Long-term approaches to strategic planning allow you to identify the potential in smaller or less popular ideas. Listen to a story that articulates the value of considering your portfolio's changing potential over time.
- Another assessment you need to conduct when you look at your portfolio of initiatives is how does it change over time. You've laid out a vision for what your organization should look like three years to five years from now. It's important to understand if the initiatives that you're pursuing are going to get you there. Allow me to illustrate. I worked with a financial services firm that had a huge core business in sub prime credit card lending. And they had a smaller business in prime credit card lending. The problem was new entrants were continuing to enter the market and challenge them in sub prime lending. Now, they had a long list of initiatives they could pursue, and many of those initiatives were focused on fixing that sub prime business. However, they had other initiatives that were much smaller in the near term that were going to get into new markets, and new products, and new types of lending like auto finance, and installment loans, and even having a bank. Now, when you look at the portfolio today, and you look at the financial returns that those initiatives were going to generate, it was very clear that the initiatives focused on the core business would have a bigger financial impact than those smaller new businesses. However, when they looked at the portfolio over time, and they said the sub prime business is declining over that period, and these new initiatives, these new smaller businesses, are going to grow over that period of time, they understood that those smaller initiatives today had a bigger role in the future. So as you look at your portfolio, it's important to look beyond this year's financial impact. You have to appreciate the role that those smaller initiatives are going to play in your future, and be able to prioritize and reallocate resources for that initiative portfolio to achieve your overall vision.
- Define the principles of strategic planning.
- Identify forces used to assess the market.
- Explain how to conduct a SWOT analysis.
- Articulate how to establish guiding principles and set goals.
- Explain what strategic filters are used for.
- Describe the steps of a strategic planning process.