“Structuring a strategic plan makes it possible to transform an ambitious vision into concrete, measurable actions.”
Frédéric Monomakhoff
Managing Director of Virage group
When an organisation launches a strategic plan, it is because it wants things to change, and wants to change things!
In a large organisation, management plays a key role in setting the course. Those in management drive this vision, while the operational teams are responsible for implementing it on the ground. Whilst a certain degree of participation is involved in defining the course to be taken, it is essential that everyone benefits and feels involved.
Why structure a strategic plan?
A strategic plan is often broken down into hundreds or even thousands of actions, spread across different sites and business lines.
No one can manage this volume without a structure.
This is where the need to structure the plan comes in to clarify communication, make management more fluid, and guarantee that the objectives are achieved.
How should a strategic plan be structured?
The structuring of a strategic plan is based on a top-down approach and follows simple but crucial stages.
1- Define a main ambition
This is the main aim which can be put into words.
For example, a drinks company might aim to “become the European leader in milk bottles within three years”.
This ambition must be clear and inspiring, ambitious enough to motivate the whole organisation.
2- Identify strategic objectives
These objectives, also known as priorities, areas, etc. depending on the organisation, are key stages in achieving the main ambition.
For example, to become the market leader in milk bottles, a company can set objectives such as increasing its market share through acquisitions or developing new, more environmentally-friendly products.
Ideally, these objectives should be limited in number to between three and five so that they are easy to read and remember.
3- Break down the objectives into sub-objectives
The strategic objectives need to be broken down into more concrete and measurable sub-objectives.
For example, to achieve the objective of external growth, a sub-objective could be to raise funds on the financial markets.
This sub-objective may itself give rise to a specific action, such as issuing bonds on the Madrid stock exchange.
Example of structured objectives:
- Main ambition: To become the European leader in milk bottles.
- Strategic objective: Increase market shares through acquisitions.
- Operational objective: Raise €XXm to finance these acquisitions.
- Action: Issue €10m worth of bonds on the Madrid Stock Exchange.
The structure should be hierarchical and clear, with a limited number of sub-objectives and actions to facilitate monitoring and communication.
Distribution of responsibilities
To ensure that the strategic plan progresses as intended, it is crucial that each action is assigned to a specific team and that a manager is responsible for monitoring it. High-level strategic objectives are often cross-functional, and it can be difficult to attribute them down to a single entity. In this case, a dedicated team can take charge of coordination.
Example of distribution of responsibilities:
- The objective of “increasing market share through external growth” could be managed by the General Management or the Development Department.
- The task of raising funds would be entrusted to the Finance Department.
- Finally, issuing bonds on the Madrid Stock Exchange would be handled by the Spanish subsidiary’s finance team.
The overlap of hierarchical and organisational structure
To ensure the plan’s effectiveness, it is essential for the hierarchical and organisational structures to overlap. This means that each action must be linked to one or more strategic objectives while being attributed to a specific organisational unit.
Example of overlap:
Action to change the process in a plant to improve economic efficiency can also be linked to an objective to reduce CO2 emissions. This action could be classified in two categories: “productivity” and “sustainable development”.
Managing a strategic plan with several areas of analysis
In a mature organisation, it may be useful to analyse the actions of the strategic plan from different angles, such as economic efficiency, environmental impact or innovation. In this way, a single action can contribute to several strategic objectives simultaneously.
E.g.
Modernising a plant to cut costs can also contribute to an environmental plan by reducing CO2 emissions. This dual contribution strengthens the impact of the action and shows that different objectives can be achieved with a single initiative.
Structuring a strategic plan enables an ambitious vision to be transformed into concrete, measurable actions. By clearly allocating responsibilities and prioritising objectives, organisations can monitor and adjust the actions needed to achieve their goals. With a well thought-out approach, a strategic plan is not just a document, but a driver for change throughout the organisation.
Find out how Strat monitor can help you manage your strategy.
