STRATEGIC ADVISORY

Strategic advisory

When was the last time you looked at your overall Business performance and determined how your Business can better reach its goals?

Your Business goals may have originated from an idea, or they could revolve around the confidence of doing what the Business did in the past, or be based on a well-considered and documented strategy. 

Most Businesses would have defined goals and some type of plan to achieve these goals. Better planning will improve your chances of success. 

The importance of strategic business planning

Strategic Business planning is the process whereby organisations;

  • define the destination
  • analyse and assess their internal and external environments
  • create strategies that are intended to move them in that direction
  • implement and monitor those strategies, all in effort to satisfy key stakeholders

Most organisations do not undertake strategic business planning. The most common reasons for not doing so include the following;

  • lack to time – management are too busy running the business to have the time to look ahead into the future
  • lack of resources – the business does not have the spare cash to get external help
  • the future is too uncertain and unpredictable – why make a plan when you know you will just have to change it anyway?
  • management does not recognise the need for strategic planning

The Strategic Planning Model

Strategic Direction

  • The vision statement – this is intended for the external audience and defines the mid-to long-term aspirations of the business. It should influence the way in which those outside the organisation perceive it. 
  • The mission statement – this is mainly directed at the internal audience and sets out the business’s fundamental purpose. It reflects the business’s values and helps provide strategic direction to the key stakeholders within the business.

STEP 1 - DEFINE THE DESTINATION

STEP 2 - REVIEWING THE BUSINESS ENVIRONMENT

Strategic Analysis

  • Analysis of the internal environment – factors within the business itself, including its structure, culture and resources. To determine a business’s strengths and areas of competitive advantage it is important for a company to identify its core competencies and strategic resources. 
  • Analysis of the external environment – external variables that are outside an organisation and not usually within the immediate control of its senior management. These factors may be broad forces and trends within the general economic environment, or specific factors that exist within an organisations industry.

Developing the strategy

Strategy formulation is the development of long-term plans for the purpose of achieving a organisation’s mission and vision in accordance with its values.

The typical business usually considers three types of strategy;

  • corporate level ( overall company )
  • business level ( business unit or product )
  • functional level ( specific function, such as accounting )

STEP 3 - GENERATE THE STRATEGY

STEP 4 - IMPLEMENT AND MONITOR

Strategic selection

Once various alternatives have been outlined, strategic choices need to take place. After the best strategic alternatives have been selected, adequate resources will need to be allocated.

Evaluation and feedback then needs to take place on an ongoing basis to ensure that objectives are achieved.

Consideration of of the strategy impact on the environment and greater community, to ensure that the organisation is adopting standards of behaviour that would be considered acceptable within society. 

Performance evaluation

In order to successfully deliver its strategy, an organisation must have in place mechanisms to monitor internal performance. Without a system to do this, managers will potentially be unaware whether or not their decisions align with the organisation’s goals and objectives.

For a performance evaluation system to effectively drive performance, it should have these attributes:

  • link to strategy and the goals of the organisation
  • employees understand the system
  • employees can clearly drive actual performance
  • performance targets are seen to be realistic and achievable
    the standard of
  • performance expected is clearly communicated to employees
    the reward for meeting
  • performance targets is understood by employees
  • be timely.
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Useful Links

Business.gov.au  – Connecting you to information, grants, registrations and support to help your business succeed in Australia.

business.gov.au