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By Victor Muchemwa (ACMA, CGMA)
2020 Business Coach of the Year Finalist
Founder Zim Business Ideas and Network
AS the year comes to an end, most corporations will be looking forward to fine tuning their corporate strategies for the New Year. Overall, 2020 was possibly the worst year for the business sector, as the world economy plunged into a recession, induced by the Covid-19 pandemic.
Yes, there are some sectors that grew exponentially due to the novel pandemic, but for most business sectors, this has been a tough situation.
This is a year where strategic planning went off the rails with disturbances in all key sectors of the economy – the lockdown periods, the partial reopening thereby affecting production, logistics, consumer spending and more.
Although tests for the Covid-19 vaccine are bringing in positive results, the fact is, it is still a long way before the pandemic is effectively managed across the globe. Coming to Zimbabwe, we are talking of some many months or even years before we can have sufficient supplies of the vaccine on our shores.
All this points to a very fluid business environment and financial analysts sum it as a VUCAH environment – Volatile, Uncertain, Complex, Ambiguous and Hostile environment.
According to Drucker, “Corporate planning is the continuous process of making present entrepreneurial (risk-taking) decisions systematically and with the best possible knowledge of their futurity, organising systematically the efforts needed to carry out these decisions; and measuring the results of these decisions against the expectations through organised systematic feedback.”
In a nutshell, organisations ask themselves the following questions;
- Are we on track to meet our set objectives?
- Can we continue operating the same way we have been doing or we need to change the strategy?
- What does the future hold for us?
- Do we have sufficient resources to meet our objectives?
- What are the blind spots that we need to prepare for and manage?
With the rate of change across the globe taking a blistering pace, how prepared are local companies to adjust to unknown changes in order, first, to keep their heads above water and secondly, to thrive?
Whilst big organisations have the expertise for strategic planning, implementation and reviews, the situation is however not systematic for many an entrepreneur. They just go with the flow and in some cases, it works but research shows that shooting in the dark is not the most efficient way for success.
We explore the processes you will need for strategic planning, with this varying with an organisation’s size;
Defining long and short range plans: In the Zimbabwean context, planning beyond five years is tricky, given the VUCAH environment. However, knowing the direction you intend to go helps in motivation and pushing for success. Long term plans need not be too detailed but short term plans should be brief. What are your strategic plans in 2021? Is it maximisation of profits with a target, maximisation of revenue, market diversification, consolidations, change in business models or more?
- Macro and Micro environment
What are experts saying about 2021? You need to do thorough researches so that you are not surprised by sudden breaks big corporate companies pay substantial amounts of funds to access Zimbabwe Outlook Reports produced by international research agents. In case you are not able to afford the, then you need to read wide financial articles, follow the National Budget and policy statements from the Ministry of Finance and Economic Development. Whatever happens at macro-level has a direct bearing on what eventually takes place at your micro-level. In short, the assessment involves The Political environment which sets the pace for everything in a country, Economic environment, Social Environment, Technological environment and Legal environment (PESTEL).
- SWOT Analysis
Given developments in the external environment, how do you plan to survive and thrive? You are supposed to carry out a Strengths, Weaknesses, Opportunities and Threats analysis.
- Structural changes from SWOT Analysis
Having analysed the SWOT Analysis, what key decisions can you make? Your objective being to maximise on strengths and minimise on weaknesses.
- Implementation plan
Write down your implementation plan with timelines and responsible persons. This officially becomes your 2021 plan with WHAT, HOW, WHEN, WHO being the key questions
- Optimal use of financial resources:
A strategic plan needs resources for effective implementation. This is where budgeting comes in and it is tailored to the activities identified in the implementation plan. This becomes your official budget.
- Monitoring, Evaluation and Adjustments
You then decide when to implement your plan – go on and implement, and review whether you are achieving your objectives or not. Make adjustments accordingly.
The big question is, can you do a strategic planning session on your own? Unfortunately, no; you need outsiders for facilitation. Trained experts in the field help you to critically analyse external and internal events and the experts should not be engaged for a once off event. You also need them for a mid-year official evaluation where you review progress to date and fine tune your strategy for the remainder of the year.
This article was first featured in the Dec Issue of The Entrepreneurial Magazine, it can be downloaded on the link below:
