In his best seller, Good to Great, Jim Collins says that one of the key differentiators of great companies is their ability to “confront the brutal facts, yet never lose faith”. For effective strategic planning, a brutally honest current state assessment provides important baseline information.
Use of facts and data
Ideally, the current state assessment is built on facts and data, rather than perceptions. Balanced scorecard results, customer and employee satisfaction surveys, financial results, market share data, and organizational audits are invaluable at this stage in the planning process. Data and trends over time provide more meaningful information than snapshot statistics. Data on how the organization has performed compared to competitors or best in class will ensure the assessment is not colored by “internal group think”.
The most common method for assessing the current state is the SWOT analysis where the following aspects of the organization and its external environment are assessed:
• Strengths (Internal) – current capabilities or assets within the organization that provide a significant advantage over competitors in the marketplace
• Weaknesses (Internal) – deficiencies or absences in organizational capabilities that result in less than desired performance or impede progress towards strategic goals. Some groups prefer to call these Challenges (SCOT).
• Opportunities (External) – events, or circumstances in the external environment that an organization could capitalize on to advance its own strategic agenda
• Threats (External) – events or actions in the external environment and outside of the organization’s control that could negatively impact the organization’s performance, viability or growth
Common Pitfalls and Preventions
• Using the “opportunities” discussion to “sneak in” proposed improvements and initiatives that should come later in the planning process. To avoid this pitfall, ensure the discussion focuses on what is happening “externally” to which your organization can choose to “hitch its wagon”.
• SWOT assessment is conducted in too narrow a context i.e. all comments relate to only the marketing or customer perspective. To avoid this pitfall, start with a holistic view of the organization so that participants consider all aspects of organizational performance including employee perspective, process capability, customer relationships, financial performance, etc.
For groups wishing to take an appreciative or strengths-based approach, Dr. Jackie Stavros in conjunction with some of the other founders of Appreciative Inquiry, developed the SOAR framework which couples current state assessment of Strengths and Opportunities, with future oriented Aspirations and Results.
Many groups stop with the lists of strengths, etc. but the most valuable part of the process is the synthesis and assessment. This is where organizations need to reach a conclusion about the state or condition of the organization much like a doctor provides a diagnosis after your annual physical examination, or an investor determines the state of a business before investing.
A helpful tool at this step is for each participant to complete the sentence, “All in all, in my opinion, our organization is (diagnosis)”. Make sure the diagnosis is a judgment, not simply a description of the current state.