A Strategic Planning Business Process: Leveraging the Harvard Business School Approach

Strategic planning is a critical business process for businesses of all sizes. By developing a well-crafted process, organisations can set themselves apart from competitors, improve performance, and achieve long-term success. This guide will explore the Harvard Business School approach to strategic planning, outlining the key elements, activities, and suggesting KPIs. This approach works for private, public, and not-for-profit organisations.

Each element should be considered inputs and outputs. The activities are not simply checklists. Information captured at each step is necessary as an input for other steps and must be captured and documented to be reusable.

1. Define the Organisation's Mission and Vision

The first step in strategic planning is to clearly define the organisation's mission and vision. This provides a guiding framework for all decision-making and ensures that the organisation's activities align with its overall goals.

2. Conduct a SWOT Analysis

A SWOT analysis is a tool used to identify an organisation's strengths, weaknesses, opportunities, and threats. By understanding these factors, organisations can identify areas for improvement and capitalise on opportunities.

3. Analyse the External Environment

The external environment consists of factors that are outside the organisation's control, such as economic conditions, industry trends, and competitive forces. By analysing the external environment, organisations can identify potential threats and opportunities.

4. Analyse the Five Forces

Porter's Five Forces model is a tool used to analyse the competitive intensity of an industry. The five forces are:

• Threat of new entrants: The ease with which new competitors can enter the industry.
• Bargaining power of buyers: The power that customers have to negotiate lower prices.
• Bargaining power of suppliers: The power that suppliers have to raise prices.
• Threat of substitute products: The availability of substitute products or services.
• Rivalry among existing competitors: The intensity of competition among existing firms.

5. Develop a Strategic Positioning

Strategic positioning involves identifying a unique market space where an organisation can compete advantageously. By understanding the competitive landscape and leveraging its strengths, an organisation can create a sustainable competitive advantage.

6. Develop a Value Chain Analysis

A value chain analysis identifies the key activities involved in creating value for customers. By understanding these activities, organisations can identify opportunities for improvement and optimise their operations.

7. Develop Operational Effectiveness

Operational effectiveness refers to an organisation's ability to perform its activities efficiently and effectively. This involves optimising processes, reducing costs, and improving quality.

8. Develop Key Performance Indicators (KPIs)

KPIs are metrics used to measure progress towards strategic goals. By tracking KPIs, organisations can identify areas for improvement and make data-driven decisions.

9. Implement and Monitor the Strategy

The final step in strategic planning is to implement the chosen strategy and monitor progress. This involves allocating resources, making necessary adjustments, and tracking KPIs to ensure that the strategy is delivering the desired results.

Sequence of Activities

The following sequence of activities can be used as a guide for strategic planning (DCAA-4Ds&I):

1. Define the organisation's mission and vision.
2. Conduct a SWOT analysis.
3. Analyse the external environment.
4. Analyse the five forces.
5. Develop a strategic positioning.
6. Develop a value chain analysis.
7. Develop operational effectiveness.
8. Develop KPIs.
9. Implement and monitor the strategy.

KPIs for Strategic Planning

Here are some examples of KPIs that can be used to monitor strategic planning:

• Market share: The percentage of a market that an organisation controls.
• Customer satisfaction: The level of satisfaction that customers have with an organisation's products or services.
• Financial performance: Key financial metrics such as revenue, profit, and return on investment.
• Employee satisfaction: The level of satisfaction that employees have with their jobs and the organisation.

Strategic Planning Function in the Value Chain

Strategic planning can be considered a support activity in the value chain. It provides the framework and direction for the primary activities involved in creating value for customers. By ensuring that the organisation's strategy is aligned with its operations, strategic planning can help to improve efficiency, quality, and customer satisfaction.

Strategic planning is a critical process for organisations of all sizes. By following the steps outlined in this guide organisations can develop effective strategies that align with their goals and achieve long-term success.