill reminded us that “large views always triumph over small ideas.”

A strategic plan is also an articulation of core values and basic directions tethered to reality by action steps and financing.  It is a means of setting priorities.  It aims to achieve a sustainable competitive advantage over rivals by highlighting the organization’s special strengths.

Harvard Business School Professor Michael Porter defines competitive advantage as being able to utilize the organization’s distinctive competencies to create superior value for its customers.  This value is produced by delivering either the same product at lower cost (cost advantage) or a better product at the same cost (differentiation advantage).

Guilford College recently launched a strategic plan for 2005-10: Creative Leadership for the 21st Century.  Over the course of two years the plan was crafted in a very participative process involving all of the college’s constituents.  Students worked alongside faculty and alumni in determining both the ends of the plan and the means chosen to attain them.  What lessons did we learn that might be useful to others contemplating a strategic plan?

Allow “blue sky” thinking initially.   Do not constrain grand aspirations and bold ideas too early in the process.  Allow folks to let their creativity run wild with the understanding that financial and management realities will be imposed later on.

Encourage broad participation.  Besides improving understanding of the plan and buy-in, allowing employees at all levels and stakeholders to participate in planning makes the plan more relevant.

Immerse planning in data.    Planning can be sidetracked by conventional wisdom and myths unless the planners base their strategic choices on historical, projected, and comparative data about the organization and its environment.  Let’s not waste time arguing about the facts.

Do SMART planning.  Objectives should be specific, measurable, aggressive yet achievable, rational and relevant, and time bound.

Make choices and set priorities.  Planners are often tempted to try to fit everyone’s wish lists into the plan.  A successful plan is clear about what the organization has chosen to do, not to do and to stop doing. 

Show me the money.  By linking money to mission, the organization’s financial plan anticipates the costs of the strategic plan and is a major determinant of its feasibility.  The annual budget is a year of the multi-year plan that the institution periodically reconsiders and possibly revises.  It is amazing how many organizations err by publishing a strategic plan without showing how much it will cost or where to find the money to pay for it.

Assessment matters. Build specific methods and processes for assessing the plan at regular intervals, and possibly revising it. A good strategic plan is always a work in progress.

This opinion-editorial was originally published in the Business Journal of the Greater Triad Area in February 2005.