An organisation without a strategic plan is like a ship without a rudder - it is at the mercy of its environment, blown around by the prevailing winds of opinion, unable to steer away from storms of misfortune, and never really taking its stakeholders to their destination.

Strategy is best thought of as the skeleton of an organisation upon which future plans are draped. It gives the basic form and shape to an organisation, defines its basic capabilities and sets the direction it is traveling.

An effective strategy will answer the following questions about an organisation:

What does the organisation really do?

This is not necessarily what it actually appears to do but represents the most fundamental activities that attract stakeholders to the organisation. For example, petrol stations don't sell petrol, they enable customers to continue driving their cars - petrol is just the enabler that satisfies the need.

Who are the stakeholders that the organisation is catering to?

Who are your clients, members, sponsors, donors, funders and suppliers. Which ones are your primary stakeholders and which ones are your secondary ones?

Where does the organisation operate?

Does it operate in specific localities, on a national basis, or internationally (and if so, what countries)?. What presence does the organisation have? Is it a physical presence at each location or are locations serviced remotely from a central base?

How will the organisation do what it does?

This is a high level description of how the organisation operates like the methods of delivery and the quality of service. Are you going to be the lowest cost or highest quality producer? Will you deal with your clients indirectly, directly or personally?

There is No 'Why'

Strategy is not concerned with why an organisation exists. As an organisation is a fictitious entity and does not exist for its own purpose, it has no reason for existing other than to satisfy the needs of its stakeholders. The `why' behind the needs of each stakeholder is different for each and collectively they explain why the organisation does what it does.

Many of the strategic plans we review, particularly those from Not-For-Profits, fail to answer these very basic questions. Either they are pitched to high and contain mostly airy vision statements, like "demonstrate leadership" or "be an employer of choice", or much too low and contain operational decisions like "provide staff training".

Having a good strategic plan that covers the above points is essential to evaluating your organisation's current strategic position. It allows you to assess if the what, how, and where of your organisation matches with what your stakeholders need. It also allows you to assess how well aligned the goals of your stakeholders are and identify conflicts.

A good strategic plan is also essential for evaluating future options. It allows you to assess the impact of changing the what, how, and where on your stakeholders, and conversely how changes in your stakeholders can impact on what you do and how you do it.