- Critical Success Factors (CSF)
- Critical Success Indicators (CSI)
- Environmental Scan
- Gap Analysis
- Line of Business (LOB)
- Strategic Initiatives
- Strategic Issue
What is strategic planning?
Strategic Planning is an orderly process for envisioning an organization’s
desired future and determining the required actions to attain that future.
Unlike long range planning which simply projects current trends into the future,
strategic planning is based on an anticipated desired future.
Strategic planning seeks to answer such questions as, “What is our mission?”, “What
are our assumptions about the future?”, “How should we be organized for that
future?”, “How should we allocate our resources to our line and support structures?”.
By answering these questions (and many others), strategic planning helps an
organization create a desired future within the context of a dynamic and changing
. . . the most effective public and nonprofit planners no doubt are now and
will be increasingly in the future, the ones who are best at strategic planning. John Bryson, 1988
Strategic planning focuses on the critical issues, opportunities, and problems
facing a community. It offers leaders a chance to look beyond day-today concerns,
and even year-to-year issues . . . One of the most appealing features is that
it helps distinguish the truly important decisions form those with temporary
impact. Public Technology, Inc., 1994
Strategic (planning) thinking . . . is about synthesis. It involves intuition
and creativity. The outcome of strategic thinking is an integrated perspective
of the enterprise . . . Henry Mintzberg, 1994
The mission statement defines the organization’s purpose, its raison d’etre,
and the general means to realize that purpose. At a minimum, an effective mission
statement should include the following:
- the social and political needs the organization fulfills
- the current and future scope of activities required to fulfill those needs
- the unique characteristics of the organization that distinguish it from
other organizations focused on the same or similar needs
The mission statement helps all members of the organization to focus and guide
internal decision making.
. . . the mission statement contains an inherent definition of priorities
for the strategic agenda . . . and identifies the major opportunities for growth
and the capabilities that have to be enhanced to achieve a superior competitive
advantage. Arnoldo Hax & Nicholas Majluf, 1991
A recent survey of twenty five “corporate tools” . . . showed that managers
used mission statement more than any other tool . . . Managers liked mission
statements because they make a difference in whether a company succeeds or
fails. Patricia Jones & Larry Kahaner, 1995
Organizational values define how members of the organization approach their
work; values help determine appropriate behavior and guide individual decision
making. Taken together, an organization’s guiding values or principles create
an overall operating philosophy and ethical framework to facilitate professional
Values form the bedrock of an organization’s culture. Terence Deal & A. A. Kennedy, 1982
For values to be truly shared, they must be more than advertising slogans;
they must be deeply supported and broadly endorsed beliefs about what is important
to us. Constituents must be able to enumerate the values and have common interpretations
of how values will be put into practice. They must know how values influence
their own jobs and how they directly contribute to organizational success. James Kouzes & Barry Posner, 1995
The vision of the organization is a simply defined, compelling ideal state
that the leadership team foresees for the organization. Nothing should be done
in an organization that is not compatible with the vision.
Imprinting the vision of the organization among members of the organization
is the heart of the strategic planning process; it leads to strategic thinking
throughout the decision-making process and by all members of the organization.
If there is a spark of genius in the leadership function at all, it must lie
in the transcending ability, a kind of magic to assemble—out of all variety
of images, signals, forecasts and alternatives—a clearly articulated vision
of the future that is at once simple, easily understood, clearly desirable,
and energizing. Warren Bennis, 1985
The ideal vision . . . can be likened to an organizational dream – it stretches
the imagination and activates people to rethink what is possible. William Belgard, Kim Fisher, & Steven Rayner, 1988
Long-Range Planning vs. Strategic Planning
There are some significant differences between long-range planning….what
most people tend to think of when considering the future of their institution…and
- Long-range planning is a projection from the present (where
you are now) or an extrapolation from the past (where you have been).
- Strategic planning builds on anticipated
future trends, data, and competitive assumptions.
- Long-range planning tends to
be bottoms-up, often a consolidation of plans from individual units.
- Strategic planning resides at the top level of the organization
and then informs lower levels from long-range planning.
- Long-range planning tends to be numbers-driven.
- Strategic planning tends to be idea driven, more qualitative;
it seeks to provide a clear organizational vision / focus.
Think of strategic planning as a strategy… "How can we orchestrate
our future?" …different from typical long-range planning, which asks, "What
does our future look like based on the information we have?" Both are
important, but they serve different purposes. Strategic planning forces an
institution to consider how it sees itself, what it wants to become, the values
it will use to make decisions, the guiding principles it will refer to for
Glossary of Terms
CRITICAL SUCCESS FACTORS (CSF) – Critical
success factors (CSF’s) represent a limited number of key performance areas
in which an organization must achieve the levels of performance required
by its mission and values.These factors are specific to each Line of Business
(LOB), and may be unique to certain LOB’s. CSF’s drive the process of strategy
implementation by defining managerial preferences with regard to key variables
at a given point in time.
CRITICAL SUCCESS INDICATORS (CSI) –
Critical success indicators drive the process of strategy implementation
by providing the performance measures used to track progress on critical
success factors. The specific indicators can include both hard (quantitative)
and soft (qualitative) indices.
ENVIRONMENTAL SCAN – Analysis
of key external elements or forces that influence the conditions in which
an agency functions. This is commonly referred to as the opportunity of
and threats to the agency (see SWOT analysis).
GAP ANALYSIS – Gap analysis is the
identification of the disparity between current performance and desired
future performance on key critical success indicators. This disparity leads
to the development of specific strategies, priorities, and resource allocation
decisions to close the gap.
In every planning period, a company is expected to make progress against
strategic goals and measures. Alexander Hiam, 1992
LINE OF BUSINESS (LOB) – Line of
Business refers to a distinct set of products or services offered by an
organization along with clearly identifiable customers and competitors.
There should be an obvious link between a organization’s mission and each
Line of Business.
STAKEHOLDERS – a term designating
anyone who directly, or indirectly, receives the benefits or sustains the
costs derived from the actions of the organization. As the term suggests,
it includes all those who have a stake in the actions of the organization
and their resultant outcomes.
STRATEGIC INITIATIVES – Strategic
initiatives represent the essential issues that an organization must confront
during the next 3-5 years to best achieve its mission and to move toward
its desired future. Strategic initiatives originate from the organization’s
assessment of its internal and external environments. They consist of both
short-term and long-term activities, specifying the pragmatic steps necessary
for managerial action. Each strategic initiative may require a distinct
commitment of resources from executive management.
The strategic initiatives are the recipients of all the analysis conducted
. . . They should be articulated in such a way as to convey a sense of the
critical tasks that every unit in the organization has to deal with in order
to develop an effective strategic position. Arnoldo Hax & Nicholas Majluf, 1991
STRATEGIES – Strategies represent the
organizational means for achieving desired outcomes. It is a pattern of organizational
policies, programs, and managerial approaches to achieve high priority outcome
goals set by the organization.
Crafting strategies is the fundamental entrepreneurial activity of executive
. . . strategy is formed by two critical forces acting simultaneously:
one deliberate, the other emergent. Managers need deliberate strategies
to provide the organization with a sense of purposeful direction. Emergent
strategy implies learning what works . . . Arnoldo Hax & Nicholas Majluf, 1991
STRATEGIC ISSUE – The identification
of strategic issues is the heart of the strategic planning process. Strategic
issues are the fundamental challenges affecting an agency and/or its units.
The manner in which the strategic issues are framed will determine much
of the subsequent politics of the process. It will also have a powerful
impact on . . . how stakeholders assess their interests and weigh costs
and benefits of alternative strategies. Bryson & Alston, 1996