– Thoughts on Strategy and Management

Two ideas for improving strategic planning

This post has the objective to analyze and to discuss one selected problem and barrier related to the strategic planning process; those problems and barriers for a sound strategic planning process have been indentified in both the academic and the business literature.

In the last two decades a large number of articles and books related to this matter have been published. Strategic analysis, agenda setting, strategy implementation including progress monitoring are confronted with barriers very often. Typically some barriers have a strong link with specific phases and their attributes. Opposite and important as well are those barriers that can be found in the organizational context, e.g. in corporate culture.

When analyzing external and internal factors most organizations employ a static view of these factors. One solution to that matter can be to see the market place as a dynamic field with actions and reaction and therefore to consider secondary effects to one’s own strategy. Another key problem area can be found in the large number of external data.

Dynamic view of the market place. In order to develop a successful and sustainable strategy, organizations should also apply an approach that considers the impact of so called secondary effects. Furthermore planned systems and structures should also be in place for tomorrow’s environment. AVILA et al (1995) recommend taking a dynamic view of the marketplace. Therefore organizations should anticipate competitive reactions and explicitly incorporate them into their strategic analysis. This dynamic view is in line with the recommendations by FARRELL and ASSOCIATES (1995) who stress that organizations’ strategy analysis should include products, markets and channels of both today and tomorrow.

Structuring (external) data. To reduce the problems related to the analysis of a large number of external data, it is recommended to structure the environment into different segments and sub-segments. Segments could be general environment, business market and industry; where technology and economy could be sub-segments of the general environment. The creation of different scenarios can be seen as a way to manage the uncertainty of forecasts. In addition to that it is essential to employ all “organizational interfaces” – i.e. sales representatives, internal call center agents – to identify soft trends and evolving customer needs. A great deal of data is flying around in most enterprises, but far too little information and knowledge (knowledge here means data understood in an organized style).

For the last issue you have to have in mind that data analysis can give your organization an enormous insight into the market; however not all empirical data will describe the future market place. A lot of organizations raise in their surveys questions like “Could you imaging to spend money on….?”; later they are wondering why potential customers do not buy their services or products. The following cartoon expresses a similar problem area:

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