Strategic Business Planning

Strategic Business Planning involves ‘strategy formulation’ that inherently addresses the mission, objectives, strategy and policies of the organization. Furthermore, this includes understanding and considering the external and internal environments and their effects on the company.

This speaks to the ‘strategy implementation phase,’ i.e., the specific programs, budgets and procedures that the company will follow to achieve the objectives and mission of the organization.

Key in this area is the evaluation of current results. This means that an evaluation should be made of the entire process, i.e., Mission, objectives, strategy and policies. Companies typically do not do this often enough, and thoroughly, on a regular basis and this can lead to a ‘less than optimal’ outcome.

There are different ways to examine a company’s performance. Certainly financial results play a key role providing senior management with information about the fiscal health of the company. But these results alone do not tell the whole story, e.g., whether sales are increasing, decreasing or flat, etc.

In a like manner, the sales history can describe the results of the company’s sales and marketing plan. But this too paints only a partial picture in that it does not tell management how well they meet the customer’s qualitative or quantitative needs. So, another program must be used.

To determine the tactical performance of a company, it is important to conduct an operational audit periodically. An audit of this kind, done quarterly or semiannually, reveals ‘how well’ the company is performing at meeting, exceeding, or missing the customer’s expectations.

Finally, once management has the results from the fiscal, sales history, and operational audit reports they can make decisions how to proceed so that the organization can tale action in any area that it feels it needs to change.

Jerome Grossman, a past Executive Vice President and Chief Operating Officer for H&R Block once said, “You can’t stand still. Your are either moving forward or going backward.”

The diagram below puts the overall planning process into perspective. 1

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1  Strategic Management and Business Policy, second edition, Thomas L Wheelen, J David Hunger, 1986, Addison-Wesley Publishing Company, Inc.