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Introduction To Visual Strategic Planning with SmartDraw VP

by SmartDraw Software on Feb 02, 2010

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Explains how to use visuals to make the strategic planning process both easier and more effective. This is a presentation prepared for The SmartDraw Blog (http://blog.smartdraw.com/) on SmartDraw's Vis...

Explains how to use visuals to make the strategic planning process both easier and more effective. This is a presentation prepared for The SmartDraw Blog (http://blog.smartdraw.com/) on SmartDraw's Visual Strategic Planning methodology.

Some of the key details of the process may be lost in translation - if you have any questions please feel free to ask us on Twitter (@SmartDraw)

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This presentation is about strategic planning and about why you should follow a more visual strategic planning process.Throughout this presentation I’m going to use a number of visuals produced using SmartDraw; if you’d like to download a free trial of SmartDraw please visit http://www.smartdraw.com/downloads/?id=333173
So why do we make strategic plans? What is their purpose. Simply stated, the purpose of a strategic plan is to give a business a roadmap to its future. The course of business is a winding road with many turns – strategic planning is the process by which you best learn how to handle them.
The purpose of strategic plan is to give a business a roadmap to its future. It answers three questions: What is the mission of the business?What goals should be met to accomplish this mission?What strategies should be employed to achieve these goals?
There is often confusion about the difference between a strategy, tactics, goals and objectives. Let’s define these terms: Goals are things we intend to achieve.Objectives are the steps along the way toward achieving Goals.Tactics are elements of going about accomplishing Objectives.Strategy is the overarching plan to use our unique competitive advantages to achieve our stated Goals through the use of specific and measurable Objectives and Tactics in pursuit of our mission as a company. Each year, the operating plan of the business lays out a set of tactics and objectives to be achieved that move towards the achievement of the strategic goals. The strategic goals guide the choice of objectives and the tactics employed. They provide direction for the business.
Although every strategic planning process is different for every business, the Visual Strategic Planning process is modeled off of this cycle, where the steps are followed in this order:Propose mission Propose goals Examine internal issues Examine external issues Summarize findings in a SWOT analysis Formulate strategy Strategic planning is an iterative activity; you might begin the strategic planning process with one mission and end with another. It really depends upon what your findings are during the process.
Each of the steps in the visual planning process requires clear and concise communication between all of the involved parties. Likewise, taking the acquired information and developing an understanding of it such that appropriate strategies can be developed and actions taken requires extreme clarity of thought. The best way to synthesize data into information and information into strategy is by thinking and communicating visually during the planning process. Most of us think and communicate visually whether we realize it or not. The human brain can and does convert auditory and kinesthetic information to visual information, but the efficiency of the process is dependent upon the complexity of and speed at which information is being communicated. Educational researchers have conducted studies which have shown that 83% of human learning occurs visually. Furthermore communicating the information in each of the steps visually also leads to better analysis. Scholars at Stanford University have found that depicting concepts and relationships visually often reveals that vital data has been overlooked, inadequately correlated, or never collected in the first place. Communicating visually also enables diverse and remote groups to reach consensus about issues far faster than textual and auditory communication alone. This is especially meaningful for multi-nationals who must manage cross-language ambiguities. In this presentation we show how visuals can be used to make the planning process come together faster and with better results.
Let’s consider an example. The Acme Printing Company prints direct mail pieces, catalogs and other marketing materials. What is its mission? To deliver great printing to its customers? Not really. What its customers are trying to achieve is effective marketing to their customers.
So the first step begins with defining a mission statement. Let’s examine some example mission statements from some major companies.Google’s mission statement is, "To organize the world's information and make it universally accessible and useful.“ Given what you know about Google’s products and services, why does this make sense as a mission?Walmart’s mission statement, as far as I can tell, is: “To help people save money so they can live better.” Given what you know about Walmart’s retail operations, why does this make sense?McKesson’s mission statement is: “Our mission is to provide comprehensive pharmacy solutions that improve productivity, profitability and result in superior patient care and satisfaction.” Does this make sense? Why?
So given what we know about Acme currently, let’s suppose that their mission is related to being a great printer, which they are. A decent mission for them might be “To deliver the world’s best-value printing to businesses everywhere.” We will reevaluate this mission at the end depending upon what we discover during the st
Each year, the operating plan of the business lays out a set of tactics and objectives to be achieved that move towards the achievement of the business' strategic goals.The strategic goals guide the choice of objectives and tactics employed. They provide direction for the business.
Goal 1: To make the highest quality prints available at the lowest costGoal 2: To turn around orders in less than 48 hoursGoal 3: To offer a wider range of printable materials and mediumsThese will likely change depending upon what we find during our planning process
Moving on to internal analysis, here’s the process we follow for both internal and external analysis:The group collectively builds an Analysis MapTeams are organized to address each category on the Analysis MapOne or more members of a team document the current state of the categories using an Issues Map.The group discusses their findings and identifies issues critical to the proposed strategyThe critical issues are added to the Issues MapLink to the Issues Map from its topic on the Analysis Map Repeat for each category on the Analysis Map until finishedComplete the Analysis Map and all of its Issue Maps
The tool we are going to use is an "Analysis Map." It's a simple mind map that makes it easier to organize the analysis of a company's internal and external issues.After some high-level categories have been mapped out by your organization's strategic planning team, you can divide the labor to research these issues and collect data more easily.
"Operational efficiency and capacity" is a high-level category from the earlier Analysis Map.You begin the Issues Map by outlining what the current state of this area is within your organization. In the critical issues area you list the factors that impact this area now and into the future, which we will address on the next slide
The critical issues for "Operational efficiency & capacity" are listed here - as you can tell the company has some issues with internal IT & HR factors. Additionally, the demand for print is falling, which complicates the company’s current mission and operations, does it not?
Examining external issues can use the same process as internal issuesIn fact, we recommend that you use the same process for external issuesBut for the sake of visual diversity, we're going to use PEST analysis for our external factors
For PEST analysis, simply list the items that affect your organization in these columns, classifying them by the type of factor (Political, Economic, Social, or Technological.)
So here’s Acme’s PEST analysis – now if this were a real company in all likelihood this would be more complicated, but this is sufficient as an example.
Be sure to avoid mixing tactical issues with strategic issues. When you’re discussing execution, then you’re already at the tactical level of abstraction. Stay focused on high level, strategic issues until your analysis and strategy formulation are complete and your organization is ready to move on to drawing up an operational plan.
It appears that changes in market trends, which reflects a shift towards online marketing mediums instead of printed ones, and insufficient IT resources to respond to them are among Acme's biggest issues.However, Acme also has strong customer relationships and robust financials - strategic issues include positive issues too, not just negative ones!Note that not all of the issues identified in the Operational and Efficiency map made it into the Critical Strategic Issue map. The financial and HR issues are not strategic. They are issues but they do not affect the ability of the company to implement its strategic goals.
The next step is to create a SWOT diagram for the company, based on the information uncovered by identifying the critical issues. The SWOT diagram helps us instantly synthesize a strategy. Let’s look at what’s on the matrix and discuss. It seems pretty clear to me that the idea of sticking to printing only is a road to ruin for Acme. What do you observe based on this SWOT matrix and the previous critical issues map? What strategies can leverage our strengths and opportunities while mitigating our weaknesses and external threats?
In world where snail mail is giving way to e-mail and catalogs are giving way to web sites, Acme’s revenues have been stagnating as more of the ad budget moves to digital marketing. Acme had better understand the real value of its services and react accordingly.
Here we have a generic strategy matrix; as you know, there are two primary types of generic strategy: cost leadership and differentiation. Acme is a differentiator as its focus is narrow (they print marketing materials only) and they are a relationship-based business that offers extremely high quality, quick turn-around service to a small number of clients, which differentiates them from many of their competitors. Based on those factors, we’ve placed them on this part of the generic strategy matrix.
We've learned much during the strategic planning processWe learned that our old strategy and goals aren't economically sustainableSo based upon that, a better mission for Acme Printing Company might be:“To help businesses obtain the highest return on investment possible on direct sales though effective communication with their customers”.Delivering on this mission involves more than traditional printing. Therefore some better strategic goals might be: To integrate our expertise in printing into digital marketing: Web, e-mail and social media.To expand the range of direct marketing services we provide beyond simple printing.To add the capability of measuring return on investment for the services we provide.See the difference? We wouldn’t have discovered this had we not gone through the strategic planning process!
To move from formulating a strategy to implementing it requires that we define objectives that support each strategic goal, and tactics to reach each of objectives. Each tactic may involve one or more tasks. We use a Mind Map/Project Chart to do this: The Acme plan is built around each of the three strategic goals. Each goal has a hierarchy of objectives, tactics and tasks. Our example below is simplistic but illustrates the idea.Based upon Acme's generic strategy of focused differentiation, the strategic planning team might develop an operating plan like this one.Each of these items addresses a number of critical issues identified on the Critical Issues Map. All of those issues need to be addressed by the operating plan!
With a visual processor (think word processor, but for visuals) like SmartDraw, you can convert the mind map of your operating plan directly into a project chart like this one, which you can use to begin scheduling the implementation of your operating plan!
In conclusionEvery organization's strategic planning process will be differentUsing visuals in the strategic planning process simplifies everythingMakes it easier to identify critical issuesMakes it easier to organize and arrange your dataMakes it easier to communicate your strategyMakes it easier to map strategy to action

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