the benefits of strategic planning

The benefits of 5 year strategicplanning to non-financial managers

versus their time andeffort that this requires.

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Content of the presentation

1.Definition -what is strategic planning

2.The benefits of strategic planning3.Time & effort required4.Feedback5.Improving the process6.Conclusion

What is strategic planning?

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The benefits of strategic planning

• Purpose of the organisation more clearly defined

• Improved Communication of goals & objectives to stakeholders

• Greater ownership, commitment & retention among employees

• Resource utilisation is improved• A baseline from which progress can be

measured

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Benefits of strategic planning (1)

Measureable output:• Actions and goals to be achieved• Resources needed to achieve goals• Funding needed to obtain resources• Links to budget & financial/operating targets

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Benefits of strategic planning (2)

• Environment. Improved understanding of the competitive, legal, political etc. environment

• Awareness. Greater awareness of strengths & weaknesses – capabilities and obstacles to exploit opportunities, react to threats

• Stimulates change – better prepared for the future• A more proactive business• Survival of the organisation. • Happier stakeholders & superior performance• Failing to plan is planning to fail

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Benefits of strategic planning (3)

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The time & effort required

Time & effort required (1)

• Significant. 1 month+.. /people/depth• Greater effort for the first time• Time and effort depends on frequency, which

is greater where products, services & environment are changing rapidly

• Process repeated every 18-36 mo (‘a cycle’)• Implementation is key / quarterly review

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Time & effort required (2)

• The planning process can become long, drawn out & frustrating

• Interference with day to day operations• Rigid & routine? Need for a true debate about

where the organisation should be heading• Good input = better quality output/results

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User feedback

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Feedback

• Mckinsey survey: X Only 45% satisfied with the process;However the process sets operational &

financial targets & identifies priorities for the management team

Can the process be improved? Probably

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Suggestions to improve the strategic planning process

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Improving the strategic planning process

Management: • Make better use of time – advance availability

of important financial & operational info’• Team mix: knowledgeable, with skill set• Traffic coding /rotation system to ID those

units to undergo full planning process• Honest, open discussion of difficult issues

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Improving the strategic planning process

Measurement:• Track strategic decisions not only by financial

targets (lagging indicator), but KPIs – eg. new product revenue, retention rates

• Compensation linked to progress of new initiatives – motivates and will identify any problems early on.

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Conclusion

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Conclusion• Failing to plan is planning to fail• Results in a clearer message, a sense of purpose &

future direction• Better use of resourcesFor better return on time & effort:• Discuss difficult issues, sacred cows• Measurement of decisions & outputs• integrate strategic planning process with HR

processes – evaluation & compensation

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