Development of strategic plans in organizations is crucial in ensuring successful business operations. Most organizations prudently create vision for their future operations and lay strategies that are necessary to achieve the set goals. However, several organizations fail in their realization of vision, as well as in delivery of their expected strategic results. In most cases of failure, executive teams appear unable to identify the reasons underlying such dilemma. Consequently, the organizations undergo the same strategic planning cycle repeatedly, hoping that better results will be realized in the next strategic planning session (Stanleigh 2014, p.1). Unfortunately, this success fails to come forth. In order to attain business goals, there are certain considerations that ought to be out in place by the executive teams. It is vital to note that business organizations operate in a dynamic environment.
As such, the current paper makes references to Porte’s Five forces model and pestel analysis in discussing the key considerations in strategic business planning. It also explores the strategic contribution that Human Resource Function ought to make to enable the achievement of an organization’s overall aims and objectives.
Key Considerations in Strategic Business Planning
Engagement and Communication
Engagement of employees at all levels is a crucial element when carrying out strategic planning. Unfortunately, only 23% of organizations have their strategic plan done formally, whenever they are trying to employ formal strategic planning process in crucial decision making. Rather than engaging all levels of staff, 52% of organizations make decisions by small senior groups.
Engaging the staff is vital, since it ensures the generation of additional input. It also aids in building their commitment to the end plan. Therefore, the executive team should always consider involving employees in strategic planning and setting direction for the organization. Engaging the staff will avail more insight into issues, opportunities, challenges and concerns which might have been hidden or not fully understood by top management. In addition, the executive management will not be directly involved in the execution of the strategies, but the staff will be. Therefore, engagement of employees ensures that they “buy-in” the ideas and assist in the execution of strategies. This move will dramatically increase the success rate in the implementation of whatever strategy the company seeks to achieve (Stanleigh 2014, p.1). Effective communication and involvement of the junior members of can enable an organization to gain a competitive advantage over its competitors. Based on Port’s Five Forces, rivalry between firms trading in similar or related goods and services is a great threat to a business enterprise (Porter 2004, p. 214). An organization’s strategic planning process should consider formulating policies to counter the effects that arise from rival firms. For example, if an organization or company deals in goods whose substitutes can be readily accessed by customers; the strategic planning professionals must consider utilizing an identified gap, possibly with regards to quality or quantity, to lure customers so that they become loyal to the organization. Besides, organizations must consider their customer’s socio-cultural values that are considered vital in maintaining customer loyalty as per the Pestel analysis. Such information should be communicated to the workforce so that employees operate as per their environment.
Strategic planning processes are effective when top-down, as well as bottom-up, communication is put in practice. Essentially, communication is a strategy that for developing, as well as sustaining, employee engagement. It begins by informing staff at all levels that the organization is set to undertake Strategic planning process. The information should entail how the management will involve its employees concerning their inputs. The employees may relay their thoughts on the strategic planning process through various ways. The feedback channels might include focus groups, feedback surveys and meetings, among others. The senior management will also, through top-down communication, and share with employees the strategic plan. This link helps employees to feel more like a part of the company. Consequently, they develop a higher level of trust in the organization’s top management.
Notably, consistency and quality of communication is a crucial factor in achieving success (Truss et al 2013, p.121).
Innovation is another essential factor that normally has to be put in consideration in strategic planning. Innovation is particularly important, in cases where strategic plans entail development of new products, delivery of new services, as well as restructuring of departments, among others. Mostly, the executive team brings teams together to undertake these initiatives. The executive management gives the team investment funds to guarantee success. Regrettably, it often becomes apparent at certain points that the team will not achieve their strategic goal. Consequently, the strategy will be considered as a failure. This perception is normally wrong; the inability to achieve the strategic goal should not be considered as a failure of execution. Rather, the failure is caused by lack of an innovation process that is necessary for the management of the strategy that caused the failure in the first place. The executive created generated strategies that demanded innovation to attain them, but the innovation failed to come forth. These unfortunate failures are common in cases where innovation process is not taken into consideration (Stanleigh 2014, p.1).
Most organizations often urge their employees to become more innovative to enable the creation of strategies for new products and services. However, the executive management fails to cultivate a strategy for Innovation in the organization. Such innovation strategies include: implementing a process for innovation management and redesigning the organizational culture to be more innovative. Research in Motion is a classic case. They will tell you that they are very innovative (Stanleigh 2014, p.1).
Organizations should also develop an innovative culture as a strategic plan that is targeted at reducing the rate of employee turnover. Current technological trends make it inevitable for organizations to keep an eye on the new development in the market so that they operate in line with their customer demands. Organizations must be on the lookout for their areas of weaknesses that may provide room for new entrants into the market. This is due to the potential risk that such entrants can cause to the organization’s market share. Porter’s Five forces identify new market entrants as a great threat to an organization’s survival (Porter 2004, p. 230) One sure way to avoid such a threat is to develop innovative ways of production and service delivery that present entry restrictions to potential competitors.
Once the strategic plan is in place, project management becomes crucial in achieving the overall objective. Effective project management requires organizations to be focused enough to predict future market changes. Looking at the petal analysis, good project management should involve a consideration of future political influence and economic factors like inflation among others.
Making such considerations is vital for an organization that seeks to retain and expand its market share. For example, such an organization will always go ahead of its competitors in terms of catering for the dynamic customer needs and showing compliance with the consumer laws regarding product quality and quantity. There are two critical elements that are associated with project management that should be considered in strategic planning. The first entails the identification of projects that are essential for the successful execution of each strategy. The second factor entails development of a prioritization plan for the projects. The arrangement ensures the high priority projects have the appropriate resourcing to guarantee success. This prioritization requires high employee participation and commitment, in order to spend enough time on the projects. High level of employee participation guarantees that they comprehend the strategic plan. It upsurges their level of obligation to warrant the successful execution of strategy, since they understand their work. Therefore, their work towards the completion of the project enables the organization to achieve its key strategies partially or entirety. Unfortunately, 95% of employees normally fail to comprehend their company’s strategy. Evidently, the failure to appreciate the strategies implies failure to execute the plans (Stanleigh 2014, p.1).
Organizational Culture is another important factor that should be considered in strategic planning. This culture entails the commonly believed values, attitudes, behaviours and behaviours of an organization’s employees. Organizational culture is unique, as the organization’s personality of individuals. Considering the need for sustainability of an organization’s culture, the management should considering setting high standards that the workforce should adopt and abide by as part of the organization’s culture. An already established organizational culture is difficult to root out even when it compromises an organization’s success. For instance, it is usually challenging to bring about change in organizations, where employees believe that the change is a dreadful undertaking that has to be avoided. Implementation of change in such organizations is normally reactive and haphazard.
Meanwhile, in cases where employees believe that the change demands aggressive implementation “from above,” change rarely receives support from the employees. Conversely, if the entire staff of an organization perceives change as a worthwhile course and everybody’s obligation, then the organization can realize change and growth with relative ease. First, the executive management shares the said strategic plan with the rest of the staff in a top-down communication. They will have to explain to the employees how the change is essential in ensuring the success during the execution of these strategies (Stanleigh 2014, p.1).
Human Resource Function
Human Resource Function plays a crucial role in organizations with regards to the realization of overall strategic objectives. Conversely, organization strategies and plans developed without the input of the human resource tend to fail to achieve overall objectives. Usually, once an organization defines its goals, it becomes ready to determine appropriate strategies for achieving the same. The strategies essentially define the course of action that the organization will adopt to achieve the goal. Close involvement of Human Resource functions at all stages is necessary for the success planning, as well as in efforts of implementing the strategies (Mello 2014, p.121).
Growth is one of the major organizational strategies that necessitate proper input from the HR Function. Usually, growth is aimed at enabling an organization to realize the benefits of economies of scale, provide more opportunities employees’ advancement, and professional development. Growth also enables the organization to enhance its standing in the industry against its competitors.
Growth can be understood in relation to diversification of goods and services that an organization deals in. Such initiatives can limit the chances of new entrants to the market as there will be no gap that they seek to fill. Organizational growth can be achieved internally by developing new markets, further developing existing markets, or by generating new products to sell in new or existing markets. In order to achieve this goal, qualified human resources, in their proper numbers, time and place, is essential. It is the role of Human Resource Function to enable the achievement of such organizational goals and objectives. It plays an important role in instituting a skilled workforce that this is crucial in achieving organizational objectives (Mello 2014, p.121).
The skilled workforce is attained by recruiting qualified staff. Once it has put the needed workforce in place, HR Function works towards establishing well motivated and dedicated employees, in order to maximize their performance. It can employ various motivational techniques, including increased pay, promotion and among other benefits to ensure that the workforce remains motivated (Workinfo 2014, p.2). The HR Function also works to ensure that quality of performance standards are upheld during the rapid growth phase. In order to improve performance, the function can take employees through further training. This training ensures the presence of a skilled workforce to handle market demand (Mello 2014, p.121).
Otherwise, in the absence of qualified personnel, not even the most carefully formulated plans, the most sophisticated automated manufacturing systems, and advances in marketing programs can institute themselves. Since they are not self-actuating, human resource plays a crucial role in implementing, maintaining and realization of plans, programs, structures and systems. Therefore, an organization can only expect to achieve its goals and fulfil its mission through effective staffing (Caruth 2009, p.2).
HR Function helps in achieving organizational goals by fully comprehending and supporting the direction that the organization has chosen to adopt. This understanding and support prompts the function to align its strategy with broader organizational objectives.
Moreover, the HR function normally works to ensure that the rest of the organization embraces the broad organizational objectives.
The common support can be achieved through consultation of all stakeholders on the nature of the broad strategy by cultivating and developing supporters and allies of the broad strategy through the consultation process. The engagement of other departments is crucial in the creation of “the people element” that makes it substantively easier for a company to achieve its broader strategic and operational goals. Through careful strategic planning, Human Resource function brings together various departments that work towards the attainment of the overall organizational goals (Workinfo 2014, p.2).
In addition, the function aids in the realization of the overall goal by supporting other specific strategic objectives, undertaken by financial, technology, marketing and operational departments. The support of other departments is aimed at capturing “the people element”, concerning the overall goal of the organization, both in the medium and long term. “The people element” ensures that strategic planning has the right personell and the relevant mix of skills. It also develops employees in the right way and enables them to display the right attitudes and behaviours towards achievement of the set goals (Reddy 2005, p.243).
The Human Resource Function is essential in articulating more explicitly some of the shared themes that might not have been identified before. Such themes are crucial in the achievement of other plans and strategies. The function also pinpoints the major underlying issues, which any organization has to address to motivate its people and seek their commitment towards an effective operation. Once the fundamental underlying issues are identified, the organization must draw clear plans for addressing them before it can achieve its overall goal (Reddy 2005, p.243). The underlying issues that HM Function should consider might include planning issues, workforce skills plans, succession planning, black economy empowerment initiatives and employment equity plans.
Moreover, the HR Function can add value to the achievement of organizational goals by ensuring that the organization takes into account the changes that might occur in the wider environment. Such changes are often likely to have a crucial impact on the organization. The changes might include alterations in the whole employment market and changes in relations to climate market of employees. Cultural changes are also likely to have an impact on the employment patterns in future. Understanding the environmental changes are important, as the help the organization makes necessary adjustments to achieve its objectives (Workinfo 2014, p.2).
Organizations need to establish an explicit and meaningful strategic planning process, in order to achieve its goals and objectives.
Essentially, achievement of strategic goals requires an organization to put in consideration certain factors. These include communication, employee engagement, organizational culture, the innovation process and project management. It is essential to communicate with employees at all the levels of strategic planning. Use of the innovation process is also crucial for the introduction of new services and new product development. Identification of projects and their prioritization is necessary, following identification of strategic plans. Meanwhile, Human Resource Function plays a crucial role in organizations, with regards to the realization of overall strategic objectives. These important roles include: realization and maintenance of a skilled workforce and support of overall objectives of the organization. HR Function also helps in the realization of overall goal by supporting other specific strategic objectives, undertaken by other departments. It also helps in articulating some of the shared themes across departments in an organization. Besides, organizations must do a pestel analysis at every strategic planning stage to predict the expected outcome of its proposed action plans. This will help in identification of the potential threats that can hinder an organization from meeting its objectives.