Most of the tools of modern managers can be divided into two large categories. These are successful methodologies, usually already tested in other organizations, and software products that facilitate (automate) many processes related to personnel management and other managerial actions.
Let’s take a closer look at theory and practice.
Theory
Before the topic disclosure, it would be worthwhile to outline what the concept of strategic planning includes and why it is needed.
Strategic planning is a set of actions to create and implement general plans covering large time intervals in the future life cycle of an enterprise.
Typically, strategic plans have a low level of detail, but they set general trends for action — the furthest-reaching yet important performance goals.
In addition to strategic planning, enterprises can apply operational and business planning. They are detailed much better, but always on the basis of plans from higher levels.
Less frequently, some methodologies emphasize the conceptual level of planning, but in practice ‘concepts’ are hardly ever used in business.
As with any other type of planning, the same steps will be relevant for strategic planning:
- analyzing the environment;
- defining the goal;
- strategy selection/development;
- its implementation;
- evaluation and control.
Strategic planning can consider the company’s values and mission as input data.
Strategic planning approaches
The most popular approaches, which are clearly documented and have already been tested in large businesses, usually include:
- PEST analysis (aka STEP in some sources). It covers almost all elements of the external environment of any enterprise: political (P), economic (E), social (S) and technological (T). As a variation, the PESTLE approach is sometimes used (legal and ethical aspects are added to the previous method). For example, PEST-analysis can anticipate the political situation around your area of activity, predict inflation, growth in demand for specialized personnel, problems in the raw materials sector, and so on.
- Scenario planning. The approach has found its greatest application in military affairs (it helps to consider different variants of conflict development with the participation of different parties and with different balance of forces). Recently, it has been used by large corporations to analyze future scenarios. The output of scenario planning is usually a flowchart showing the process of transition between possible stages (stages are often formed on the basis of intuition, sound logic and existing experience in certain areas). There can be many scenarios, but the most probable or the most optimal one is chosen as the main one (depending on the planning objectives).
- Porter’s Five Forces Analysis. An interesting approach by the famous American economist who considers the attractiveness of areas within an industry based on the balance of five main forces: the threat of new entries, the threat of substitute goods, the market power of suppliers, the influence of consumers (demand) and the level of competition.
- SWOT analysis. A very popular recent approach (although it was first introduced in 1963) that looks at internal Strengths and Weaknesses in relation to external Opportunities and Threats. The methodology is very flexible and can be easily adapted to different scales of activity, but it has some disadvantages. For example, the final picture of the analysis is rather static and highly dependent on the knowledge and experience of the person conducting the research.
- BCG (Growth-Share Matrix). Sometimes it can be designed in the form of curves/diagrams that visually demonstrate the relationship between demand growth and market share. Based on the fact that a product falls into one of the four sectors, you can understand how to work with it further. The following types of products are distinguished: ‘stars’, “cash cows”, “question marks, “dogs”. The wording may vary, but the general meaning is clear.
- Balanced scorecards (BSC) and strategic maps (diagrams for BSC). Aimed at performance management. Unlike many other strategic planning tools, they are based on a small set of monitored key performance indicators (for more fruitful monitoring of plan execution).
- Responsive evaluation, provides a preliminary assessment of planned actions based on feedback from clients or audience. It can be used for hypothesis testing.
Programs for strategic planning
Typically, a strategic plan is a simple list of talking points that don’t require operational actions or specific things to do.
But if you want, you can dive a few levels down and break down each point of the plan into smaller components, including assigning responsible executives, deadlines, reporting and other actions.
This is exactly what we have developed the Projecto platform for.
Projecto service contains all necessary tools in one window, allows you to keep track of any assigned cases and tasks, facilitates planning and implementation of projects of any complexity.
And to always keep your work with you, we have original mobile applications that provide notifications and convenient interaction with your personal account even on smartphone screens.
You can test Projecto for free!
