By : Fuad Al-Bahrani
Strategic planning consultant
The internal and external factors that affect the ability of the organization to perform effectively cannot be ignored in strategic planning. It is not wise to focus only on the organizing’s long-term vision and strategic objectives. It is strategically vital to address all side issues that might hinder the organization’s momentum for implementing its strategy, or worse, it could cause irreversible damage in some cases. Also, it is important to exploit available opportunities that might open up unexpected business frontiers.
Successful strategic management should demonstrate tolerance for changes in work environment by continually reviewing and improving internal and external factors. Such a process will provide the strategic plan with a renewing execution power and assure its capability of achieving the vision of the organization efficiently.
Analyzing Internal and External factors:
There are number of strategic planning methods that are used to analyze internal and external factors. The most common methods used for this purpose are:
1. SWOT Analysis
2. Porter’s 5 Forces
3. PEST analysis
4. Value chain analysis
Depending on the nature of the organization one or more of those methods could be used. Although the SWOT analysis is the most popular technique, it helps an organization identify the Strengths, Weaknesses, Opportunities, and Threats related to business competition, and identify the internal and external factors that are favorable and unfavorable to achieving the business objectives.
Internal and external factors revealed by the analysis intersect and overlap most of the time, which makes addressing them in a conventional manner unpractical. For example, improving customer’s satisfaction inspires opportunities for growth and expansion, at the same time they may represent threats if a customer decided to move to another provider. Hence, improving the strategic relationship with customers is a vital strategic issue that must be addressed in a holistic manner. This approach also applies to many internal and external factors that are important to consider from a strategic perspective, as an example of strategic issues that are shared by many organization:
1. Relationship with customers (beneficiaries)
2. Relationship with partners
3. Staff relationship and development
4. Organizational structure and internal processes
5. Technological developments
6. Legislation and laws
7. Political and economic developments
These Strategic issues should always be open for dialogue and discussion between concerned parties as well as the senior management, It is important to address all strategic areas, and continually follow up on actions taken to improve the position of the organization within these areas.
After defining the strategic issues that encompass critical internal and external factors, strategic tasks are assigned in order to translate these strategic propositions into concrete practical reality, these tasks are located in a transitional zone between the strategic and tactical parts of the strategy implementation plan. For example, a strategic task could be assigned for improving supervisory competencies, which address the strategic issue related to staff relationship and development, In particular it addresses a vulnerability factor was revealed during the primary analysis, The interaction of whoever is in charge with this strategic task should result in decisions on how to rectify this weakness, such as starting an internal on-job training, an external formal training program, updating supervisory positions nomination criteria, setting incentives, or any other appropriate initiatives.
We have to keep in mind that strategic tasks are not SMART objectives, rather they are proposals without an implementation plan, Whoever is in charge of related functions has to come up with ideas on how to turn these tasks into tangible initiatives, moving from strategic to a tactical stage in the plan. The outcomes may materialize in the form of projects, policies, procedures, directions, or any others activities to fulfill the tasks.
In this way, the internal and external factors of an organization will be addressed in a systematic manner; it will be part of the overall strategy implementation plan and given the proper weight that represents its importance. The strategy team must set strategic tasks at all functional levels in the organization, and establish the means of monitoring the progress made in each strategic task periodically, using suitable presentation methods such as scorecards or dashboards.
Strategic Tasks Scorecard – Date: 24 May 2018
Strategic tasks are assigned in order to translate strategic issues into concrete practical reality, these tasks are located in a transitional zone between the strategic and tactical parts of the strategy implementation plan.