Guest post by Ken Burnett, VP/Director of Training and Business Development, Bank of American Fork
This series is written from experience and is part of Bank of American Fork’s management training program. The program embraces the philosophy that management is a skill-based job, and managers need to learn specific skills to be successful
Strategic planning is a management activity that elicits fear and loathing from managers at almost every level. Strategy is often viewed as something “I have to do for corporate.” It may be so detail oriented that the content is hundreds of pages—the sheer weight of the strategic plan makes your building sink six inches, and is written in a secret language that you need the Rosetta stone to understand. Many organizations don’t try because the difficulty seems too much for its value.
However, strategic planning is a core skill that your organization must demonstrate to be viable long-term. Strategic planning requires use of a perspective or way of thinking that is analytical and creative at the same time. Strategic thinking nests every decision and action in both a short-term and a long-term context.
Strategic plans should include the following components, with details in each area to support the organization’s long- and short-term goals.
• Core Function – What is the focus of your organization? The core function question should also be asked within each department.
• Risk Management – Systems and processes that protect the organization from various types of risk.
• Money – Strategy for growing profit or managing/reducing costs, while maximizing and enhancing revenue streams.
• Internal and External Customers – Strategy for creating value for the customer in what we offer in terms of products and services.
• People – Are the employees engaged in their work? Do they have the capacity, or ability, skills and time, to do the tasks necessary to support the strategy of the organization going forward?
• Infrastructure – Strategies that address the efficient use of internal business processes, items necessary to keep the organization delivering on its needs, technology, training, human resources, and other support functions.
• Learning and Growth – Strategies and tactics that support change, innovation, expanded capacity and growth.
As you start on the analysis section of strategic planning, your job is not to reinvent the organization so you can do your strategic plan. You should listen to what your existing processes tell you, use your analysis of outside information and then go from there.
When you begin to analyze your organization, consider the following:
• Review your internal systems and processes.
• Identify what external factors will affect those internal processes. How does the external environment view those internal processes?
• As you analyze your environment, recognize critical areas that you may need assistance in to address or put placeholders in as you move forward. That said, you should not ignore an area because you do not have the answer.
• What are some areas where you don’t have the information needed to make a decision?
Types of analysis
Environment Scan – How is the department/branch doing now?
An environment scan has nothing to do with potential indigenous ruins. Before you can make a plan of where to take your organization, you need to have a good understanding of where you are as an organization. An environment scan is an internal analysis.
SWOT – Strengths, Weaknesses, Opportunities, Threats
The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. These come from within the company’s unique value chain. SWOT analysis groups key pieces of information into two main categories:
• Internal factors – The strengths and weaknesses internal to the organization.
• External factors – The opportunities and threats presented by the external environment to the organization.
PEST – Political, Economic, Social, and Technological
The PEST analysis tool is another way to look at the outside environment to make sure your strategic plan will address those issues. Along with the SWOT analysis, you will use these tools as resources in building your strategic plan.
Building the Plan
After you identify an issue, then you need to develop a plan for how to get there. For example, if I determine what the department will look like three years from now, I must begin to develop now so that I will be ready in three years.
Using the project plan approach, develop steps to begin to determine what the department will look like three years from now.
Selecting the Items for Your Strategic Plan
You should use your project team to identify a manageable number of items to develop into your strategic plan. Consider these questions when you choose which items to focus on:
1. What do we have to do to keep the doors open? Are there regulatory or other barriers?
2. What do we need to do to make sure we are open tomorrow? Is the infrastructure in place to support future developments?
Strategic planning skills will benefit your organization. They make best use of the organization’s resources by focusing on key priorities that matter most. Strategic planning helps to integrate the organization’s mission and values with objectives and specific goals that are consistent in a time frame that is within the organization’s capacity for implementation. It will help you incorporate effective internal communication.
Ken Burnett is vice president/director of training and business development for Bank of American Fork. He is responsible for training more than 300 employees on a variety of topics, including coaching and feedback for dozens of senior managers within the organization.