Strategic databanks: design for success

Abstract

PurposeStrategic planning remains the top‐ranked management tool, across continents, sectors, and firm sizes. Yet many firms fail to adequately prepare a strategic databank to help optimize the planning process: senior managers suffer from too little formal data, too much, or unbalanced input that neglects critical market, industry, firm, and stakeholder inputs. This article outlines the key classes of information, recommends a process, and provides examples of specific information and formats that are useful in creating an informed, strategic context for making decisions about strategy and resource allocation.Design/methodology/approachGood strategy development hinges on good data about competitive position, industry structure, market forces/trends, and internal performance trends/conditions. The practical strategic databank described balances an external perspective with an internal one; it comprises inputs from standard sources (financial statements) and less common ones (stakeholder audits, benchmarking, and other analyses designed to highlight opportunities, obstacles, and levers for enhanced performance). The approach described also stresses management and staff engagement in assembling, assessing, and presenting the data, because the process itself can serve to enhance strategic thinking and commitment to implementation. Hundreds of firms across a wide array of industries have used the methodology, which derives from two decades of strategy consulting and senior operating experience.FindingsA balanced, comprehensive databank enables more robust and rational decision‐making about future strategy. A focused process can help engage managers and stakeholders, enhancing buy‐in and implementation. Simplicity, a common language, and uniform formatting help cross‐functional managers gain insights into strategic condition (both form and content are important). By developing a small set of analytic/performance ratios, managers can also sharpen their abilities to monitor implementation performance.Research limitations/implicationsThe guidelines and logic are universal, but some of the parameters described may need to be adapted to fit the planning cycle, technology, and data constraints of each firm, and refined over time, as more and better data are cultivated.Practical implicationsFirms can enhance the strategy development process immeasurably by honing the strategic databank – in terms of both content and format. Sharper analytic tools and an insistence on translating data into accessible information will better prepare managers from all backgrounds to make rational decisions about priorities, metrics, and strategic investment. A transparent and inclusive process will increase the likelihood of buy‐in, and signal senior management's commitment to a balanced and thorough assessment of issues.Originality/valueThe rational, practical approach described offers strategic managers a toolkit for developing a succinct strategic databank – for bridging the gap between dry numbers and eye‐opening discussion about how to play the game better. It outlines a straightforward process, providing hands‐on guidelines for optimizing performance, and galvanizing the management team.