What is strategic planning ?
Strategic Planning is a management tool that helps an organization focus its energy, to ensure that members of the organization are working toward the same goals, to assess and adjust the organization's direction in response to a changing environment. In short, strategic planning 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, with a focus on the future.
The process is strategic because it involves preparing the best way to respond to the circumstances of the organization's environment, whether or not its circumstances are known in advance; nonprofits often must respond to dynamic and even hostile environments. Being strategic, means being clear about the organization's objectives, being aware of the organization's resources, and incorporating both into being consciously responsive to a dynamic environment.
Strategic planning process :
The key components of 'strategic planning' include an understanding of the
firm's vision, mission, values and strategies. The vision and mission are often
captured in a Vision Statement and Mission Statement.
1. Vision: outlines what the organization wants to be, or how it wants the world in which it operates to be (an "idealised" view of the world). It is a long-term view and concentrates on the future. It can be emotive and is a source of inspiration. For example, a charity working with the poor might have a vision statement which reads "A World without Poverty."
2. Mission: Defines the fundamental purpose of an organization or an enterprise, succinctly describing why it exists and what it does to achieve its vision. For example, the charity above might have a mission statement as "providing jobs for the homeless and unemployed".
3. Values: Beliefs that are shared among them of an organization. Values drive an organization's culture and priorities and provide a framework in which decisions are made. For example, "Knowledge and skills are the keys to success" or "give a man bread and feed him for a day, but teach him to farm and feed him for life". These example values may set the priorities of self sufficiency over shelter.
4. Strategy: Strategy, narrowly defined, means "the art of the general." A combination of the ends (goals) for which the firm is striving and the means (policies) by which it is seeking to get there. A strategy is sometimes called a roadmap which is the path chosen to plow towards the end vision. The most important part of implementing the strategy is ensuring the company is going in the right direction which is towards the end vision.
Organizations sometimes summarize goals and objectives into a vision statement. Others begin with a vision and mission and use them to formulate goals and objectives. Many people mistake the vision statement for the mission statement, and sometimes one is simply used as a longer term version of the other. However they are meant to be quite different, with the vision being a descriptive picture of future state, and the mission being an action statement for bringing about what is envisioned (i.e. the vision is what will be achieved if the company is successful in achieving its mission).For an organisation's vision and mission to be effective, they must become assimilated into the organization's culture. They should also be assessed internally and externally.
The internal assessment should focus on how members inside the organization interpret their mission statement. The external assessment — which includes all of the businesses stakeholders — is valuable since it offers a different perspective. These discrepancies between these two assessments can provide insight into their effectiveness. Although the strategic planning phase put more concentration into strategy in relation to the business environment, markets and competitors, the most common process was still based on the preparation of corporate-wide plans.
Some organisations modified the planning process to enable a broader strategic review to take place, and some used the techniques to determine a strategy, without relating it to a formal process of planning. What was often missing was an emphasis on implementation, and a close relation between the analytical and behavioural aspects of management. It was the growing awareness of the shortfalls of the strategic planning phase, the way in which many organisations tried to overcome them, and the work of researchers and theorists that moved many organizations gently into the next phase.