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