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Strategy Spotlight: 4 Parts Of The Strategic Analysis Process

Some time ago I wrote a blog about the five terms in the planning process that every business leader and professional should know. It was part of filling in the strategic blank and getting to know the strategic planning process. With the word strategic, and by adding the word analysis, planning, leadership, management and implementation you get the perfect adjective-adverb combination. The terms are defined in my other article (5 Terms in the Planning Process).

That got me thinking about taking a deep dive into each term separately to see what can be revealed. In this feature I will tackle strategic analysis. I suspect it might be a book in and of itself.

I defined strategic analysis as having a simple definition. It is the process of developing strategy for a business by researching the business and the environment in which it operates. Often it requires the knowledge and use of various tools to prepare business strategies by evaluating the opportunities and challenges faced by the company as it moves forward. It takes into consideration internal and external factors that would be impacting the organization.

The key part of strategic analysis is having a good tool belt and know how and when to use the tools. This can be the role of the business analyst.

Often strategic analysis has four fundamental parts: present state, future state, risk, and transitional analysis.

Present State Analysis

Also referred to as current state analysis and is part of situational analysis. Present state analysis is used to understand the internal and external current affairs of a business.

Often when doing a present state you use a combination of high-level environmental scan and tools to dig deeper into your initial assessment. An environmental scan could include:

  • A review of current mission, vision, values, and guiding principles, stakeholder analysis to understand key relationships
  • A review existing organizational structure and mandate
  • A review of past strategic plans, reports, and other relevant materials, interviews with key stakeholders
  • A review of pre-analysis questionnaires
  • Profiling people and their impact
  • Preparing for planning sessions
  • A SWOT, PEST or SOAR analysis

or using other tools or techniques that are more appropriate. This is all done to grasp an understanding on the NOW of the business and becomes the benchmark for future comparison.

Future State Analysis

It is great to get the current state but even more fun to create a future state situation taking into consideration all the factored revealed in your present state analysis.

Future state comes from your discussion with team members from imagining the vision of success and future of the organization, the key strategic agenda items, the strategic initiatives that will help you achieve the desired future state and the work elements that will get you to where you need to go.

Related Article: Four Common Skills Needed to Embrace Strategic Thinking in Your Business

Future state is often forged through dialogue and decisions made about key business impact zones and the solutions needed to leverage opportunity and solve challenges. Often you need to ensure your goals and objectives are set that will satisfy the business needs.

Future state analysis helps create a bridge from the existing situation to the future situations with consideration for strategic, tactical and operational commitments and reality.

Risk Analysis

In risk analysis, I have always likened it to predict the outcome of a game and whether you are dealing with positive risk (opportunity) or negative risk (challenge). There are always the known-known, the known-unknown and the unknown-unknown (look it up). Either way, you need to understand the levels of risks and what is acceptable. Every organization has its own risk culture that will need to be satisfied.

During your initial analysis, risk should have been identified in your initial situational analysis with consideration for economic factors, market factors, competition, technology, suppliers, process, labour markets and business rules to name a few. If you are going from a present situation to a future state of change and transition, then the gap would need to be analyzed to understand the uncertainties around the change and the actions to take to overcome the risk. Always fun.

Transitional Analysis

Also referred to as change analysis, this is where the rubber meets the road. A full gap analysis would be performed to ensure that the recommended solutions can be done and what needs to happen to make sure the change can be implemented. I consider transition, change, and implementation analysis all part of the transformation requirements process.

Things to consider are the context of the change, alternatives, justification, investment, resources, solution value, stakeholder reviews, and decision points and the business state on the road ahead.

In transitional analysis, key business artifacts would be used or created that could include a strategy map and/or a roadmap, work-plans and communication plans. The key is to go the distance.

Strategic analysis is a great adjective/adverb combination. It is the umbrella of a powerhouse of professional work requirements, approaches, and tools and techniques that must be completed to fully understand the business problem or opportunity, the potential solutions, the implementation requirements and the measurements of success from the present state to a new future state. Strategic analysis is an important overarching part and component of the strategic process. All good plans and change start with great strategic analysis and a little imagination (just needed to throw that in).