Strategic planning is essential for every business and institutions like the IOD can help with every facet of business in all types of industry.
The following strategies are courtesy of the IOD and they clearly outline some very fundamental points that we should all be reviewing over the coming months as we prepare to navigate through some uncertain times ahead.
1. Identify strategic business vulnerabilities
Directors need to review their strategies to identify possible vulnerabilities, such as potential takeover, availability of large cash balances and underperforming divisions. Once concerns are identified, directors need to evaluate how to address them, bearing in mind the shareholders’ best interests.
2. Assess the emerging economic outlook
Directors must address the impact of the fragile global economic outlook, banking sector strengths, Brexit and its knock-on effect on business, the war on terror and instability in the Middle East on their organisation’s business.
3. Identify paths to profitable growth
The board should identify approaches to stimulate revenue growth bearing in mind that preference should be given to organic growth where challenges are even greater. They may consider a review of capabilities and additional investment in resources, systems and structure.
4. Focus on long-term goals
In order to counteract pressure to deliver short-term results, directors need to maintain their focus on attaining long-term goals and long-term shareholder value. This can be achieved through sticking to the core capabilities and the agreed strategy and avoiding investments in non-strategic areas.
5. Assess the impact of declining oil and gas prices
Directors need to address the impact of low oil and gas prices on their businesses. They must identify and leverage opportunities while at the same time addressing likely challenges brought about by decreasing oil prices. While low prices may benefit some sectors of the global economy, they challenge energy organisations whose stock prices have dropped and who are going through major cost-cutting activities.
6. Decide where to invest corporate cash
Organisations with cash stockpiles need to make important strategic decisions on how to deploy their corporate funds, particularly as shareholders demand higher returns on investments. Directors must consider their investment options carefully, possibly comparing stock buybacks and paying dividends to other forms of investment and growth opportunities.
7. Assess climate change opportunities and risks
Directors need to assess the risks that climate change and resource scarcity may present to their businesses. In view of forthcoming government legislation, directors may have to address the need for disclosures on climate change risk and liabilities.
8. Plan for CSR
Directors may have to consider integrating CSR into their business objectives. Today’s shareholders are more interested in investing in socially and environmentally responsible organisations. Directors should assess their stakeholders’ views on CSR and consider reporting CSR-related activities in their annual reports to publicise their stance on the matter.
9. Address cyber security risk
Directors need to establish how to provide effective oversight of cyber security, possibly by establishing a cyber-security review committee, determining clear lines of reporting and responsibility for cyber issues and seeking expert advice.
10. Use social media to connect with stakeholders
Directors should appreciate the influence of social media on stakeholders, including customers, employees and investors. They need to encourage the use of social media to bring about improvements in customer relationships while at the same time recognising and addressing the potential risks of social media use.