Tips for effective strategic planning

HR Magazine, August, 1994 by Christine D. Keen

Answers to some of the most commonly asked questions about this often complicated and intensive process.

Participating in the strategic planning process has become an increasingly important HR competency. Many human resource professionals are being asked, often for the first time, to participate in or even lead their organization's strategic planning efforts. Others are looking for ways to better integrate HR planning with their organization's strategic planning. Still others would like to do strategic planning for the HR department itself, but are unsure where to start.

WHAT IS STRATEGIC PLANNING AND WHY USE IT?

Strategic means working from a strategy: a plan of action designed to achieve a specific objective. Chess players, for example, employ strategies. They move their game pieces in such a way as to advance specific objectives, for example, capturing an opponent's rook or forcing an opponent into check. The individual moves (or tactics) are part of each player's broader game plan (or strategy) and reflect his or her indvidual values and priorities. For instance, is saving a knight worth sacrificing three pawns? Is it more important to capture a bishop or a rook?

To be successful, the players must continually be aware of not only their own strengths and vulnerabilities, but also those of their opponent. And, as the game unfolds, each player's strategies will change to capitalize on new opportunities or minimize potential threats. This example of a chess game highlights some of the key features of strategic planning:

* Strategies are not just a random series of events; they are a sequence of actions designed to achieve specific objectives.

* These objectives may be either short term or long term, but they are critical to long-term success.

* The development of a given strategy reflects the strategist's personal values and priorities.

* Effective execution of a given strategy requires an understanding of both internal strengths and weaknesses as well as external threats and opportunities.

* Strategic planning is a dynamic process and requires regular reality checks.

Strategic planning, then, is the process for articulating an organization's values and long-range goals and developing the strategies necessary to achieve those goals. Put another way, strategic planning is the organization's route from "is" to "should be." Consequently, the primary objectives of strategic planning are to assess what is, decide what should be, and develop a series of strategies for advancing the organization from is to should be. Advancing the organization from is to should be will help the organization capitalize on change.

COMPONENTS OF STRATEGIC PLANNING

Many of the benefits of strategic planning stem from the process of planning, rather than from the plan itself. For this reason, skillful execution of the planning process is critical. A mismanaged strategic planning process creates two things: cynicism about strategic planning and plans that sit in binders on shelves collecting dust.

We use planning all the time, whether we realize it or not. Every time we come up with a "to do" list, for example, we are assessing what is, identifying what should be, and deciding what we need to do to get from here to there. The same basic process applies to strategic planning.

Strategic planning has six key components:

1. Internal scan: Understanding your resources. In order to plan for the future, you need to know what your resources are right now. In strategic planning, the internal scan is designed to help an organization identify its current resources (physical, financial, human, attitudinal, etc.) and assess how those resources may be strengths or weaknesses for the organization in the future.

2. External scan: Assessing your environment. The external scan alerts an organization to what is going on in its external environment and how these actual or anticipated events may translate into challenges or opportunities for the organization. (Because it deals with the external environment, the external scan is sometimes known as the environmental scan.)

3. Vision and purpose statements: Articulating your preferred future. Of all the possible futures, which is the organization's preferred future? The vision and purpose statements are the organization's articulation of its preferred future and serve as the target for strategic planning. All other planning efforts should be evaluated in light of their ability to move the organization closer to this preferred future.

4. Strategic objectives: Outlining key objectives for securing that future. Which issues will be most critical to the organization in making its preferred future a reality? Key objectives--have no more than five or six--should reflect those issues, projects and ideas that the organization considers most important to advancing its preferred future.

5. Action Plan: Deciding who must do what when to achieve those objectives. Whereas key objectives outline what must be done, the action plan details how these things will be done. The action plan lays out the specific tasks necessary to achieve a given objective and assigns timetables and accountability for these tasks. Action plans should be incorporated into operational plans and used as the basis for budgets and performance appraisals.