BSBMGT616

Develop and implement

strategic plans
Learner Guide
 Page |2

Table of Contents

Unit of Competency 4
Application 4
Performance Criteria 5
Foundation Skills 6
Assessment Requirements 8
1. Confirm organisational vision and mission 10
1.1 – Check with stakeholders that organisational vision and mission are still held to be current and
are supported 11
Introduction 11
Organisational vision and mission 11
Activity 1A 13
1.2 – Make any changes or refinements to vision or mission statement as required 14
Changes to vision or mission statement 14
Activity 1B 15
1.3 – Review or develop organisational values to support the vision and mission statement 16
Organisational values 16
Activity 1C 18
1.4 – Gain support for strategic planning process from all relevant stakeholders 19
Strategic planning process 19
Activity 1D 20
2. Analyse the internal and external environment 21
2.1 – Determine information requirements and undertake or commission research to deliver relevant
information 22
Environment research 22
Activity 2A 24
2.2 – Analyse political, economic, social, and technological developments in a global context 25
Global context 25
Activity 2B 27
2.3 – Seek advice from appropriate experts wherever necessary 28
Expert advice 28
Activity 2C 29
 Page |3

2.4 – Identify and consider strengths and weaknesses of existing and potential competitors and allies
30
2.5 – Analyse organisation’s strengths, weaknesses, opportunities and threats 30
Strengths and weaknesses of other people in marketplace 30
Activity 2D 33
2.6 – Consider cooperative ventures that are supported by risk and cost benefit analyses, are
consistent with the organisational vision, mission and values and provide for due diligence 34
Cooperative ventures 34
Activity 2E 36
2.7 – Check that analysis of internal and external environment is consistent with the perspectives of
other informed people 37
Checking analysis 37
Activity 2F 38
3. Write strategic plan 39
3.1 – Document relevant research and background for inclusion in the strategic plan 40
Documenting research 40
Activity 3A 41
3.2 – Formulate strategic objectives and strategies needed for the future 42
Strategic objectives and strategies 42
Activity 3B 44
3.3 – Detail each strategy with an assigned priority, a timeframe, responsible parties and measurable
performance indicators 45
Detailing strategies 45
Activity 3C 47
3.4 – Circulate strategic plan for comment, support and endorsement 48
Circulating plan 48
Activity 3D 50
4. Implement strategic plan 51
4.1 – Communicate strategic plan to all relevant parties 52
Communicating plan 52
Activity 4A 54
4.2 – Brief people with a specific role in relation to strategies 55
Briefing people 55
Activity 4B 56
4.3 – Use performance indicators to monitor progress in implementing plan 57
 Page |4

Performance indicators 57
Activity 4C 60
4.4 – Make necessary refinements to plan 61
Refinements to plan 61
Activity 4D 62
4.5 – Evaluate achievement of objectives at agreed milestones – 4.6 – Review effectiveness of plan
and consider methods for improving strategic planning processes 63
Evaluating achievement of objectives 63
Activity 4E 65
Summative Assessments 66
References 67
 Page |5

Unit of Competency
Application

This unit describes the skills and knowledge required to establish the strategic direction of the
organisation, sustain competitive advantage and enhance competitiveness. It covers analysis and
interpretation of relevant markets, capability assessment of the organisation and analysis of the
organisation’s existing and potential competitors and allies. It also covers implementation of the
strategic plan and developing specific actions and initiatives that will be undertaken by people working
in various roles.

It applies to individuals working in senior roles in the organisation who have responsibility for ensuring
that the organisation is positioned to ensure its long-term viability and success.

No licensing, legislative or certification requirements apply to this unit at the time of publication.

Unit Sector

Management and Leadership - Management

 Page |6

Performance Criteria
Element Performance Criteria
Elements describe the Performance criteria describe the performance needed to
essential outcomes. demonstrate achievement of the element.

1. Confirm organisational 1.1 Check with stakeholders that organisational vision and
vision and mission mission are still held to be current and are supported
1.2 Make any changes or refinements to vision or mission
statement as required
1.3 Review or develop organisational values to support the
vision and mission statement
1.4 Gain support for strategic planning process from all relevant
stakeholders

2. Analyse the internal 2.1 Determine information requirements and undertake or

and external commission research to deliver relevant information
environment 2.2 Analyse political, economic, social, and technological
developments in a global context
2.3 Seek advice from appropriate experts wherever necessary
2.4 Identify and consider strengths and weaknesses of existing
and potential competitors and allies
2.5 Analyse organisation’s strengths, weaknesses, opportunities
and threats
2.6 Consider cooperative ventures that are supported by risk
and cost benefit analyses, are consistent with the
organisational vision, mission and values and provide for due
diligence
2.7 Check that analysis of internal and external environment is
consistent with the perspectives of other informed people

3. Write strategic plan 3.1 Document relevant research and background for inclusion in
the strategic plan
3.2 Formulate strategic objectives and strategies needed for the
future
3.3 Detail each strategy with an assigned priority, a timeframe,
responsible parties and measurable performance indicators
3.4 Circulate strategic plan for comment, support and
endorsement

4. Implement strategic 4.1 Communicate strategic plan to all relevant parties

plan 4.2 Brief people with a specific role in relation to strategies
4.3 Use performance indicators to monitor progress in
implementing plan
4.4 Make necessary refinements to plan
4.5 Evaluate achievement of objectives at agreed milestones
4.6 Review effectiveness of plan and consider methods for
improving strategic planning processes
 Page |7

Foundation Skills
This section describes language, literacy, numeracy and employment skills incorporated in the
performance criteria that are required for competent performance.

Reading
 Identifies and analyses complex organisational texts to determine business
requirements
 Reviews, evaluates, interprets and applies content from a range of sources to aid in
development of strategies.
Writing
 Prepares strategic plans for relevant stakeholders incorporating appropriate
vocabulary, grammatical structure and conventions
 Incorporates amendments to documents according to organisational requirements
 Collates and compiles data to convey specific information, requirements and
recommendations.
Oral communication
 Presents information and seeks advice using language and register appropriate to
audience
 Participates in discussions using listening and questioning to elicit the views of others
and to clarify or confirm understanding.
Numeracy
 Interprets and analyses statistical data and mathematical information to consider
trends and resource implications of proposed strategies.
Navigate the world of work
 Works autonomously making high level decisions to achieve and improve
organisational goals
 Takes a lead role in the development of strategies to achieve organisational goals.
Interact with others
 Selects and uses appropriate conventions and protocols when communicating with
internal and external stakeholders to seek or share information
 Collaborates with others to achieve joint outcomes, playing an active role in facilitating
effective group interaction, influencing direction and taking a leadership role
 Seeks feedback or expert advice where required.
 Page |8

Get the work done

 Develops flexible plans for complex, high impact activities with strategic implications,
taking into account capabilities, efficiencies and effectiveness
 Systematically gathers and analyses all relevant information and evaluates options to
inform decisions about organisational strategies
 Evaluates outcomes to identify opportunities for improvement
 Applies problem solving processes to identify risks, evaluate options and determine
solutions.
 Page |9

Assessment Requirements
Performance Evidence

Evidence of the ability to:

 Consult and communicate effectively with relevant stakeholders to:

o confirm or revise the organisation’s mission, vision and values
o validate findings of research and analysis
o get input to and endorsement of strategic plans
o brief relevant parties about the plan
 Analyse organisation’s internal and external environment to formulate strategic plans
including:
o background and research relevant to the plan
o legislation, regulations and codes of practice, including for intellectual property
o objectives, strategies and priorities
o roles and responsibilities
o performance indicators
o timeframes
o consideration of co-operative ventures
o cost-benefit and risk analysis
 Seek advice from appropriate experts wherever necessary
 Monitor and evaluate the implementation of the plan and make refinements as
appropriate
 Review effectiveness of planning processes and identify opportunities for
improvement.

Note: If a specific volume or frequency is not stated, then evidence must be provided at least once.
 P a g e | 10

Knowledge Evidence

To complete the unit requirements safely and effectively, the individual must:

 Outline the legislation, regulations and codes of practice relevant to the organisation’s
strategic plan.
 Give examples of risks and risk management strategies relevant to strategic planning
including:
o intellectual property rights and responsibilities
o other risks
 Outline strategic planning methodologies including political, economic, social and
technological (PEST) analysis and strengths, weaknesses, opportunities and threats
analysis (SWOT)
 Identify internal and external sources of information relevant to the organisation's
market, competitors, customer base, vision, values and capabilities
 Outline techniques for developing organisational values.

Assessment Conditions

Assessment must be conducted in a safe environment where evidence gathered demonstrates

consistent performance of typical activities experienced in the management and leadership field of
work and include access to:

 Relevant legislation, regulations, standards and codes

 Workplace documentation and resources
 Case studies and, where possible, real situations
 Interaction with others.

Assessors must satisfy NVR/AQTF assessor requirements.

Links

Companion Volume implementation guides are found in VETNet -

https://vetnet.education.gov.au/Pages/TrainingDocs.aspx?q=11ef6853-ceed-4ba7-9d87-4da407e23c10
 P a g e | 11

1. Confirm organisational vision and mission

1.1. Check with stakeholders that organisational vision and mission are still held to be current and
are supported

1.2. Make any changes or refinements to vision or mission statement as required

1.3. Review or develop organisational values to support the vision and mission statement

1.4. Gain support for strategic planning process from all relevant stakeholders
 P a g e | 12

1.1 – Check with stakeholders that organisational vision and mission are still
held to be current and are supported

By the end of this chapter, the learner should be able to:

 Discuss organisational vision and mission with stakeholders

 Adapt organisational vision and mission if necessary.

Introduction
Strategic plans are used in many organisations to establish the overall direction of it and ensure that
everybody is working together towards common goals. This prevents energy, time and resources from
being wasted.

It may focus on:

 Priorities

 Goals and objectives

 Use of resources

 Methods of measuring success

 Action plans.

Organisational vision and mission

In order to establish your organisation’s current strategic plan, you will need to research the
organisational vision and mission. These may change over time; when they do, the plan will need to be
adjusted.

Mission statement
The mission statement briefly defines the purpose of the organisation and the reason for its existence. It
provides the framework to help guide the company’s strategies. A mission statement should not remain
stagnant, though; it should change as a company alters over time.

A mission statement should:

 Be short, yet engage with employees and those outside the organisation.

 Define the beliefs or principles of the organisation

 Give your customers a sense that they're buying into your vision when they purchase
your products.

Existing mission statements

To test the effectiveness of a mission statement in a business, you could ask its leaders, managers and
employees to recall the mission and vision statements of the business to you. If they are unable to
promptly tell you both, the statements are of little use. The vision and mission statements ought to
 P a g e | 13

guide the everyday activities of each person involved in the business. To be effective, your statements
need to be short and simple, capturing the essence of what you want to accomplish.

After implementing your vision, mission and core values, you can then develop the goals and objectives
needed to achieve your vision.

Vision statement
The mission statement differs to a vision statement, which dictates the direction you want the company
to move in. This is what you want to include in the mid-term or long-term future. It should be concise
and easy to remember. Consequently, if people focus on the vision, their daily activities are
automatically directed towards achieving the vision.

(Source: http://balancedscorecard.org/Resources/Strategic-Planning-Basics)
 P a g e | 14

Activity 1A
 P a g e | 15

1.2 – Make any changes or refinements to vision or mission statement as

required

By the end of this chapter, the learner should be able to:

 Change vision or mission statements to reflect current organisation ethos

 Gain approval for the changes.

Changes to vision or mission statement

If you identified any problems with the vision or mission statements in the previous chapter, you need
to make relevant changes to them.

In particular, if the organisation doesn’t have a vision or mission statement, you should develop one as
soon as possible to guide their direction.

Refining a mission statement

Brainstorming with those connected to the business is a useful first step in developing a mission
statement. Interact with employees and customers, and ask them to describe the company’s main
strengths and weaknesses. Asking others to define your image will build a wider perspective, while
senior management doing so on their own may create a narrow-minded mission statement. Remember
that this consultation may take more than a couple of hours so set aside some time to create a
statement which will truly reflect your organisation's core values.

Mission statements are usually too long. People tend to want to include additional information and
qualifications in the statement. These statements can, in fact, have a negative reaction and confuse the
reader, clouding the real meaning of your statement. Each successive draft of your statements should
be simplified and clarified by using as few words as possible.

Approval for changes

As essential parts of the organisation, you will usually need to gain approval from senior managers
before you introduce changes to the vision or mission statement. You may need to formally present it to
them. Explain the benefits of any changes you’ve made and how it will help the organisation. For
example:

“This statement is shorter and more concise so employees will be able to remember it. It also has your
company motto in the first line, putting it at the heart of the vision. Finally, there are less technical
details that customers don’t need to know straight away.”
 P a g e | 16

Activity 1B
 P a g e | 17

1.3 – Review or develop organisational values to support the vision and mission
statement

By the end of this chapter, the learner should be able to:

 Review organisational values to ensure they are appropriate for the vision/mission
statement

 Develop organisational values to meet the organisation’s needs.

Organisational values
Each organisation has values that are unique. No two organisations have exactly the same values. The
values of an organisation are not always easy to define. They may affect the way employees behave and
the goals that they work towards.

Some values that the organisation may include:

 Innovation – These organisations are flexible, adaptable and open to new ideas. People
are encouraged to take risks and to try new things

 Aggression – These organisations value competitiveness, but they sometimes neglect

corporate social responsibility in terms of making a contribution to the wider
community. Unethical behaviour may be the norm in this type of organisation

 Outcome-orientated – These organisations value achievement, results and action

towards achieving objectives. Performance is managed closely and people are held to
account for non-delivery as well as being rewarded for good performance

 Stability – In these organisations, there are rules and bureaucracy which people must
always follow. Although this leads to a great degree of control and predictability, this is
at the expense of creativity and innovation

 People-orientated – These organisations value fairness, support and respect for

individuals. Staff are rewarded well financially, often enjoying higher levels of pay than
the norm for their industry

 Team-orientated – These organisations have a collaborative approach and encourage

co-operation and teamwork amongst employees.
Relationships between staff members tend to be
very good

 Detail-orientated – Precision and attention to

detail are important in this type of organisation.
This can give a competitive edge to an
organisation in the hospitality sector, for
example.
 P a g e | 18

You should ensure that the organisation’s values support their mission and vision statement. For
example, if they claim to be employee-orientated yet their values result in a high staff turnover, it is a
sign that they aren’t properly aligned. Either the values or the mission statement need to change. If the
organisation doesn’t have any values, these can be developed using the statement.
 P a g e | 19

Activity 1C
 P a g e | 20

1.4 – Gain support for strategic planning process from all relevant stakeholders

By the end of this chapter, the learner should be able to:

 Communicate with stakeholders to gain support for strategic planning process. This
may be done by:

o explaining details of the strategic planning process

o explaining benefits.

Strategic planning process

A stakeholder can be any person who has an effect or may be affected by the business by plan. The
more they stand to benefit or lose by it, the stronger their interest is likely to be. They can be both
internal and external. Key stakeholders can play an important role in influencing what you do or do not
achieve.

It is therefore important to gain support from them regarding all strategic planning changes you make.
This may be passive support (e.g. continuing to give your organisation their business) or active (e.g.
voting to approve the changes).

Stakeholders may include:

 Shareholders

 Board members

 Staff/employees

 Business partners

 Customers

 Government agencies

 Suppliers

 Community from which business draws its resources

To gain their support for the strategic plan, you may have to consult with them several times. This
means seeking their opinion and making changes accordingly.

Stakeholders could be involved in the following ways:

 A series of consultation meetings
 Completing questionnaires
 An open day with workshops
 Creation of budget and project schedule
 Identification of project risks
 P a g e | 21

 Planning for data management.

Activity 1D
 P a g e | 22

2. Analyse the internal and external environment

2.1. Determine information requirements and undertake or commission research to deliver relevant
information

2.2. Analyse political, economic, social, and technological developments in a global context

2.3. Seek advice from appropriate experts wherever necessary

2.4. Identify and consider strengths and weaknesses of existing and potential competitors and allies

2.5. Analyse organisation’s strengths, weaknesses, opportunities and threats

2.6. Consider cooperative ventures that are supported by risk and cost benefit analyses, are
consistent with the organisational vision, mission and values and provide for due diligence

2.7. Check that analysis of internal and external environment is consistent with the perspectives of
other informed people
 P a g e | 23

2.1 – Determine information requirements and undertake or commission

research to deliver relevant information

By the end of this chapter, the learner should be able to:

 Identify areas of research relevant to the internal or external environment

 Undertake research or commission it from an appropriate source.

Environment research
Businesses do not work within a vacuum; there are factors outside of your control which will have an
effect on your objectives, and therefore actions have to be taken to respond to such factors. The
chances of your organisation gaining success in achieving goals and objectives could be dependent upon
your ability to adapt to varying external forces.

Examples of external environmental factors may include:

 Competition – Are there other organisations developing similar products to you in the
marketplace?

 Suppliers – The financial situations of your suppliers

 Legal – How will changes to employment legislation

impact on the running of your business?

 Economic – What impact will taxation, interest

rates, demand, government spending, etc. have on
the business?

 Technological – How will product innovation and

advances in production technology impact on your
business plan?

External environments may consist of agencies of:

 Those external services used for promoting, selling and distributing your products and
services

 These consist of wholesalers, retailers, and agents for distribution as well as market
servicing and also financial institutions

 They also have their own external factors that in turn impacts on you

 They may be individuals or organisations of varying size.

Information sources
Information and data can also be used to reinforce your strategic plan. This may be already held by your
organisation, such as the financial department, or can be collected by commissioned research
organisations. Some information may also be freely available in public documents or on the Internet.
You may need to consult with experts to properly interpret and apply the information.
 P a g e | 24

Information may include:

 Financial/accounting information

 WHS information

 Human Resources information

 Customer data

 Customer feedback

 Market information or trends

 Competitor analysis.

Customers will have opinions about your products/services which you may have collected during the
consultation process. Consider using their feedback to as an information source. Although they are likely
to be less educated about issues than other specialists, their opinions matter as they are the ones who
will make purchasing decisions. No amount of data will convince them to buy if they don’t like your
product.

For example:
“Last year we were forced to cut production as sales were down across the industry. However, this data
shows that they are sharply rising. Therefore, we should invest in recruiting more staff and increasing
production now to capitalise on this. As you can see, customers now have more disposable income and
are displaying more interest in products like ours. Most of our competitors have also reported similar
spikes in sales.”
 P a g e | 25

Activity 2A
 P a g e | 26

2.2 – Analyse political, economic, social, and technological developments in a

global context

By the end of this chapter, the learner should be able to:

 Undertake PEST analysis of the organisation’s marketplace. This includes:

o political factors

o economic factors

o social factors

o technological factors.

Global context
There are also a range of global factors you may have to consider. A PEST analysis considers a range of
political, economic, social and technological factors.

You should analyse:

 Political factors, such as:

o new or changing legislation

o change in governments

o political instability in various countries

 Economic factors, such as:

o growth or decline of markets

o rising or falling costs

o inflation

o unemployment and disposable income

 Social factors, such as:

o changes in demographics

o lifestyle changes

o media consumption

o customer attitudes

 Technological factors, such as:

o development and use of new technology

 P a g e | 27

o legislation relating to technology

o international communication

o competing technology.

Intellectual copyright legislation

There are a variety of policies and procedures your organisation may have to protect intellectual
property.

These may include:

 Control who can access intellectual property (e.g. passwords)

 Monitoring agreements with other organisation

 Asking employees to sign waivers to their right to intellectual property they develop

 Control over who uses/manages property

 Pursuing legal action against parties who steal intellectual property.

Any policies and procedures should be clear in which intellectual

property they relate to. You may have to define any relevant
terminology and refer to the appropriate legislation/regulation.

The Copyright Act 1968 protects creative idea or concepts and

applies automatically as soon as it documented. Therefore, you
don’t need to go through a registration process to protect your
content.

Copyright law:
 Does not protect from independent works that
are similar but not identical to yours

 Will vary in level and scope depending on the nature of the work. Sub-sections include:

o part III Section 31(1) for original literary, dramatic, musical and artistic work

o part IV Sections 85-88 for all other works (e.g. recordings, films, TV or radio
broadcasts, published works.

If you believe your copyright is being infringed, you can use a copyright notice to prove your ownership
and deter other parties from infringing on it.

(Source: http://www.businessballs.com/pestanalysisfreetemplate.htm)
 P a g e | 28

Activity 2B
 P a g e | 29

2.3 – Seek advice from appropriate experts wherever necessary

By the end of this chapter, the learner should be able to:

 Communicate with internal or external experts to seek advice on research and
environmental circumstances.

Expert advice
If you need respected, expert advice, you may be able to consult a range of people inside or outside
your organisation. They should be able to give you information that will support your plan and can be
used to convince stakeholders. Be careful not to twist the meaning of information or take it out of
context, as this will often weaken your argument when it is discovered.

Specialist advice can come from:

 Managers

 Financial consultants

 Marketing experts

 Accountants

 Suppliers

 Internal and external customers

 The sales team

 External experts.

If you decide that it is necessary to hire skilled experts then it will be important to advertise in the right
places. You could pay for job listings on websites and within magazines relevant to your industry.
Alternatively, you may use the services of professionals in your area.

If you’re looking for advice on specific projects then it would be worth carrying out web searches for
local experts. You may pose questions on digital forums and ask fellow business people for their
recommendations. Alternatively, you could read books and research information on quality websites for
the research. However, the results will generally be less accurate and more time-consuming.
 P a g e | 30

Activity 2C
 P a g e | 31

2.4 – Identify and consider strengths and weaknesses of existing and potential
competitors and allies
2.5 – Analyse organisation’s strengths, weaknesses, opportunities and threats

By the end of this chapter, the learner should be able to:

 Undertake SWOT analysis of potential competitors and allies

 Undertake SWOT analysis of their organisation.

Strengths and weaknesses of other people in marketplace

A SWOT analysis is used to analyse the market position of organisations, which could be yourself,
potential competitors or allies. This will help you planning and alert you to things that will help and
hinder them.

SWOT analysis includes:

 Strengths: Skills, resources and advantages that the organisation have which will allow
them to reach their objectives

 Weaknesses: Problems, disadvantages or needed improvements that will stop the

partnership from reaching their objectives

 Opportunities: External factors, (such as changes in the market, economy or the

organisations) that may benefit the partnership if they exploit it correctly

 Threats: Issues either outside the partnership (which could include those listed for
opportunities) that could prevent also them from reaching their objectives.
 P a g e | 32

(Image source: https://en.wikipedia.org/wiki/SWOT_analysis)

Partnerships
SWOT analyses may be used to look at the benefits and drawbacks of a potential partnership. They
would help you to rationally determine how successful it would be beforehand, allowing you to make
decisions on whether or not to proceed with it.

An example of a SWOT analysis for a potential partnership is:

Helpful Harmful

Internal Strengths – Weakness –

 Access to a wide range of relevant  Poor communication systems
resources
 Similar objectives and interests

External Opportunities - Threats –

 The organisation is hiring which  Their products may become
may lead to more people outdated
requiring training
 P a g e | 33

In the above example, the potential partner may need to act on:
 Improving communication

 Expanding resources for more people

 Updating current courses when required

 Ensuring that objectives remain compatible.

Sometimes after conducting a SWOT analysis, you may come to the conclusion that the weaknesses and
threats are far greater than the strengths and opportunities. In this case, you may decide that the
partnership is work pursuing as it will have a low chance of success. However, you could also look for
ways to increase the strengths and mitigate the weaknesses.

Remember that a SWOT assessment is subjective. For example, what you may consider poor staff
knowledge may actually be considered good by others. It all depends on the particular situation and the
partnership. This is why communication and careful analysis are so important.

(Source: http://www.shell-livewire.org/swot-analysis/)
 P a g e | 34

Activity 2D
 P a g e | 35

2.6 – Consider cooperative ventures that are supported by risk and cost benefit
analyses, are consistent with the organisational vision, mission and values and
provide for due diligence

By the end of this chapter, the learner should be able to:

 Conduct risk and cost-benefit analyses of cooperative ventures

 Ensure cooperative ventures are consistent with organisational vision, mission and
value.

Cooperative ventures
When you are consideration cooperative ventures with another
organisation, you will need to undertake careful analysis to
determine whether it is worthwhile. You should consider both
what could go wrong and what will happen if it succeeds. This is
known as risk and cost-benefit analysis. For example, a venture
which could be extremely damaging if it goes wrong and has
small upside if it succeeds would be an unwise proposition. On
the other hand, if there is a low downside but high potential
upside, it would be advisable to pursue it.

Risk analysis
The first step of your risk analysis should be to identify the
various risk events and the likelihood of them occurring. These
may involve one or more things going wrong, such as a
breakdown in communication or bankruptcy. You should also
arrange group meetings and brainstorming sessions for the
identification of issues which wouldn’t otherwise be considered.

A risk assessment should help you to identify:

 The severity of the risk

 Whether or not the existing control measures are effective, if applicable

 What action should be taken to control the risk

 How urgently the action needs to be taken.

Cost-benefit analysis
A cost-benefit analysis is a simple tool which enables an assessment to be made to establish whether a
venture is going to be worth the investment required.

To complete a cost/benefit analysis, complete the following steps:

 List costs and benefits: These should include unexpected costs and benefits and
include the whole lifetime of the venture, not just the start-up costs/benefits
 P a g e | 36

 Assign a monetary value to the costs: Costs may include the value of:

o new equipment and materials

o new or altered premises

o recruitment and/or training

o rebranding, etc

 Assign a monetary value to the benefits: This is more difficult to predict, and may also
include intangible factors like ‘customer loyalty’ and ‘better brand awareness’ which
are hard to quantify

 Compare costs and benefits: Identify whether the benefits outweigh the costs or vice
versa.

It is useful to repeat cost/benefit analyses regularly to determine whether your initial projections are
holding up. For example, if the costs are higher and the benefits lower than what you predicted, you
may need to re-evaluate the relationship.
 P a g e | 37

Activity 2E
 P a g e | 38

2.7 – Check that analysis of internal and external environment is consistent with
the perspectives of other informed people

By the end of this chapter, the learner should be able to:

 Communicate with informed people to verify accuracy of analysis.

Checking analysis
As most analysis is subjective and opinion-based, it is important that you check your findings with those
of other informed people. They could help to catch mistakes or challenge assumptions you have made.

Informed people may include:

 Managers

 Owners

 Employees

 Other stakeholders

 Experts.

They may have knowledge of the organisation, its processes, products, customers, competitors, markets
or a range of other factors. Experience is often important with regards to this. Try to get the opinion of a
wide range of relevant people, not just those you think will agree with you.

To reduce the chance of bias, ask the informed people neutral questions like: “What do you think of this
analysis?” rather than loaded ones such as “I’m right on this, aren’t I?”

If the people you show the analysis to don’t agree with it, use the opportunity to improve it.

You may need to ask questions such as:

 Can you describe how you see the situation?

 Why do you think that?

 Which parts don’t you agree with?

 Does this affect your opinion of whether the venture should go ahead?

For example, they may say:

“I don’t agree with your analysis of the market. You say that it’s not growing, but if you look at our
competitors in this industry, they are all expanding.”
 P a g e | 39

Activity 2F
 P a g e | 40

3. Write strategic plan

3.1. Document relevant research and background for inclusion in the strategic plan

3.2. Formulate strategic objectives and strategies needed for the future

3.3. Detail each strategy with an assigned priority, a timeframe, responsible parties and measurable
performance indicators

3.4. Circulate strategic plan for comment, support and endorsement

 P a g e | 41

3.1 – Document relevant research and background for inclusion in the strategic
plan

By the end of this chapter, the learner should be able to:

 Document research and background information according to organisation
requirements.

Documenting research
Once you have agreed on the organisation’s strategic plan, you will now need to document various
aspects of it.

Be aware of whenever you need record information. Your organisation may have set forms or templates
you should fill in. All documents should be stored properly when you have submitted them so they can
be used and reviewed at a later date.

Research may include:

 Opinions and testimonies of experts and other informed people

 Market information and data

 Information on the company’s current and previous performance.

Therefore, documents need to be stored in an appropriate method, such as a computer hard drive that
is backed up or a secure paper filing system. Ensure you take relevant security measures to protect it,
such as usernames and passwords or lock and key. The information may be confidential, sensitive or
commercially important.
 P a g e | 42

Activity 3A
 P a g e | 43

3.2 – Formulate strategic objectives and strategies needed for the future

By the end of this chapter, the learner should be able to:

 Identify and agree an overall strategy

 Break strategy down into detailed objectives.

Strategic objectives and strategies

Having collected and analysed data, you should be in a position to propose objectives and strategies for
organisational development.

In other words, you should be able to set out:

 What you aim to achieve

 How you are proposing to do it.

This may be something that you do alone and then seek approval, or you may
be involved in a wider team which has the power and authority to act upon the
proposal. Either way, it is important to have an outline plan of what you are
hoping to achieve and how you intend to do it.

The strategic objectives should closely align with the organisation’s overall
mission and vision. If there is a disconnect, then it would seem that a strategic
plan may not deliver the results that are required.

Having clarity and agreement on the strategic objectives is crucial to the overall
success of the plan. All other action will stem from the objectives and so it is important that all those
involved are in agreement about what the plan is aiming to achieve. The strategy – the ‘how’ – is fine
detail and can be modified and revised at a later date if necessary. The most important part is to
confirm the objectives in the first instance.

Let’s take an example of the cheese factory which is developing a new product range in addition to its
well-established and successful products.

A strategic plan might have the following objectives:

 To achieve flexibility in the workforce so that personnel can operate in any part of the
business

 To instil a sense of pride in making high-quality products

 To achieve more effective and more consistent people-management across the

business.

These objectives are just ‘headlines’ and would need to be further qualified with target dates and
measures, but they give us a flavour for what the plan is aiming to achieve and we can use this as the
basis for further examples throughout this unit.
 P a g e | 44

The objectives set out the ‘what’. The strategy should now set out the ‘how’. In other words, the
strategy explains what specific actions are to take place in order to achieve the objectives.

In the cheese-factory example, this may involve the following:

Objectives Strategies

1. To achieve flexibility in the a) Training for each person in a range of skills and activities
workforce so that personnel
b) Appoint training co-ordinator for each team/department
can operate in any part of the
business c) Establish recognised experts or ‘champions’ for each
activity/process

2. To instil a sense of pride in a) Publicise quality data to all staff via team briefings
making high-quality products
b) Ensure all employees understand the importance of their role
via job descriptions and feedback
c) Implement performance management process which
recognises achievement

3. To achieve more effective and a) Implement a new performance management process

more consistent people-
b) Set standards for effective management
management across the
business c) Management development training program
d) Cross-functional teams of managers to work together to solve
real business issues
e) Ensure managers get feedback about their performance and
effectiveness as managers
f) Provide additional training for individuals where necessary.

Having identified and agreed a strategy, it is then possible to develop a project plan for its
implementation which sets out:
 Specific actions that are required to implement the strategy

 Time and resources required

 Who is responsible for each action.

It would be usual practice to then propose the objectives and strategy to the decision-makers in the
organisation. This might be the board, or a panel of senior managers, for example. At this stage,
objectives and strategies may be refined, but it would be important to make reference back to the data
which underpins the proposal.
 P a g e | 45

Activity 3B
 P a g e | 46

3.3 – Detail each strategy with an assigned priority, a timeframe, responsible

parties and measurable performance indicators

By the end of this chapter, the learner should be able to:

 Develop priorities, timeframes, responsible parties and performance indicators for
each strategy, ensuring they are practical for their organisation and comply with the
strategy.

Detailing strategies
In order to detail the strategies, you will need to finalise a range of information related to them.

Priority
A strategy’s priority relates to how many resources and how much effort are devoted to pursuing it. It
may help to rank the various strategies in order of priority. This doesn’t mean that the bottom ones are
more important, just that the top ones need to be achieved first.

For example, the cheese factory’s strategies may be

ranked in the following order of priority:
1. Achieve flexibility in the workforce so that
personnel can operate in any part of the
business

2. Achieve more effective and more consistent

people-management across the business.

3. Instil a sense of pride in making high-quality

products.

Reasonable timeframes
The plan should list in what timeframe the objective needs to be completed (e.g. three weeks, six
months.) Change will be most effective if it is implemented gradually. Employees should be given the
chance to adapt over time. There should also be preparation for bottlenecks in the process. It may even
be worth trialling the change on a select group of employees and obtaining feedback about the effects.
The process can be adapted to suit people’s individual requirements. There should be transparency in
your organisation so that employees are aware of the need for change. This will mean that your
proposals don’t come as a complete surprise.

It might not be possible to make accurate forecasts about the effects of change. However, you should
establish ways of measuring and evaluating the effects over time. Positive results may be
communicated to your employees and customers for increased motivation and engagement.

Responsible parties
The plan must list which parties are responsible for completing which strategies. This gives ownership of
it to them and ensures they can’t complete. People can also be challenged when they don’t produce
results and can’t use excuses such as: “I didn’t think it was my job.”
 P a g e | 47

For example, the responsible parties for the cheese factories strategies could be:

Strategies Responsible parties

a) Training for each person in a range of skills and activities Training managers, appointed
and training co-ordinators
b) Appoint training co-ordinator for each team/department
champions
c) Establish recognised experts or ‘champions’ for each
activity/process

a) Publicise quality data to all staff via team briefings HR manager, individual
employee managers
b) Ensure all employees understand the importance of their role
via job descriptions and feedback
c) Implement performance management process which recognises
achievement

a) Implement a new performance management process Business owner, managers

b) Set standards for effective management
c) Management development training program
d) Cross-functional teams of managers to work together to solve
real business issues
e) Ensure managers get feedback about their performance and
effectiveness as managers
f) Provide additional training for individuals where necessary.

Performance indicators
Performance indicators are used to determine whether the strategic plan’s goals and objectives are
being met, and will be covered in more detail in Chapter 4.3.
 P a g e | 48

Activity 3C
 P a g e | 49

3.4 – Circulate strategic plan for comment, support and endorsement

By the end of this chapter, the learner should be able to:

 Communicate plan to other relevant people in the organisation. The learner may need
to:

o seek feedback

o seek resources

o approve strategic plan.

Circulating plan
When the first draft of the strategic plan is complete, you should circulate it around relevant people in
your organisation. These are usually senior managers or those involved with the implementation. There
are numerous purposes for this.

The purpose could be to get:

 Comment: This could include
opinions and feedback, such as its
strengths or ways to improve it

 Support: You will need managers’

support for it to proceed forwards

 Endorsement: You may need

managers’ or owners’ formal support
to approve the plan.

Circulating or presenting the plan

Presenting a plan properly is essential to obtaining approval from the relevant party. This is often done
as a presentation to stakeholders, senior management, committees and other interested people. The
formality of this will vary on the scope of resources you are requesting.

Tips to improve proposals are:

 Providing your audience with copies of the plan so they can read it through as you
continue
 Using PowerPoint to visually demonstrate key points
 Using graphs to put costs and savings in context
 Including contingency plans and risk management plans to show you have considered
all possibilities
 Making a conclusion which sums your facts and information up
 Closely following the organisational goals and explaining how it will benefit the
business.
 P a g e | 50

You will likely need to wait for parties to review the plan in detail once you have made your plan. They
may also recommend it to other bodies (e.g. board of directors) that are responsible for making
decisions.
 P a g e | 51

Activity 3D
 P a g e | 52

4. Implement strategic plan

4.1. Communicate strategic plan to all relevant parties

4.2. Brief people with a specific role in relation to strategies

4.3. Use performance indicators to monitor progress in implementing plan

4.4. Make necessary refinements to plan

4.5. Evaluate achievement of objectives at agreed milestones

4.6. Review effectiveness of plan and consider methods for improving strategic planning processes
 P a g e | 53

4.1 – Communicate strategic plan to all relevant parties

By the end of this chapter, the learner should be able to:

 Identify the personnel who ought to be informed of adjustments

 Communicate to relevant stakeholders using appropriate methods.

Communicating plan
Organisations that provide the strategic plan to all relevant people are more likely to develop trust,
reliability, and a sense of strength in the workplace. People like to know what is going on. They like to
be aware of changes, amendments and anything that is likely to have an impact on them. The more
aware staff members are of changes in the workplace, policies, systems and anything else that could
affect them, the more likely they are to take accountability and responsibility for their actions.

Some ways in which the information can then be communicated to the relevant parties includes:
 Regular meetings with staff

 Regular meetings with clients

 Newsletters

 Blogs

 Emails

 Face to face meetings.

You will need to create a plan of action to communicate your findings. Information that is not utilised is
information wasted. Use the feedback as a method to improve the processes, systems, and procedures.

Note that feedback is never a personal attack on a person or the company. It is simply a tool that can be
used to enhance and improve what is currently not working. Feedback can also highlight areas that are
working well and this information can also be utilised to implement similar systems or processes in
other areas.

“To effectively communicate, we must realise that we are all different in the way we perceive the world
and use this understanding as a guide to our communication with others.”

- Anthony Robbins

Be aware of any barriers such as language problems, lack of budget or diverse branches. Not all
employees will speak the same language in an organisation. This will require translating information
into multiple languages or using graphics to communicate the meaning. Employees may also have
special communication needs that you will have to take into consideration. If they have sensory
disabilities, such as blindness or deafness, you should provide information in alternate forms such as
written, audio or Braille.
 P a g e | 54

Another effective technique for creating trust is to explain exactly where boundaries lie and giving
employees autonomy within their areas. Don’t tell people how to do their jobs; instead, empower them
to make improvements. When sharing information, explain clearly where people have responsibility.
Feedback can help in this process.

In order to communicate the details of it effectively, your goals should be SMART

SPECIFIC – Detailed and easy to measure

MEASURABLE – Progress toward the goal can be tracked and tested

ATTRACTIVE – Positive and something beneficial for the client

REALISTIC – Your goal is reasonable and attainable within defined schedules

TIME-FRAMED – Your goal is linked to explicit time measures

For example, “make employees aware the plan” doesn’t satisfy most of these requirements. A SMARTer
goal would be “ensure 95% of employees are aware of key details of the plan within two weeks.” This
would enable you to more accurately track progress and measure whether you have achieved it.

(Source: http://www.ccalpa.com/wp-content/uploads/2012/01/2010-07-14-communication-article.pdf)
 P a g e | 55

Activity 4A
 P a g e | 56

4.2 – Brief people with a specific role in relation to strategies

By the end of this chapter, the learner should be able to:

 Identify people and groups who need to be informed about the plan

 Use appropriate internal communication channels.

Briefing people
Once the operational plan has been approved, you will need to explain it to the employees and teams
responsible for carrying it out.

Don’t just give employees instructions; you should explain why they are doing something. This will give
them a clearer understanding of the organisation. This can create trust and improve quality of work. For
example, saying: “Provide good customer service” wouldn’t be as effective as explaining: “Our
competitors have a problem with providing good customer service, so if we do this well, we have an
opportunity to expand our client base.”

There are different ways of briefing the distinct business groups. Time may be allocated for traditional
business meetings and consultations during the working day. Emails can be sent and notes left to
remind workers of their responsibilities. There’s even the option of using advanced video-conferencing
technology. It is worth taking the time to plan and review any messages for clarity and general
understanding.

Internal communication channels may include:

 Notice boards, signs or posters

 Internal emails

 Website

 Newsletters

 Training courses and materials

 Employee meetings or briefings

 Reports.

It will be necessary to brief the following groups:

 Project groups – Comprising workers of different skills and responsibilities who
combine for the purpose of completing specific projects

 Cross-functional groups – Comprising workers of distinct skills and business purposes

 Self-directed work groups – Comprising variously skilled workers who assume

responsibility for different aspects of project management and don’t necessarily
require the approval of supervisors.
 P a g e | 57

Activity 4B
 P a g e | 58

4.3 – Use performance indicators to monitor progress in implementing plan

By the end of this chapter, the learner should be able to:

 Demonstrate the uses and key features of key performance indicators

 Recognise areas within their organisation where KPIs can be developed.

Performance indicators
Key performance indicators are a measure of success within the performance of staff members within
an organisation. They provide an avenue to benchmark and keep track of the actual performance of
staff in relation to the organisational objectives.

Consider the following examples:

 A school may focus its key performance indicators on
graduation rates of its students

 A customer service department may have as one of its

key performance indicators, in line with overall company
KPIs, the percentage of customer calls answered in the
first minute

 A key performance indicator for a social service

organisation might be the number of clients assisted
during the year.

Whatever Key Performance Indicators are selected, they must reflect the organisation's goals, they
must be key to its success, and they must be quantifiable (measurable). Key Performance Indicators are
usually long-term considerations. The definition of what they are and how they are measured do not
change often. The goals for a particular Key Performance Indicator may change as the organisation's
goals change, or as it gets closer to achieving a goal.

Key Performance Indicators reflect the organisational goals

An organisation that has as one of its goals "to be the most profitable company in our industry" will
have Key Performance Indicators that measure profit and related fiscal measures. ‘Pre-tax Profit’ and
‘Shareholder Equity’ will be among them. However, ‘Percent of Profit Contributed to Community
Causes’ probably will not be one of its Key Performance Indicators. On the other hand, a school is not
concerned with making a profit, so its Key Performance Indicators will be different. KPIs like ‘Graduation
Rate’ and ’Success in Finding Employment after Graduation’, although different, accurately reflect the
school’s mission and goals.

Key Performance Indicators must be quantifiable

If a Key Performance Indicator is going to be of any value, there must be a way to accurately define and
measure it. ‘Generate More Repeat Customers’ is useless as a KPI without some way to distinguish
between new and repeat customers. ‘Be The Most Popular Company’ won't work as a KPI because there
is no way to measure the company's popularity or to compare it to others.
 P a g e | 59

It is also important to define the Key Performance Indicators and stay with the same definition from
year to year. For a KPI of ‘Increase Sales’, you need to address considerations like whether to measure
by units sold or by the dollar value of sales. Will returns be deducted from sales in the month of the sale
or the month of the return? Will sales be recorded for the KPI at list price or at the actual sales price?

You also need to set targets for each Key Performance Indicator. A company goal to be the employer of
choice might include a KPI of ‘Turnover Rate’. After the Key Performance Indicator has been defined as
‘the number of voluntary resignations and terminations for performance, divided by the total number of
employees at the beginning of the period’ and a way to measure it has been set up by collecting the
information in an HRIS, the target has to be established. ‘Reduce turnover by five percent per year’ is a
clear target that everyone will understand and be able to take specific action to accomplish.

Key performance indicators provide measurement criteria in which management and staff can
benchmark the standards to which they are achieving the required and desired organisational goals.

Key performance indicators (KPIs) can assist in the:

 Identification of performance and training gaps

 Establishment of standards for team members to work towards

 Measurement of performance

 Clarification of expected standards

 Ability to determine how to improve client services.

Team members should be made aware of the expected KPIs during their annual performance reviews or
performance management plans. This ensures the ability of the staff to achieve the expected
benchmarks and lets them know whether they are meeting the organisational objectives required to
achieve the operational plan goals.

Factors that will assist in the achievement of KPIs also include:

 Available resources

 Budget allocations

 Available staff members

 Supplies and stationery

 General equipment and machinery

 Organisational structure.

The standards that are set within these KPIs should be based on the following:
 Client surveys (including feedback on client satisfaction and suggestions)

 General organisational goals

 Staff members and their knowledge, skills and levels of motivation

 P a g e | 60

 Benchmarking practices

 Industry standards and expectations.

KPIs can highlight areas that need improvement, assist staff members in determining whether they are
working according to required objectives and identify areas where they can also be excelling in the
workplace.

KPIs should be flexible – able to change according to organisational needs – and they must also be
realistic and achievable. A KPI that cannot be met will create unrealistic expectations in a working team
and create negative feelings among staff members.

Balanced scorecards can offer a strategic outlook on the organisation by building on KPIs to grow the
business, looking at the overall business perspective, determining the client perspective and also by
determining how the company looks financially.

Balanced scorecards can be used for measuring and benchmarking:

 Customer satisfaction

 Customer complaints

 Response time

 Overall quality of service and timing

 Returns and defective stock

 Error rates

 Staff satisfaction

 Staff turnover.

Measures for team member productivity and performance should be linked to balanced scorecards and
KPIs. This should ideally form part of the performance management plan or performance review for
staff members every year or every six months.

Performance management plans and KPIs should be viewed as an opportunity to provide staff members
with accurate and timely feedback on their performance in the workplace. It should not be viewed as an
opportunity to shame or ridicule staff, but as a chance to let them grow, develop and identify areas
where they need more assistance in their job roles and in their workplace.

(Source: www.management.about.com)
 P a g e | 61

Activity 4C
 P a g e | 62

4.4 – Make necessary refinements to plan

By the end of this chapter, the learner should be able to:

 Identify refinements that need to be made to the plan from previous performance data

 Make and document changes to plan.

Refinements to plan
As the strategic plan is implemented, you may identify changes that need to be made to it in order to
reach your targets. For example, one of the suggested action points has been counter-productive to the
goal and you need to replace it with another. Alternatively, an action point has been a success and you
wish to see if there are any further improvements that can be made to yield more results.

As mentioned in the previous chapter, KPIs are important in identifying refinements that could be
made. Look for anomalies, such as results that are worsening rather than improving.

You should also take feedback from people involved with implementing the program, as they may have
suggestions on how to refine it.

For example, one of the strategies for the cheese factory was to appoint recognised champions for each
task/activity. To further refine this, you could consider the communication structure between the
champions.

Refinements may relate to:

 Timescales
 Resources
 Personnel involved
 Communication structure
 Processes
 Intended outcomes.
It is a good idea to have regular meetings with team members, management or even external sources to
check for progress on the implementation plan. Recommendations for improvement, suggestions or
changes can be discussed during meetings.

When considering refine, remember:

 Changes to methods coming from employees are less likely to be radical, and therefore
should be easier to implement than wholesale changes you may make at the start of a
new business plan
 Small incremental changes are less likely to need major capital investment than major
process changes
 All workers should continuously attempt to improve their own performance, which will
contribute to overall business performance and productivity.
 P a g e | 63

Activity 4D
 P a g e | 64

4.5 – Evaluate achievement of objectives at agreed milestones – 4.6 – Review

effectiveness of plan and consider methods for improving strategic planning
processes

By the end of this chapter, the learner should be able to:

 Use performance measures to evaluate achievements

 Review plan and make suggestions for improving it.

Evaluating achievement of objectives

After a specified period of time, you will need to evaluate whether objectives have been reached. These
periods of time are known as milestones.

Performance reports should:

 Contain adequate detail so that readers can clearly differentiate between planned
objectives and actual performance

 Include an assessment of the overall organisation performance, which is free from bias

 Clearly identify any assumptions you make

 Address key performance indicators (KPIs) to assess the gaps and variances of the
business plan against actual performance

 Be accurate and presented in a clear and concise manner.

Analysing employee performance

It is a good idea to keep figures and reports on what
employees have achieved, their sales records, their
level of accuracy, the quantity and quality of their
work, and how long it is taking them to complete
tasks. These can then be compared at specific periods
with planned individual objectives. However, there are
a number of challenges to consider when responding
to performance data.

Activities not easily measured

Another issue with determining performance occurs when the job has no clear quantifiable measures.
This makes it tough to produce objectives which are specific and can be assessed over time.

Solutions:
 Ensure you have considered all forms of measurement e.g. quality, quantity, timeliness,
cost-effectiveness, customer satisfaction. Try to utilise at least one

 Alternatively, subjective assessments could be made regarding performance by those

who are highly knowledgeable about a particular area.
 P a g e | 65

Good performance measures:

 Provide a way to see if your strategies are working

 Focus employees’ attention on what matters most to success

 Allow measurement of accomplishments, not just of the work that is performed

 Provide a common language for communication

 Are explicitly defined in terms of owner, unit of measure, collection frequency, data
quality, expected value (targets), and thresholds

 Are valid, to ensure measurement of the right things

 Are verifiable, to ensure data collection accuracy.

 P a g e | 66

Activity 4E
 P a g e | 67

Summative Assessments
At the end of your Learner Workbook, you will find the Summative Assessments.

This includes:

 Skills assessment

 Knowledge assessment

 Performance assessment.

This holistically assesses your understanding and application of the skills, knowledge and performance
requirements for this unit. Once this is completed, you will have finished this unit and be ready to move
onto the next one – well done!
 P a g e | 68

References

These suggested references are for further reading and do not necessarily represent the contents of
this unit.

Websites
SWOT Analysis: (Source: http://www.shell-livewire.org/swot-analysis/)

Strategic planning: http://balancedscorecard.org/Resources/Strategic-Planning-Basics

PEST Analysis: http://www.businessballs.com/pestanalysisfreetemplate.htm

SWOT Analysis image: https://en.wikipedia.org/wiki/SWOT_analysis

Communication: http://www.ccalpa.com/wp-content/uploads/2012/01/2010-07-14-communication-
article.pdf

KPIs: (Source: www.management.about.com)

All references accessed on and correct as of 12th January 2017, unless other otherwise stated.