SEMINARS

The Strategic Planning Cycle

Zainab Salbi

Overview

In the process of strategic planning an organization has to familiarize itself with the rules of the game - the threats, the demands, the opportunities etc. - in order to be well equipped, conditioned, and able to pursue the strategic plan. According to John M. Bryson the strategic planning process includes the following:

Setting up the organization’s direction

Formulating the organization’s broad policy

Assessing the external and internal environment

Identifying key issues and developing strategies to deal with them

Paying attention to the needs of the stakeholders

Planning, reviewing and adopting procedures

Implementing the planning

Making fundamental decisions and taking actions accordingly

Continuous monitoring and assessing the results.

The above is only the framework within which numerous details need to be worked out. Each issue that is dealt with should have a procedure to evaluate it; only if evaluation is incorporated in all planning steps will an organization be able to stay up-to-date with the current situation.

In brief, strategic planning is an in-depth assessment of the overall situation, reviewing all of an organization’s various aspects. The scope of the individual strategic plan depends thereby on an organization’s size, resources, and circumstances. A realistic expectation of the outcome of the process is to gather key actors and issues, work through strategic acting and thinking, and to focus on what is truly important for the organization. Strategic planning is designed to question the current routines along with the contracts made with the stakeholders, and to assess what has been accomplished and how this relates to the decisions made.

Getting Started

Before starting the strategic planning process it must be ensured that there is a decision-making body that is responsible for facilitating and following up on the process. Depending on the organization, this can be a board of directors or any other group of people with clearly defined roles who are committed to implementing the strategic plan. As a principle it can be said that in a small NGO the leader herself/himself could formulate the draft strategic plan, while larger organizations usually appoint a steering committee. The ideal planning team would consist of experts from a variety of different backgrounds (e.g., politicians, academics, economists, fundraisers, etc.), because each will bring in his own perspective, and - as long as there is agreement on the vision - contribute. Diversity is a crucial element in obtaining the best results.

Although they are not decision-makers, middle management and front-line workers should also be incorporated in the process, because they are the ones who deal with the clients on a day-to-day basis and among the first to perceive mismatches between the organization and its environment.

The time allocated to the planning process itself depends on the size of the organization. A small NGO may need a few hours and a couple of follow-up meetings, a medium size organization will need at least a couple of days, while a large organization may need a month or more to prepare an agenda with all the details, including deadlines and rules. How often a strategic plan is undertaken depends on the organization as well as on the changes in the environment and how these effect the organization. In Bosnia, for example, the environment totally changed with the end of the war; at that point many organizations decided on strategic planning in order to assess their role and context within the newly created situation.

The Strategic Planning Process Step-by-Step

Initiation and Agreement on the Strategic Planning Process

The first step in developing a plan is setting a direction. Setting directions means reaching an initial agreement on the overall strategic plan, i.e., identifying and agreeing on critical, strategic issues, the actors, the scenes, and the overall present situation. The first step is therefore to negotiate an agreement amongst the key decision-makers that includes the outset of the plan, the midway scenarios and the desired conclusion, as well as ways to get there. The process is likely to flow more smoothly if a coordinating committee or any other board is involved in policy making, but sometimes organizations decide to hire a consultant or advisor. Consultants are total outsiders, who often do not know much about the organization and are rather expensive; advisors usually know the organization, but in many cases are unable to make a full-time commitment; in other cases, their input might only be required at the actual decision-making stage.

Bryson focuses on the importance of support and commitment of key decision-makers to the success of the overall planning process. Sometimes representatives from the clients and/or the funders may be invited, depending on the specific situation and goals. In Bangladesh, for example, the Grameen Bank, a micro-credit organization incorporated into its board several of its clients into their board, who were selected by election and had worked long enough with the organization to know what was going on. In Bosnia, it was too early to incorporate clients into Women for Women because most goals were either urgent or short-term projects to meet the tremendous needs, such as housing, the bid to find missing relatives, work etc. The clients had no time to adjust and become familiar with the overall vision and mission.

The initial agreement should be negotiated with at least some of the key decision-makers as reaching agreements at the very beginning on how to function and divide the work results in far fewer problems later on. Whatever problem might occur later, it would be filtered in the context of such an agreement or ‘contract’, and the problem solving procedure will follow an agreed set of rules.

Every planning process is based on a purpose that is worth the strategic planning effort and focuses on a certain desired outcome. Once all the required information is collected the various units and groups involved in an organization must be put in the picture and informed of the options. Then, the decision-makers must agree on the various steps of the strategic plan, as well as on time and reporting schedules.

The benefits of this step are that it convinces the people concerned of the strategic plan, develops their commitment to it, forces them to think strategically, and gives legitimacy to the organization. Attention should be paid to the fact that funders do not necessarily like to hear that everything about an organization is wonderful, but appreciate critical self-analyses about weaknesses and strengths because this provides a clear definition of the organization, its abilities and needs.

A good initial agreement should include a general outline of the sequences in the strategic planning effort and signify the support of key decision-makers at several levels in the organization. Leadership is very crucial in each of the planning steps regardless of whether it is in the form of a decision-making body, a steering committee, or a board of directors, etc.

The initial agreement should stipulate the goal and purpose of the effort, i.e., explain why strategic planning is needed at this particular point. There should be a steering committee responsible for defining, modifying and putting together the agreement. The identification of roles is crucial in terms of overseeing and implementing the work and defining what resources (money, time, staff, etc.) are needed.

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Identification of the Organization’s Mandate

The second step includes an examination of all by-laws, regulations, personnel manuals, etc., pertaining to the organization. It is important to be aware of these stipulations in order to avoid controversies and unnecessary self-imposed restrictions. This also includes taking into consideration the organization’s social environment, i.e., identification of what is socially accepted and the prevailing ethical standards within the community. Furthermore, it has to be clear what is expected of the decision-making body and what constraints and limitations apply.

Clarification of the Organization’s Mission and Values

A mission provides social justification for the organization’s existence and activities. In this context, the socioeconomic and political needs and interests of the clients must be identified and reasons underlying the establishment of the organization be explained. The mission clarifies the purpose and defines the arena in which an organization operates - whether it is a humanitarian or human rights group, a micro-credit program or a think tank. A socially justifiable mission leads to an identification of the key stakeholders in this process and their concerns. The target group needs to know that the organization is there to provide services to them. An example from Bosnia illustrates this: there were a lot of villages besieged by the Serbs with no food, no water, and no clothes. A Saudi organization distributed Arabic Qur’ans to the people, who did not even read Arabic; with all due respect, this well-intentioned act did little if anything to meet their needs.

Another element is identifying the criteria according to which the clients judge an organization. For example, many of the besieged Bosnian towns and villages argued that they did not want food but weapons; they criticized the UN and other international organizations for feeding them, and then allowing the Serbs to kill them. Concerns and criteria have to be put in context carefully. The criterion in the above example was the delivery of weapons for self-defense as the UN was not defending the civilian population while only food was supplied as a means of helping the people survive. The rhetorical call for weapons did not mean that the people did not want food but it shows how actions can be judged differently and how stakeholders can influence organizations.

Funders’ criteria might also differ from that of an organization or its clients, and the organization will have to decide whether to follow the funders’ aspirations and divert from its original task or stick to its mission and refrain from changing track and providing the alternative kinds of support. Organizations often opt for the money, which results in them diverting their projects and, at a certain point, losing track of what they are actually working towards. Ideally, an organization should seek unconditional funding where the criteria applied do not force it to alter its vision. A stakeholder analysis will help clarify whether the organization needs to change its mission and perhaps its strategies. In some cases the overall situation might change in a way that obliges an organization to review its mission according to the changes. Principally, if an organization has an agreed set of criteria, priorities and ethical standards on which it bases its arguments, it will be much easier to make a decision as to whether to follow the clients’ expectations or the funders’ requests.

While a vision is a more general and relates to what changes are to be made, a mission is more concrete, stating the ways and means with which those changes are to be achieved. Other organizations might share one’s vision but differ in their mission. A mission statement can be anything from a paragraph to several pages. It has to be concise and identify who is being served, what is being altered and why. Often a mission statement is rather short and general in that it fits into the different programs of an organization.

Assessment of the External and Internal Environment (SWOT-Analysis)

The environmental assessment identifies the strengths and weaknesses pertaining to an organization as well as the opportunities and threats it is likely to face in the future. With the SWOT (strengths, weaknesses, opportunities, threats)-Analysis, both the internal and external environment of the organization are investigated. The external environment includes many elements that are beyond the control of an organization, e.g., political changes, technological advances, social conditions, state of war or peace, etc. The internal environment is usually controllable and assessable and relates to staff, budget issues, by-laws, or organizational policies.

Opportunities and threats are future-related, whereas weaknesses and strengths refer to present situations. To be able to predict the opportunities and threats one needs to be familiar with the environment. For example, in 1999 Palestine might become a state or it might not – this is the situation the Palestinian people are facing and the outcome will be the result of unpredictable developments. According to Bryson, "opportunities and threats can be discovered by monitoring various economic, political, technological, social, educational and physical trends and forces." Identifying an organization’s strengths and weaknesses also means preparing and planning for the future.

To identify internal strengths and weaknesses an organization must examine its resources, number and qualifications of staff, salaries and appraisal structures, as well as underlying philosophies, values, culture and ethics. All these issues are crucial in learning about the organization’s character and in assessing its present strategies, performance and output. Bryson emphasizes that organizations must also monitor clients and important external stakeholders, especially those that affect the organization’s resources, and analyze current trends amongst both funders and beneficiaries. This also includes an assessment of what is socially acceptable within a given community, for example, to which degree women can be involved, after which the organization must make a strategic decision as to whether and to what extent it wants to follow social norms or challenge them. In Bosnia, for example, part of the Women for Women program was to train women in non-traditional jobs, such as painting and carpentry, which was a challenge to conservative limits.

Another example is Bangladesh, which is a very conservative society, where women in rural areas do not go to the market. One women’s organization decided to promote women’s involvement in non-traditional jobs, simply because they pay better, but everyone resisted the idea except one woman, who was willing to face the challenge. With the help of some friends and relatives she started selling food in the market and was successful enough to open up a store, at which point all the men in her street closed their shops in protest. Her clients remained faithful, however, and other businessmen began opening shops nearby, due to the fact that so many people came to that area, which eventually developed into a totally new market. The woman sacrificed a great deal and faced many problems, including from her husband, who was beating her every day, but in the end everyone accepted the idea of women selling in the market and she even hired her husband as an employee!

Identification of Strategic Issues

According to Bryson, "Strategic issues are the fundamental policy questions or critical challenges that affect an organization’s mandate, mission and values, as well as the clients, the finances, the staff, etc. By definition, strategic or critical issues involve conflicts pertaining to what, how, why, where, and when something should be done and who should do it." Strategic issues could be, for example, the goal of a project; the ways and means to undertake it; the philosophy behind it; the location and timing, and the persons involved, favored or disadvantaged by the different ways of solving an issue. An organization must be prepared to deal with the consequences that occur once a decision has been made. For example, the approach of the Bangladeshi woman to challenging the social norms was a strategic one: she continuously assessed how her environment reacted and decided accordingly whether or not it was worth taking the risk of going ahead. She and the organization that helped her went through a tough time with many of the employees being threatened by men, but in the end, they fulfilled their mission.

Bryson suggests different ways of identifying the major critical issues that lead the whole process of strategic planning. The first is one is the critical issue approach and examines all the important issues an organization is facing or affected by and puts them in a logical order. These are then ranked according to priority and dealt with one by one. In doing so, one might find that some of the issues are interrelated and that by focussing the strategic planning on certain issues the remaining ones will be solved as a consequence. For example, ‘water’ is a critical issue for the Palestinians, but it results from other constraints and would be less of a problem were a state to exist.

Another way is the scenario approach, which develops several alternatives of a vision and then selects the best scenario. For example, the scenarios that are available for the Palestinians right now are a Palestinian state, an arrangement with Israel, or (con-) federation with Jordan. In choosing the scenario that is most desirable and meets the relevant issues and concerns, a relationship with Jordan, for example, would be less inclusive than having one’s own state. The scenario that provides the best answers to pressing questions should be elaborated. In elaborating, one always must ask questions such as what is the goal of the organization; what is its goal within the community; which services does it provide; which are its key relationships; and how is it financed? The advantage of this approach is that it is quick and engages creativity and imagination.

A third possibility is the alignment approach, which puts the critical issues side by side in three dimensions, lists the significance of each and tries to align them. Basically it is like a car, whose four wheels must be in alignment. In the case of an organization there needs to be an alignment between the mission, the programs and the resources. If these components do not fit with each other they must be worked on until a balance is reached. This is to clarify the mission statement, assess its future relevance, and see whether it should be changed. Other questions include: Are the program strategies relevant? Do they address the right needs in the community? Are the programs well implemented and if not, how can this be changed? Are the required resources available and utilized correctly and efficiently, and if not, what should be done?

A statement of strategic issues should always include the following three elements:

All issues should be put as questions: i.e., if x, y, or z happens, this is what we will do;

The factors that make the issues challenging should be listed; and

The planning team should prepare a list of the consequences of not taking the proper steps.

Bryson suggests three types of strategic issues that can be differentiated:

Issues that require no action at the present but must be monitored.

Issues that are appearing on the horizon and will require action soon, so that they need to be addressed from now. When the negotiations in Bosnia were initiated, for example, it became apparent that the war would end in the not-too-distant future; accordingly, the organizations began to think about how this would affect them and began to prepare for a postwar stage.

Issues that require an immediate response to things that are happening now and need to be addressed without delay.

Formulation of Strategies and Plans to Deal with the Strategic Issues

After selecting the strategic issues, a first draft plan will be drawn by a chosen individual or group according to an agreed upon format. It should include an executive summary and an outline of the process and the ultimate goal. A mission and a vision must be stated as must the values and guiding principles of the organization. The history of the organization - how it was founded, how it started – should be noted as well as past accomplishments. If an organization is ten years old, for example, there should an explanation of what it has achieved thus far and why it is different from when it started. In addition, an organizational profile should be drafted, detailing who the members, clients and stakeholders are and what specific services are offered. Finally, financial plans are needed; the budget must take into consideration the expected revenues and expenses and be balanced according to the available resources. Furthermore, the marketing strategy and success indicators should be identified as should future challenges, competitors, allies, etc.

Bryson defines a strategy "a pattern of purpose, policies, programs, actions, decisions or resources; allocations that define what an organization is, what it does and why." Formulating strategies start with and build on the vision. Once strategic issues are identified the next step is deciding how to deal with them. While this should always be answered positively, the planning team must consider the difficulties inherent in the implementation of these strategies, such as budgeting, staff and resource challenges. The team should develop major proposals for dealing with the obstacles and challenges ahead. The strategy and corresponding rules must be clear from the beginning in order to avoid conflicts over issues at a later stage. Putting strategic issues into a strategic plan also requires a system that allows one to reassess the strategies. This is a continuous process that examines the strengths and weaknesses of the plan as well as the modifications necessary in order to achieve better results.

Implementation

Once the strategies have been agreed upon and formulated, the organization must develop an effective implementation process for the actions it will be taking over the specified period, e.g., the next two or three years, whereby past strategies and their pros and cons should be taken into consideration. The required actions need to be identified and outlined in a work plan, which should also predict what kind of challenges might occur and when. By referring to pre-designed action plans for varying scenarios, an organization is able to react timely and appropriately to an emerging situation. In this context, one should bear in mind that strategic planning can be carried out for an entire organization as well as for a certain program or unit. Accordingly, the work plan may extend over weeks, months or even years and is usually divided into various phases, e.g., stage 1, stage 2 and so forth.

For example, if the goal is that five percent of the population have a high school degree in five years, the initial tasks would be to identify the illiterate and draw up a basic literacy program. The second stage would be to move step-by-step from literacy to formal education until the ultimate goal is reached.

The implementation plan should also contain an appendix, in which any additional information can be listed, e.g., the results of a stakeholder survey.

Evaluation

Once the plan is put together, it should be reviewed and refined, where necessary, taking into consideration the general reaction to the plan and any changes that have occurred. The strategic plan must always be up to date and a monitoring system should be established at an early stage to ensure that the plan is implemented according to its stipulated strategy, vision, mission values, etc.

An evaluation must be made at the end of the planning process, although it is even better to carry out an assessment after each step of the planning cycle. Each section of the plan should be discussed to identify and eliminate possible risks and problem spots. In doing so, it can be useful to seek the input of the various stakeholders, but the ultimate decision on the final version of the plan should lie with the determined decision-making body; otherwise, things might get out of hand and delay the process considerably. In Bangladesh, for example, a women’s group that ran literacy and empowerment programs for women used very traditional textbooks, which portrayed the woman as mother and housewife, while the father went to work and made a living. Hence, the women enrolled in the programs received contradictory messages: while they were taught to become (financially) independent, the books suggested they stay at home and cook. Consequently, the women’s organization decided to write a new textbook based on their input. The clients, asked to provide feedback on the new book, did not like it so the book was revised over and over again until everyone agreed upon a final version.

The assessment process is to strengthen and reinforce the strategic plan; by comparing it to its original vision, it is possible to assess why and how the plan has diverted. Diversion from the initial version is not necessarily wrong but the reasons behind it should be examined why it evolved. The need for a reassessment of the strategic plan - and a decision as to whether it should be modified or not - may also arise if the leadership changes, reforms are pending, needs have changed, or staff or the external environment provide new relevant input.

Before undertaking an evaluation the organization has to decide and be clear about which issues and goals should be assessed (e.g., time, services, performance, etc.). In Bosnia, for example, a training program was undertaken that aimed at providing skills training for women and teaching them about their civil, economic, social and political rights. The ultimate goal of the project was to improve their chances of employment, based on the notion that awareness concerning their rights would strengthen their self-esteem and make the women more confident in pursuing their goals. Since the reasoning was that an increase in their awareness would lead to increase job opportunities, the program was then evaluated with regard to the employment situation afterwards and not with regard to how much the women had learnt during the training itself.

It is also important to look at the suitability, appropriateness and possible duplication of a project within a given context. Principally, by knowing its environment and challenges an organization should have a reasonable idea of what evaluations should be based upon and how outcomes can be measured.