Learn how to identify and resolve your strategic issues. Address those critical unknowns that can present themselves as problems, opportunities, market shifts or any other factors that have impact on the direction and course of your company.
For more resources on building your strategic plan, view the Essentials Guide to Strategic Planning.
“Hi, I am Elsa Ozuna Richards and our white board session is on how to identify strategic issues. So what are strategic issues? They are those things that keep you up at night; they are those critical and unknowns that can present themselves as problems, as opportunities as market shifts or any other factors that have impact on the direction and course of your company.
So how do we address strategic issues? We address strategic issues through good strategy, and good strategy is developed through good analysis. So if you are having trouble identifying how to come up with your strategic issues, I am going to give you four key areas to look at. Let’s look first at evaluating the achievements, the successes and failures of your company. With company Y, they had an increase in profit they had excellent staff retention last year, and they gave market share by gaining a great new client. Their failures last year, they lost a great client; they had a decrease in sales due to the economy and they lost a little bit of efficiency. Another area I want like you to evaluate is how how your products and services are performing.
So let’s look at a company Y, product A, B and C. I want you to develop a little grid where I want you to list what the gross sales are for each product or service that you perform. Then I want you to subtract out all of the expenses that are associated with developing, performing, providing that product or service and then when you have subtracted it out, you find your gross profit. In this case let’s look at product or service B; great gross sales but it cost them a lot to provide it, so that was a loser. At this time you can either decide to keep your winners, dump you losers or you can implement some additional strategy that may help you improve their performance; Re-evaluate it in year two, and may be decide then if it is a keeper or a dumper.
Then, the other area that I want you to look at are evaluating your financial performance areas. Let’s look at financial ratios. Financial ratios is the excellent way to determine the dynamics of you financial performance. Identify the key ratios that you need to track. I want you to develop some benchmarks and some targets that we can shoot for in our financial performance. Then external to our company, I want you to look at the external forces that have impacted our company. Let’s look at our past model that we like using at M3: political, economic, social and technological. What are the the political factors that will have impact on the course of our company? And then the economic factors; may be its a slumped economy, may be is a great economy and your company is doing excellent. Let’s look at those social elements that will have an impact and then technological.
It could be a blessing or it can be a curse because in order to compete, you may have to invest a lot of dollars to keep up with the technology. I am going to throw in a couple of letters here: environmental. You may depend on the environment to provide the supplies that you need for producing your product, so that is a big factor that you have to evaluate. And then it may be a year of governmental scrutiny and you need a lot of legal assistance, so let’s look at the legal ramifications that have an impact on your company.
Four great areas that I want you to evaluate your company successes and failures. I want you to evaluate the products performance or the service performance of your company. I want you determine how your company is doing financially, and then I want you to look outside your company to the external forces. Thank you so much.”