A Perspective on Strategy Development

What is a strategy?

A strategy is simply a plan. However, it is not just any kind of plan. Developing a strategy requires planning that is comprehensive, long-term, and integrated. A strategy charts a path to the future -- how do we get from here to there? Strategy development allows businesses and governments to:

• examine current strengths and weaknesses
• identify potential opportunities and threats
• establish a clear sense of direction
• identify the specific actions that can be taken to
  • create new strengths or enhance existing ones
  • eliminate or minimize weaknesses
• establish the means for monitoring actions taken and measuring success

Why is having a strategy important?

Constant change is a reality not only in the economy but also in all aspects of our lives. Dealing with change creates both opportunities and challenges. Developing a strategy is an essential tool for managing change effectively. It provides the avenue for businesses and governments to indicate priorities to key stakeholders. A stakeholder is any individual, group, or organization (public or private) that can affect or be affected by the actions of the planning organization.

However, a strategy is not a quick fix, a substitute for adequate resources, or a magical solution for all problems. It must recognize what cannot be controlled locally and deal with actions that are realistic and desirable.

What are the purposes of strategy development?

Strategy development serves two primary purposes. The first is to chart a path to the future. Although the future is always uncertain, a strategy provides a framework against which to test policies and decisions, particularly those relating to the deployment of human, financial, and material resources. Secondly, strategy development leads to a strategic approach to decision making and management. It creates a climate within a business or government department that is conducive to continuous and participatory planning. Planning ceases to be the responsibility of "planners" and becomes the shared responsibility of every member of the organization. A "planning culture" takes root as stakeholders begin to anticipate and welcome change rather than react to and resist it.

Both the substance and process of strategy development are important. The substance is readily equated with the content of the planning document, i.e., vision, strategic directions, and objectives. The process of formulating a strategy is of almost equal value. Planning that invites the meaningful participation of stakeholders generates the fresh commitment and new skills necessary to ensure that the strategy does not simply take up space on the shelf.

What are key elements of a strategy development process?

Although there is much variety in the academic literature and in practice regarding terminology and approach, there is a consensus that the strategy development process involves three fundamental phases -- analysis, direction setting, and implementation:

The focus of analysis is to identify the organization's strengths, weaknesses, opportunities, and threats (SWOT). Strengths are what the organization does well. Weaknesses are what it does not do well, what it is doing but should not be, or what it fails to do. Opportunities allow the organization to maximize strengths and minimize weaknesses. Threats prevent the organization from seizing opportunities.

The analysis phase contains three elements. The first is an environmental scan. The scan encompasses an analysis of political, economic, demographic, technological, legal, and social trends and it provides a basis for identifying the opportunities and constraints facing an organization. The second element is an internal scan and it analyses strengths and weaknesses of the organization's current structure, policies, procedures, and resource allocations. The third element is an analysis of stakeholders' perceptions of the organization's strengths and weaknesses as well as potential opportunities and threats. At the end of the analysis phase of the strategy development process, the strategic issues confronting the organization should be clear.

Direction setting involves the formulation of a vision/mission statements and the identification of priority strategic directions. A mission statement is an interpretation of the organization's current purpose, relationships with key stakeholders, and values. A vision statement outlines the preferred future that the organization wants to create. Strategic directions emerge from the set of strategic issues identified in the analysis phase and once they are officially adopted and prioritized, strategic directions are the main opportunities and challenges that must be managed if an organization is to realize its mission and vision.

Implementation starts with action planning. The first step in the action planning process is to identify the specific actions that must be carried out to manage each strategic direction in a cost-effective manner. Next, actions must be ranked in order of priority. Finally, a clear objective and other planning factors (for example, resource needs, time frame, etc.) must be articulated for each action.

What role should stakeholders play in developing the strategy?

Key stakeholder groups drive effective strategy development. Since there are many potential stakeholders, it is important to ensure that they participate at the right time and in an appropriate manner. Failure to do so will result in a planning process that is ineffective. In short, stakeholder participation is central to successful strategy development but only if it is managed.

In the particular case of government, the management of stakeholder participation must recognize several fundamental issues. At the core is the notion that active and continuous involvement of citizens in the affairs of government is the hallmark of democracy. Ideally, public participation is not limited to the minimal obligation to vote in periodic elections. It must also include the right to be informed about, to comment on, and to influence the major policy decisions that elected representatives make between elections. Although the constitutional basis of a representative democracy stipulates that those who are elected have the final say, their capacity to make intelligent and just decisions is clearly expanded by meaningful citizen input and influence.

Notwithstanding the ultimate value of participation in the development of public policy, a number of constraints must be recognized and overcome in any scheme designed to inform as well as to obtain the views of the public. Ordinary citizens are neither planning experts nor are they able to commit substantial amounts of personal time to planning exercises. The demands imposed by one's job, family, and social and recreational interests can easily displace the need to get involved in governmental matters. This is true even at the municipal level, the government that is closest to community residents and whose responsibilities are very visible in the day-to-day activities of individuals. Finally, not all citizens have the same degree of political efficacy, i.e., a sense that they can influence the political system and that their votes and opinions really count.

Therefore, any scheme designed to encourage public participation in government decision-making must be substantive, flexible, balanced, and focused. Substantive participation means that citizen involvement will have an impact on the final outcome. This implies that a two-way communications channel must exist between citizens and governmental officials. Flexible participation means that mechanisms to provide information and to solicit views will be designed to accommodate the daily realities of citizens, i.e., normal hours of work, limited technical background, and competing time demands. Balanced participation requires discussion forums that are open and representative along age, gender, occupational, and organizational lines. Focused participation necessitates the translation of technical background documents into an agenda for discussion that is clear and deals with the fundamental policy choices that are often masked by the jargon of the professional. Given the constraints to participation faced by most citizens, open-ended invitations for input usually yield few worthwhile results.

The development of public policy can benefit from substantive, flexible, balanced, and focused participation in three ways. First, it leads to better decisions since they are developed from a wider information base. Second, public participation may facilitate the development of a consensus around some or all of the contentious issues and options that are generated by any planning exercise. Third, public participation increases the legitimacy of government decisions and contributes to higher levels of political knowledge and efficacy within the community.

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© R.A.L. Consulting Limited, 2008