3. Strategy Design Process
Strategy Design Process is to break down Management Principles and Corporate Vision into an action plan so that the organisation can execute. In addition, Strategy planning can be a rolling plan where you will repeat setting hypothesis and verification multiple times.
Step1: Define Management Principles and Corporate Vision
The first step of Strategy Design Process is to define Management Principles and Corporate Vision. In this steps, business owners and founders will describe core values and the directions they want to proceed with their business. The Management Principles and Corporate Vision will be the backbone of the Corporate Strategies and Business Strategies and business goals of the company.
Step2: Perform Environmental Analysis
Second step ofStrategy Design Process is Environmental Analysis. It is the process to identify the external and internal elements which affect your organisation. External Environments are outside of your organisation which you do not have control. Internal Environments are the managerial resources in your organisation, such as financials, labour, goods and information. External Environment Analysis is to analyse the trend and the market demand changes, which can be an opportunity or threat for your business. Internal Environment Analysis is to understand the available resources you have internally as well as to maximum utilise the combination to convert that into a business opportunity.
Step3: Define Key Success Factor
The third process of Strategy Design Process after the Environmental Analysis is to determine Key Success Factors.Key Success Factors are the requirements for you organisation to succeed in the business. For example, customer satisfaction, employee turnovers, market shares and product quality can be one of the key success factors for your organisation.
Step4: Strategy Options and Selection
There are multiple ways to achieve your Corporate Vision as well as your business goals. It is also crucial for Executives to consider various options, because if one option does not work, you may as well fine tune your strategies. Once you have designed a couple of options to execute your plan, then consider the type of resources to allocate to each option. At the same time, evaluate the difficulty, and assumed result to make the final decision on which option to proceed.
Step5: Execute Strategy
Once you design strategies, then the next phase is to execute the plan. There are multiple projects or tasks to be monitored during the execution. It is necessary to set indicators to make sure the projects and duties align with the strategy. Also, it is important for executives to consider an incentive scheme for the employees who contributed to the execution to achieve business goals.
Step6: Review Strategy
Business Strategy will have feedback based on execution. Some of the strategies may work and some may not. Based on the feedback you receive from the result, identify key issues and the cause of these matters.
Management Plan and Management Cycle
Strategy execution requires support from multiple organisations, managers and employees. These parties not just understand business goals but also think about how to reach the target. To execute Corporate Strategy, Management Plan will help the organisation to visualise the steps and actions. Management Plan includes the action plans, programs and projects for the corporate to execute. It also includes the Functional Management Plan which covers what each department needs to perform to achieve the overall target. For example, the annual budgeting process is part of the Management Planning process to estimate the financial impact of the election plan. Management Plan will follow PLAN-DO-SEE cycle to plan, execute and review Management Plan and make necessary adjustments to achieve the goal of the Strategy.
Rolling Plan and Contingency Plan
Management Plan is created based on the current business environment and internal resources that the company holds. External and Internal Environments change dynamically. Therefore corporations will need to adjust their Strategies and Plans based on the feedback of the program execution. Rolling Plan is an approach to reviewing and update Mid-term Management Plan periodically. Contingency Plan is to take measures to unexpected events and situations.
Summary of This Topic
Strategic Design Process starts from describing the purpose of the business. It also shows how you want to contribute to society with your business. You will then analyze the business domain and the external environment to understand the resource requirements. Designing Corporate Strategies, Business Strategies will follow to break down what and how you are going to delivery to the market. Once you execute your Business Strategies, then you will review and get feedback from the business results. You will perform management cycle to evaluate what worked and what did not work in your strategies. Fine-tune your strategies and get the feedback again.