Continuous Strategic Analysis Fosters Long-term Success – in Chess and Business
In business as in chess, creating a winning strategy requires knowledge about not just your situation and the current environment, but also the potential changes ahead. With a continuous strategic analysis process, businesses can map out a clear path to success.
FUTURE PROOF – BLOG BY FUTURES PLATFORM
Strategy, in its essence, is about choices; what you choose and plan to do and not do. A winning strategy is one that consists of well-informed and well-thought-out decisions that will drive positive outcomes in most of the envisioned scenarios ahead. Strategic analysis is essential to achieve – and maintain – a winning strategy.
In many ways, strategy is like a game of chess. You have the high-level objective clear in mind – what you are trying to achieve, what ‘winning’ looks like. In chess play and business alike, a successful strategy needs an awareness of the long game and the big picture, a way to accurately assess risks and rewards, and an ability to learn, adapt, and persevere.
But as any chess player knows, creating a winning strategy is not a one-off exercise. As time passes and the situation changes, strategies need to be adjusted. Thus, strategy formation is an iterative or circular process: The first step is a strategic analysis to identify what you need to change about your strategy. The refined strategy is then implemented and, after a time, the process begins anew.
WHAT IS STRATEGIC ANALYSIS?
Strategic analysis is the process of researching and analysing the external and internal environment within which a business operates in order to formulate a strategy or refine an existing one. This process usually includes utilising various analysis tools and methodologies.
Strategic analysis is a crucial part of long-term business planning and the first step in the strategic planning process. It provides the context and foundation upon which the strategy for your business is built.
HOW TO DO STRATEGIC ANALYSIS
There are three key steps to conducting a strategic analysis:
1. Defining the strategy level
A strategic analysis starts by defining the level at which the strategy will be assessed. In general, there are three different levels of strategy. The first one is the functional level, which works on the strategy of an individual team, function or department. The second is business-level strategy, which looks at how the company competes within its market. The third is corporate-level strategy, which focuses on the high-level view and long-term business goals.
2. Internal analysis
In the world of chess, this is the moment when the player focuses on their own pieces, assessing where they are, what each piece can do and what opportunities they can create together.
In business, internal analysis maps the current situation in terms of the organisation’s strengths and weaknesses. Usually, tools such as SWOT are used for this, and as an exercise, it is one that almost all businesses have undergone at some point.
3. External analysis
What distinguishes an inexperienced chess player from a master is that the latter not only sees their risks and opportunities but also those of the environment. Looking at how the pieces are positioned on a chessboard, a true chess master imagines many possible futures, many moves ahead, and calculates what moves they should make to win.
Similarly, after assessing the business from within, the next step of the strategy analysis is to perform an external analysis. This means scanning for factors which currently impact or could potentially impact the business. One of the most popular strategic analysis tools is PESTLE analysis, which looks at the political, economic, social, technological, legal and environmental factors that affect business operations.
But as opposed to mathematical, rule-based chess, the real world comes with many uncertainties and unexpected turns of events, and factoring in the external uncertainties is arguably the most challenging part of the strategic analysis process. This is where foresight comes in: Exploring a wide range of future possibilities with an established future planning framework, you can address these uncertainties in your strategy in a meaningful, organised way.
DEVELOPING A STRATEGIC PLAN
Once the strategic analysis process is completed, the insights from it will inform strategic planning, which is the stage where you explicitly set out your (updated) goals and objectives and how you will pursue them.
You can start developing a strategic plan by addressing the external and internal factors identified in the strategic analysis process. How will you use your strengths to take advantage of present and future opportunities? How can you address your weaknesses to minimise the negative impact of looming threats? How do you envision the environment will change, and how is your business preparing for it?
BENEFITS OF STRATEGIC ANALYSIS AND PLANNING
The benefits of in-depth strategic analysis and planning are multiple. The key results your organisation will gain from continuous strategy analysis cycles are:
Control. Creating (and then altering) a clear business strategy gives you more control and focus over your day-to-day business activities.
Confidence. A well-founded business strategy allows you to plan ahead confidently and allocate resources, making your business more efficient.
Future-focus. Continuous strategic analysis ensures that your strategy is always up-to-date with the current local and global situation. The analysis questions the assumptions and expectations about the world your current strategy is built on, helping you to move away from outdated practices.
MAKE IT STICK WITH THE RIGHT STRATEGIC ANALYSIS TOOLS
With the speed of change in global markets accelerating, periodic re-assessment of strategies is a must for long-term success for all businesses today.
Continuous strategic analysis is hard work, but you can make it a systematic exercise with the right tools. Futures Platform has all the resources you need: With a futurist-curated database of trend analyses and external news, your business will have a plethora of future-focused information to build its understanding of how the pieces are laid out on the chessboard and what kind of strategy is needed to win.
To stay ahead, organisations must widen their lens, exploring not just their own industry but what’s happening on the edges.