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Strategic planning should never be a one-off action, even in normal trading conditions, but with a government roadmap to lead the UK economy out of the pandemic, it is most definitely time for businesses to consider their own roadmap.  Many may discover it is not just a case of dusting off business strategy but overhauling it.  Society and the economy have changed and your market may have transformed.

The reality is that many businesses will have been absorbed by the external forces affecting their operations in 2020 but may have been less focused on internal strategy.  One without the other is like trying to sail a catamaran with one hull.  Conducting an internal strategic review – or an analysis of your micro-environment, as it is also known – is vital.

Why make time for an internal strategic review?

All business leaders should regularly confirm that their business plan is relevant and functioning correctly.  Relevance is key to your objectives.  Do they make any sense in the current marketplace?  Is your mission valid?  Are your customers really who you think they are.  Are your products and services the right ones?  In other words, are you barking up the right tree as a business? Could you be missing out on any key opportunities?

Another strong reason for an internal strategic review is that of checking different parts of your business are still in alignment, to deliver on your set objectives.  There may be important areas needing to be re-balanced.  Employees may lack skills, or you may need to add resources in certain parts of your operation, to create the value customers seek.

Although an internal strategic review is about the here and now, it can equip you with the insight for a 3-to-5-year plan, helping to future-proof your business.

Making time to conduct an internal strategic review is key. As Dorie Clark has said: “Strategic thinking is an essential component of leadership”.[i]  In one survey of 10,000 senior leaders, 97% said being strategic was the leadership behaviour most important to their organisation’s success.  However, in another, 96% of leaders said they lack the time to devote to strategic thinking.  It is vital you do not fall into the trap of putting it on the back-burner.

[i] If Strategy is So Important, Why Don’t We Make Time for It? , Dorie Clark, Harvard Business Review, June 21 2018

Ways of analysing your internal (micro) environment

McKinsey’s 1980s 7S Model[i] still offers a useful way of assessing internal realignment within the business.  It may help you assess the impact of recent and extensive economic disruption.

The Model covers Structure, Strategy, Systems, Skills, Style, Staff and Shared Values and the interconnectedness of these elements within a business.  If one element changes, the model suggests that others also need to adapt, to maintain balance.  Shared Values are placed at the centre of the model, as any change in founder values affects everything.  There are three Hard Ss – Structure, Strategy and Systems – and the others are deemed soft Ss.

Structure is about your organisation chart and chains of command.  Strategy is your business plan and how it aligns with mission and values.  Systems are the processes and technology supporting activity and decision-making.  Skills are the capabilities existing within the organisation.  Style is about tone of leadership and internal culture.  Staff relates to your people, levels of training and recruitment.  Shared Values is the vision/mission.

Using this as a starting point for an internal audit, may be productive.


Having used the 7S model, you could move on to one of the core ways of examining a company’s internal strategy and adding focus to it, by conducting a SWOT Analysis.  Here, you will examine the business’s Strengths and Weaknesses, as your internal factors within a 2×2 square and then positives (opportunities) versus the threats existing in your external environment (assessed via an external strategic review such as a PESTLE analysis).

Very recent thinking, published in the Harvard Business Review (HBR) on February 23, 2021, suggests that you conduct the SWOT Analysis backwards, to prevent it being “ineffective”.  If not, it can often fail to be a true diagnosis and merely becomes a list of factors with no clear path to action emanating from them.[ii]  Descriptions within a SWOT are said to often be too short and lack explanation.  In other words, it can sometimes just be a ‘brain dump’.

Rather than starting with internal factors and moving to external (opportunities and threats), HBR’s article recommends you start with your external analysis.  The same external factors apply to all of your competitors and so strategies must be adjusted to reflect what is happening in the wider world.  It also avoids you thinking too narrowly about your internal situation.

Once you have conducted your PESTLE, (we discussed this last time, here) you should explore internal strengths and weaknesses with the external environment as their context and write a detailed sentence or phrase about the S or W.  From there, HBR suggests you create recommendations of what should be done, as actionable outcomes.  It offers this template box:

Given the condition of (external factor), our ability to (internal factor) leads to our recommendation that we (recommendation).

It gives an example of Given the condition of our current recession, our ability to maintain strong relationships throughout our distribution channel leads to our recommendation that we offer discounts to our channel partners to help them weather the storm.

Having carried out your SWOT Analysis, in this useful way, debate how you can best capitalise on your ‘strengths’.  Ask whether you need to bring in external support, to better equip your leaders or train your managers as you tackle your ‘weaknesses’.  Consider how you can you engineer the improvements you need, to take advantage of the ‘opportunities’ and keep the ‘threats’ at bay?  Such actions could be key to business resilience and growth.

This internal strategy review set within the context of the external strategy review we wrote about last month provides some groundwork for you to be able to write your fresh strategy.  We’ll provide more information on how to do this in our next strategy blog.

Tips to make your Strategy Review productive

  • Understand the level of ‘strategy review’ you are required to do: corporate, business, functional or team?
  • Invite the right people to participate in the work. They say people don’t resist change, they resist ‘being changed’ – so it makes sense to involve all key stakeholders and executors to take part to a greater or lesser extent. Also invite some creative, ‘big picture’ thinkers.  Our times require fresh ideas and courage to go beyond what is known.
  • Decide which tools you wish to use – we have highlighted PESTLE, the 7S model and SWOT in our two strategy blogs so far this year but the list to choose from is long. Here are a few more:
    • Porter’s 5 Forces
    • BCG Matrix
    • Ansoff MAtrix
    • Value Chain Analysis
    • Gap Analysis
    • VRIO Analysis
    • Four Corners Analysis
  • Engage a facilitator… having run hundreds of these sessions over 20 years, we know it is almost impossible to be ‘holding the room’ (engagement, focus, energy) whilst objectively contributing as a leader.
  • Be proactive – this isn’t a meeting you can prepare ‘on the hoof’ – it takes planning, pre-work, reflection time and follow up.
  • Strategy is a continual process – not a once-a-year activity… so create good governance around it.

To conclude, the pandemic has brought widespread change to the economy and the external forces which all businesses face, making strategic reviews imperative.  While we at Space2BE would always urge you to carry out such a review on a frequent basis, there has perhaps never been a time when it is more imperative.



[ii]Are You Doing the SWOT Analysis Backwards?, Laurence Minsky and David Aron, Harvard Business Review, February 23, 2021