You have already learned about reviewing and evaluating present and future strengths, weaknesses, opportunities and threats, including a scan of the internal and external environments.
The next stage is to formulate strategy. Although described as a series of exercises leading to an outcome, in practice this should be an ongoing process; maybe an annual corporate retreat combined with a review at every board meeting, or on a quarterly basis.
A lot of strategic planning fails because of incompetence or indifference on the part of those responsible for the strategic plan. Reviews should determine how strategy has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment, or a new social, financial, or political environment.
Vision, mission and values can be consistent over the long term, but strategies and tactics need to be flexible and responsive to changing circumstances.
Strategy is about the future. Consequently it requires assessment of the possible behaviours of both markets and competitors, as well as opportunities for co-operation and strategic alliances.
Strategy is the large-scale plan for making the vision happen. Tactics are the specific actions involved in following the plan
Many people find strategic thinking difficult and easily revert to tactical thinking instead.
If strategic planning is to be more than a superficial update of an existing plan, it requires a discipline that includes elements of creativity, lateral thinking and 'thinking outside the box'.
Brefi Group specialises in helping boards by facilitating off-site, often residential, corporate retreats. These give directors an opportunity to escape the normal pressures and broaden their thinking through a structured process that incorporates a return to vision, mission, values, an environmental scan with SWOT and PEST, and a scenario planning exercise that leads to option generation and strategy development.
Brefi Group uses a strategy building process based on a scenario planning model developed in South Africa by Chantell Ilbury and Clem Sunter.
The key discipline in this process is identifying those things that you do know but cannot control. For example: exchange rates fluctuate, interest rates change, taxes, weather. From these you can learn more about what you can control.
The next stage is to identify the things that you do not know and cannot control. These include things like actual rates of exchange, interest rates, taxes and rates of tax, and actual weather – place and date. From these, you can identify the key uncertainties – those that will have the greatest impact on the success or failure of a strategy. By putting these together in different mixes you can create three or more scenarios, and then develop and test different potential strategies in each one.
Finally choose a strategy that has the optimum balance between robustness and potential success.
The process is shown in the diagram below, from which you can see how the classic PEST and SWOT analyses contribute
Does your board determine corporate and financial strategic options, review and select those to be pursued, and decide the resources, contingency plans and means to support them?
If so, are the strategic options:
Once options are chosen, are they:
* Inspired by the Institute of Directors Standards for the Board
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