The Process of Strategic Planning

I'm a process guy.  I'm not a big fan of the claims of process management software, but I'm a huge fan of developing and using process models to organize the activities of people, and then to drive the requirements for software from those models.

So when I was asked to look into the processes for Strategic Planning (one of the three business functions of enterprise architecture), I took a process oriented approach.  I looked at each of the different activities that have been suggested or planned or were being performed in strategic planning.  I created a chart of inputs and outputs and linked it up so that the output of one activity is the input to another.  Normal stuff. 

Without going into the details of the result, I would like the share the huge reliance that all of the activities have on a basic understanding of what the business is and does.  It became obvious when we began to trace back the core element of strategic planning: the business goal.

Strategies chart a path to a business goal.  Both the OMG Business Motivation Model, and my Enterprise Business Motivation Model, say this same thing.  A strategy is a statement of "how" a business can reach a goal.  But beneath this statement, we have to recognize something even more fundamental: that an enterprise can have more than one business.

Let's say that your company is a clothing retailer.  If you are successful at all, you probably have one or more "lines" of clothing that are made for you, and sold only through your stores.  That is differentiation.  You also may have clothing that is made by a well-known manufacturer and is sold widely, including in the stores of your competitors.  (this applies to other products, not just clothing, but I'll stick with the scenario for now).

How many businesses are you in?  If we want to look at the strategies of your business, it matters.  This is because the strategies that may make the "custom made clothing" business successful may actually work against the "name brand retailing" business.  A strategy to promote the in-house brands may hurt relationships, or drain resources, or drive down prices of the name brand products. 

So before you can even write down a strategy, you have to write down the number of businesses that you are in, and then, when you write down the strategy, you write it down in context.  You say "this is a strategy for making Business 2 meet it's goals."  You may not know if that strategy hurts "Business 1."  Depending on the organization of the business, and your responsibilities within it, you may not actually care. 

But the business architect must care.  The business architect, in this example, must be able to say "you are in two businesses, and they sometimes compete for resources, customers, and market-share."

So as you look at your strategic planning processes, don't forget to take the time to chart out how many businesses you are dealing with.  It is such an important part of the "first step" to strategic planning.

Comments

• Anonymous
  May 08, 2009
  Great point- Companies need to chart an overall business strategy, but they also need to be aware of the different needs within their organizations. Trying to apply the same generic strategy throughout a multi-faceted organization (such as your retail example) only works against management.