Avoid These 6 Pitfalls in Planning Your Strategy

  One of the most important roles of a CEO and the senior leadership team is to develop and successfully execute their company’s strategic plan. One of the most important roles of a board is oversight of the company’s strategy. To quote a line from “Any Road,” sung by George Harrison: “If you don’t know where you are going, any road will take you there.” The foundations of the strategic planning process are the situation analysis and the SWOT analysis. A situation analysis describes the economic, competitive, technical, regulatory and societal environment in which the company operates and will operate during the plan period. The company has little, if any, control over trends in these areas. A SWOT analysis outlines the company’s strengths, weaknesses, opportunities and threats. Strategies need to be developed for the company to build on its strengths, minimize the impact of its weaknesses, take advantage of its opportunities, and defend against its threats. Directors should play an active role in reviewing management’s situation and SWOT analyses, offering their own views of each. Much has been written about the role of the board in the development of the strategic plan. I believe that it is management’s responsibility to develop the plan with board input. The board’s role is advisory: to pose questions to management to stimulate thought and provide guidance, to assess the risks of the strategies under consideration, and to evaluate alternative strategies. This ...

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