Developing StrategyWednesday 01 April 2020
In the past most organisations took a highly structured approach to strategy development known as strategic planning which involved an annual process of putting plans in place for the coming year and beyond.
However, in today’s complex and turbulent business environment, it is impossible to plan for every eventuality and strategy making needs to be a more flexible and dynamic process which reflects a way of thinking strategically about the business and the environment in which it operates. Organisations that fail to think strategically will be vulnerable to threats and ill-prepared to take advantage of fresh opportunities. A flexible but focused approach will put organisations in a better position to deal with setbacks and to respond to new opportunities as they emerge. Nonetheless, organisations still need to gain a clear understanding of the market place and their strategic position within it. Analysis and planning remain important for the majority of organisations.
Characteristics of Good Organisational Strategy
Organisational strategy needs to be:
- flexible – adaptable to change, but in line with corporate mission and vision
- responsive – taking account of market, economic and environmental conditions
- creative – to inspire commitment and ensure the organisation stands out from the crowd
- challenging – so that it acts as a source of inspiration and motivation
- realistic – so that it can be seen to be achievable and people can get to grips with it
- focused – clear, defined and understandable to all stakeholders, especially employees and customers
- engaging – in line with organisational culture and values.
Definition of Strategy and Strategy Development
Strategy can be defined as “The direction an organisation takes with the aim of achieving future business success.” Strategy sets out how an organisation intends to employ its resources, including the skills and knowledge of its people as well as financial and material assets, in order to achieve its mission or overall objectives and its vision.
Strategy development is the process of researching and identifying strategic options, selecting the most promising and deciding how resources will be allocated across the organisation to achieve objectives. Key questions to be considered include: the key questions an organisation needs to ask in connection with its future, including:
- What business are we in? Or what business should we be in? (Mission)
- Where do we want to be? (Vision)
- How are we doing? What is going well? What is not so successful?
- How did we get to this point? What went well? What went wrong?
- How can we improve our position?
- What options are open to us?
- What might hinder us from getting there?
- What do we need to do to get there?
- What should we not do?
Strategy Development Techniques and Best Practices
Below checklist provides a framework for thinking about and developing organisational strategy. It is based broadly on established processes of analysis, choice and implementation.
1. Understand the current position
2. Reflect on how you got there
3. Be clear about your corporate identity (mission, vision and values)
4. Analyse your strengths and weaknesses
5. Analyse the business environment
6. Identify and evaluate strategic options
7. Set objectives
8. Communicate the strategy
9. Implement the strategy
10. Review progress
For detailed explanation of each step and to find out more about developing strategy, view the guide below.
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