2. Financial planning is a continuous process of
directing and allocating financial resources
to meet strategic goals and objectives. The
output from financial planning takes the
form of budgets.
Financial Planning starts at the top of the
organization with strategic planning. Since
strategic decisions have financial
implications, you must start your budgeting
process within the strategic planning
process. Failure to link and connect
budgeting with strategic planning can result
in budgets that are "dead on arrival."
3. Strategic planning is a formal process for
establishing goals and objectives over the long run.
Strategic planning involves developing a mission
statement that captures why the organization
exists and plans for how the organization will
thrive in the future. Strategic objectives and
corresponding goals are developed based on a very
thorough assessment of the organization and the
external environment. Finally, strategic plans are
implemented by developing an operational
/operating or action plan.
Financial Plans (Budgets) Operational Plan Strategic Plan
4. Section 1: The “What” of Strategic Planning
What is strategic planning? A generally acceptable
definition of strategic planning is as follows:
“Strategic planning is the process by which
members of an organization envision its future and
develop the necessary procedures and operations to
achieve that future.” [Pfeiffer, Goodstein, Nolan,
1986] and [Rothwell, 1989]
5. Strategic planning is also “a process of defining the
values, purpose, vision, mission, goals and objectives of
an organization. Through the planning process, a
jurisdiction or agency identifies the outcomes it wants
to achieve through its programs and the specific means
by which it intends to achieve these outcomes.”
Strategic Planning can be:
A process for setting future directions
A means to reduce risk
A vehicle for training managers and direct supports
A process for making strategic decisions
A way to develop consensus among managers and direct
supports
A means to develop a written long-range plan.
A sound strategic plan will:
Serve as a framework for decisions or for securing
support/approval.
Provide a basis for more detailed planning.
6. Explain the business to others in order to inform, motivate &
involve.
Assist benchmarking & performance monitoring.
Stimulate change and become a building block for the next
plan.
Most of us know that planning is a way of looking toward the
future and deciding what the organization will do in the
future. Strategic planning is a disciplined effort to produce
decisions and actions that guide and shape what the
organization is, what it does, and why it does it (Bryson,
1995). Both strategic planning and long range planning cover
several years. However, strategic planning requires the
organization to examine what it is and the environment in
which it is working. Strategic planning also helps the
organization to focus its attention on the crucial issues and
challenges. It, therefore, helps the organization's leaders
decide what to do about those issues and challenges.
In short, as a result of a strategic planning process, an
organization will have a clearer idea of what it is, what it
does, and what challenges it faces. If it follows the plan, it
will also enjoy enhanced performance and responsiveness to
its environment. (source: Western Michigan University)
7. OOP’s!
Why Should Departments and Agencies Plan Strategically?
So your organization doesn’t end up like this!
Also, planning strategically can help your department or
agency:
•Improve the confidence of our citizens or customers in the
capability of government
•Improve Program/Service effectiveness and management
accountability by focusing on RESULTS
•Enable managers to improve service by developing a plan
to meet objectives and providing information on program
results & service quality
•Improve effectiveness and efficiency of government
agency operations
8. Strategic planning enables you to answer the
following questions:
Who are we?
What capacity do we have/what can we do?
What problems are we addressing?
What difference do we want to make?
Which critical issues must we respond to?
Where should we allocate our resources? /what
should our priorities be?
Only once these questions are answered, is it
possible to answer the following:
What should our immediate objective be?
How should we organize ourselves to achieve this
objective?
Who will do what when?
9.
A strategic plan is not rigid. It does, however, give you
parameters within which to work.
You will need to plan strategically when:
You begin the planning for a new project, program,
department or organization.
You need some ideas to help you prepare a budget for a
new project, program, department or organization
When you need some ideas to help you plan a planning
process.
You need to plan strategically as well as operationally
and to make a distinction between the two.
You need some ideas to help you plan a strategic
planning process.
You feel you need to review your strategic framework
.
10. The management team of the organization or project should work through
the following questionnaire.
Where a statement has two parts and you would answer “definitely” to
one part but not another, then go with the weaker response. So, for
example, in the first statement, you may be able to answer “definitely”
your organization has a clear vision, but not be sure whether there is
consensus about the vision. Your response then is “not sure”.
Score your project or organization as follows on each statement:
1 = Definitely
2 = Maybe/Not sure
3 = Definitely not
If your total is 20 or more, then your organization or project is ready for a
strategic planning process. If it is 15, or between 15 and 20, then your
organization probably would benefit from a strategic planning process.
Under 15, then there is no urgency but you should at least do strategic
planning three years after your last strategic planning process
11. A clearly stated vision;
Clearly articulated values;
A mission, articulated in a mission statement;
The overall goal of the project or organization;
The immediate objective of the project or
organization;
The key result areas on which the project or
organization intends to focus;
An understanding of the gaps between where an
organization or project is and where it needs to be to
achieve its goals and objectives and of the forces that
are likely to help and hinder it.
The strategic framework should give coherence and
clarity to the work of the organization or project.
12. In a diagrammatic form, the process of defining the
strategic planning framework looks like this:
13. Strategic planning enables a development organization to:
analyze the situation or context in which it is operating (social,
political and economic) so that it understands the context and is
able to formulate a vision;
identify the problem or problems within the situation that the
organization believes it is well-placed to address;
reflect on its value system in order to create parameters (a frame)
for its activities;
set goals for itself;
formulate a vision and mission statement based on its problem
analysis and identification;
analyze its strengths and weaknesses in addressing the identified
problem;
identify opportunities and threats in the environment that may
affect its work;
prioritize what it needs to do;
review strategic options for achieving its goals and select the most
appropriate;
structure itself appropriately.
14. Without the strategic planning phase, it is very likely that you will
end up doing a range of activities that may not always add up to a
co-ordinated effort. The strategic plan keeps you on track. It
provides a touchstone against which to answer questions such as:
Is this the sort of work we ought to be doing?
Will this activity contribute to the achievement of our vision and
goals?
Given that we have scarce resources, is this the most strategic
action for us to take? Will it have the maximum impact for the
investment of resources made?
Is this the most appropriate way for us to go about achieving our
goals?
Any new organization, department, project or program needs to
do strategic planning in order to develop a strategic framework in
which to work. However, established or existing organizations,
departments, projects or programs also need to revisit the
strategic planning process from time-to-time. Situations change,
strategies don’t work, different opportunities become available. It
is not recommended that you do strategic planning every year.
This could well lead to you chopping and changing your strategic
choices without giving them a real chance to work. However, a
strategic review every two years, and a full-scale strategic
planning process every three to five years, can work well.
15. It is now that we get to the “doing”. Most
organizations find this much easier than “being
strategic”. A workshop to plan? A campaign to
launch? Let’s get on with it! But without the
preliminary strategic work, you have no way of
assessing whether the workshop or the campaign or
the approach is what you really should be doing!
Once strategic planning is done, the organization
is ready to move into the next phase of planning
which is doing the operational/ action planning.
This turns a strategy into implementation.
16. “Strategic” and “operational” planning - these are different words
for a very similar process. Each of them refers to a plan for
implementation in order to achieve your broader goals and your
objectives. For the sake of simplicity, we generally refer to the
process as operational planning and the plan as an
operational/action/operating plan.
The key result areas of your strategic plan become the goals of
your operational planning.
Once you have a strategic plan, the operational plan answers the
following questions:
What needs to be done?
How will it be done?
Who will do it?
By when must it be done?
What resources are needed to do it?
Answering these questions will give you the basis on which to
plan a budget and raise money or generate income.
The operational plan records what must be done, the date by
which it will be done, who will be responsible for getting it done,
and what resources will be needed to do it (money and people).
17. Provides a basis for budgeting.
Forces the organization or project to decide how it intends to reach an
objective.
Helps the organization or project move beyond crisis management to
sensible planning and use of resources.
Helps to resolve issues of sequence or the order in which things should be
done.
Provides a basis for holding people accountable for what they do.
Provides a basis for measuring progress and doing a work progress review.
Provides a basis for job descriptions.
Without an operational plan, implementation is very difficult. Work
tends to be confused and uncoordinated. It is difficult to know who
should have done what by when. Sometimes things don’t get done and
no-one notices until it is too late.
- A strategic framework is the skeleton of planning that results in
impact. An operational plan is the hands that lead to efficient and
effective implementation.
18. Strategic Thinking Operational Thinking
For Long Term … 3 years For Short Term … 6 Months
Based on a specific vision for the
future
Analytical and not necessarily based on
the vision
Focus on Theoretical side and
apply by strategy.
Focus on Tactical and executive sides
and apply by actions.
Designed for effectiveness Designed for accuracy