The main categories of these would include:
- The organisation's vision, mission and values
- Key Risks
- Organisation and Resources
The organisation's vision, mission and valuesThese define the basic purpose and parameters of existence for the organisation.
Often a statement of vision OR mission is sufficient (as opposed to having both).
Where the organisation is not a completely stand-alone entity, the vision, mission and values should reflect the context of the parent structure. The more stand-alone the organisation is, the more important it is that the vision and mission reflect a uniquely differentiated competitive position.
AnalysisThe analysis should cover both the external competitive environment, as well as internal factors.
Factors to consider in the external competitive environment include the current situation, recent changes and anticipated changes with regard to
- The relative negotiating power and interests of external entities such as customers, suppliers, regulators, government and lobbying groups.
- The level and nature of competitiveness within the industry, for example
- the number of competitors and/or level industry fragmentation, and
- the bases of competition, for example price, innovation, customer segmentation, distribution relationships, etc.
- The threat of product or service substitution or becoming obsolete.
- The threat of new entrants into the market, which would probably include an analysis of the barriers to entry.
Internal factors would include, strengths, weaknesses and flexibility with regard to:
- Systems, including computer and manual systems, process, procedures and policies,
- Staff, skills, knowledge / intellectual property and organizational capabilities, and
- Culture, organizational style and structure.
You might also include an Options Analysis, where a number of options were considered before deciding on a way forward (and/or where it is important to argue and/or justify the option(s) carried forward into the plan). Typically you would evaluate each option in terms of:
- Robustness in the face of the external analysis (including multiple scenarios, if you have done scenario planning),
- The organisation's ability to deliver it, given its strengths and weaknesses,
- Fit to the vision, mission and values of the organisation or its parent context, and
- Financial value of the option (as per a Discounted Cash Flow or similar analysis)
PlanBased on the analysis, the plan itself is then articulated in terms of:
- Initiatives or tasks: what will be done and by when, including what the output or deliverable of the task will be, and, depending on the plan's audience and purpose, who will do it. A stylized or simplified Gantt chart is often a useful way of communicating this. (S.M.A.R.T.) objectives or outputs of the plan. I find it useful to consider 4 types of objectives:
- Financial objectives such as shareholder returns, (working) capital efficiencies, margins, funding, etc.
- Market share and/or customer experience objectives,
- Process performance and efficiency objectives, and
- Organisational capability, staff, skills, systems and cultural objectives.
- A budget or forecast showing how the plan plays out. I find it most useful to consider this as a forecast of the balance sheet and income statement for the organization, including relevant key non-financial indicators such as head count. Typically one might, for example, do this on a monthly basis for the first 12 months, and on an annual basis for the subsequent 4 years. The structure of this should reflect the underlying economics of the business model so that meaningful sensitivity test can be run. The inputs to the sensitivity tests should be consistent with the uncertainties identified in the Analysis or in the Key Risks, and the outputs should be consistent with the stated Objectives.