A strategic plan defines what our organization stands for.

It depicts the market where we compete

and how we compete. It represents goals and the initiatives we will pursue and achieve. It helps us
allocate limited resources to pursue those initiatives and reach the goals. The strategic plan is
essential because it focuses on our efforts and restricted investments. It gives our team something
to rally around and be excited about. It also helps us identify the risks and opportunities we will face
in the market and plan for those risks or exploit the opportunities. There are three principles of
strategic planning to follow.

1. Set a clear direction and stay in our lane, versus meandering and pursuing strategies that
change every year.
2. Say no to distractions.
3. Make sure we diversify our bets.

Here are some warning signs to determine if our strategic planning process is flawed.

1. Initiative proliferation. Do we use multiple pages to add up different initiatives we wish to

pursue.
2. Thinking too small.
3. Thinking too big.
4. The Random initiative generator.

There are major tools and steps that we can follow to pull together our strategic plan.

1. Set direction and stay in a lane. It begins with articulating the vision, mission and goals and
then defining the core competencies.
2. Defining strategic filers. These are the objective functions we want to achieve and the
evaluation criteria we will use to analyze the initiatives.
3. Say NO to distractions. Stay focused and use tools like a two by two matric to evaluate which
opportunities to pursue and avoid. Take all the initiatives on the list and run through the
strategic filers to identify high value and potential and the ones to avoid.
4. Draw the line. Identify the top and bottom initiatives, resource them appropriately, and
work on things above the line for which we have resources.
5. Diversified portfolio initiatives and then executed the strategic plan. Look at the long term
and short term initiatives, whether they balance our core competencies, and how this
portfolio evolves.

Implementing and sequencing involve resource allocation while discussing vision and mission
principles is best done in a team. Evaluating initiatives should be done individually, whereas resource
allocation is decided as part of the team.

A classic tool for assessing the market is Porter's five forces. Dr Michael Porter, a professor of
strategy, came up with a set of five forces to evaluate the different dynamics that affect an
organization. They are;

1. Competitive rivalry.
2. Threats of new entrants.
3. Threat of substitution.
4. The buyer power.
5. The supplier power.

By assessing Porter's five forces across our entire market and organization, we can identify the major
threats and opportunities our organization faces.
Another tool to assess the environment we are competing in is the SWOT analysis, where the SWOT
represents Strengths, Weaknesses, Opportunities and Threats, which is drawn on a grid. Strengths
and weaknesses are within the organization's capabilities that we have or don't have, and
opportunities and threats can either be internal or external market-facing. We will have a better
sense of the strategic environment once we look at the SWOT analysis. Once SWOT analysis has
been conducted, we will need to refine it to eliminate things that will not be our strategic themes.

When setting direction for the organization as part of the strategic planning process, there are four
elements: Articulate mission, vision, guiding principles, and goals. The mission is why our
organization exists, vision refers to where the organization is going and what we want to achieve,
principles refer to how employees behave, and goals need to be quantified. As we define and set out
our mission, vision, guiding principles, and goals, we will be providing clarity for where we want our
organization to be in the future.

The mission needs to be clearly articulated. It is why our organization exists. It should reflect our
values, beliefs and the philosophy of the organization. The mission statement should be clear, brief
and understandable to everyone.

Another element of setting direction for our organization is articulating a vision. Company vision
should provide a clear picture of where we want to be in three to five years. The vision should be
ambitious but realistic. The vision statement needs to be concise with a few critical words and
differentiate us from our competitors.

To generate and refine the vision and mission statement, we need to bring in the head of the
organization the people from multiple functions and involve people from various levels in the
organization to brainstorm together. Next, together with the SWOT analysis and Porter's five forces,
disseminate it to all employees and get people to identify what they like and don't like. We need to
identify the most common phrases and assemble them into a statement. Capture all the ideas, look
for synthesis and common themes, and produce it into a clear, crisp, compelling vision and mission
statement.

The last two elements of setting direction are articulating the guiding principles and goals. Guiding
principles dictate how we want the organization to behave, especially when the leaders aren't
around. It is about setting principles that an associate can use when they are confronted with a
situation where they don't know what to do. In terms of goals, it is to set the metrics that we can
look back and measure the achievements. Therefore, the goals must be measurable. The guiding
principles and goals need to be clear enough to guide behaviour and help people behave in a
manner consistent with the organization's mission, and those goals should be driving us to achieve
our vision over time.

One considerable aspect of strategic planning is to look at our core competencies. Once we have
identified our two primary core competencies, it is helpful to plot them against one another on a
grid. Look at each of them, understand the market/product/initiative we are pursuing, and rely upon
the core competency and how much from low to high of those two core competencies.

Once we have identified the core competencies, we should look at the initiatives that we are
thinking about pursuing to determine what our approach should be. It can be markets we are
thinking about entering, products or services we are launching, or new capabilities we wish to build.
This way will help us prioritize the initiatives we think about pursuing.
Evaluating the initiatives, we will pursue as part of our strategic plan is at the core of the strategic
planning process. We need to identify what the high and low priority initiatives are. To do so, we
need a standard set of criteria that everyone across the organization can use to conduct those
evaluations. They are also known as strategic filters. These filters are essential to our organization.
Things like this idea meet a customer's need, help to differentiate us from the competition, or it has
an acceptable level of complexity. Sometimes the filters aren't qualitative, and they are quantitative.
Those filters will screen out initiatives that aren't consistent with the organization's direction. Once
we have generated the set of strategic filters, we need to understand how much risk they will have,
and there are five things to look at as we evaluate risk.

1. Existing capabilities and the strengths we have.

2. Channels, whether they are existing or new.
3. Cost structure or the infrastructure.
4. Customers.
5. Competition.

Once we have generated the filets, do the back-check against the above five criteria to understand
whether our filters will direct us in a riskier direction or play it safe. We want to take some risks as it
creates new opportunities. By creating this consistent set of filters, we will be able to evaluate our
initiatives quickly and effectively and stay on our stated path to reach our goals.

When creating strategic filters, we get the right people from multiple levels in the organization to be
involved in a brainstorming session and identify common themes. We look at the core competencies
that we have developed, and our mission, vision, goals and guiding principles as those are filters that
will help keep us in the right direction. Once we identify the common themes, we should have six to
twelve filters. A hard filter is an initiative that passes that filter and stays in the process. A soft filter
is when we evaluate it from a low to high scale.

When we are ready to apply the strategic filters, we need to assign homework. Take the list of
initiatives and break it among the team. Identify who should be evaluating which set of initiatives,
and then take the strategic filters that were agreed upon and distribute them. We should provide a
template for them to determine the soft and hard filters and determine high, medium and low
priority, including the rationale and a given deadline to complete this assignment.

Strategic planning is about focus and prioritization. We will need all team members to provide their
scoring and defend how they justified their score on a specific filter. We then need to go through the
calibration process and identify points where people are not consistent. Expect rankings to change
as part of the discussion, and the output is a consistent list of initiatives where everyone agrees on
the scoring so that we are ready to prioritize them.

Once we have been through the filtering exercise to identify the highest priority, we need a deeper
analysis. For top initiatives, we need to assign them to individuals for further analysis. Part of the
evaluation will require filling out templates that include listing multiple aspects of the initiative.

1. Description of the initiative.

2. The value proposition.
3. The customers (both external and/or internal).

For external-facing initiatives, it is essential to identify the point of differentiation from the
competition. Initiatives with a high point of differentiation should be high on our core values.
Identify the effects of the initiative on competitors. Identify the milestones of when the market
validation of the initiative will be assessed. It is crucial to identify the market for the proposed
initiative. Conduct deep financial analysis of the initiative and how it might change. The last step is
execution considerations. By doing detailed planning, we will have a much clearer picture of what
this initiative will take to get executed and what the initiative should deliver as part of our broader
strategic plan.

Prioritization is a critical aspect of a good strategic planning process. We must evaluate the cost and
resources of each initiative. It is essential to evaluate our functional resources.

Two-by-two matrix is another tool we can use to prioritize our initiatives. It is to look at two
objective functions, plot them against one another, and place the initiatives on the grid. Plotting our
initiatives assist with identifying which initiative to start with.

The strategic plan can be complicated. It is vital to ensure we have balance across the chosen
priorities. Further analysis will assist with narrowing down our initiatives, and our portfolio should be
balanced across the priorities. Time will affect our portfolio. It is crucial to understand if our
initiatives will get us to the goal. It is important that when we look at our portfolio, we analyze it
over time to achieve overall success.

To allocate resources properly, we must align them to our initiatives. Many times the company and
resources are misstructured for the proposed initiatives. When we look at capabilities, we may have
to move team members to other teams. The way to make sure initiatives are achieved is to hold
people accountable. We need a proper reporting structure and a matrix to monitor if an initiative is
on track. We need to know if the initiative is on track as early as possible. As leaders, it is our
responsibility to assist when a team isn't achieving the initiative. It is important to monitor if we
have the right resources to complete the projects. We need to ensure we get the results promised as
part of the strategic process. We should put in an ongoing evaluation process. We need to define an
owner for the process. A quarterly priority meeting is recommended. Conduct the strategic filter
assessment on the new ideas, if there are any, during the session. Assess if the idea fits in the overall
process. If a very profitable new idea comes along, then move other projects down the list and start
with the new idea. We should focus our resources on the highest value initiative. There are very
tactical steps to achieving a strategic planning process. It is crucial to alert everyone that will be
involved in the process. It is essential to be clear and concise in meetings, and there must be an
ongoing evaluation process for future projects.

It is critical to cosntantly be aware of pitfalls of a strategy. One possible pitfall is lack of direction for
the company. Always say yes are seen as a pitfall. Failure to prioritize is another major pitfall. Giving
all our resoruces to one project, which is known as starving the kids is another pitfall. We should
refresh our initiative plan at least once a year. Diversification risk is known as not looking at different
areas. We should set regular reviews and conduct yearly analysis. The strategic planning is a critical
element of success.

References

Chevallier, A. (2016). Strategic thinking in complex problem solving.

Oxford University Press.

Kenny, G (2005). Strategic planning and performance manager; develop and measure winning
strategy.
DiVanna, J.A., & Austin, F. (Eds.) (2004). Strategic thinking in tactical times.
Houndmills, Basingstoke, Hampshire; New York: Palgrave Macmillan.

Hacioglu, U., Dincer, H., & Alayoglu, N. (2017). Global business strategies in crisis strategic thinjing
and development preface.

Dincer,H., Hacioglu, U., & Yuksel, S. (2018). Strategic design and innovative thinking in business
operations.
The role of business culture and risk management.