Strategic Planning
Making Sense out of Strategy
Introduction
Strategic planning has been one of the best practices in the corporate world, with the management reassessing the current and previous environments and using them to develop the best strategies to lead the company in the selected direction. Through analyzing resources and identifying strengths and weaknesses in the environment, the management is able to develop the best operating strategies that are aimed at maximizing shareholder wealth in the long term. Strategic planning is conducted based on several factors, with small companies opting for less formalized and continuous processes (Olsen 2011, p. 218). Less formalized processes entail the chief executive cooperating with other managers and using their knowledge to solve strategic issues the firm is facing. Depending on the size and nature of the business, the management ought to regularly develop strategies that meet the needs of the firm. Thus, small companies do not need elaborate and formalized strategic planning. They use only systems that offer the required solutions for the enterprise and involve a small number of executives. By contrast, larger and more diversified companies often use formalized and more technical structures to develop strategic plans and involve many executives due to the high level of diversification of the firms.
The Samba Financial Group is one of the leading financial services companies in Saudi Arabia. The main rivals of the firm are Dar Basil Investments and Islamic Development Bank among others. Over the past few years, the Samba Group has faced tight competition from its rivals, thus prompting the use of international experts in the formulation of secretive strategic plans to help counter challenges experienced in the highly competitive financial market in Saudi Arabia. In the past, the firm experienced many challenges in its growth as a result of making its activities public. For example, some unique strategies developed by the firm were borrowed and implemented by its rivals, which has led to the loss of customers and thus low profits for the company. Reduced company revenue contributed to the need to develop better strategic ways of conducting business, one of which might be the use of secrecy in strategic planning. The use of secretive strategic plans will enable the firm to maintain its position in the market as one of the best organizations in the sector and counter competition from the rivals (Redford 2017, p. 137). Due to the current trends in the Saudi Arabia corporate world, the Samba Financial Group might prefer conducting its strategic planning in secret. The paper, therefore, focuses on the reasons to use secrecy when conducting strategic planning in the Samba Group in Saudi Arabia and suggests mechanisms for the companys continual strong performance.
Reasons for Secrecy in Strategic Planning
Strategic planning in many companies is nowadays hidden from most employees apart from senior executives because of the need to protect the firms competitive intelligence. With free dissemination of any companys strategies, there is a high likelihood that rival firms will take advantage of its competitive intelligence, thus exploiting the opportunities of the company. People attribute different meaning to the term competitive intelligence in the corporate market, with each segment developing unique marketing trends to help gain a wider market share (Dave & Smith 2017, p. 84). Hence, providing information to all parties of the organization poses many risks, including the threat of its leakage to competitors, who can use the information to prevent the firms activities from succeeding.
Currently, most of the firms are able to find substantial information regarding their rivals from online sources. The use of such sources of information as magazines, journals as well as newspapers provides rivals with valuable information of the firms operations. However, the use of competitive intelligence can open access to vital information about the firm, which often gives a competitive advantage to the competitors. According to recent studies, competitive intelligence has many adverse effects to an organization including the risk of closing of the organization due to exposure and unhealthy competition from rivals (Olsen 2011, p. 108). It is thus crucial for the Samba Financial Group to maintain secrecy in strategic planning to reduce competitive intelligence, which can otherwise result in many negative effects to the company.
Another reason for secrecy in strategic planning is that secrecy often limits criticism, regular guessing as well as hindsight by competitors. Analysts state that secrecy in strategic planning limits competitors access to the companys essential information, which implies that they are not able to spy on the major plans of the organization (Lehtimaki 2016, p. 326). Therefore, conducting strategic planning in secrecy, the Samba Financial Group will prevent interference in the activities of the firm from its competitors, which will facilitate driving the company in the desired direction. Too much guessing and criticism may affect the customers as well as shareholders perception, which may lead to reduced investment from stakeholders, thus lower returns.
Moreover, secrecy is necessary in strategic planning to maintain employees as publicizing the process may lure employees to join rivals, thus resulting in the loss of talented staff. In most instances, competition forces companies to poach the best employees in the market, thus making them public may pose the challenge of their brainwashing by the rival companies (Olsen 2011, p. 342). For example, in the recent past, the head of the strategy and corporate affairs of IBM was poached by the rival firm Samsung, which is a common practice among most companies used with the aim of matching the strategy with their growth aims and objectives. Secrecy in strategic planning helps limit rival firms from imitations or duplications of the firms strategies, which often undermine the long-term aims of the organization.
Duplication of strategies by rival firms is the major challenge to contemporary companies as it renders them irrelevant through the use the same strategies by many companies in the market. According to analysts, strategic plans are one of the most important documents to an organization, which should be kept in secrets to avoid other firms accessing the information and using it before the parent company (Dave & Smith 2017, p. 168). Insufficient protection of strategic plans often leads to lack of good competition as companies can easily access each others information. It is thus essential for companies, particularly the Samba Financial Group, to conduct strategic planning in secret to maintain healthy competition in the market based on the merit in the attainment of their goals.
Mechanisms for Continuous Survival of the Samba Financial Group
Due to the dynamic and highly competitive nature of the market, companies have been forced to develop mechanisms to help them operate despite the use of secretive strategic planning. One of the best mechanisms to ensure survival is the use of continuous innovation by the company. In the past years, the Samba Financial Group has embarked on continuous innovation of its products and services to ensure that it is always ahead of competitors in the market. Continuous innovation will help the company retain the majority of its customers and other stakeholders due to the aggressive nature of the company. According to financial experts, companies in the financial services sector ought to continuously innovate to build a competitive edge and achieve their goals and objectives (Lehtimaki 2016, p. 153). Therefore, there should be a fully-fledged department in charge of innovation activities in the organization with all the required resources, training and experience.
Secondly, communication should be effective, both within and outside the organization. Communication should be conducted through the most effective means, which will ensure that all stakeholders receive the necessary information (Redford 2017, p. 218). For example, the Samba Financial Group has employed communication experts from around the world to ensure there is no point in time when the stakeholders do not have access to the required information. Without proper communication, the internal and external stakeholders such as suppliers and customers do not have updated information, thus the company might face operational challenges.
Thirdly, the use of performance management systems has proven useful in the success of the organization (eds Mohiuddin et al. 2017, p. 38). In the Samba Financial Group, employees have proven to be more productive through the use of performance management systems as they are aware of the actions which can be taken in case of lack of the intended results. Experts continuously advocate for formal performance management systems to ensure that the employees work effectively towards attainment of the set goals and objectives of the organization.
Finally, it is extremely important for any organization to consider and prioritize all stakeholders, not only its employees and shareholders (Redford 2017, p. 256). Other stakeholders such as government policies, creditors, the society, suppliers etc. are also important for the achievement of the goals of the organization. In secretive strategic planning, the organization should ensure that all stakeholder interests are taken into consideration and that strategic plans address their concerns.
Strategic planning is an essential element in the success of any organization. Therefore, companies ought to develop the best strategies that will ensure their growth and performance in accordance with the companies aims and objectives. Depending on the environment, it is important for any company to continuously align its strategies with the desired direction of the company for shareholder wealth maximization in the long term. Finally, there should be regular analysis to ensure that the best strategies are implemented in secrecy to ensure their effectiveness.