| The strategy cycle is a simple tool that will help you to | | | | A good example of this would be the marketing |
| achieve the goals of your organisation. Consisting of | | | | department implementing a campaign to increase |
| four main phases, the cycle is an iterative process that | | | | sales, without informing the production department, |
| you can use to build and improve your business year | | | | who will not have had enough time to prepare for the |
| after year. | | | | increased level of demand. |
| Research | | | | Other important factors to consider during the planning |
| Successful business relies on informed decision making. | | | | process include: |
| Managers with access to information on the market, | | | | -- Determining how the success of the strategy will be |
| competitors and their own business will be better | | | | measured |
| placed to set goals and devise strategies, than those | | | | -- Outlining the key milestones and stating when these |
| who are less well informed. | | | | will be achieved |
| Larger organisations often have business intelligence | | | | -- Financial planning to agree appropriate budgets for |
| units, specifically tasked with the collection and analysis | | | | each activity within the strategy |
| of data, but there is nothing to stop managers from | | | | -- Undertaking a risk assessment and identifying ways |
| smaller businesses from spending a couple of hours | | | | to mitigate major risks |
| each month collecting their own business intelligence. | | | | -- Establishing an approval and sign-off process for |
| Often a manager's personal knowledge and | | | | each activity |
| experience of the market can be just as effective as | | | | Implementation |
| expensive research studies and decisions are made | | | | Strategy implementation involves the delivery of a |
| through 'market sensing' as opposed to 'market | | | | number of inter-related activities to an agreed standard |
| research'. | | | | and schedule. This is often referred to as project |
| As the strategy cycle is an iterative process, the | | | | management. |
| results of previous strategies should feed into the | | | | To successfully deliver projects, managers need to |
| business intelligence, along with any important | | | | have good communication, financial and time |
| experiences or key learning's gained. | | | | management skills, so that they can liaise with staff, |
| Planning | | | | contractors and customers (both internal and external), |
| After analysing the business intelligence to identify the | | | | whilst ensuring the project remains on schedule and |
| most important internal and external factors affecting | | | | within budget. |
| the organisation, managers can begin to formulate | | | | In larger organisations there may be a number of |
| appropriate strategies for meeting their goals. | | | | inter-related projects taking place in order to meet an |
| Organisational goals are the aspirations that the | | | | objective. This is often referred to as programme |
| business seeks to achieve. These generally revolve | | | | management, with a programme board regularly |
| around growing the business and increasing profitability, | | | | monitoring each project to ensure it is delivering. |
| but can also be industry specific, such as a technology | | | | As each milestone activity in the strategy is completed, |
| company wanting to become the leading innovator. | | | | it should be reviewed and signed-off by designated |
| To make these goals possible, managers set | | | | managers. Activities that are not delivered to time or |
| objectives which provide a more tangible destination | | | | quality should be reviewed to understand why and |
| for the business to move towards. | | | | corrective action undertaken to try and get the |
| For example, a business seeking market leadership | | | | delivery of the strategy back on track. |
| would probably set objectives around increasing sales | | | | Measurement |
| and reducing costs. It would then be up to the heads | | | | Once implementation of the strategy is complete, it is |
| of finance, marketing, HR, R&D and production to | | | | important to assess the degree to which it enabled the |
| develop strategies to achieve these objectives. | | | | objective to be achieved. Without proper |
| A strategy can be described as a collection of | | | | measurement it will be difficult to accurately |
| activities that will enable the organisation to reach it's | | | | understand what worked and what improvements |
| objective. A cost reduction strategy may involve staff | | | | might be needed for future strategies. |
| redundancies, renegotiation of contractual terms with | | | | The method of measuring the strategy should be |
| suppliers and the development of more efficient supply | | | | closely related to the objective that was set. |
| chains. | | | | Therefore an organisation whose objective was to |
| Throughout the planning process, managers should | | | | increase sales turnover, would use the increase (or |
| constantly consult with other heads of department and | | | | decrease) in actual sales as one of its measurements. |
| with employees further down the line who will be | | | | On some occasions it will not always be possible to |
| responsible for implementing the strategy activities. | | | | use internal data to measure strategy success, |
| Without suitable levels of communication, the different | | | | especially for less tangible factors such as brand |
| parts of the business will not be able to take an | | | | awareness. In these cases it will be necessary to seek |
| integrated approach towards the objectives, often | | | | external data in the form of market research surveys |
| resulting in duplication of effort or inability to deliver to | | | | and opinion polls. |
| customers. | | | | |