Strategy is undoubtedly a key element in business management. However, if we were to ask different managers what strategy consulting is for them, we would get different answers. This article reflects on what is and what is not a strategy and describes the main stages of a strategic plan.
According to Michael E. Porter, “For nearly two decades, executives have been learning to perform according to a new set of rules. Companies must be flexible enough to respond quickly to competitive and market changes. They must incessantly compare themselves with benchmarking to achieve best practices. They must also foster some core competencies to stay ahead of their rivals.”
Continuing Porter’s thoughts, he tells us that “Strategy makes decisions about what not to do as important as decisions about what to do. In fact, setting boundaries is another function of leaders. Deciding which target customer groups, varieties, and needs the company should serve is fundamental to developing a strategy. So is the decision not to serve other customers or other needs and not to offer certain features or services. Consequently, the strategy requires constant discipline and clear communication.
Indeed, one of the most important functions of an explicit and well-communicated strategy is to guide employees in making decisions that originate from the choices they must make in their individual activities and day-to-day decisions. Competitive strategy is about being different. It means the deliberate selection of a distinct set of activities to deliver a unique mix of values. Moreover, a company can outperform its rivals only if it can make a difference that it can sustain.
The strategic plan is a document in which the managers of an organization reflect on the strategy to be followed by their company in the medium term. For this reason, a strategic plan is generally established for a period of between 1 and 5 years (usually working with a time horizon of 3 years). Although in many contexts the concepts of master plan and strategic plan are often used interchangeably, the strict definition of a strategic plan indicates that it should set the guidelines for an organization to achieve the objectives set out in its master plan. Therefore, in contrast to the master plan, a strategic plan is quantitative, manifest, and temporary. It is quantitative because it indicates the company’s numerical objectives. It is manifest because it specifies policies and lines of action to achieve these objectives. Finally, it is temporary because it establishes specific and explicit time intervals that must be met by the organization for the plan’s implementation to be successful.
On the other hand, the master plan is an official document in which the managers of a company reflect their intentions for the future of their company in the long term, generally defining a period of no less than 5 years. Among the characteristics of this document are that it is qualitative (not quantitative), objective (not subjective), and timeless. It is qualitative because it specifies the future qualities of the organization, such as its structure, its mission vis-à-vis society, or its service catalog. It is objective because it indicates what the company’s purpose is but does not go into the details of how to achieve it. It is timeless because, regardless of the duration of the plan, it does not establish time intervals that govern the priorities to be carried out on a day-to-day basis.
In short, a strategic plan involves an exhaustive analysis of a company’s competitive positioning and the definition, together with the Management Team, of the main lines of action towards which the company’s efforts will be oriented in the coming years in all areas of the organization. Not having a defined strategy in the medium and long term can limit growth in the short term and even its viability in the medium and long term. The strategic plan facilitates the vision, allows an objective evaluation of the real situation of the company, and serves as a starting point for business planning.
- Stages of a strategic plan
Upon reviewing various strategic plans, we will realize that the structure in which they are organized can diverge quite a bit. The approach to carrying out the strategic definition of an organization is filled with nuances and objectives that necessitate focusing and customizing the plan to the general approach of the management team. In any case, in a generic manner, we can say that a strategic plan has a structure based on a set of sequential stages, which are summarized as follows:
Stage 1: Situation analysis
This stage allows us to understand the reality in which the organization operates.
Stage 2: Diagnosis of the situation
It enables us to comprehend the current conditions under which the organization operates. To achieve this, a thorough understanding of the current situation (both internal and external to the company) is necessary.
Stage 3: Declaration of strategic objectives
Strategic objectives are future points that are duly quantifiable, measurable, and realistic, as they must subsequently undergo measurement.
Stage 4: Corporate strategies
Corporate strategies address the need for companies to respond to market demands (both internal and external), enabling appropriate actions to be taken at the right time and under the right conditions.
Stage 5: Action plans
These plans integrate objectives, policies, and a sequence of primary organizational actions.
Stage 6: Follow-up
Monitoring enables us to track the application and development of the strategies and actions we have defined.
Stage 7: Evaluation
Evaluation is the process that enables us to measure the results and assess how well they align with the set objectives. This evaluation allows for an assessment over a specific period and facilitates a comparison between the proposed objectives and the actual outcomes.
- Strategic Consulting. Services
Currently, strategic consulting entails external assistance from seasoned consultants specializing in management, organization, and leadership. They provide support to the management teams of companies seeking to update, modify, or evolve their existing total or partial organizational concepts. This process involves a thorough analytical study of each company process. Strategic consultancy goes beyond conventional consulting by posing profound questions for the company’s future.
