Strategic planning: How to create measurable outcomes

Strategic planning is the process that encompasses all tactical plans implemented to meet interim objectives in the aim of achieving the strategic goals. By facilitating the effective management of organizational processes, strategic planning determines where an organization is today, where it is going and how it plans to get there (Answering questions like: “Where are we now?” “Where do we want to be?” and “How do we get there?” )

The strategic planning process

The most commonly used top-down strategic planning model portrays the process of formulating and implementing a strategic plan. With this model, leaders plan a strategy and communicate it throughout the organization to be implemented.

1. Mission statement: This sets the direction for the company’s actions toward the achievement of strategic goals.
2. Key objectives: These need to be Specific, Measurable, Achievable, Realistic, and Timely (SMART). They represent the extent to which strategic goals will be met and are directly related to the outcomes.
3. Environmental scan: This assesses the external and internal factors that affect the organization’s capacity to effectively pursue its mission.
   1. The external macro-environment is assessed using the PEST analysis that includes Political, Economic, Social and Technological factors.
   2. The external micro-environment is assessed using the Porter’s Five Forces model that includes barriers to entry, customers, suppliers, substitute products and rivalry among competing firms in the industry in which the firm operates.
   3. The internal assessment includes an objective look at the company culture, company image, organizational structure, operational efficiency, brand awareness, market share, financial resources, exclusive contracts and patents and trade secrets.
4. Strategic initiatives: These are developed based on Porter’s Generic Strategies Model that considers differentiation, cost leadership and focus as three generic alternatives to be used individually for a given product.
5. Strategy implementation: This requires the translation of strategy into detailed plans that the functional areas of the organization can identify with and implement.
6. Monitoring and evaluation: Strategic outcomes need to be measured and evaluated to ensure that any required adjustments will be made to respond to dynamic environments.

Strategic planning questions

It is critical to clearly express the mission and key objectives to identify the desired outcome of the strategy. Strategic planning aims to answer key questions that can lead to organizational alignment, if the strategic plan is successfully implemented.

1. What is our mission?
2. What is our vision?
3. What are our distinctive capabilities?
4. What are our competitive advantages?
5. What problems should be addressed?
6. How we should allocate our resources?

Creating measurable outcomes

One of the most difficult aspects of strategic planning is identifying and articulating measurable outcomes that can be quantified and agreed upon at the end of each step of the strategic process. Prior to choosing specific performance measures, the key objectives should be reviewed to ensure they correlate to each step and provide the basis for effective interpretation of outcomes. Then, leaders should identify the critical success factors and possible barriers that may obstruct the translation of key objectives into measurable outcomes.

Measurable outcomes respond to specific criteria and originate from specific measures that are incorporated in the Balanced Scorecard System. The Balanced Scorecard System is used to balance different measures of success including financial performance, customer satisfaction, operational efficiency and human resources to measure organizational success.

With the use of the Balanced Scorecard System, leaders get measurable results by asking specific questions. Quantitative questions such as “How much?” and “How many?” but also qualitative questions such as “How economical?” “How accurate?” “How responsive?” “How reliable?” and/or “How valuable?” result in long-term and short-term outcomes.

In addition, when assessing departmental activities and their contribution to organizational goals, leaders should consider the following questions:

1. What do we want to accomplish?
2. What set of tasks are required to accomplish that?
3. How many employees with specific sets of skills are required?
4. What sort of equipment and support is required to do the work?
5. What is the appropriate sequence of tasks to get the objective attained most competently?
6. What is the estimated completion time?
7. How will we know where we are as we go?
8. When the assessment is completed, how will we know we accomplished our goal?
9. Is there any room for improvement?
10. What are the next steps?

In conclusion, some strategic goals relate to measurable units including earnings per share, total sales, market share, return on investment and so on. Other strategic goals symbolize management ambitions that are more complex to measure such as an aspiration to be the leading food company in the United States, a desire to be the leading socially responsible firm and so on. Nevertheless, strategic planning should ensure that each organizational member has a structured role and can perform effectively.