Strategic Planning for Sustainability

Alan S. Gutterman

• Éditeur: Business Expert Press
• Année: 2020
• ISBN:
  9781952538957
• Sujet: Business
• Sous-sujet: Business Strategy

This book is a comprehensive guide to the key steps required to strategically approach becoming a successful sustainable business including conducting a CSR assessment, developing a CSR strategy and the accompanying business case, developing and implementing CSR commitments, and measuring the performance and effectiveness of the planning initiative.

Although corporate social responsibility (CSR) has been adopted by many companies, few of them are practicing it with any formal strategy, and the common situation seems to be a portfolio of disparate CSR programs and initiatives, some of which the support core strategy and others of which appear adjacent and discretionary. The diversity of potential CSR initiatives is one issue; however, developing a strategic orientation is complicated by the fact that each company has its own unique set of drivers and motivations for CSR and ideas and responsibilities for those initiatives come from all parts and levels of the organization.

Strategic planning for sustainability is far from easy or precise, if only because it requires that simultaneous consideration be given not only to economic performance and development but also to environmental protection and the social wellbeing of employees and other persons and groups outside of the organization. This book is intended as a comprehensive guide to the key steps required to strategically approach becoming a successful sustainable business including conducting a CSR assessment, developing a CSR strategy and the accompanying business case, developing and implementing CSR commitments, and measuring the performance and effectiveness of the planning initiative.

CHAPTER 1

Introduction

In order to understand how to formulate and execute a strategy for corporate social responsibility (CSR) and sustainability, it is necessary to have a foundation in the art and science of strategic planning generally. A substantial amount of literature exists on the importance of strategic planning and it generally is accepted that implementing and maintaining formal planning processes at the appropriate time during the development of the company is an essential element in creating and maintaining competitive advantage. It is not uncommon for larger companies to employ teams of experts in a dedicated strategic planning unit to work full-time on the planning process and to solicit input from hundreds or thousands of managers throughout the organization. For smaller companies, however, the process is necessarily more informal and compressed and may even be as simple as the founder or chief executive officer (CEO) sitting down with a handful of key employees to solicit their opinions on where the company should go over the planning period and what investments will need to be made in order to achieve the mutually recognized goals and objectives.

Regardless of the context, a variety of factors determine the planning practices that may be adopted by a particular company including environmental conditions, which include both the “specific environment” (i.e., the forces, such as stakeholders, that can be expected to have a direct impact on the ability of the specific company to obtain the scarce resources required for the company to create value for its owners and other stakeholders); and the “general environment” (i.e., the forces that typically will have an impact on the shape and design of all companies, including the company and other companies that are part of the stakeholder network of the company (e.g., economic, technological, political, demographic and socio-cultural forces)); organizational size, complexity and age; the nature of the business engaged in by the firm, top management values and styles; organizational culture; and the initial trigger for commencement of formal planning.¹

Definitions and Objectives of Strategic Planning

Simply put, strategic planning can be thought of as a process of carefully and thoughtfully aligning the strengths of a company’s business to the opportunities that are available to the company in its chosen business environment. While strategic planning is much debated and remains imprecise in many ways, it is generally believed that in order for this process to be successful the managers of the company must collect, screen, and analyze information about the company’s business environment, identify and evaluate the strengths and weaknesses of the company, and develop a clear mission for the company and a set of achievable goals and objectives that then become the basis for tactical and operational plans. The strategic planning process allows managers to be proactive in identifying, and responding to, changes in the company’s business environment. Companies can use strategic planning to prepare for future events and allocate their resources to take advantage of emerging opportunities and minimize the potential harm from environmental threats such as new competitors and technologies and changes in customer requirements or regulatory guidelines. Strategic planning is an important and essential process for every company regardless of the size of its business and the time and other resources the company has available to invest in the developing, documenting, implementing, and monitoring a strategic plan. The business environment and relevant technologies are constantly changing and new risks and uncertainties will surface on a regular basis.

Management Participation in the Planning Process

In order for strategic planning to be successful and meaningful, there must be active and enthusiastic participation from multiple levels of management within the firm in order to bring the most experience to the planning process and ensure that plans are made based on the full and current information about the operational activities of the firm and conditions in the marketplace. Managers at the highest level of the company—the CEO and the senior executives of all of the key functional groups and other business units—are charged with defining the strategic mission of the company and selecting and articulating the company’s overriding goals and objectives. Other members of the management group are responsible for collecting the information that the executive group needs in order to engage in long range planning, which usually means reports that include necessary data about operations, finances, competitive conditions, technological trends, and other important characteristics of the external environment in which the firm is operating.

Active involvement of all managers throughout the company in the planning process is also required because a company’s strategy is not only firmwide goals and objectives but also a comprehensive set of tactical and operational plans that impact the activities of everyone inside the company. While senior executives should expect to pore over and digest mountains of information about every aspect of the company’s business their key role is to establish general, long-term goals, and objectives for the firm that will usually take more than just one annual planning period to achieve (e.g., long-term growth of revenues, market share or product lines; improved profitability; and/or building a “best of class” customer service function). It then falls on the managers of each business unit and department to identify and implement the specific ideas, or tactics, that are best suited to achieving the goals and objectives set at the top of the company. These tactical plans address important and practical questions for each unit or department: what needs to be done, how it will be done, what resources are needed to do it, how will those resources be acquired and managed, and how will progress be tracked and evaluated. Tactical plans typically cover one year or less and require the same type of information needed to set overall goals and objectives—financial information, operational performance data, and information on markets and the external environment in general. The supervisors below the business unit and departmental managers also play an important role in the strategic planning process by the way in which they develop and enforce the operational plans that serve as guides for the day-to-day activities of the specific employees that they oversee. The supervisors are responsible for the “nuts and bolts” of executing the tactical plans and do so through scheduling, budgeting, setting, and enforcing standards (i.e., policies, procedures, methods, and rules) and identifying and procuring necessary resources (e.g., personnel, information, capital, facilities, machinery, equipment, and materials).

The recognition that planning is a collaborative exercise may require some changes in the company’s management style and company culture. In order to create and implement the most effective strategy, managers must be open to innovation, change, and new ways of doing business and communicating. Specifically, management must be willing to accept and embrace employee participation and set up a whole set of procedures and practices that support the planning process. For example, if the plan includes performance targets, appropriate changes in the incentive and reward systems in the firm may be required. If the traditional approach to decision making within the company has been “top-down” and managers and employees at lower levels of the organizational hierarchy have simply accepted directives from the senior management team without question or advance consultation, it can be expected that the transition to collaborative planning will be difficult. There may be deep reservoirs of distrust and fear that will depress the flow of new ideas and critical feedback that is so necessary to effective planning.

Fundamental Elements of the Planning Process

Strategic planning has become increasingly complicated with the introduction of new theories and supporting technologies that attempt to incorporate the seemingly unlimited number of variables that firms must consider when grappling with the challenge of anticipating future changes in their external environment. However, the fundamental elements of the planning process—the key initial steps and activities—have generally remained the same and thus provide a roadmap for the leaders of any company to launch and maintain their strategic planning activities:

• Define the mission of the firm, which is a statement of the purpose of the company typically described in a formal “mission statement.” The mission statement should be clear and concise summary, generally no more than a single sentence, which summarizes what the firm does and provides direction for managers and employees as the types of decisions that should be made with respect to the operational activities of the company and the opportunities that should be pursued. A mission statement is not effective unless each employee is able to recite it from memory.

• Conduct a comprehensive SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis to develop the foundation for the strategic plan. This type of analysis forces the management team to make a thorough internal assessment of the company’s distinctive competences and the areas in which the company lags behind competitors and/or is unprepared for identifiable changes in the business environment. An external assessment is also required to identify strengths and weaknesses of competitors, emerging technologies, and changes in customer habits and requirements.

• Define strategic goals and objectives, which are the performance milestones that must be attained in order for the company to advance from its current position—identified in the SWOT analysis—to the position suggested by its mission statement. Goals and objectives are both quantitative—return on investment, earnings per share, gross revenues, profit margin, and market share—and qualitative—improve workforce skills and implement best practices for project management and operations, and must be defined in such a way that progress can be tracked and evaluated. Whenever possible, the key strategic goals and objectives should be succinctly summarized in a short strategy statement that becomes as familiar to all managers and employees as the mission statement.

• Develop tactical plans based on the selected goals and objectives of the company and operational plans that support execution of the elements of the tactical plans. Tactical and operational planning is necessary in order to ensure that managers and employees at every level in the company act in a manner that is consistent with pursuit of the company’s strategic goals and objectives.

• Develop processes for continuously monitoring the effectiveness of the plan and identifying changes in the company’s business environment. Monitoring is done to ensure that the plan is being executed correctly and to uncover methods for improving the planning process. In addition, monitoring is the best and only way to really identify when changes in the plan, as well as the company’s overall strategic goals and objectives, are needed. Information collected from the monitoring processes should be used as valuable input for the next planning cycle.

Formal strategies should be created for the purpose of defining and pursuing ambitious long-term goals and objectives—targets that the firm wishes to achieve by certain dates that fall outside of the usual short-term planning period of 6 to 12 months. The time period to be covered by the strategic planning process should be dictated by the length of time that the company is willing and able to commit its current resources. Strategic plans typically extend no longer than five years and may go out only two or three years for many emerging companies given the dynamic rate of change in their business environments and the fact that their limited resources at the time of launch demand a focus on goals and objectives that can reasonably be achieved within a relatively short period of time in order to survive and attract additional resources. Strategic planning has usually been done on an annual basis with planning activities concentrated into several weeks or months immediately prior to the beginning on each annual planning period (e.g., for companies operating under calendar year plans and budgets the planning process would be scheduled for October and/or November prior the beginning of the year to be covered by the plan). However, many firms, particularly emerging companies operating in dynamic environments in which changes can and do occur quickly, have abandoned their annual plans in favor of continuous planning processes that make it easier for the company to readily identify new opportunities and make the necessary changes in course required to take advantage of them.

Strategic Planning for Sustainability

Corporate sustainability and social responsibility initiatives had been subject to criticism from both sides of the ideological spectrum.² On the left advocates from civil society have often questioned the fundamental motivations of corporations’ actions under the umbrella of CSR, arguing that in most cases corporate support for environmental and social programs was nothing more than a public relations campaign designed primarily, if not solely, to boost brand reputations as another means for achieving the primary corporate objective of maximizing profits. At the other end of the spectrum, CSR has been denounced as inappropriate and unnecessary in a capitalist society where the responsibility of business is to create financial returns for its shareholders and the larger economy and environmental and social issues should be left to the government and civil society. Both sides have also complained about the lack of metrics to evaluate the efficacy of CSR programs, a situation that is all the more problematic given that businesses are generally driven and managed through precise tools designed to...

Table des matières

• Cover
• Half-Title Page
• Title Page
• Copyright
• Description
• Contents
• Chapter 1 Introduction
• Chapter 2 Environmental Forces and Strategic Planning
• Chapter 3 Conducting a CSR Assessment
• Chapter 4 Developing a Corporate Social Responsibility Strategy
• Chapter 5 Developing CSR Commitments
• Chapter 6 Implementing CSR Commitments
• Chapter 7 Measuring Planning Performance and Effectiveness
• About the Author
• Index
• Backcover