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23008125 Developing a Strategic Plan

Published: 30.08.2012 |
Last Updated: 07.08.2013

[1]

DAVID BRESLIN [1]

David Breslin is a Consultant with Prospectus. He has assisted a range of organisations in the public, private, and voluntary sectors to develop, implement and review their
strategic plans.

Introduction

“The essence of strategy is choosing what not to do” (Michael Porter)

Strategy dates back to the time of ancient Greece, where the word ‘Strategia’ had military connotations and could be loosely translated as ‘The art of the General’. Strategy
has become more widely known in modern times as a means for an organisation to achieve certain long-range objectives and goals. Pankaj Ghemawat, a global strategist and
former professor at Harvard Business School gives an interesting account of the history of the word ‘Strategy’.

“Strategy is a term that can be traced back to the ancient Greeks, for whom it meant a chief magistrate or a military commander-in-chief. More recently, the term has been
refined by military analysts like Carl von Clausewitz, who wrote that whereas ‘tactics involve the use of armed forces in the engagement, strategy is the use of engagements
for the object of the war.’ But the use of the term in business dates only to the twentieth century, and its use in a self-consciously competitive context only to the second half of
the twentieth century”. (2002, p.37)

With that in mind, there has never been a more important time for leaders of community and voluntary organisations in Ireland to think about strategy. Having worked with a
range of organisations in the community and voluntary sector, a number of noticeable trends are evident. A large number of organisations in the sector are concerned about
financial sustainability, increasing demand for services, changes in public funding, declining charitable donations, sector reform and consolidation, more stringent governance
requirements and a possible reduction in philanthropic giving.

All of these concerns and issues lead to a focus on the here and now, trying to survive and keep afloat. The problem with that though, is that when the economy in Ireland
improves, and it will, many organisations will not be ready for the upswing, while some will have strategically positioned themselves to take advantage of the improved
situation.

The aim of this article is to provide practical and current guidelines about Developing a Strategic Plan, by outlining:

What is a strategic plan

What is the purpose of a strategic plan
What steps are involved in developing a Strategic plan
Who should be around the table?

What is a strategic plan?

"In real life, strategy is actually very straightforward. You pick a general direction and implement like hell" (Jack Welch)

A strategic plan can be likened with a road map for an organisation. You wouldn’t set off on a long journey without a plan and the necessary resources, and the same goes for
setting up an organisation, or preparing for the next phase in your organisations development. A strategic plan, in essence, charts the future direction for the organisation. In
previous years, some strategic plans may have been developed for a period for five years or more into the future. These days, we advise clients that it is generally wise to plan
for the next three-to-five year period, usually three, as the external environment is too turbulent and unpredictable to forecast anything longer. Many organisations in the
corporate world have been known to engage in twenty-year long-range planning exercises, and while this did have some merit in more predictable times, this long-range
direction setting is often ambiguous, and not as amenable in today’s environment.

Therefore, first and foremost a strategic plan must be grounded in the current realities, and you should have a good understanding of the expected future changes, shifts and
trends in your operating environment. It must set out the vision (ambition) for the organisation, alongside its mission (purpose) and the organisational values that will be
espoused. The plan should detail the key areas of focus for the organisation in the form of strategic priority areas, and the more specific strategic objectives. The strategic plan
should also outline how the strategic objectives will be realised, by committing to certain actions or activities that will be carried out to fulfill the objectives. Actions should
be developed with the understanding that they must be implemented, measured and managed correctly, as the saying goes ‘what gets measured gets managed’. With that in
mind, a set of Key Performance Indicators should be linked to each objective and corresponding action.

A strategic plan, in detailing the future direction of the organisation, may also outline the resource implications of the new strategy, alongside an analysis of the risks involved
in strategy implementation. Strategic plans are typically written documents, with varying levels of detail and formality depending on the nature, size and scale of the
organisation. Public sector, and community and voluntary sector organisations would usually publish their plans or make an external version of the plan available to the
public, whilst private sector and commercial organisations would more often keep the plan in-house, due to the sensitivities inherent in them. On many occassions,
organisations engage an external firm to aid the process with independent thinking, research and consultation skills, sectoral expertise, new ideas, tried and tested
methodologies, group facilitation skills and a willingness to challenge assumptions.

What is the purpose of such a plan?

“You have to be fast on your feet and adaptive or else a strategy is useless”
(Charles de Gaulle)

A strategic plan is an important document, and the level of effort required to develop it should be on par with the effort required for the preparation of annual budgets,
governance documentation, financial plans, annual reports, HR policies, marketing campaigns and other important activities. Indeed one could say that the strategic plan
requires more thought and resources as it usually encapsulates all of the aforementioned areas in one way or another. The purpose then, is to gather up all of the ambition,
objectives, goals, activities, ideas, knowledge and resources, and ensure that the organisation is well placed to provide the right products and services, in the right markets, to
the right people, at the right time, and in the most efficient and effective way, whether that is for-profit or not-for-profit.

For a commercial organisation, the motive for creating a strategic plan and preparing for the future will be profit seeking; to create the greatest returns for its shareholders, in
an ethical way, while providing a safe and rewarding place to work for its employees and being socially responsible. The purpose will be to create a sustainable competitive
advantage and unique selling proposition amongst its competitors in order to generate the greatest returns.

However, in a community, voluntary or non-profit organisation, the motive for developing a strategic plan can be different. For these organisations, the objective is to deliver
on a social need and provide services that may not be provided by any other agents, many times for stakeholders who are less fortunate in some shape or form. These
organisations develop strategic plans, once again, to gather up all of the component parts and frame them in a single document that outlines the ambition, purpose and
objectives of the organisation, in a way that provides clarity and direction moving forward.

What are the practical steps involved in developing a strategic plan?

“However beautiful the strategy, you should occasionally look at the results”
(Winston Churchill)

Setting out to develop a strategic plan can be a daunting task. It is an important and often complex piece of work, and it should challenge the current direction of the
organisation. It also takes time and commitment to develop a thorough and comprehensive plan. Different organisations may use different processes and steps to develop their
strategic plans, but in the vast majority of cases, the steps below should be taken to arrive at the final plan.

The starting point is for the organisation in question to decide on whether they will use an external Consultant or complete the process in-house. If it is decided to develop the
plan in-house, the appropriate skills and resources will need to be utilised, and a group of people who can objectively challenge and contribute to discussions will be
identified. If facilitated by an external Consultant, care must be taken to choose a reputable firm with a track record of providing guidance to similar organisations in the sector.

At this point, a project team or Steering Group is usually formed, consisting of between four and six people, typically comprised of members of the executive team, a Board
representative and other senior leadership. This group will complete much of the work in developing the strategy and will provide interim feedback to the Board before the
final sign-off by the Board at a later date.

The first phase for the Steering Group is to carry out an environmental analysis. This will entail researching the key trends, themes, issues, risks, demands and drivers in the
current operating environment in order to help frame and inform the discussion. A strategic plan that is developed absent of an environmental review runs the risk of not being
relevant or informed adequately.

The next phase is the consultation phase and has two objectives. The first is to obtain feedback on the success or otherwise of the previous strategy, if there was one. The
second objective is to elicit the views of stakeholders on how they would like to see the future of the organisation developing. The stakeholders that are chosen to be consulted
with may range from service users to funders and staff to policymakers. Also, the methods of consultation are varied, and might consist of focus groups,
surveys/questionnaires, face-to-face interviews, workshops and telephone interviews. Careful consideration should be given to who carries out the consultation process. It is
important that people feel that their views are considered objectively and confidentially. This is one area where external support can be particularly effective.

At this point, you will have carried out the research and consultation and are ready to begin the actual Strategy Development phase. This phase entails a number of steps that
should be followed in sequential order. The first step is to develop the vision for the organisation for the lifetime of the strategic plan. The vision is usually captured and
expressed in a short, sharp, succinct statement that sets out what the organisation will look like in the future, its desired end state. The vision statement conveys the ambition
of the organisation and what it wants to be in ten to fifteen year’s time. Six criteria for an effective vision were outlined by Kotter in his book, Leading Change (1996), and
can be seen as cited by Hayes below.

1. Imaginable: conveys a picture of what the future will look like

2. Desirable: appeals to the long-term interests of employees, customers, service users, and others who have a stake in the enterprise
3. Feasible: comprises realistic, attainable goals
4. Focused: is clear enough to provide guidance in decision making
5. Flexible; is general enough to allow individual initiatives and alternative responses in the light of changing conditions
6. Communicable: is easy to communicate; can be successfully explained within five minutes (2007, p.173)

Once the vision has been developed, organisations typically create a mission statement. The mission statement is a concise statement, outlining the organisations purpose, its
raison d'être. Wickham provides a useful definition of a mission:

“A mission is the reason for the firms existence. It is a statement of what it will achieve and how. A mission can include a statement of what the firm offers, to whom it is
offering it, the source of its advantages in the marketplace, its aspirations and the ethical values it will uphold” (2008, p.111)

A mission statement for an organisation in the community and voluntary sector will be no different from a mission statement for a commercial entity in that it will detail who
the organisation is, what it does, how it is unique, who it serves and how it will provide for its service users.

The next step in a traditional strategy development process is to develop and refine a list of organisational values. The values statement is becoming an increasingly important
component in the strategy development process and is becoming a popular way for organisations to explicitly list the values that they would like their organisation to espouse,
and the supporting behaviours that they wish their employees to display. Lake (2012, p.97) states that “The job of the values statement is to answer the question: How do we
go about doing our work?”. The values are dictated by the ethos and philosophy of the organisation and it is this, which differentiates the values statement from the vision and
mission statements.

Typically, an organisation would develop between four and eight organisational values, sometimes in list form and sometimes rolled up into a single values statement. The
task then turns to identifying a range of employee behaviours that underpin and support the values, so that they are enacted on a day-to-day basis in the organisation. Sets of
values will be unique to each organisation, and will be a function of the size of the organisation, number of staff, the culture, type of services provided, sector that it operates
in, and other varying factors. An indicative list of values for a community and voluntary organisation might consist of some of the following:

Focus on quality
Respect for service users
Continuous improvement
 Ethical decision making
Striving for excellence
Giving back to the community
Being honest and trustworthy

At this stage in the strategy development process, having developed the vision, mission and values statement, the organisation is in a good position to identify strategic
priority areas. These are a number of broad thematic areas that will lead to the achievement of the vision. Not all organisations include this step as part of their strategy
development process, but it is good practice to do so, as it identifies between two and four high-level areas that the organisation plans to focus its resources on over the course
of the strategic plan.

The strategic priority areas paint a broad brush-stroke picture of the agreed areas of future focus for the organisation. The team working on developing the strategy must now
develop strategic objectives for the organisation. Strategic objectives are a series of relatively high-level statements describing how the organisation will deliver on its vision
and mission. The strategic objectives are more specific than the strategic priority areas, and indeed usually fit into neat themes around the priority areas, so that the
organisation may end up with four strategic priority areas each supported by two to three strategic objectives, giving a total of eight to twelve strategic objectives.

In order to ensure that the strategy is put to work and actually implemented, the attention, at this point turns to identifying actions that will deliver on the objectives, and Key
Performance Indicators that can measure their effectiveness. Actions or activities, defined by Watson as “A series of transactions that translate inputs into outputs using
resources in response to a business requirement” (1993, p.259) are individual work-packages that when combined, will ensure the achievement of the strategic objectives.
Each action should be linked to a key performance indicator (KPI), which is a metric such as time, cost, scope, revenue, service levels, number of service users or anything
else that can be quantified and objectively assessed and compared. The KPIs allow you to measure strategic progress effectively. It is also worth considering Critical Success
Factors at this point. Critical Success Factors are specific areas that need to be addressed to ensure the successful implementation of the strategy, and may include funding,
staff, technology, appropriate organisational structure, and other areas that are crucial to the effective functioning of the organisation.

The steps involved in developing a strategy can be seen graphically displayed below:

Who is typically involved in the strategic planning process?

“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat” (Sun Tzu)

The strategic planning process can be a lengthy affair, often spanning a number of months. It is crucial to get the appropriate people involved at the outset. We must make the
distinction here between those that feed into the process, and those that develop and craft the strategy.

Looking firstly at the many and varied stakeholders that will feed into and contribute to the strategic planning process. You will want to consult with an appropriate number of
stakeholders to adequately inform the strategy. Consultees could include; Board members, staff, management, service users, policymakers, funders, members/non-members (if
your organisation is a membership based organisation). Some organisations consult even more widely, and encompass suppliers and the local community for instance. It is
important to remember that it is quality, not quantity that is important when considering stakeholder consultation and you should be very clear about the purpose of the
individual/groups involvement and the questions that you would like to ask them.

Looking now at those that will help to shape and develop the strategic plan. As mentioned previously, a Steering Group will usually be established, consisting mainly of
members of the executive team, and complemented by external Consultants if required. The Consultants will project manage and facilitate the process, drawing on previous
experience and sectoral expertise to keep the project on track and objective. The Steering Group carry out the majority of the research, analysis and actual crafting of the
strategic plan.

The Board members are also an important contributor to, and guardian of the strategic plan. The Board is the body ultimately responsible for the strategic direction of the
organisation and must sign-off on the final strategic plan, whereas the Executive is responsible for implementing the plan. While not usually getting involved in the detailed
analysis and wording of the plan, the Board do receive interim updates from the Steering Group and provide feedback and guidance as necessary.

Conclusion

“I’m as proud of what we don’t do as I am of what we do.” (Steve Jobs)

The aim of this article is to help organisations to understand the reason for developing a strategic plan, the contents of a good plan, and the phases and steps involved in
developing the plan. No matter how large or small an organisation, it is always good practice to plot out the future course to ensure sustainable and effective service provision.
Some final tips to keep in mind are outlined below:

Developing strategic plans takes time, stick with the process and don’t let small obstacles halt the momentum
Choose the Steering Group wisely, as they will be the primary group responsible for informing, shaping and developing the strategic plan
Communicate progress to relevant stakeholders at appropriate intervals and focus on the ‘small wins’
Try not to focus on ‘wordsmithing’ every sentence. Focus on agreeing the general messages and direction, and the details will follow
If possible, engage a Consultant(s) who is experienced in assisting organisations to develop strategic plans, in order to objectively
challenge and inform the process
 Consult widely with relevant stakeholders to ensure buy-in and ownership of the new plan
You need to be as cognisant of what your organisation will not do, as you are about what it will do. No successful organisation can be a
‘jack of all trades’

If you follow these guidelines you will be well placed to develop a thorough and comprehensive strategic plan. We hope that you find this article useful and wish you all the
best in your strategic endeavors.

Links:
[1] http://knowledgenet.carmichaelcentre.ie/contributor/david-breslin
[2] http://knowledgenet.carmichaelcentre.ie/printpdf/104