Resources on Strategic Planning

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Strategic planning is a process of carefully and thoughtfully aligning the strengths of a company’s business to the opportunities that are available to the company in its chosen business environment. While strategic planning is both a science and an art, it is generally believed that in order for the planning process to be effective on a consistent basis the managers of the company must collect, screen and analyze information about the company’s business environment, identify and evaluate the strengths and weaknesses of the company and develop a clear mission for the company and a set of achievable goals and objectives that then become the basis for tactical and operational plans. Strategic planning is an important and essential process for every company regardless of the size of its business and the time and other resources that the company has available to invest in the developing, documenting, implementing and monitoring a strategic plan. The business environment and relevant technologies are constantly changing and new risks and uncertainties will surface on a regular basis.

Although corporate social responsibility (“CSR”) has been adopted by many companies, few of them are practicing it with any formal strategy, and the common situation seems to be a portfolio of disparate CSR programs and initiatives some of which supported core strategy and others of which appear adjacent and discretionary. The diversity of potential CSR initiatives is one issue (e.g., companies may simultaneously disburse funding for community activities, provide grants for nonprofits/NGOs, launch environmental sustainability programs to reduce energy and resource use and engage in “cause” marketing and comprehensive system-level efforts to remake their entire value chain); however, developing a strategic orientation is complicated by the fact that each company has its own unique set of drivers and motivations for CSR and ideas and responsibilities for those initiatives come from all parts and levels of the organization. Moreover, while it makes sense to identify a specific business logic and rationale for each CSR initiative, the reality is that companies often take on causes and projects that have little or no connection to their core competencies or business strategy.

Serious interest in CSR strategy has been driven by the emergence of two challenging environmental conditions that must now be addressed by all companies: the growing interest in sustainability and the need to engage with a broad range of stakeholders beyond the owners of the business (i.e., suppliers, distributors, employees, unions, special interest groups, governmental agencies and competitors). These conditions have not made strategic planning any easier, given that they expand the levels of unpredictability and risk in any company’s environment, and the response has been the development of a new discipline: strategic planning for sustainability. Strategic planning for sustainability recognizes that businesses operate in a world where every participant, large and small, has an obligation to act in a manner that addresses and reasonably satisfies their current goals and needs while not compromising the ability of future generations to meet their own goals and needs. Traditionally companies acted primarily out of self-interest and the need and desire to deliver profits, as quickly as possible, to their shareholders. It is certainly true that enterprises need to generate sufficient return on their investments in order to survive and continue to provide jobs for their employees, generate tax revenues to support their communities and produce goods and services sought by customers; however, companies cannot continue to focus simply on financial and physical capital and ignore the adverse long-term impact that their operations may have on natural and human resources.

Strategic planning for sustainability is far from easy or precise, if only because it requires that simultaneous consideration be given not only to economic performance and development, but also to environmental protection and the social wellbeing of employees and other persons and groups outside of the organization. Companies and their managers are struggling to find and deploy the tools and practices that are necessary for balancing and reconciling the “triple bottom line” of profits, planet and people. Clearly a company cannot contribute to sustainable development on a long-term basis unless it remains “in business” and this often means taking actions thought necessary for financial survival at the expense of other actions that would be environmentally or socially preferable. Even when businesses clearly understand that respecting the environment and society are necessary it may take time for them to make the necessary changes in their operational activities and it is not always possible for companies to avoid actions that might cause short-term environmental or social harm. In those situations, however, companies need to take responsibility for their actions and remediate the damage, such as by committing to build new skills and find meaningful employment for workers laid off as part of a downsizing of operations in a specific community. Another challenge is that the empirical data that manages are used to having for their financial analysis is not as readily available for environmental and societal issues and the information that does exist is continuously changing, often technically ambiguous and subject to competing interpretations that not only make internal decision making more difficult but also muddle the regulatory environment in which businesses must operate.

The path for developing and pursuing a CSR or sustainability strategy will be different for each company and will depend on its unique characteristics and circumstances; however, it is generally recognized that an effective strategy must be based on accepting the need for organizational change, a commitment to continuous improvement and strong board-level vision and oversight. Companies can consult international instruments that provide guidance and ideas for designing and implementing an effective and comprehensive CSR initiative, and a growing body of empirical research has helped to build consensus on the elements of an effective framework for developing CSR and sustainability strategies including assessing current CSR norms, standards and practices by benchmarking against competitors and universal standards; engaging key stakeholders to raise awareness of CSR, solicit positive participation in the CSR strategy process and mobilize commitment for significant organizational change; prioritizing proposed CSR actions; defining the specific CSR commitments and sustainability goals and articulating a clear business case for sustainability; developing an integrated strategic plan to achieve the selected CSR goals and embed CSR into organizational strategy; implementing the plan and the initiatives linked with CSR based on a thoughtfully formulated CSR implementation plan; establishing internal and external communications regarding CSR commitments and performance; forging partnerships with outside parties, including non-governmental organizations, to collaboratively pursue CSR goals and objectives that are best addressed with the complimentary skills and resources of the partners; evaluating, verifying and reporting on CSR progress; and institutionalizing the strategies and policies by embedding CSR into corporate culture and values and aligning organizational systems to support CSR commitments.

Becoming a sustainable business, or improving a company’s current performance with respect to acting in an environmentally and socially responsible manner, requires the same sort of strategic approach as any other major corporate initiative. However, while strategic planning for sustainability has become a recognized discipline, companies and their directors and senior executives must acknowledge and seek to overcome various specific challenges such as the fluidity of the concepts of CSR and sustainable development, ongoing debate about the allocation of responsibilities for sustainable development between governments and business, understanding and adopting new performance measures that go beyond financial results to include environmental and social dimensions, reconciling the difficult tradeoffs that often must be resolved when implementing sustainable business practices, effectively communicating with stakeholders to explain the long-term approach that is necessary for implementing CSR and the need to adopt new processes for decision making in the boardroom and implement internal controls that track sustainability and facilitate CSR reporting.

In order to understand how to formulate and execute a strategy for CSR and sustainability, it is necessary to have a foundation in the art and science of strategic planning generally. A substantial amount of literature exists on the importance of strategic planning and it generally is accepted that implementing and maintaining formal planning processes at the appropriate time during the development of the company is an essential element in creating and maintaining competitive advantage. Simply put, strategic planning can be thought of as a process of carefully and thoughtfully aligning the strengths of a company’s business to the opportunities that are available to the company in its chosen business environment. While strategic planning is much debated and remains imprecise in many ways, it is generally believed that in order for this process to be successful the managers of the company must collect, screen and analyze information about the company’s business environment, identify and evaluate the strengths and weaknesses of the company and develop a clear mission for the company and a set of achievable goals and objectives that then become the basis for tactical and operational plans. The strategic planning process allows managers to be proactive in identifying, and responding to, changes in the company’s business environment. Companies can use strategic planning to prepare for future events and allocate their resources to take advantage of emerging opportunities and minimize the potential harm from environmental threats such as new competitors and technologies and changes in customer requirements or regulatory guidelines. Strategic planning is an important and essential process for every company regardless of the size of its business and the time and other resources the company has available to invest in the developing, documenting, implementing and monitoring a strategic plan. The business environment and relevant technologies are constantly changing and new risks and uncertainties will surface on a regular basis.

It is not uncommon for larger companies to employ teams of experts in a dedicated strategic planning unit to work full-time on the planning process and to solicit input from hundreds or thousands of managers throughout the organization. For smaller companies, however, the process is necessarily more informal and compressed and may even be as simple as the founder or chief executive officer sitting down with a handful of key employees to solicit their opinions on where the company should go over the planning period and what investments will need to be made in order to achieve the mutually recognized goals and objectives. Regardless of the context, a variety of factors determine the planning practices that may be adopted by a particular company including environmental conditions, which include both the “specific environment” (i.e., the forces, such as stakeholders, that can be expected to have a direct impact on the ability of the specific company to obtain the scarce resources required for the company to create value for its owners and other stakeholders); and the “general environment (i.e., the forces that typically will have an impact on the shape and design of all companies, including the company and other companies that are part of the stakeholder network of the company (e.g., economic, technological, political, demographic and socio-cultural forces)); organizational size, complexity and age; the nature of the business engaged in by the firm, top management values and styles; organizational culture; and the initial trigger for commencement of formal planning.

ADDITIONAL RESOURCES

Forms

Strategic Planning Toolkit
Template for Information Submission for Seed Stage Startups

Training Materials

Mintzberg’s 10 Schools of Thought on Strategy Formulation

Future-Fit Business Benchmark (KFI Calculations)

Future-Fit Business Goals (Comparison to Other Standards)

Future-Fit Business Goals (Pivot Goals Examples)

Future-Fit Business Network Sources of Global Threats & Risks

Sustainability Handbook

Books

Strategic Planning for Emerging Growth Companies