Strategic planning is an action that every organization has to carry out. For the better part of the year, an organization or the strategic planning team within the organization gathers information that will help them carry out Outcomes Improvement Strategies. Strategic improvement could be long term or short term and it could include big projects that are capital intensive or small incremental or periodic changes within the organization.
Improving Strategic Planning
Strategic planning has to be improved on constantly so is to keep up with improving times and the emerging competition. Most of the strategic planning happens annually and this annual planning process is essential. Each annual plan lays a foundation for the budget for the coming year. The budget is often used to determine compensation metrics and to provide guidance for financial markets; and aligns the management team on its strategic priorities.
The operative question for chief executives is how to make the planning process more effective i.e how to improve outcome strategies and efficiencies. Efficiency defines the extent to which a process performs relative to its full potential. Greater efficiency comes from delivering a greater output of goods and services relative to the assets required for that purpose. Less efficient organizations operate at a competitive disadvantage.
Research has shown that formal strategic planning plays a significant role in improving the overall outcomes of an organization. A survey was taken and it showed that 79 percent of managers claim that their formal planning process plays a significant role in developing strategies and 21 percent felt the process was not very effective. Looked at another way, 51 percent of the respondents whose companies had no formal process were dissatisfied with their approach to the development of strategy, against only 20 percent of those at companies with a formal process.
Outcome Improvement Strategies
There are common steps that are taken when trying to carry out outcome improvement strategies. Let’s discuss some of those steps below
Define the Business Processes
One major way of defining a business process is by making a process map. Process maps provide the foundation for how work gets done and insights into what can be done to improve it. By defining and deploying strong business processes, an organization engages its employees in a valuable way, distributing responsibility and accountability closer to the work itself. If you don’t have one in your organization, work towards building a process map no matter how small or big the organization is.
Improving Customer Experience
With a better business process, you would eventually have more satisfied customers regardless of if you are a B2C or B2B business. One way to refine your process for better customer satisfaction is by systematically studying customers to understand which of your process work best with them and which don’t. This will help your organization to be able to consistently meet the customers’ needs. Behind every unhappy customer lays a broken business process. Improving the customer experience begins by aligning internal business processes to deliver better external customer outcomes.
If you understand where the most of your costs are coming from, you would be able to come up with better ways to reduce them thus leading to an overall improvement in business strategy. When organizations operate through strong standard business processes, the costs of goods and services become transparent, which facilitates visible and sustainable improvement. Some main types of costs are fixed and variable costs, overhead cost, operating cost etc. Is a small business owner you should probably understand in detail what each type of cost means.
For example, overhead costs are usually mistaken with operating costs but they are different. Overheads are the expenditure which cannot be conveniently traced to or identified with any particular cost unit, unlike operating expenses such as raw material and labor. Therefore, overheads cannot be immediately associated with the products or services being offered, thus do not directly generate profits
Improving Resource Productivity
We just talked about how companies need to focus on cutting costs is an outcome improvement strategy. Cutting cost is a way of improving resource productivity. Assets include people, tools and equipment, facilities, information technology, and intellectual property. Organizations acquire assets with the express purpose of using them to produce profits. The productivity of those assets is derived from the ratio of outputs produced by the process relative to the resources required to produce those outputs. ‘If a company diligently measures the extent to which these assets are productive, they would be able to find ways they can improve.
Perfecting the Supply Chain
Every business has a process of how they deliver products to the end customer and how the get products delivered to them from their suppliers. A proper analysis of these delivery processes and their response time can help an organization systematically reduce any waste and delays in the supply chain. An organization that builds a consistent capability to deliver a faster response will have a competitive advantage in the industry.
How to Implement Outcome Improvement Strategies
Have a Macro Mindset: A company should always take the external environment into consideration. The external environment consists of the social, economic, technological, government, and environmental factors that could affect the business. This will help managers plan and implement strategies according to trends. Like a company selling ice cream should not plan a big sale event in the winter. No matter how great the strategy is, because the planning team did not factor in the macro aspects that are beyond their control, the strategy will not produce desired results.
Determining Priorities: There is only so much you can do at the same time and same goes for an organization. If clear goals and priorities are not set, the strategy will not be effective. Strategy planning teams should choose around 3 to 5 clear and objective prioritized goals and pursue them with the certainty that they can be achieved.