A good strategic plan incorporates two types of assessments with the ultimate goal of creating an organization that can has the capability and knowledge to move successfully toward the vision. Those assessments are the strategic and the internal.
Bill focused on the internal assessment in his recent post. The internal assessment is an essential part of a comprehensive strategic plan as it focuses on what is not working within the organization that threatens its ability to successfully achieving the vision. The assessment addresses key issues such as an out of date computer equipment, poor recruitment and hiring systems, etc.
The strategic assessment is the focus of this post. This assessment is aimed at finding the best strategic projects to move the organization toward the vision.
Part one of a strategic assessment is a thorough examination of all the opportunities available to the organization, as well as the threats against it, to move toward its vision. The examination has 3 pieces, each looking at a different aspect of the organization.
The first piece is a complete a scan of the environment outside of the organization for opportunities and threat. This environmental scan encompasses several categories – technology, politics, the economy, customer demographics, and culture. A good environmental scan will identify the opportunities and threats relevant to your unique organization in each of these arenas.
For example, a change in government administration or change in the economy could either be an opportunity or a threat to the funding of a non-profit organization. Or an influx of millennials to a once rundown part of town may pose an opportunity to a small organic grocery chain to open a new store.
The next piece in the assessment is a competitive analysis. At PGS, we utilize the work of Michael Porter for this step. His competitive analysis includes a thorough look at what is happening with your customers, competitors and suppliers. It then expands the focus to encompass potential new entrants into your competitive landscape, including how easy it is to enter the market, and potential substitutes to your product or service that could make your offering obsolete.
The final piece in the assessment is based on the work of Gary Hamel. His focus is on strategic assets, those things that are unique and marketable in what the organization owns, knows or does. Can the organization’s expertise or skills be used to grow the organization? A common example of the use of a strategic asset is a popular sports figure putting his or her name on a local car dealership or restaurant with the intent to bring in additional customers.
At the end of a thorough look at the outside environment, the competitive landscape and the strategic assets, leadership should have a list of the strategic projects available to the organization to expand its customer base and offerings to grow the organization. With limited time and resources to invest, how do you determine which are the best opportunities? You use a prioritization tool that will allow the best contenders to rise to the top
At PGS, we use a priority matrix in which an organization identifies the 4-7 criteria most important for the strategic initiatives to address. Criteria such as return on investment, expansion of customer base or risk are common criteria. Once the criteria are determined, each potential strategic is assessed on its ability to meet the criteria. Those that are the best match, are the best strategic projects for the organization to pursue.
The result of a strategic assessment is a list of the 2-5 clearly defined strategic initiatives chosen to grow the organization. The next step? Take the projects identified in the internal assessment and the initiatives from the strategic assessment and outline the project plans to accomplish them.
Questions or thoughts? Email us to join the conversation.