Strategic Planning and Management Systems

Introduction 

This document will provide a brief overview of strategic planning and related concepts and principles. The content of this article for the most part relates strategic planning and its major processes that are applicable to government organizations such as city, county, state and educational agencies.

And in addition, it will focus on how some of the management systems that promote strategic planning as a major component for determining the organization's future operations.  Strategic planning is an important management process worthy of implementation in government organizations, education agencies, business and industry. Strategic planning will often “soften” or reduce the political aspect of decision-making that exists in governmental organizations.

Strategic Definition Sources

Strategic and strategic planning are terms commonly used by the military. One military definition is "The science or art of military command as applied to the overall planning and conduct of large-scale combat operations". In Roget's International Thesaurus the words plan or strategic would seem to support the military and public sector definitions.

Strategic planning may be defined as “the process of planning and guiding internal change so that the organization adapts effectively to the dynamic society of which it is a part”. Another definition somewhat similar is - “strategic planning is a systematic process for visualizing and conceptualizing the environment that leads to the creation of a desirable future for an organization”.

Components of Strategic Planning

Generally there is a beginning or a logical point of starting. However, very few organizations are newly organized and thus the actual start place is to begin with a study of its mission statement, goals and existing programs and each program component. This analysis should include program goals, objectives resources to be consumed and the immediate and long-range costs. Perhaps several of the strategic planning components may already exist in the organization. However, as an overview, the following major elements of strategic planning may be worthwhile considering.

The External Environment (local, state, national and world)

It is essential to research factors and/or conditions in the external environment that will impact on the organization in the immediate and future years. The research information obtained must be carefully analyzed and processed for use in the planning of the organization’s strategic mission, goals and programs. Utilizing information from the external environment provides a sound foundation for the organization within which it must function.

The Future Environment

Government agencies at the local, regional, state and nation, business and industry all serve members of society with services and products. Some or many of theses entities will have developed a vision of the future that may be worthwhile analyzing. This analysis will provide information that may impact upon the organization engaged in strategic planning. In general adults and children are the primary persons to be served by government agencies and society. Businesses and industry provide products and services to clients and customers.  Thus, it is imperative to have an understanding of what these organizations have envisioned for their future when developing strategic plans.

Information related to the future environment of societies is very useful for preparing planning assumptions that will enable decision-makers to guide society and/or organizations toward a desirable future. Strategic planning is primarily future oriented. Some persons may see it as a "crystal ball gazing" process. Although thoughtful conjecture can be useful at times, the responsible planner is constantly seeking valid data for decision-making concerning future programs. Strategic planning provides a base for analyzing changes in the environment and a rational way to adjust to the changes so that the organization remains viable and on the track to achieve its mission. Another aspect of strategic of planning is that it should be a continual process for mission and goal achievement.

Internal Analysis

Internal analysis is acquiring and studying information such as the existing management processes, operational procedures, human resource capabilities, capital available, projected income/sales and operating expenses, etc. The information obtained can be analyzed and related to the external information. Research information obtained from the internal analysis provides valuable information that is an integral component in the strategic planning process.

Mission and Goal Statements

Organizations will need to develop a broad mission statement and major goals or to examine and update their mission and goal statements on a regular basis as new information is acquired about the existing and future environment. Significant changes in the environment can occur quite rapidly that may require large changes in the mission, goals and programs of an organization. The mission and goal statements must take into consideration the acquired external and internal research information. The updated mission and goals are representations of the long-range future expectations for the organization. 

Program Planning 

Programs are detailed descriptions of how an organization can go about the achievement of its mission and goals. The research information obtained from the external environment and internal analysis usually will result in a continuation of many existing programs. Or perhaps the elimination of some unneeded programs. However, it is advisable to develop several alternative program examples that may lead to new programs that are subject to analysis and prioritization prior to implementation by the organization. Existing programs of the organization that have stood the test of time may be updated to reflect the conditions of the external and internal analysis.

Involvement of Personnel

The involvement of appropriate persons, both from within and outside, the organization is an important consideration of good strategic planning. A series of planning activities implies order; however, the planning process should not necessarily suggest a perfectly "neat," line or step by step approach.  The use of an appropriate number of strategic planning teams is a productive way to proceed with the strategic planning process. In-depth involvement of those persons who operate or receive benefits of the organization’s programs can produce worthwhile information for strategic planners.

Discrepancy Analysis

If one accepts that the existing programs are fulfilling some portion of the organization’s mission and goals. It then follows that an effective discrepancy analysis of these programs be accomplished to determine if they are consistent with the mission and goals of the organization. A very thorough appraisal of these programs is essential. There may be discrepancies in some of the programs and activities. However, the fact remains that there is much that is valuable in them that can serve as a solid foundation for the analytical procedure useful for the organization.

It is essential to recognize the importance of a strong relationship between the organization’s mission, goals, objectives, resource allocation, resource utilization and desired outcomes. The lack of such a direct relationship tends to make a mockery of the planning process. Therefore, it is essential to examine current programs and goals simultaneously.

Furthermore, this information can assist management and other staff members in discussions with their constituency and will improve their involvement in the overall strategic planning process. Essentially, persons who are deeply involved in these activities will be more effective as they proceed through the analytical procedure of determining “what is” as compared to “what ought to be”.

Prioritization

Prioritization is an important process in strategic planning. It is important because of its relationship to the identification of the organization’s mission, goals, alternative approaches and operational programs. It is equally important to recognize that prioritization is an integral part of each strategic planning component. This is primarily due to the fact that most organizations do not have the human or financial resources to do everything. State, local governments and educational organizations are typical examples of organizations that have restricted resources.

Resource Identification

Resource identification like so many of the other activities should be started in the early stages of the planning process and it should continue year after year. Early delivery of data regarding the various kinds of available resources to the organization will add to the effectiveness of the strategic planning activity. Future increases and/or decreases in financial, material and/or human resources can have major impact on how strategic planners prepare the organization for the future.

Strategic Analysis

Strategic analysis is a central and extremely important process of strategic planning. It is recommended that the analytical procedure include:

·        An analysis of the suitability of existing programs.

·        A consideration of proposed strategies to meet unfulfilled needs.

·        An examination of the potential benefits of proposed strategies (feasible options) in relation to the organization’s capabilities.

·        A study of the consequences of implementing the various proposed strategies during selected time periods.

Adherence to these recommendations should give strategic planners valuable guidance in the final selection and prioritization of major programs. Specifically, the expected improvement in the selection process will result in:

·        The retention of programs with a high degree of relevancy.

·        The reduction or elimination of obsolete, non-relevant programs.

·        The addition of new programs to meet unfulfilled needs.

Need for a Management System

A management information system (MIS) must be implemented, if none is present, within the organization to perform strategic planning, to guide and control program activities and all financial affairs. Currently the use of MIS has given way to Information Systems (IS). The IS must include the entire organization and be capable of monitoring program progress in relationship to the mission, goals and objectives of the organization. Also, the IS must provide for periodic communication and reports relating to progress of all program operations. Weak or non-functioning management processes tend to encourage adjustment and/or change based upon political expediency and incremental additions rather than on the basis of the organization’s mission, goals and long-range planning.

Furthermore, there seems to be a consensus that line item object budget procedures have become quite inadequate in terms of program accountability. Administrative officers, Boards of Directors and stockholders need program budget formats to show the constituency that resources are being planned and utilized according to documented organizational mission and goals.

Newer approaches to improved management systems have titles such Program Planning and Budgeting System, Management by Objectives, Zero-Base Management, Site-Based Management Systems, Cost Center Management etc. These approaches have similar popular concepts embedded in their structure, such as strategic planning at the organizational level, planning and decision making at the program level that promotes staff empowerment and participatory management.

However, despite some local, state and federal limitations there exists a wide range of possibilities that are available to an organization when implementing a management system for improving the operational procedures and generating acceptable profits. Strategic planners will need to research what type is best suited for their organization.

Planning

The Planning component is the area where much of the results of strategic planning are utilized. The mission and goal statements as well as the alternative approaches are vital to the planning process in a properly designed management system. In the planning process the program activity structure is prepared. This includes identifying major program, sub-programs, and operational units. The level of detail is a decision of the management group. Also, included in this activity are the identification of human resources within each program and the establishment of appropriate accountability processes. 

Resource Allocation and Utilization

Resource allocation is the selection and assignment of resources deemed essential to operate the programs and achieve the objectives of the programs. A well-designed management system includes the development of alternative ways of achieving the program's objectives and each alternative usually requires different levels of resources. The selection of the most desired programs then leads to the development of an organization’s program budget. The utilization of resources occurs during the annual operation of the organization. The organization’s financial accounting system will assist administrators to keep an account of all resources committed and used in the operation of the programs. Although the nature of the resource allocation and display process component implies a major emphasis upon budgeting, its application is more meaningful if it is considered from the following viewpoints: 

·        The allocation of available resources is the result of decisions reached through strategic planning by personnel involved in each program.

·        The development of resource allocation displays (budget formats) must be designed appropriately for management and staff involved in operating the programs.

Evaluation Process

The evaluation process may be defined as the acquiring, processing, analyzing and reporting of operational information for determining how well programs are contributing to the success of the mission and goals. Strategic planning requires that evaluation be major component of all management and operational processes. Although evaluation is the final major component listed in this document, in practice, it is an integral part of all other components of strategic planning.

The procedures of evaluation provides information to assist decision makers at all operational levels of the organization and enables them to make informed decisions related to program planning, resource allocation and utilization. In addition, the evaluation process helps to clarify the program consequences of making decisions that lead to particular courses of action.

It should be recognized that evaluation research is a rational operation that takes place in a political context. Therefore, most if not all organizations in society exists in a political environment. Thus, it is important to understand that evaluators should concern themselves with both the technical measurement aspects, and the political situation impacting upon the assessment of operational programs. Decision making is a complex activity that includes the thinking of planners that must weight the relevant information in a political environment in which the organization must operate.

Summary

Much more could be written about strategic planning and management systems. However, that was not the intent in this article. A brief overview was provided and some of the key concepts and components were mentioned. There is no doubt that strategic planning is an important and valuable process to implement within an organization. But, to go through a strategic planning process and not use the results in planning programs, allocating resources, utilizing resources according to program plans and evaluating program achievement is but an exercise in futility. Strategic planning provides the foundation and structure for the implementation of a management system and lessens the unknowns existing in the organization’s current and future environment.

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