Research and Analysis – In this five-week article series, we are going ‘back to basics’ to examine the organisational strategic process in detail. Last week we looked at vision and mission.
Research and Analysis
This is the data-driven, number-crunching phase of the strategic process, and it’s the point where the creative visioning process takes a pause for a minute and the business instead gathers evidence and objective insights to guide intelligent decision-making.
There are various tools available to support the research and analysis stage, but all have the same outcome in mind; to provide robust, objective, thorough and relevant data sets for the strategic plan, that can be fed into the subsequent phases of the process (particularly the objectives setting and implementation tactics planning stages.)
Tool to support research & analysis
Many of the available research and analysis tools are incorporated into broader strategic planning and management frameworks such as the Balanced Scorecard. Full details of these tools can be found at https://www.intrafocus.com/strategic-analysis/ – but in essence, the main ones that most organisations prefer to use are:
This tool recognises that most strategic processes build on earlier strategic activity. Gap analysis takes all of this previous valuable work and systematically validates it and identifies any gaps, using a list approach. Typically, the list format will be provided from a framework such as the Balanced Scorecard, to ensure that ‘things that you don’t know you don’t know’ aren’t inadvertently excluded. Learn more about best practice checklists here: https://www.intrafocus.com/strategic-planning-checklist/
Representing Strengths, Weaknesses, Opportunities and Threats, the SWOT is an intuitive four-box quadrant diagram which describes enablers and challenges according to internal or external focus. The resulting SWOT analysis presents a summary strategic position in one easy-to-read chart. It’s a flexible tool that can be used to kick-start strategic research or can comprise meaningful analysis on its own merits. Most usefully, it allows rich insights to be captured visually from a range of internal subject matter experts, in a way that can then guide strategic decision-making.
The mnemonic represents Political, Economic, Socio-Cultural, Technological, Legal and Environmental ‘big picture’ factors, focusing on the broader business environment and the positive and negative impact of likely or anticipated changes. By identifying these changes and the resulting opportunities and threats associated with their occurrence, it allows strategic planners to build mitigating steps and response objectives into the strategic plan.
Porter’s Five Forces
Developed by Michael Porter from Harvard University, this tool focuses on the forces that exist close to the organisation – rather than the ‘big picture’ reviewed by PESTEL analysis. The five forces measured in the tool are buyers, suppliers, substitute products and services and their relative threats, new entrants and existing rivals. During the process of creating the analysis, questions will be asked that identify different factors that relate to each force. For example, within ‘customers’ the team will look at the volume of buyers, any geographic concentrations, ease of switching and total trading volume to assess customer bargaining power. The resulting diagram will visually centre existing competitors as an anchoring force that represents its importance and the impact that the other four forces will have on it.
Whilst there is some value in comparing internal benchmarks and company trends, the real value of benchmarking lies in looking externally to see what competitors are doing in the market. There are formal and informal means of doing this type of research, and some benchmarks can be purchased commercially. Strategy canvases are also popular and provided as a strategic tool of the Blue Ocean Strategy framework. Find out more: https://www.intrafocus.com/strategic-analysis/
Critical Success Factors
Critical Success Factors help organisations to avoid the mistake of jumping straight to objective setting or project planning and instead focuses on what is important to accelerate desired change. By definition, they are limited in number and – if achieved – will allow the organisation to enjoy a competitive performance and to flourish. If a strategic component describes what the organisation must do, the CSF defines how it will be delivered.
As you can see, there are plenty of tools that exist to help organisations to carry out their strategic research and analysis, and most will use a combination of these to carry out this vital stage of the strategic process before moving on to stage three: formulation of objectives.
We’ll examine this stage in our next article. Until then, download your free Strategy 101 Beginner’s Guide