Let us know how it is going
6.1 READ THE ARTICLE

Strategic Planning

A very important part of planning and targets is the subject of strategic planning. This subject has to be covered in detail, including the definition of the word “strategy” and how strategic planning fits with other areas of management.

The word “strategy” comes from a Greek word, strategos, which means “a general,” a person who leads or directs an army and decides what the soldiers will do. The word strategos itself is made from stratos (Greek word meaning “army”) and agein (Greek word meaning “to lead”).

“Strategy” is defined as a plan of how to direct armies in a war or a part of a war.

From this original meaning, “strategy” also means a plan or method for directing any activity in order to achieve a specific goal or result.

This is the type of planning that is done at a high level of a group or company by its leaders and executives. They are the ones who have a wide view of the entire activity, so they are the ones who can figure out a strategy for the entire group.

A strategy lays out the plans that will accomplish something large for the group. It also shows how to use resources (money, employees, equipment, supplies, etc.) in a smart way or the methods to use to block an enemy or overcome existing obstacles in order to achieve the result.

Because a strategy is worked out at the high level of a group, it is a central strategy and acts like an umbrella that covers the activities of the levels below it.

All this tells us what strategic planning is.

What It Does

Strategic planning gives direction for the activities of all the lower levels of a group. The lower levels have their own plans and programs and projects. These take up what their smaller areas have to deal with and these smaller plans are coordinated so as to help accomplish the main goal.

This gives a clear look at why strategic planning is so important and why it must be done by the upper-level planning body so that management can be effective and succeed.

What happens if strategic planning is missing? Well, what happens in a war if no strategic planning is done?

Groups of soldiers could be fighting in important areas, such as trying to keep control of a bridge that is the easiest way across a river or in an area where there are a lot of enemy soldiers to fight. These groups of soldiers can be left without any other soldiers or supplies to support them. At the same time, other groups of soldiers are fighting in areas that are a long way from where all the main fighting is happening, so they are not helping where they are needed. Supplies and ammunition could be moved to the wrong area or not sent at all. The result would be orders that block each other, communications that are not sent to the right places, resources (soldiers, supplies, ammunition, etc.) that are wasted and battles that are lost. Without a plan, there is no coordination among the different parts, so everything ends up being confused, disorganized and headed for disaster.

What a difference between this and a strong, coordinated push toward achieving the goal!

You can see how strategy would also work in any group and why it must be done at the upper levels. The important word here is “done.” It cannot be ignored or dropped out. It cannot be supposed to be done, but without proof of actually being done. Strategic planning must be done and then made known at least to the next lower levels of management. This way coordination and correct targeting can be done.

Purpose and Strategic Planning

A strategic plan begins with noticing that there is a problem to be handled or a goal to be met. It always includes the purpose or purposes to be achieved.

Once the purpose has been figured out, various strategic plans can now be written up based on this purpose.

For example, a community group surveys the people of the town and finds that a problem for many is the high unemployment in their area. The group decides to handle that and, with this purpose in mind, it works out a strategic plan that includes bringing more jobs into the area. It also works out plans to increase and improve adult education so local people can learn new skills.

First, several members of the community group organize meetings between companies that are looking for employees and people in the community who are looking for jobs. And on the educational targets, other members of this community group are contacting and bringing in to the community various education classes and training programs. These steps and others on the plan would all help improve the employment scene in the town and bring about an improvement in the existing scene (the way things are right now).

In fact, STRATEGY CAN BE SAID TO BE HOW TO EFFECTIVELY AND QUICKLY GET A PURPOSE INTO ACTION IN THE REAL PHYSICAL UNIVERSE AT SPEED AND WITH NO FLUBS (MISTAKES OR ERRORS).

Any strategic plan can include several major actions that are going to be handled by different parts of a group in order to achieve the purpose. These are given in very general terms, because they are a statement of the beginning overall planning that has been done. From them, smaller, shorter-range plans can be developed. But all of these things have to fit together.

Example:

Problem to be handled: The ABC Paper Company has always had a successful line of paper products and it is continuing to produce these. But it is dealing only with its regular customers. It is not going out to find possible new customers. As a result, the company is quickly going broke and its executives are leaving to go to work for other companies where there is more opportunity for expansion (an increase in the amount or type of work that a company or business does).

Purpose: Put a paper company there that does all parts of its job and that reaches all of its possible customers, both old and new, for high sales of existing and new products. The company continues to deal with its regular customers and sell even more and so increase the money that the company earns. By all these actions, it builds its reputation (the opinion people have of something) as a successful, modern business that earns money and, because it is continuing to grow, has opportunities for expansion.

Strategic plan: The strategic planning, based on what needs to be handled and the purpose, might go something like this:

1. The most important action needed to stop going broke is to start a new sales unit. But the company has to do this without stopping any sales activities that are occurring right now and they also cannot get rid of any other sections of the company. The new sales unit is first going to find new customers for the current line of products from among (a) stores that sell paper products, (b) large businesses that sell paper products to stores and (c) mail order, a way of selling things in which people choose what they want, usually from a catalog, and have it sent to them by mail. Sales reps who have worked in sales before and who have excellent production records (reports of how much a person has produced in a particular type of work) will need to be hired to run each of these sections. Many other professional sales reps will need to be found. These can be hired for a low basic pay and make most of their money on commissions (extra amounts of money paid to someone based on how much he has sold). These sales activities can then be increased and spread over an even larger area by hiring managers for each area, sales reps who start other sales reps and even door-to-door sales reps. As a part of this plan, commission systems and sales kits will need to be worked out, along with ways of advertising and making the products known through such things as handouts, commercials, free samples, etc. These things all have to be done right away to quickly increase sales, prevent further losses and increase the company’s profits.

2. While the above steps are happening, the sales and production records of existing staff need to be reviewed. Any unproductive staff will be fired so that the company keeps only those who are productive. The company’s records of money earned and money spent need to be checked and if this shows that any stealing has occurred, this will need to be handled with the correct legal action. In other words, the current staff and procedures have to be fully reviewed and corrected as needed, while increasing production.

3. Surveys need to be taken of existing customers and possible new customers to find out what new paper products people want or will buy. Based on survey results, a whole new line of paper products can then be developed, produced, advertised and sold in many areas. The program for establishing the new line of goods will need to cover organizing the new production unit (including its executives, designers and workers) as well as any additional machinery or equipment required. The program also needs to include targets for handling public relations (the practice of keeping or improving friendly feelings between a group and people outside the group). And it should include the things that must be done to advertise and push both the new and old products for high sales of both. This planning would also include ways to make known that the company has always been a leader in developing new paper products, so there are many opportunities for expansion-minded executives.

Such a strategic plan corrects the bad condition that the company is in. It also creates a highly profitable and expanding scene for the future of the whole company.

From this strategic plan, tactical planning would be done. Tactical planning means taking the broad strategic targets and making them into many smaller actions that are precise and exactly targeted, in order to get the strategic planning executed.

There would be many people working on this and they would all have to understand the purpose and agree with these plans. Somebody reading over such plans might not see their importance unless they understood the conditions that exist in the company and the overall purpose that the strategic plan is supposed to handle. With this, they could work out their tactical planning.

It is quite common in the tactical execution of a strategic plan to find that some tactical targets need to be changed or new ones added. Some targets even need to be dropped from the program because they aren’t needed. The tactical management of a strategic plan requires skill and understanding, so this is allowed for.

The above description shows the sequence that is done to develop a strategic plan, starting with a good purpose that other actions can be coordinated with. Then the strategic action necessary to accomplish the purpose can be worked out. And finally, the tactical plans to bring the strategic plans into existence can follow.

This way, a group can flourish and prosper. When all strengths and forces are aligned so as to push forward together, a huge amount of power can be created.

So you state the purpose and from that work out what strategy will be used to accomplish the purpose. This then creates a connection from the purpose into the area of tactical planning.

When the strategic plan with its purpose has been worked out, it is picked up by the next lower level of command and turned into tactical planning.

Strategic Versus Tactical Planning

Strategy differs from tactics.

This is a point that must be clearly understood by the various levels of management.

There is a very, very great difference between a strategic plan and a tactical plan.

Tactical planning is used to win something small, such as a battle, and strategic planning is used to win the full war.

The strategic plan is the large-scale, long-range plan to ensure victory and a tactical plan tells exactly who to move what to where and exactly what to do at that point.

The tactical plan has to coordinate with and accomplish the strategic plan. And it has to do this with precise, doable targets.

Basically, that is management.

Bridging Between Purpose and Tactical

One error that is commonly made by untrained personnel is to jump from purpose to tactical planning, omitting the strategic plan. This won’t work because the tactical plan has to be aligned to a strategic plan to be successful.

The point to be understood here is that strategic planning creates tactical planning. The strategy has to be worked out so that the purpose can be achieved. Based on that strategy, you then work out the tactical actions to be done to implement the strategy. But if you try jumping from purpose to tactical, ignoring the strategy, your plans will not accomplish the desired results.

So between purpose and tactical there is always the step of strategic planning. We could say that a strategic plan is the means to get the purpose itself to function.

It is actually a plan that has to do with being clever (intelligent and having good ideas).

A person might know all about the purpose and might come up with a number of tactical targets having to do with it. And possibly the targets will work, in themselves. But the purpose is supposed to handle something. So if there is no strategic means to do this, the same problems could continue to exist.

Putting the actual bridge there (the strategy) between purpose and tactical means that the purpose will be able to succeed.

NOTE: In order to continue, you must complete all previous steps in this course. Your last incomplete step is
NOTE: You had several answers that were incorrect. In order to continue, you should re-read the article and then test your understanding again.