Strategic Planning

Sustainable competitive advantage doesn't just magically materialize. Instead, it's the culmination of a lot of hard work and planning. Strategy is all about planning, and planning requires structure.  In general, the strategic planning process consists of the following:

1. Strategy analysis (Lessons 1-4 of this course) which includes defining a vision, selecting a mission, and setting major corporate goals, analyzing the company's external environment to identify opportunities and threats, and assessing the company's internal environment to identify strengths and weaknesses.
2. Strategy formulation (Lessons 5-10 of this course) which includes creating strategies that build on strengths and mitigate weaknesses to capitalize on opportunities and protect against threats.
3. Strategy implementation (Lessons 11-14 of this course) which is focused on carrying out these strategies and collecting feedback by monitoring the success of the strategies while scanning the external and internal environments for potential strategy-altering changes.

And of course, since we expect strategies to change, we have to act upon the feedback we receive to refresh our strategies and ensure their continued viability. We'll spend a lot of time in the upcoming lessons examining these steps in more detail. But what's really important to understand now is that strategy is an interplay between pro-action and reaction. A proactive, or deliberate, strategy is one where the management team effectively gets to take the offensive. A reactive, or emergent, strategy is one that is formed on the fly as a result of unforeseen events. While reactive or emergent strategies can result in great benefit, we generally consider proactive, deliberate strategies to be more advantageous.

So, who's responsible for the strategic planning process? Is it just for the top management team to plan and implement strategy? Well, yes and no. While top management generally is accountable for creating and implementing strategy, all levels of management should be considered strategic managers. In short, strategic management shouldn't be done in a closed environment. Managers at all levels of the organization, and non-managers too, should provide input into the strategy. Sometimes top management, although they're loathe to admit it, don't always have the best picture of what's going on at lower levels. A sad and too common scenario includes top management creating strategies that the lower levels simply don't have the resources or capabilities to implement. And even the best strategies need the full endorsement and energies of lower level managers to be successful. So, all levels need to have a say in creating and implementing strategy. Remember though that top management still bears the responsibility for a strategy's success or failure.

This is one reason why top management gets paid those seemingly astronomical salaries. Think of the risk they bear. They shoulder the burden of strategic failure, even if the reasons for that failure were completely beyond their control. Many would say that the reward far outweighs the risk, and that top managers lately seem to be rewarded even for failure, but that's a topic for another day. Yet it brings forth an important last point about the quality of strategic leadership. Truly strategic leaders seem to intuitively select the best courses of action.

When we look at Bill Gates, or Steve Jobs, or Sam Walton, or Jack Welch, we can't help but be impressed. What makes them so impressive? Most strategic leaders share a common set of traits. Strategic leaders typically are:

• Visionary
• Committed to their causes
• Well-informed
• Able to delegate, empower, and transform
• Power-savvy
• Emotionally intelligent

Do you see yourself in this list of traits? Then, with the appropriate education (which you are receiving) and some suitable mentoring (which you can get), you may be well on your way to becoming a strategic leader, adept at guiding the process of creating and implementing strategy!