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Subject 5. Strategic planning as a function innovation management
1. Essence And objective preconditions strategic planning V innovative management
In the context of increasing trends in the unpredictability of the business environment and risk, strategic planning acquires particular relevance.
Complication production processes, increasing the knowledge intensity of manufactured products, changes in the external environment of the organization determine increased requirements for the content of its policies, strategies and tactics, and for the quality of management. In this situation, the main condition for the effectiveness of any economic entity is the level of its real and potential innovativeness. Therefore, it is quite logical to define innovation strategy as a key link in organizational strategy, without diminishing the role and importance of its other elements.
Innovative strategy as an integral part of the overall strategy of the organization, it is a focused activity to determine priorities promising development organization and their achievement, as a result of which a new quality of production and management is ensured. It is implemented through progressive, non-standard, well-founded management decisions made taking into account the specifics of the organization’s work.
The main goal of strategic planning in a company is to create long-term advantage, and the main method is constant adaptation to market conditions and anticipation of changes in the external environment. Thus, the main task of strategic planning of innovation activity is the construction of a diagram of the company’s innovative behavior in the market. This process can be represented schematically as follows.
Rice. 7. Planning of innovative activities.
Specifics innovation strategy organization depends on the profile of its activities, the level of production and technical development, the focus and volume of work implemented in production and research departments within the framework of the innovation cycle various types innovations, areas of their application.
When assessing an organization’s innovation strategy, one should take into account the high dependence of its development prospects on the results of previous periods and accumulated potential.
The content and results of the innovation strategy are greatly influenced by the intensity and quality of interaction between specialized and professional units.
Responsibility for the innovation strategy on which the survival of the organization depends rests with managers, and the task of senior management is to identify management potential for the specific operating conditions of the organization, systematically review their “internal” reserves of management talent, set the scope and goals of the necessary management training and allocate appropriate resources .
But in any case, the priorities of the commodity producer’s innovation strategy are limited to its innovative potential in the field of production (core) activity.
2. Basic kinds innovative s strategists th
Depending on the conditions of the micro- and macroenvironment, the goals of the enterprise, the organization can choose one of the main types of innovation strategy:
ь Active /technological/ strategy,
ь Passive /marketing/ strategy.
Active strategies represent a response to ongoing and possible changes in the external environment through constant technological innovation.
Passive strategies represent constant innovations in the field of marketing, for example, constant innovations in the field of forms and methods of marketing products, communication policies.
Let us consider in detail active innovation strategies. They, in turn, are divided into leadership strategy and imitation strategies.
Strategy leadership (offensive strategy). The goal of the enterprise: to occupy a leading position in the market. Characterized by this strategy high level of risk and efficiency. For its effective implementation, a focus on research (in most cases, fundamental) in combination with the use of the latest technologies is required. The strategy is typical for large companies when the industry is dominated by a few large companies with a weak leader.
The offensive strategy is also called the “technological leader strategy,” which means that the company implements a new technological idea, conducts R&D, produces a pilot batch, conducts market testing, launches mass production, etc. In other words, all of the above necessitates the creation of strategic alliances in the field of R&D with other scientific and technical organizations, the creation venture funds and divisions within companies.
Many companies that once chose this strategy transformed into multinational corporations and are known throughout the world: microsoft, xerox, ford, ge, etc.
True, the choice of such an innovative strategy also has a number of disadvantages: due to the lack of market experience in implementing a new strategy, technology leaders face a high degree of risk and uncertainty (technological, market, business).
Imitation strategies.
Protective (defensive or strategy following behind leader). Goal: maintain competitive positions in existing markets, stay close to the leader, using its innovations with some changes.
Enterprises that have chosen this strategy are distinguished by a high level of technology and production technology, the quality of their products, relatively low production costs, have a stronger position in the field of marketing and production compared to innovative developments, R&D (they benefit by identifying the mistakes of the “technological leader” and technological and marketing adjustments of the new product).
Imitation strategy. Enterprises with this strategy use innovations released to the market by other organizations with some improvements and modernization. Strengths of imitating enterprises: high production culture, organizational and technical potential, good knowledge of market requirements, strong market positions. Often, such imitating enterprises occupy a leading position in their industry and in their respective markets, surpassing the original innovating leader. Under certain conditions, this strategy becomes very profitable.
Intermediate strategy. Characterized by the use weaknesses competitors and strengths of the enterprise, as well as the absence in the first stages of direct confrontation with competitors. Using this strategy, enterprises, mostly small ones, fill gaps in the specialization of other enterprises, that is, they choose market niches. The presence of such niches is explained by a certain weakness of other enterprises, their lack of capabilities or unwillingness to fill existing gaps. This strategy is used in relation to modifications of basic models of innovation.
Absorbing strategy (licensing). Involves the use of innovative developments carried out by other organizations. Innovations are so diverse in terms of complexity and novelty that even large companies with powerful innovation development departments cannot carry out work across the entire spectrum of innovation efficiency.
Strategy "dependencies". The firm fully recognizes its secondary role to the leader and introduces innovations only at the request of consumers or the leader company. The most typical firms choosing this strategy are firms with a low level of knowledge intensity, government-subsidized firms, or small (family) firms in the service sector.
Strategy "improvements". The essence of the strategy is to accept the need to improve the product with the main goal of reducing its cost. However, if earlier, during the period of the dominance of price factors of competition, this strategy could be limited, then at present this limited innovation strategy can only bring short-term results.
Robber's innovative strategy. It can be used when fundamental innovations affect the technical and operational parameters of previously produced products. Effective at the initial stages of dissemination and implementation of innovations. This strategy can be chosen by enterprises with weak market positions if they have breakthrough technologies at a certain stage.
The specific type of innovation strategy for new products depends on a number of factors, the most important of which are the technological capabilities and competitive position of the organization.
Technological capabilities are determined by the internal and external characteristics of innovation activity. Internal ones include previously formed scientific, technical and technological potential, the elements of which are personnel and a portfolio of patents. Examples of external manifestations of an organization's technological capabilities are the presence and scale of distribution of licenses, the forms and nature of relationships with suppliers and consumers.
Competitive capabilities reflect the following indicators: the relative market share controlled by the organization, the ability to quickly respond to the dynamics of market structures and, as a consequence of this, a flexible approach to the content of the goals of the organization's innovation strategy, etc.
In practice, firms use several strategies.
3. Choice innovative strategies
The specific type of innovation strategy, first of all, depends on the state of the processes of interaction between the commodity producer and the external environment in the broadest sense.
The process of choosing the most rational innovation strategy in specific economic conditions is always based on the results of an assessment of all forms of innovation activity, manifested in innovations of various types.
However, in practice, the implementation of this provision causes certain difficulties. The main one is that innovation activity as an object of innovation management covers all aspects of the organization’s work and is an integral part of any functional or production subsystem. For example, the main goals of the organization include:
Release of high-quality products of a given type and volume within a specified time frame,
Increasing the efficiency of using scientific and production potential,
Active foreign economic activity,
Ensuring environmental safety of production and eliminating negative consequences economic activity etc.
The first goal involves improving the products themselves and their production technologies, mastering new products and processes, which allows, at a minimum, not to reduce the financial results of the main activity and maintain the organization’s market position in the event of changes in the state of the business sector.
Second the goal is based on the need to rationalize production, service, management processes based on improving functional and production structures, increasing the efficiency of using human, information, financial, material resources, updating the production, technical and engineering base.
The third goal requires the presence of a scientific and technical basis that ensures a high level of competitiveness of products on the world market and, accordingly, wide consumer demand.
Environmental goals are realized as a result of the development and application of waste-free technologies, types of products that are environmentally safe for the manufacturer, necessary environmental protection structures, etc.
In the practice of innovation management, various techniques and methods for choosing an organization's development strategy are used. The most rational is a systematic approach. The application of its principles in the development of an innovation strategy allows us to identify the following processes as its fundamental elements:
Improving previously developed products and technologies,
Creation, development and use of new products and processes,
Increasing the quality level of the technical and technological base of production,
Increasing the quality level of the research and development base,
Improving the organization and management of innovative activities,
Ensuring environmental safety of innovative activities,
Achieving competitive advantages of an innovative product over similar products in the domestic and foreign markets.
The prerequisites for the success of an innovation strategy are specific conditions, in which it is developed and implemented, the state of the research sector, production processes, marketing, investment activities, strategic planning and their relationship.
Any organization is not at all free to choose an innovation strategy in the literal sense. Their “freedom of choice” is limited by the previously accumulated experience of innovative activity, the results of using existing techniques and methods for choosing a strategy in general and individual innovative projects, the professionalism of managers, consumers and opportunities practical application results of proposed projects.
A constant analysis of the adequacy and feasibility of the existing structure of markets, functions, tasks, and the qualification level of personnel in a specific economic situation should be carried out, which is very important for developing real long-term prospects for the development of the organization.
Let's consider the bkg matrix used to select an innovation strategy.
Fig.8. Matrix bkg
New products are more likely to appear in growing industries and have the status of a “problem” product. Such products may be very promising, but they require significant financial support from the center. As long as these products are associated with large negative cash flows, there remains a danger that they will not be able to become star products. Main strategic issue Presenting a certain difficulty - when to stop financing these products and exclude them from the corporate portfolio? If you do this too early, you may lose a potential star product. The category of “star” products can include both new products and new trademarks of the enterprise’s products. The risk of financial investments in this group is greatest.
Star products are market leaders, usually at the peak of their product cycle. They themselves bring in enough funds to maintain a high share of a dynamically developing market. But despite the product's strategically attractive position, its net cash income is quite low, as significant investment is required to ensure high growth rates to take advantage of the experienced curve. Managers are tempted to reduce investment in order to increase current profits, but this may be short-sighted, since in the long term the product may become a commodity - a cash cow. In this sense, what is important is the future income of the star product, not the current one.
When market growth slows, star products become cash cows. These are products, or business units, that occupy leading positions in a low-growth market. Their attractiveness is explained by the fact that they do not require large investments and provide significant positive benefits. cash flows, based on the experimental curve. Such business units not only pay for themselves, but also provide funds for investment in new projects on which the future growth of the enterprise depends. In order for the phenomenon of cash cow products to be fully used in the investment policy of an enterprise, competent product management is necessary, especially in the field of marketing. Competition in stagnating industries is very fierce. Therefore, constant efforts are required to maintain market share and search for new market niches.
Dog products are products that have low market share and lack growth opportunities because they are located in unattractive industries (in particular, an industry may be unattractive due to high levels of competition). Such business units have zero or negative net cash flows. Unless there are special circumstances (for example, the product is complementary to a cash cow or star product), then these business units should be disposed of. However, sometimes corporations retain such products in their range if they belong to “mature” industries. Capacious markets of “mature” industries are to a certain extent protected from sharp fluctuations in demand and major innovations that radically change consumer preferences, which makes it possible to maintain the competitiveness of products even in conditions of a small market share (for example, the market for razor blades).
Thus, the desired sequence of product development is as follows:
The implementation of such a sequence depends on efforts aimed at achieving a balanced portfolio, which involves, among other things, a decisive rejection of unpromising products; ideally, a balanced product portfolio of an enterprise should include 2-3 “cow” products, 1-2 “stars” , a few “problems” as a foundation for the future and, perhaps, a small number of “dog” products. A typical unbalanced portfolio typically has one “cow” product, many “dogs”, several “problems”, but no “star” products that can take the place of the “dogs”. An excess of aging goods (“dogs”) indicates the danger of a recession, even if the current performance of the company is relatively good. An oversupply of new products can lead to financial difficulties.
Topic 6. Types of innovative behavior of firms
1. Competitive innovative strategies
One of the main problems in innovation management is the temporary nature of the benefits obtained from the implementation of innovative projects. The innovator has excess profits only until competitors appreciate the potential of the new product or technology and begin to copy the innovation. Therefore, the most important task of planning innovation activities is to design strategies that make it possible to maintain profit flows from innovation for a long time.
Depending on the firm's capabilities, its innovation strategy, type of product or service and stage life cycle new products, the company can adhere to the following innovative competitive strategy:
b Blocking strategy
b Strategy of “anticipation”,
b Strategy of “cooperation”.
"strategy blocking"- this strategy can be used when the company has already released new product to the market and strive to extend the period of obtaining maximum profits by blocking competitors' access to the market. As practice shows, access can be limited in two ways.
The first way is to use at each stage of creating a new product unique technology and know-how that competitors do not have. Accordingly, the information must be kept confidential.
The second way is to signal a future reduction in prices for your products in the event of the appearance of analogue products. This strategy can also be used when competitors have similar capabilities as the manufacturer at every stage of development and release of a new product, and also have access to new technologies and marketing know-how.
The reason for using this strategy in a situation like this is the assumption that economic point From our point of view, potential imitators of a new product will decide to enter the market only if they are confident not only of cost recovery, but also of obtaining high profits. And if previously the technology leader reacted by reducing the price level for a new product, then potential competitors will most likely make a negative decision on entering the new market.
Blocking the entry of potential competitors by lowering the price level is especially relevant when the innovator is protecting technology that can be used in subsequent new products (this reduction is also offset by future excess profits from the implementation of new projects).
"strategy advance"- this strategy assumes that the company must be so innovative that it can develop and bring new products to the market faster than competitors. At the same time, the problem of “cannibalism” arises - the company’s old products are forced out of the market when a new product appears in its assortment. This problem seriously interferes with the implementation of the “anticipation” strategy.
"strategy cooperation"- this strategy is the exact opposite of the “blocking” strategy. In other words, instead of preventing competitors from entering the market, the company, on the contrary, stimulates their entry into a new market. There are several reasons for this behavior.
The first reason why an innovator has a positive attitude towards copying his products is his desire to establish a certain technological standard. The more analogues of new products appear, the more extensively the technology is used, the more related new products will enter the market, which means the more likely it is that consumer interest in new products will grow. Thus, by turning his innovation into a market standard, the innovative leader gains significant advantages.
The second reason lies in the innovator's intention to increase counter demand, which is an incentive to increase demand for new products. For example, Intel makes its developments in the field of computer software available to other companies. An increasing number of companies are purchasing personal computers, which are becoming more accessible thanks to the use of new technologies, and this in turn leads to an increase in demand for Intel microprocessors.
Quite often, innovative firms are forced to license their inventions to gain access to markets and business areas where they do not have sufficient competence, or when entering new geographic markets.
Most effective interaction with potential competitors will be using a combination of the strategies described above.
2. Types innovative behavior firms
In accordance with the classification of l.g. Ramensky distinguishes the following types of innovative behavior of firms:
ь Violenty,
ь Patients,
ь Explerents,
ь Commutators.
Violents- these are large companies with mass production, developed infrastructure and significant research base. They have high innovative potential, free financial resources, scientific developments, material and technical means in order not only to develop an innovation, but also to master it in production and commercialize it. They can act as an innovator, investor and innovator (depending on the stage of development).
Patients- companies specializing in the production of unique new products. Patient occupies a narrow market niche and serves non-standard consumers. These are large, small or medium-sized companies (for example, the German company Porsche specializes in the production of luxury sports cars). These firms have an adaptive innovation policy. Patients use a differentiation strategy - they create a product with specific characteristics. Due to the uniqueness of the innovative product offered by this company, competition in the segment it occupies is not high, and this creates additional advantages.
The development of patents occurs within the boundaries of the selected market segment, and therefore is highly dependent on market conditions (which is the weak point of patents). Next, two possibilities open up for the company: either to diversify (master the new kind activity) and turn into a violent, or gradually reduce the scale of activity and then leave the market.
In addition, such a narrow specialization causes other inconveniences - a small or medium-sized patent company can be absorbed by the violent.
Explerents- the purpose of the existence of such companies is to constantly release radical innovations. These are small innovative companies. The peculiarity of the experimenter is that their innovative potential mainly includes intellectual resources with the help of which innovative products are developed.
Eksplerent lacks financial and logistical support, so it is not able to promote and distribute its development on a large scale. In other words, these are innovative firms that carry out the first stages of the innovation process.
Since the explorer lacks financial resources, then he needs financial support. And if help is provided, then the explerent rapidly develops and turns into a violent. In the absence of such support, the explerent is quickly forced out of the market, and, accordingly, there can be two development scenarios: either bankruptcy or loss of autonomy, that is, transformation into a violent division. If the developer becomes such a division, it gets the opportunity to carry out its developments without experiencing a shortage of financial resources. And the violent gets access to the know-how of the controlled company.
Commutators- firms that imitate new products or offer new types of services based on new products. This imitation strategy is common to many small firms. Their role in the innovation process is to facilitate the diffusion of innovations. Their activities are mainly related to the production of legal copies of products from well-known companies, as well as the provision of after-sales services for innovative products.
Topic 7. Financing innovation activities
1. Sources financing innovative activities
Innovative activities require significant investments related to the development of resource, personnel and information potential of organizations. Because of this, the formation of a financial base for innovation is an important element of state scientific and technological policy, for the implementation of which resources must be attracted from various sources. At the same time, the forms and methods of attracting resources, even from traditionally established sources, do not remain constant due to changes in economic practices.
On In practice, not only small and medium-sized companies, but even large ones often face the problem of insufficient financing. There are three main obstacles to the accumulation of financial resources.
1. The planned innovation may be so risky, and future income so unpredictable, that the company’s management refuses to finance the project from its own sources;
2. If a company plans to finance innovation with borrowed funds, and profit from the project is expected only in the long term, it seems quite difficult to convince the lender of the potential of the innovative project;
3. A situation may arise when an investor allocates funds for a specific project, and the company’s management decides to use these funds to partially finance another innovation. As a result, at the project implementation stage there are insufficient funds and one of the directions is closed.
World practice identifies the following sources of innovation financing:
State appropriations
Own funds of industrial organizations, higher educational institutions
Funds from non-profit organizations
Credit resources, private savings of the population and foreign capital.
State statistics in the Russian Federation keeps records of funding sources in the following areas:
Republican (local) budget funds
Own funds
Extra-budgetary funds
Funds from business sector organizations
Funds from private non-profit organizations
Funds from foreign sources.
In general, all sources can be divided into 2 large groups: direct financing and indirect. Direct financing is associated with obtaining real financial resources, while indirect financing - These are tax discounts and benefits, tax credits, credit benefits, leasing of special scientific equipment, customs benefits, depreciation benefits, etc.
2. State financing
By allocating funds from the budget, the state has a real opportunity to accelerate innovation processes, orient them in the right direction and contribute to an overall increase in the efficiency of resource use and the formation of an innovation climate.
In general, in Russia it is legislatively established that appropriations for financing scientific research and development for civilian purposes are allocated from the federal budget in the amount of at least 3% of the expenditure portion of the annual federal budget.
Direct budgetary allocations are made through a combination of two forms of direct support: in the form of core funding scientific organization and in the form of competitive distribution of funds for conducting fundamental and exploratory research (grant system) and implementing tasks of state scientific and technical programs (contract system). Grant - monetary, material and other resources transferred by any individual (legal entity) irrevocably and free of charge to any individual (legal entity) solely for the purpose of carrying out scientific activities.
The use of basic financing aims to preserve the modern material and technical base, as well as highly qualified and creative personnel of the organization.
A higher priority is the form of distribution of budget funds based on parallel competitive research and development on the most important problems of science and technology - a form of competitive distribution of funds that contributes to the formation of a competitive environment in the innovation sphere.
There are two possible forms of holding competitions for obtaining government orders for research and development.
Firstly , the practice of awarding government contracts on a competitive basis. In this case, at the preliminary stage, from the circle of applicants for receiving a government order, an organization is selected that will offer the most effective solution, which is allocated the government order.
Secondly , the practice of fulfilling government orders on a competitive basis. In this case, several performers who proposed their original and promising ways to solve the problem receive government orders. In the future, the most effective solution is selected for industrial development. Therefore, this option for placing government orders can be called a competition for decisions.
The state order form, based on a competition of ready-made solutions, will allow you to select the most effective solution and, using the income received from its implementation, cover the costs of paying for the work of several contractors who carried out the state order.
At the same time, in Russian practice, the procedure for financing projects with the allocation of state budgetary funds in stages with a cumulative total is used. The state strives to minimize the degree of risk and uncertainty characteristic of innovation processes. Therefore, at the initial stage, the amount of funds allocated is usually minimal, and if encouraging results are obtained as the project or program is implemented, the amount of allocation increases.
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Management department
Department of Management and Marketing
TEST
discipline: Innovation management
Topic: Strategic planning of innovation activities
Completed by a 3rd year student
UZs21.1_B2-14,
Prokopova Oksana Alexandrovna
Teacher: professor of the department. Alekseev A.N.
Introduction
The concept and essence of innovative activity
1General theory
2 Types of innovation
3 Classification of innovations taking into account the subject of innovation
Planning innovative activities in an organization
1 Preparation of an innovative project
2 Drawing up a business plan for an innovative project
3 Taking into account risk in innovation activities
Conclusion
Introduction
Over the last decade, innovative activities have been actively introduced into the market system. One of most important tasks becomes an increase in the innovativeness of enterprises, namely: their ability to clearly and adequately respond to changes in the market by releasing new or improving existing products, introducing new production and sales technologies, restructuring, improving the internal management system and using the latest marketing strategies. As a result, the formation and development of innovative potential becomes an integral part of the strategy modern enterprises. To achieve commercial success, entrepreneurial structures need to create goods and services that can attract the attention of consumers, despite the existence of many analogues on the market. This is especially important for small and medium-sized businesses that cannot compete with large companies in the field of costs and pricing policy, but thanks to innovation, that is, the introduction to the market of a new product that can satisfy consumer needs better than existing products, they can increase their entrepreneurial income. The purpose of this work is to consider the following main issues:
The essence of innovation strategy in the activities of the enterprise,
The main stages of planning innovations in an organization are:
Preparation of an innovative project,
Creation of a business plan,
Taking into account risk in innovation activities.
The relevance of the topic is due to the fact that in the dynamic external economic and socio-political environment of an organization’s activities, achieving long-term positive results is impossible without constant updating of the applied technological, management and procurement and marketing processes, the range of products (goods, services) and the search for new market opportunities(development of new market segments).
1. The concept and essence of innovative activity
Innovation is the main means of ensuring the competitiveness of products and ensuring the sustainability of the success of an enterprise (corporation) in the market as a whole. Because of this, innovation management is an integral part and one of the main directions strategic management enterprise.
The concept of innovation (in Russian - innovation) comes from the English word innovation, which translated from English means the introduction of innovations (innovations). Innovation means a new order, new method, new product or technology, new phenomenon. Thus, innovation is an activity aimed at developing, creating and distributing new types of products, technologies, and organizational forms.
Innovation in a broad sense refers to the profitable use of innovations in the form of new technologies, types of products and services, organizational, technical and socio-economic solutions of a production, financial, commercial, administrative or other nature. In other words, innovation is interpreted as the transformation of potential scientific and technological progress into real progress, embodied in new products and technologies.
Analysis of various definitions of innovation leads to the conclusion that the specific content of innovation is change, and the main function of innovation activity is the function of change. The Austrian scientist J. Schumpeter identified five typical changes:
· usage new technology, new technological processes or new market support for production · introduction of products with new properties · use of new raw materials · changes in the organization of production and its logistics · emergence of new markets In the innovation process, a significant role is played by the creators of innovation (innovators), who are guided by such criteria as the product life cycle and economic efficiency. Their strategy aims to outperform competitors by creating an innovation that will be recognized as unique in a particular field. However, the development and implementation of innovation in everyday practice requires certain financial resources. 1 Types of innovation strategic planning innovative Innovation can be divided into two main types: technical and organizational. Technical innovations include: new products, new technologies or new services. Often the success of an enterprise is determined by the joint effect obtained when introducing a new product, new technology and new services. Technical innovations can also be classified according to their knowledge-intensive nature, the amount of capital costs, payback periods and their impact on the development of a particular enterprise or industry. In this case, they can be classified as basic and applied innovations, innovations to improve products, technologies or services, and modification innovations. The most radical impact on the success of an enterprise and the economy as a whole is caused by basic innovations associated with the development of scientific and technological progress. Innovations to improve (improvement) products have the greatest share in the practice of industrial enterprises, and modification innovations have the least. The main objective prerequisites (root causes) for the emergence of technical innovations are new technical capabilities and new needs, on which two famous models innovation process. Statistics from the analysis of the root causes of various innovations in different industries and in different countries indicate that need plays a more important role than new technical capabilities in the development of innovation processes. At the same time, practice shows that to achieve success it is necessary to take into account and timely use both root causes and the corresponding innovative models. Organizational innovations usually pay off faster than technical innovations, and therefore are also important for the success of the enterprise. These include: innovations in the organization of production, new marketing methods, financial innovations, new management methods, structural innovations, innovations related to changes in competition, market characteristics and segmentation, and other innovations. 2 Classification of innovations taking into account the subject of innovation Technical and technological innovations manifest themselves in the form of new products, technologies for their production, and means of production. They are the basis of technological progress and technical re-equipment of production. Organizational innovations are the processes of mastering new forms and methods of organizing and regulating production and labor, as well as innovations that involve changes in the relationship between spheres of influence (both vertically and horizontally) structural divisions, social groups or individuals Management innovations are a purposeful change in the composition of functions, organizational structures, technology and organization of the management process, methods of operation of the management apparatus, aimed at replacing elements of the management system (or the entire system as a whole) in order to speed up, facilitate or improve the solution of the tasks assigned to the enterprise. Economic innovation in an enterprise can be defined as positive changes in its financial, payment, accounting areas of activity, as well as in the areas of planning, pricing, motivation and remuneration, and performance evaluation. Social innovations manifest themselves in the form of activating the human factor through the development and implementation of an improvement system personnel policy; systems vocational training and employee improvement; systems of social and professional adaptation of newly hired persons; systems of remuneration and evaluation of labor results. This also includes improving the social and living conditions of workers, occupational safety and health conditions, cultural activities, and organization of free time. Legal innovations are new and amended laws and regulations that define and regulate all types of enterprise activities Environmental innovations are changes in technology, organizational structure and management of an enterprise that improve or prevent its negative impact on the environment. Innovation management is one of the areas of strategic management carried out at the highest level of company management. Its purpose is to determine the main directions of scientific, technical and production activities companies in the following areas: · Development and implementation of new products or services. · Modernization and improvement of manufactured products. · Improvement and development of production of traditional types of products and services for the enterprise. · Creating conditions to ensure more efficient operations and increase the competitiveness of the enterprise. Thus, innovation is final result innovation activity, embodied in the form of a new or improved product introduced on the market, a new or improved technological process used in practical activities or in a new approach to social services. 2. Planning innovative activities in the organization An innovation project can be defined as a set of targeted, interdependent activities, largely unique and autonomous, planned and documented, aimed at the development and/or implementation of an innovation of a commercial or technological nature, limited in time and resources Planning an innovative project consists of three stages: preparing an innovative project, drawing up a business plan for the project and taking into account risks and their features. Preparation of an innovation project includes: defining the problem and purpose of the innovation project; Creation working group; understanding the project, developing a plan and stages of project implementation, as well as their timing; defining expected results; compilation calendar plan execution of work on the project. Drawing up a business plan for an innovative project includes: determining the requirements for a business plan for an innovative project; drawing up the content of a business plan and assessing the effectiveness of investments in an innovation project. The stage of taking into account the risks of innovative projects consists of determining the classification of innovative risks and creating basic techniques for managing the risks of innovative projects. 1 Preparation of an innovative project Let's consider the first stage of project creation - preparation of an innovative project. What all projects have in common is identifying a problem and setting a goal. Development research project consists of the following stages: analysis of the degree of development of the problem and collection of material for its solution; processing of received materials; registration of research results. The preparatory stage of the project is important for all participants, especially for the investor or customer who decide on the feasibility of the project and the prospects for its implementation. For the researcher, it begins with identifying the problem and initiating ideas. A problem is understood as either any significant deviation from established norms, requirements and standards, or the most important task that does not have a clear solution. Problems are solved through the preparation and implementation of innovative projects. One of the most important conditions for the success of a project is the presence of clearly defined realistically achievable, promising and current goals that are directly generated by problems. The description of the project's goals defines its essence. Goals are structured according to their significance and all subordinate to the main one act as tasks that must be completed within a specified time frame during the preparation, implementation and implementation of the project. Customers of the project can be any legal entities or individuals, government agencies, off-budget and charities and foreign investors and funds. The procedures for processing application materials for the implementation of R&D (scientific research) and R&D (experimental design) projects are strictly regulated, especially if the project is financed from state budget funds. To carry out and implement it, a team is created consisting of managers and performing specialists. The composition and structure of the team depend on the significance and requirements of the project. The team is formed by the project leader or manager. When selecting a team, along with professional ones, compatibility factors and personal qualities are taken into account. Simultaneously with the preparation of documents for the implementation of research and development projects, contracts for the creation of scientific and technical products, and agreement on prices for them, the project is being conceptualized as a system of interconnected, interdependent elements that are in unity and perform various (specific) functions in contrast to the project generally. The system view has a number of advantages and allows you to obtain a synergistic effect as a result joint activities participants. The material embodiment of a complete understanding of the project is the development of a methodology and feasibility study for research and development work. The most important elements terms of reference are: the purpose of the work, the scope of application of the results, the content of the work, the program for its implementation, technical, economic and other indicators, requirements for the work, the level and method of its implementation, the results of the work, the scientific, technical and practical value of the expected results; the intended use of the results and the type and form of presentation of the reporting materials. When the starting materials and documents are accepted and approved, the organizational conditions for the implementation of the project are prepared, the planning of the work is carried out - this stage of the preparatory process, which provides for an accounting definition of the subject area of applied research or R&D, the timing of the project and its individual stages, the cost of the work and stages, the final and intermediate results, acceptance procedure and sources of funding for the work. Along with the development of a calendar plan for the implementation of research and development work, technological work and the provision of scientific and technical services, a cost estimate is necessarily calculated, which justifies the need for expenses for the purchase of equipment and materials, remuneration of performers and co-executors, and calendar plans. After determining the cost of the project, a budget is developed, which represents the distribution of costs in accordance with the stages and timing of the work. The final indicators obtained as a result of the project can be material (materials, process, technology), organizational (norm, standard), scientific and technical (design documentation, research, scientific and technical report, program), intangible (patents) , monographs, articles) and other forms. The economic meaning of the expected results of the project lies in the excess of the organization's income from the implementation of the project over the costs of implementation and implementation. 2 Drawing up a business plan for an innovative project The second stage is to write a business plan for an innovative project. The choice of strategy is one of the main parts of strategic management of an innovation project. At the same time, it is a necessary condition and basis for developing a plan for any innovative project. The presence of a methodological base of completed research and tools allows you to choose the most adequate strategy of behavior depending on the market, technological and resource positions of the project, the state of the external competitive environment and personnel capabilities. For example, in a stable external environment, moderate competition, and the presence of fundamentally new technologies and products at the enterprise, the innovation strategy should be of a leading, offensive nature. It must be remembered that the creation of new knowledge and skills and new technologies does not in itself lead to the realization of long-term goals of maximizing income and fruitful growth. Goals and strategies for long-term development should be situationally grounded taking into account the current state. The strategic stage of implementing an innovation strategy is based on an accurate analysis and forecast of the situation, an alternative choice based on analysis data of the most appropriate type of strategy, followed by management of the implementation of this strategy. When the external and internal environment is favorable (stable environment and radical innovation), the only alternative is the leader's strategy. And vice versa, in an unstable external environment and imitation technological activity, favorable circumstances in the form of weak competition and low costs should not push the enterprise to an offensive strategy, because the situation dictates the possibility of only one strategy - following the leader. At the same time, with a stable market and high demand, the same enterprise can formulate a low-cost leader strategy. A business plan is a comprehensive, strategic, final document that substantiates and evaluates an innovative project in various aspects and contains data from all areas of its analysis. It reveals the strengths and weaknesses of the project, the possibility of obtaining expected income and life support in a competitive market environment, which is the basis for obtaining financial support and means of raising capital for its implementation. The main reasons for developing a business plan are: · the ability to detect problems through research before they arise; · the need to attract investment. Currently, a business plan is a standard document for familiarization with a project and a mandatory requirement on the part of the civilized market. The composition of the document, its structure and degree of detail depend on the target orientation, scale and cost of the project, i.e. - the more significant the project, the more detailed and comprehensive the business plan should be. Its most common form at present is a document that reflects information about the enterprise that will implement the innovative project; products (goods, services, works); product sales markets; competitors; marketing and financial strategy; risks and their compensation; production, organizational and financial (sometimes legal) plans. Most innovative business plans belong to the group of investment projects that have significant differences from standard ones both in content and in methods and techniques for assessing the effectiveness of their application. Investment projects involve the use of borrowed funds and therefore the definition of commercial, financial and economic efficiency is absolutely necessary as a justification for guaranteeing the return of funds within a specified period. 3 Taking into account risk in innovation activities The final stage in creating an innovative project is taking into account risks and their features. We will consider the risks of innovative projects from two positions: according to classification criteria; and on basic techniques for managing risks of innovative projects. Innovative projects belong to the highest risk category for investments. Therefore, when looking for investment from commercial sources, the initiator of an innovative project needs to realistically assess his chances. The risk of innovative projects takes into account the probabilistic nature of the expected result under conditions of uncertainty. In other words, the risk of innovative projects is the uncertainty associated with decision-making, the implementation of which occurs only over time. Risk assessment is part of any business decisions, including those related to innovative projects. Innovative projects are associated with capital investments in individual industries, enterprises, and production facilities. When constructing a risk classification for innovative projects, it is advisable to use the block principle. The block principle of classifying the risks of innovative projects involves the distribution of risk into categories, subtypes, groups and subgroups, and other levels. It is precisely because of the variety of risks of innovative projects that the classification of risks is carried out not on an end-to-end basis, but on a block basis. Risks can be external, internal or mixed. External risks include general economic, market, socio-demographic, natural and climatic, information, scientific, technical and regulatory types of risk. At the same time, the reasons that determine external economic, market, natural-climatic, informational, scientific, technical and regulatory types of risk may lie in the actions of subjects of the external environment, as well as the internal one, therefore they are classified as mixed. Mixed risks are associated with the activities of developers of innovative projects. To manage innovation risks, it is advisable to systematize them. In innovative projects, it is important to take into account the risk of a new product, a new design solution, etc. not being in demand. To avoid the consequences of the product not being in demand, the manufacturing enterprise must analyze the reasons for this. Therefore, it is necessary to classify risk factors for the lack of demand for products. The risk of a product not being in demand is the probability of losses for the manufacturer due to possible refusal consumer from his products. It is characterized by the amount of possible economic and moral damage suffered by the company for this reason due to a drop in demand for its products. The risk of products not being in demand belongs to the mixed category and is associated both with the uncertainty of the external situation and with the activities of the enterprise itself that produces and (or) sells products. The risk of not being in demand for innovative products is due to internal and external reasons. Internal reasons depend on the activities of organizations. These include: · insufficient qualifications of personnel; · improper organization of the production process; · improper organization of supplying the enterprise with material resources; · improper sales organization finished products;
· unclear enterprise management. External reasons, as a rule, do not directly depend on the activities of the developers of innovative projects. The main external reasons causing the risk of not being in demand are: · engineering and design; · consumer solvency; · transport; · work organization and condition financial system;
· increasing interest rates on deposits; · socio-economic; · demographic; · geographical; · regulatory Risk management of innovative projects involves solving the following tasks: identifying risks; grade; impact on potential risks; risk control (collection and analysis of information about risks arising during the implementation of the project, actions aimed at eliminating risks, etc.). Classic models of decision theory provide for the following situations: · game situation: the state of the surrounding world is determined by the possible actions of a rational opponent/competitor; · risky situation: the state of the environment is characterized by certain probabilities known to the decision maker; · situation of uncertainty: criteria/probabilities characterizing events in the surrounding world are unknown or not objectively given. The following decision-making options are possible in the conditions risky situation: · risk aversion - the decision maker strives to avoid possible risks as much as possible, therefore he is ready to incur high costs for various measures to control and insure risks; · risk preference - the subject willingly meets the risk, he takes only minimal measures to insure it and is ready to bear responsibility for its consequences. This strategy is typical for those individuals who expect as a result of speculative risks profitable income, therefore it is often used by young, growing enterprises; · indifference to risk - the decision maker strives to optimize risk costs and tries to carefully apply various tools and methods of insurance and risk elimination The distribution of risks between project participants is usually fixed in the project contract. It is important to keep in mind that behavior in a risk situation depends mainly on the level of awareness of a particular project participant regarding various aspects and aspects of project implementation. In order to manage risks, they must be assessed. When a risk is detected, first of all, it is necessary to determine the existence of risk zones for the work being carried out, and if they exist, at least qualitatively assess the importance of these risks. The algorithm for the method of expert assessment of economic risks includes: developing a list of possible risks for all stages and key events of the solution being implemented; determination of the danger of each risk for the possibility of implementing the management decision and achieving the set goal; finding the probability of risk. Thus, the development and implementation of innovative projects is influenced by various factors. To reduce the risk of innovative projects, it is important to conduct marketing research, which will determine the demand for innovative products. Predictability of the result reduces the degree of risk. With zero variance, there is no risk at all. The risk can be reduced by conducting a design analysis of new products (commercial, technical, organizational, social, environmental, economic), which is important for the development of an innovative project. In large innovation projects, timing risks are of particular importance. They can lead to a situation where the project deadlines are not met, which will lead to additional costs (delayed payments, loss of interest, etc.; increased project costs). All innovative projects (research and venture) are subject to examination, the results of which are taken into account when making decisions on project financing. In some cases, the most effective opportunity to avoid negative consequences or reduce the level of risk in innovation activities is direct management influence on possible manageable risk factors. Such as: · analysis and evaluation of an innovative project; · checking prospective partners for an innovation project; · planning and forecasting of innovative activities; · selection of personnel involved in innovation activities, etc. The organization of protection of trade secrets in the organization plays a great role in reducing innovation risk. The choice of a specific way to minimize risk in innovation depends on the experience of the manager and the capabilities of the innovative organization. However, to achieve a more effective result, as a rule, not one, but a set of risk minimization methods are used at all stages of the project. Conclusion As a result of innovative activity, new ideas, new and improved products, new or improved technological processes are born, new forms of organization and management of various spheres of the economy and its structures appear. Innovation activity is a powerful lever that helps overcome the recession, ensure structural restructuring and saturate the market with a variety of competitive products. A company may find itself in a crisis if it fails to anticipate changing circumstances and respond to them in a timely manner. In conditions market economy It is not enough for a manager to have a good product; he must closely monitor the emergence of new technologies and plan their implementation in his company in order to keep up with competitors. Modern management must be management of an innovative type, that is, it must have a certain innovative potential. In a market economy, there are tendencies to accelerate development, compress time, and increase the number and variety of changes that characterize the operating conditions of a company. Management must keep up with the changes that are actually happening in reality. And the factor in such compliance of management with the changes that occur in economic life, science and technology is the innovative potential of management, which is formed in working with personnel, training managers, and organizing management focused on dynamics. In conclusion, it should be said that supporting innovative entrepreneurship is one of the priority areas of state scientific, technical and economic policy in all countries with developed market economies. In general, the implementation of innovative activities is of great importance for the development of the economy of each country; forecasting depends on which form of innovative activity is predominant economic development national economies all countries of the world. Bibliography 1. Barasheva A.V. Innovation Management: 2015 Goncharov V.I. Management. M. Modern school, 2014 Kirina L.V., Kuznetsova S.A. Strategy of innovative activity of the enterprise. 2016 Lapin N.I. Theory and practice of innovation. 2016 Morozov Yu.P. Management of technological innovations in market conditions. N. Novgorod, 2015 Nerisyan T.Ya. Entrepreneurship. 2014 Schumpeter J. Theory of economic development (study of entrepreneurial profit, capital, credit, interest and business cycle) 2015 Yarkina T.V. Enterprise economy. 2016Similar works to - Strategic planning of innovation activities
The choice of strategy is the most important component of the innovation management cycle. In a market economy, it is not enough for a manager to have a good product; he must closely monitor the emergence of new technologies and plan their implementation in his company in order to keep up with competitors. Innovation strategy can be integrated with the decision-making process. In both cases, there are goals (strategy objects) and means by which the goals are achieved (decisions are made). A clearly defined innovation strategy is important for driving innovation. Besides, innovation strategy means an interconnected set of actions in the name of strengthening the viability and power of a given enterprise (firm) in relation to its competitors. In other words, innovation strategy–this is a detailed, comprehensive, comprehensive plan for achieving your goals. An increasing number of firms recognize the need for strategic planning and are actively implementing it. This is due to growing competition. You have to live not only for today, but also anticipate and plan possible changes in order to see and win in the competition. The choice of innovation strategy is also associated with the development of plans for conducting research and other forms of innovation activity.
Strategic planning has two main goals:
1) efficient distribution and use of resources - this is the so-called “internal strategy”, where it is planned to use limited resources, such as capital, technology, people. In addition, the acquisition of enterprises in new industries, exit from unprofitable industries, selection of an effective “portfolio” of the enterprise are carried out here;
2) adaptation to the external environment, i.e. the task is to ensure effective adaptation to changes in external factors (economic changes, political factors, demographic situation, etc.).
In addition, strategic planning is based on conducting numerous studies, collecting and analyzing data, which allows you not to lose control of the market.
Development of an innovation strategy begins with articulating the overall purpose of the organization. It should be understandable to anyone, since it plays an important role in the company’s relations with the external environment, market, and consumer.
The overall purpose of the organization must take into account:
– the main activity of the company;
– working principles in the external environment (principles of trade, relationships with consumers, conducting business relations);
– the culture of the organization, its traditions, working climate.
After setting the overall goal of the organization, the second stage of strategic planning is carried out - specifying goals.
Innovation strategy is the starting point for theoretical and empirical research. Organizations may differ in the extent to which their key decision makers have committed themselves to an innovation strategy. If the top management of an organization supports attempts to implement an innovation, then the likelihood that the innovation will be adopted for implementation in that organization increases. As senior management becomes involved in the decision-making process, the importance of strategic and financial goals increases.
The developed innovation strategy is rarely purely formal and is often based on the assessments and intuitions of several employees from senior management. It is carried out according to the following scheme: phase A is the most difficult. The mechanism for its implementation is clearly presented in Fig. 5.3.
Many innovation strategies arise after an idea associated with an innovation.
Rice. 5.3. Phases of strategic planning
To assess the innovative strategic state of an organization, various methods can be used: key questions method, SWOT analysis method, SPACE method and other methods1 (Fig. 5.4).
Rice. 5.4. Formulation of innovation strategy
Key question method is based on asking questions and analyzing answers to all factors of the organization’s external and internal environment that hinder or facilitate the achievement of the organization’s goals.
SWOT analysis method is based on first identifying the strengths and weaknesses of the organization, external threats(threats) and opportunities (chances), and then - on establishing chains of relationships between them for the subsequent establishment of adjustments to the organization’s goals and the choice of strategies to achieve them.
Thus, it is first necessary to identify strengths, weaknesses, opportunities and threats and summarize them in a table (Table 5.2).
Table 5.2. SWOT Analysis Factors
Then you need to create a SWOT matrix (Table 5.3).
Table 5.4. Opportunity Matrix
The impact of threats on organizations is assessed in a similar way (Table 5.5).
Table 5.5. Threat Matrix
Rice. 5.5. Coordinates of the enterprise state
SPACE method (strategic assessment of provisions and actions) is based on an analysis of the position of the company and the conditions of its functioning along four coordinates: along competitive advantage companies (CA); by its strategic potential (SP); by industry attractiveness (IA); according to the adequacy of the macroenvironment (M).
Then, using tables of certainty status indicators, the values of IA, CA, SP, M are calculated, and then the coordinates of the strategic state of the company at the present time: X = IA - (6 - CA). Y = SP – (6 – M).
The basis for developing an innovation strategy is the theory of the product life cycle, the market position of the company and its scientific and technical policy.
The following types are distinguished innovation strategies:
1)offensive– typical for firms that base their activities on the principles of entrepreneurial competition. It is typical for small innovative firms;
2)defensive– aimed at maintaining the company’s competitive position in existing markets. The main function of this strategy is to intensify the correlation between “costs and results” in the innovation process.
Such an innovation strategy requires intensive R&D;
3)imitation– used by firms with strong market and technological positions.
The imitation strategy is used by firms that are not “pioneers” in releasing certain innovations to the market. At the same time, they copy the basic consumer properties (but not necessarily the technical features) of innovations released to the market by small innovative firms or leading firms.
The innovation strategy is based on the “time is money” principle.
Directions for choosing an innovation strategy taking into account market position (controlled market share and dynamics of its development, access to sources of financing and raw materials, position of a leader or follower in industry competition) are shown in the following diagram (Fig. 5.6).
The choice of innovation strategy is carried out for each direction highlighted when setting prices. A simplified model of this choice, presented in matrix form below, was developed by the Boston Advisory Group and is designed to select an innovation strategy based on market share and industry growth rate.
According to this model, firms that have gained large market shares in high-growth industries (“stars”) should choose a growth strategy. Firms with high growth shares in relatively stable or declining industries (“cash cows”) choose limited growth strategies. Their main goal is to maintain positions and make a profit. Firms with a small market share in slow-growing industries (“dogs”) choose a strategy of cutting off the excess (Table 5.6).
Table 5.6
Market share
For enterprises that are poorly established in fast-growing sectors of the economy, the situation requires additional analysis, since the answer here is ambiguous and there are two alternatives:
1) intensification of efforts in this market;
2) leaving the market.
When choosing options for an innovation strategy, a company can use the “Products” matrix – market" (Table 5.7).
When adopting a particular innovation strategy, management must take into account four main factors, namely:
1) risk(what level of risk the company considers acceptable for each of the decisions made);
Table 5.7. Matrix “Product – Market”
| Products currently manufactured, in% | New products related to existing ones, in % | Brand new products, % | |
| Available market | |||
| New market, but connected to existing one | |||
| A completely new market |
2) knowledge of past innovation strategies and their results, the application of which will allow the company to more successfully develop new innovative strategies;
3) time factor. Often good ideas fail because they were introduced at the wrong time;
4) reaction to the owners. The strategic plan is developed by company managers, but owners can often exert strong pressure to change it. Company management should keep this factor in mind.
The development of an innovation strategy can be carried out in three ways: top-down, bottom-up and via consultation form. In the first case, the strategic plan is developed by the company's management and, like an order, descends through all levels of management.
When developing “from the bottom up”, each department (marketing service, financial department, production departments, R&D service, etc.) develops its recommendations for drawing up strategic plan within the framework of their competence, then these proposals are submitted to the management of the company, which summarizes them and makes a final decision for discussion in the team. This allows you to use the experience accumulated in departments directly related to the problems being studied, and gives employees the impression of a commonality throughout the organization in developing an innovation strategy.
In addition, the company can use the services of consultants to study the organization and develop an innovation strategy.
In today's conditions, the actions of Russian industrial enterprises focused on innovative development resemble panic rather than a system of strategic planning. What does panic look like? In companies there is a feeling that there are many innovative projects and control over their formulation and development is lost. Management is under time pressure from an overabundance of information that exists in different systems and is difficult to compare. Even if strategic planning is carried out, the plans are not implemented due to the multi-level innovation process and management in general. The lack of developed management accounting technology leads to the fact that, given the overall stable situation in the company, it is not clear whether there is potential for innovative development, although innovative activity is being carried out. Innovative and self-learning companies that are part of an organizational network become vulnerable due to a divergence of interests, which can lead to the departure of an individual company and, as a result, the destruction of the network as the basis for innovative development.
Difference modern approach to the implementation of innovative activities is that innovation is based not so much on the results of global novelty and creative changes, but on effective strategic management innovation processes, occurring both in an individual company and within an organizational network. Innovation in in this case is the choice of a system of strategic modernization. Questions arise: do companies know which innovation strategy to choose and how is this strategy implemented under the current conditions?
The use of network interaction by self-learning companies is not only possible, but also a necessary means of ensuring innovative development. Any industrial enterprise is a self-learning organization, since the production of conventional goods and services is being replaced by the production of socially and culturally accentuated products that assume the ability to meet needs and technologically meet the standards set by the current state of the sphere of ideas and technologies.
The management mechanism based on network interaction of self-learning companies directly depends on the formed and selected innovative strategy of the self-learning company, which determines its place in the organizational network.
Thus, it is not practical for learning companies to develop a strategic planning process and an innovation strategy formation process at the same time. It is necessary to give the development of a company strategy focused on innovative development a comprehensive look: integrate an analysis of the innovativeness of the external and internal environment into the strategic planning process.
Strategic planning of a self-learning company can be called innovation-strategic planning and occur in a self-learning company as shown in Fig. 11.3.
Stage I. Mission and goals of the company. The formation of an innovative strategy for a self-learning company begins with a clear understanding of the mission and operational goals. Mission in strategic management is the overall goal of the company. It determines the essence of the organization and the prospects for its growth 1 .
Rice. 11.3.
Currently, according to V.N. Basa, four projections of indicators are strategically important, taking into account such critical aspects as market, finance, business processes and intellectual capital. This system is not just a set of goals and indicators, but a system of cause-and-effect relationships between them. The organization's strategic goals in four important areas of its activities (finance, marketing, internal processes, development) are linked into a single goal map.
In our opinion, it is Bas’s map of goals that will ensure the innovative development of a self-learning company that operates on the basis of both internal potential and market-oriented ones.
Stage II. Analysis of the external environment. At this stage, the state and prospects for the development of environmental factors of direct and indirect impact that are important for the company are assessed. Analysis serves as a tool by which strategy developers monitor the state of external factors in order to anticipate potential threats and emerging opportunities.
Due to the priority of innovative development, it is advisable to highlight, along with the external and internal environment, innovative demand (analysis of the innovative situation), the study of which allows the company to achieve its goals of innovative development.
When determining innovative demand, a self-learning company develops ideas about the desired need for an innovative product and about innovative conditions for the development of its business.
Innovation demand is the established market needs for innovation over a certain period of time and scientific and technical conditions in the company’s environment that influence the implementation of innovation activities within the framework of a particular innovation strategy.
At any given point in time, the level of innovative demand may be lower than desired, meet it, or exceed it. Accordingly, for each company the desired level of innovative demand is determined individually. In this regard, the analysis of innovative demand will be based on three level gradations: low, medium and high.
The determination of innovative demand is based on calculations of the saturation of researchers, specific gravity shipped innovative products, coefficients of inventive activity, patenting, etc.
Assessing innovative demand allows us to identify the main innovative characteristics of a sector of activity, field of science, subject, assess the forces of competition and competitive positions of companies, predict the likely actions of closest competitors, assess the prospects for the development of a sector of activity, and consider the priority of the direction of development.
Stage III. Management survey. Analysis of the internal environment of the company reveals the potential that the company relies on in competition to achieve its innovative goals.
IMPORTANT. The main factor determining the innovation strategy is the company's innovative potential. A self-learning organization, being part of the external environment, must in its innovative activities not only adapt to any change in the external environment, but also be able to adapt its internal environment, which is facilitated by assessing potential, identifying weaknesses and strengths and developing its components.
Analysis of innovation potential as a process of comprehensive analysis of the internal resources and external capabilities of an enterprise in the field of innovative activities should be identified as a substage of the management survey of innovation and strategic planning.
The assessment of innovative potential occurs on the basis of studying the functional areas of the company, such as the research component, personnel, finances and material and technical base.
The results of assessing innovation potential make it possible to identify its reserves and capabilities (strengths), bottlenecks (weaknesses) and determine the directions for adapting innovative capabilities to environmental conditions when choosing an innovation strategy.
The ultimate goal of assessing innovation potential is to make decisions regarding the choice of strategic direction for innovation activities.
Stage IV. Analysis of alternatives and choice of innovation strategy. The identification of strategic alternatives is the next stage of the strategic management process, which occupies a key place. There may be quite a lot of different alternatives, but in practice they are limited by the potential innovative capabilities of the organization, depending on the dynamics of innovative developments, availability of financial resources, personnel qualifications, availability of material resources, etc.; requirements of the external environment and company goals. The formulation of an innovation strategy occurs according to the following classification: research leadership strategy, research trading strategy, entrepreneurial strategy and businessman strategy.
Research Leadership Strategy characteristic of those self-learning companies that, developing internal potential, independently manage all processes of innovation development. These companies generate their own innovative ideas, which they then develop and implement into production, i.e. create and implement innovations.
The research leadership strategy is implemented by enterprises with a fairly strong R&D department engaged in diverse research and enterprises with high technological potential.
Research trading strategy is based on the fact that these companies specialize only in some innovation development processes, in particular in distributing the results of their activities in the form of innovative developments “outside”. In most cases, these are those enterprises that work to order.
Entrepreneurship Strategy lies in the fact that on the basis of an acquired innovative idea or product (for example, by purchasing a license), a company, carrying out innovative activities, creates innovations. The success of the strategy depends on adapting the development to the conditions of a specific production, which requires an appropriate technological level of production, professionalism of workers capable of quickly mastering “alien” innovative ideas and technologies.
Businessman strategy characterized by the fact that these companies acquire the best ideas, products, innovations from a variety of sources and offer customers products according to competitive prices. Companies that adhere to this strategy have a clear market orientation and competent marketing (detailed research of innovative demand, test marketing, market orientation).
When a company chooses an innovation strategy, competent persons must answer the question: why is it necessary to change the innovation strategy and is it necessary at all?
The organization will choose the strategy that allows it to fully use the existing potential in accordance with the situation in the external environment.
To demonstrate the possibilities of making a long-term choice of an innovation strategy, depending on the levels of innovation demand and innovation potential, a matrix “innovation demand - innovation potential” is created (Fig. 11.4). As a tool for choosing an innovation strategy and leveling abilities industrial enterprise towards innovative development, it clearly demonstrates the prospects for strategic choice in the field of innovation, which is extremely important for ensuring sustainable business development in the conditions of the emerging innovative economy.
Rice. 11.4.
The logic of the matrix is based on the fact that:
- ? the location of the innovation strategy in the matrix depends on the levels of innovation potential: the higher the level of innovation potential, the more opportunities there are to carry out your own R&D and use them in the company’s activities (the research leadership strategy can only be realized with high innovation potential);
- ? levels of innovative demand determine both the market orientation of the organization and the possibility of a self-learning company occupying a market position (a businessman’s strategy, which is implemented only at high and medium levels of innovative demand, otherwise the meaning of their activities is lost);
- ? building up innovation potential can lead to the initiation and increase of innovation demand (diagonal movement of innovation strategies, for example, the strategy of trading research and entrepreneurship).
Thus, when increasing innovative potential, thereby initiating innovative demand, companies move to a higher level of innovative development.
Stage V Management of implementation of innovation strategy. Executing the strategy is the most difficult, since this is where all the developments and intentions of the previous stages materialize.
Having formalized the innovation strategy, it is important to build a system that would ensure its effective implementation. It is necessary to translate the strategy and overcome resistance in the organization 1 .
The plan for implementing an innovation strategy involves specifying the general strategic provisions of the enterprise’s innovation activities, i.e. development of directions and programs of tactical measures to achieve specific goals provided for in the innovation strategy of the enterprise. Using the position of L.N. A basic plan for implementing an innovation strategy, depending on the type chosen, may look like this:
- 1) carrying out R&D to develop an innovation idea, carry out laboratory research, produce laboratory samples of new products, types of new equipment, new designs and products;
- 2) selection of new types of raw materials for the manufacture of new types of products;
- 3) development of a technological process for the manufacture of new products;
- 4) design, manufacture, testing and development of samples of new means of labor, i.e. new equipment necessary for the manufacture of products, including machines, mechanisms, instruments;
- 5) development and implementation of new organizational and management solutions aimed at implementing innovations;
- 6) research, development or acquisition of necessary information resources and information support for innovations;
- 7) preparation, training, retraining and special methods for selecting personnel necessary for R&D;
- 8) carrying out work or acquiring the necessary documentation for licensing, patenting, know-how;
- 9) organization and conduct marketing research to promote innovation.
The outlined plans are implemented depending on the innovation strategy and the choice of unique advantages (research activities, purchase and sale of innovative developments, etc.).
Organizational support for the implementation of an innovation strategy is mandatory due to the fact that innovative activities (different from conventional ones) occupy a special place in the company’s space, ensuring its development as a whole.
Options for spatial allocation of innovation activities depend on the capabilities of the company and its scale and can be as follows:
- ? creation of scientific and technical departments;
- ? creation of a project team (both an independent unit and within the framework of a design-functional or matrix organizational structure);
- ? creation of an enterprise within a divisional organizational structure;
- ? creation of joint research centers with subjects of the external environment;
- ? acceptance of individual employees performing functions for the implementation of innovative activities.
Stage VI. Evaluation of innovation strategy. The main goal of innovation planning is to assess the achievement (or non-achievement) of certain specific indicators of innovation activity. In the course of monitoring the implementation of indicators, the degree of this implementation is assessed, the causes and consequences of emerging deviations are identified and assessed. From this, the process of adopting a certain system of measures aimed at eliminating the identified negative manifestations should logically follow. In this case, a return to the “Mission and Goals of the Company” stage may occur (if corrective action is necessary).
“Innovation in the activities of an enterprise matters only when it improves activities in accordance with the business development strategy. In fact, innovation in the process of an enterprise’s activities is impossible if they are random one-time impacts and are not focused on the strategic part of doing business and imply the achievement of strategic goals.”
Innovative business even more than other types commercial activities needs strategic planning. Strategic planning ensures the ability of an innovative business to be competitive through the concentration of innovative resources, a significant improvement in the results of innovative activities and the disclosure of those innovative opportunities that would allow them to obtain investment resources. For those investors and lenders who are considering financing an innovative business, the development strategy of an innovative enterprise makes it possible to distinguish the enterprise from its competitors and increase the chances of obtaining financing.
The strategic planning process includes four stages:
- Strategy Development
- Planning
- Execution
- Continuous improvement.
Each stage is an integral part of the strategic planning process. The strategy determines where the main efforts need to be focused in order to achieve the goals. Much of planning involves communicating the new strategy within the enterprise and discussing how to implement that strategy with the enterprise's shareholders, customers, investors and creditors. Execution represents the implementation of enterprise plans. Finally, continuous improvement means continually adapting and improving plans as they are implemented over time. Therefore, developing a successful strategy is an ongoing process and not a one-time event.
Why do strategic planning?
- To ensure stable development in an uncertain business environment;
- To take advantage of rapid changes in technological capabilities;
- To assess the restrictions placed on your activities;
- To search for opportunities;
- To remain competitive.
What is strategic planning?
Strategic planning is the process of developing and continuously strengthening the sustainable competitiveness of an enterprise. Strategic planning provides for the management of an enterprise that allows it to achieve its goals. Strategic planning solves the following problems of the enterprise:
- What customers will the enterprise have, and in what markets will the enterprise operate;
- What business processes should be developed at the enterprise;
- What are external factors, which most influence the results of the enterprise’s activities;
- What new products or new services will be offered by the enterprise;
- What specific parameters of the enterprise need to be most developed;
- What financial, material, technical and human resources will be needed to implement the chosen strategy.
In other words, strategic planning shows how you will manage the business over the next few years, what resources are needed to make your business successful, what you need to do in order to achieve your goals, and what risks await you along the way. ways.
The most limited resources are time and money. Therefore, one of the most important tasks of strategic planning is making decisions about the allocation of resources between the different needs of the enterprise. This decision-making process is the core of strategic planning. Without strategic planning, resource allocation may occur on the spur of the moment and be based on considerations of immediate need rather than on strategic importance, i.e. work on the principle of “solving burning problems.”
A company must determine where its efforts will be concentrated so that it can develop its full potential. Will the enterprise depend on customers, or will it rely on innovation, excellence? technological processes, precise management of logistics or technology?
Strategy is not the producer of various plans. Plans are just a by-product of strategy development. Strategy is the producer of results. Strategy is part of the enterprise management process. As with any process, when developing a strategy, one “gets back what you sow.” Investments of both time and money in strategic planning bring huge dividends in the form of unlocking the potential of the enterprise, creating a capable team and constant attention aimed at achieving the set goal. Ultimately, strategic planning leads to increased competitiveness of the enterprise.
Table 1.
Characteristics of Strategic Planning Systems
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Characteristics of Strategic Planning
The specific characteristics of strategic planning systems are summarized in Table 2 and are based on a five-point Likert scale ranging from 1 – “no focus on this characteristic” to 5 – “heaviest concentration on this characteristic.” Inward orientation is assessed through the possible degree of attention paid to customer service , the efficiency of the production process, attracting and retaining highly qualified personnel and analyzing the strengths and weaknesses of the enterprise.
Outward orientation is assessed by four factors related to the analysis of opportunities for the use of investments and unallocated funds, competition and market analysis. Functional orientation is measured on a four-point scale that differentiates the expected degree of emphasis placed on functional planning, coordination, and integration in strategic planning activities. Key personnel participation is assessed by the extent to which the business manager, board members and managers at various levels are involved in the strategic planning process. Creativity in strategic planning is assessed on a nine-point scale that describes the enterprise's ability to anticipate surprises and crises, adapt to unforeseen circumstances, etc. Management aspects are rated on a 10-point scale indicating the degree of concentration on managerial motivation, cross-exchange of information in the organization's hierarchy, integration of production aspects, etc. Finally, the use of planning methods is assessed by the degree of emphasis placed on the use of financial models, investment portfolio analysis and predictive analysis techniques.
Table 2.
Weight characteristics of Strategic Planning Systems
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What does strategic planning provide?
- Assessing the direction of business development - how the functional tasks of the business are changing;
- Assessing the direction of development of the enterprise as a company;
- Assessing the direction of technology development - which technologies will be cost-effective in the future;
- A strategic plan that coincides with the essence and goals of the enterprise;
- A strategic plan that reveals critical parameters in the activities of the enterprise.
What are the benefits of strategic planning for an enterprise?
- Concentration on parameters critical for the successful achievement of business goals;
- Risk minimization;
- Improving the use of resources;
- Increasing the flexibility of the enterprise;
- Getting rid of redundant parameters of the enterprise’s activities;
- Setting priorities for the enterprise;
- Determining the general direction of development of the enterprise;
- Reducing the volume of unfulfilled tasks and unachieved goals.
What is the cost of not having a strategic plan?
- Loss of competitiveness;
- Management crisis – control actions solve accumulated problems, rather than anticipate their occurrence;
- Moving in too many directions and accumulating unfulfilled tasks and unachieved goals;
- The enterprise is strongly influenced by the external environment;
What critical questions must be answered to determine the essence of business development?
- What business do we want to work in?
- What abilities and capabilities can we take with us to move forward?
- What will our competitors do?
- What to do to stay competitive?
Opportunities for innovative business are constantly expanding. Until recently, many innovative enterprises, especially at the initial stage of development, were limited only to local markets. Nowadays, world markets are open even for the most beginners. At the same time, global competition is intensifying. This leads to the fact that the main task of strategic planning is to ensure the sustainable competitiveness of the enterprise. The constant introduction of new technologies is often the main strategic factor for successful competition for many enterprises. Moreover, an even more important factor in competition between innovative enterprises the speed of implementation of new developments becomes. Over time, more and more investment funds become available in the economy. But at the same time, investors are becoming more and more selective. Therefore, the need for strategic planning, which would determine the prerequisites for the successful operation of an enterprise, becomes acute and relevant.
InvestmentsOften, businesses develop business plans to obtain financing. However, nowadays investors and lenders more often require a potential investment target to develop strategic planning rather than write a production business plan. Therefore, a business plan should reflect approaches to strategic planning. Such approaches are an indicator of how successfully the management of the enterprise manages its activities. A business plan is a reflection of the fact that management understands the state of the company and the environment in which it operates, all members of the company understand the company's goals and the strategy for achieving these goals. Lenders and investors are more interested in your strategy than in financial projections, because your approach to the enterprise development strategy shows how more or less likely it will be for you to achieve the financial projections shown.
Why do strategic planning?A strategic plan is similar to the game plan of any sports team. Without a specific game plan, the coach could simply instruct the team with the words “Get out on the field and play.” Although it is possible for such a team to win due to the physical abilities of the players, this is unlikely. At the same time, good players alone are not enough to win games. Many entrepreneurs have great ideas, but cannot implement them successfully. You need to have both a great strategy and great execution. Even then, success cannot be guaranteed. However, having both, an entrepreneur significantly increases his chances of success. This principle is key to strategic planning: combining great strategy with perfect execution. What is ultimately important is not strategic planning itself, but how it is complemented by three key parameters: planning, execution and continuous improvement.
Strategic planning and excellent execution are essential elements in achieving success in today's competitive world. Another essential element is the exchange of information. In the process of implementing plans there should be Feedback and continuous adjustment and adaptation of plans. This process is called continuous improvement.
Investments in strategy development increase the company's chances of success, unite the company's management and performers to solve the same problems. In this regard, is strategic planning a short-term or long-term task?
Many people believe that strategy is a long-term goal. It is disputed that the strategy may be short-term. In reality, strategy has nothing to do with timing. Strategy deals with competition. The following example can be used to demonstrate the last statement. Imagine that you are the general of the only army in the world. There are no competitors like other armies. As a result, you don't need a strategy. Instead, you need a good one production plan, which would decide what color uniform soldiers should wear and how to select musicians for regimental orchestras. However, as soon as another competitor is brought into the “battle,” strategy immediately becomes an important factor. Therefore, strategy has nothing to do with time. Strategic planning deals with competition.
Is strategic planning the prerogative large enterprises? Strategy has nothing to do with the size of the enterprise. In any competitive environment, enterprises that can think through their actions better than competitors, plan their activities better than competitors and maneuver in the market better than competitors receive competitive advantages.
SMEs must develop a strategy that covers the competition over the next three years. Because there will be rapid technological and marketing changes, these businesses will need to adapt their plans to changes in the internal and external environment. Like the general above, you will need to revise your tactics and refine your maneuvering techniques. This flexibility is the key to success.
Strategic planning is a dynamic process. As the enterprise implements the process of its development, the behavior of the enterprise in the market also changes. Action must be taken quickly enough. Rapid action based on a strategic approach and rapid success create the driving force for moving forward.
Most entrepreneurs, especially in innovative businesses, make excellent decisions on development strategy, because they are constantly thinking about how to improve their business. In this regard, there is no shortage of strategic ideas. Therefore, when an innovative business fails, it is most often the result of weak planning, execution and continuous improvement processes. Many entrepreneurs think that everyone else on their team understands the goals of their business, and therefore do not take the time to communicate the goals of the enterprise to everyone. Many entrepreneurs have great ideas, but fail to successfully implement them. Often, businesses cannot simply focus on the critical parameters that would help them achieve success.
StrategyThe strategy development process should be fun, driven by clear motivations, and energize the enterprise. The strategy development process is a time of reflection about the business, it is a process of moving away from daily worries and thinking about the future of the enterprise. To enhance strategic thinking, it is recommended that the entire management team take a break from daily worries for at least two days and invite an independent specialist – a consultant – to help formulate the strategy. The consultant must know the strategic planning process and have experience in business in order to create practical recommendations, and also have the ability to systematically summarize the results of group discussions.
The strategic planning process begins with an honest assessment of the current business situation. Albert Einstein is credited with saying that if he had only one hour to solve the problem of how to save the world, he would spend the first 50 minutes analyzing the problem itself. This concept also applies to strategic planning. However, many entrepreneurs indulge in daydreams and are never able to develop a plan to achieve their goals.
The strategy development process answers the following 4 questions:
- Where are we now?
- Where are we going?
- How will we reach the goal?
Although this may seem like a very simple task, in reality it is not. However, the strategic planning process, consisting of the above 4 components, provides a certain structure for the efforts of entrepreneurs and helps to obtain maximum results from entrepreneurial activities.
Where are we?The answer to this question represents an understanding of what the enterprise is and its activities today. This is an objective assessment of production activity in the broad sense of the word. This analysis of an enterprise is often called “looking at your business from across the street.” You need to look at your business through the eyes of others. To do this, you need to look at your company from the point of view of the company's shareholders, customers of the company, its staff, suppliers, as well as from the point of view of management itself. At this stage, it is necessary to assess the strengths and weaknesses of the enterprise, describe its successful activities and failures that befell the enterprise, evaluate achievements and problems, opportunities and threats to successful activities. Strategists use another expression to describe this process: "The view from a balloon" or "The view from 10,000 meters." This process of collecting information about the enterprise is not limited to a simple review of the financial parameters of the enterprise. This process also includes information exchange between the shareholders of the enterprise. Finally, sometimes the first step to solving a problem is recognizing that there is a problem.
The process of collecting data for strategic planning should include creating short reviews all types of activities of the enterprise, as well as collecting external information about the markets and economy in which the enterprise operates. All collected data is then presented to the team that will develop a strategic plan to objectively evaluate the business.
To make collection easier objective information It is recommended to survey those who represent individual elements of the enterprise, as well as all shareholders. These surveys should also include plant personnel, including various levels of management, customers and suppliers. These surveys should be conducted by persons independent of the management of the enterprise, since if these surveys are conducted by the management itself, it will not receive objective results. Since it is impossible to interview everyone, you need to select representatives from different groups of respondents. The survey should be carried out on the basis of a single questionnaire and contain sufficient space to discuss those issues that respondents consider important for the development of the enterprise’s business.
During strategy development, the first day is devoted to revision and discussion of the strategic assessment of the enterprise. The more accurate the assessment, the easier it will be to determine what you need to work on to achieve your goals.
After an assessment of the current state of the enterprise is presented to strategy developers, the next step is to analyze this state. Simple and effective way carrying out this analysis is a SWOT analysis, or an analysis of the strengths and weaknesses of the enterprise, the opportunities of the enterprise and the threats to its activities. SWOT analysis allows you to structure information and determine how to take advantage of strengths, how to deal with weaknesses, how to consider opportunities and how to defend against threats. As you go through this analysis, you will inevitably respond to the information by developing solutions to the problems identified.
However, you must not fall into this trap. You need to listen, study and analyze all the facts before making decisions. Your consultant should write down all ideas expressed and suggested actions so that you can review them later. At this stage, the main task is not to focus on problems and weaknesses, but to objectively assess the situation in which the enterprise finds itself today.
At this stage, you can only determine those aspects of the enterprise’s activities on which you must concentrate to achieve your goals. Only when you have seen where your business is today can you look into the future through the lens of what you would like to achieve, where you would like to be with your business and how you will get there.
Where are we going?Once you have conducted a strategic assessment of your business, you need to understand what direction the business should take. You must present your enterprise in 3 years. What will you achieve in three years? What capabilities have you developed? What do your customers, suppliers, staff and shareholders say about your business? What financial results have you achieved? What key achievements have you achieved? Although this process involves a certain amount of dreaming, you must remain realistic and your future must be achievable. You need to balance ambitious goals with the understanding that the future you envision is achievable. An achievable future must be understood by all team members. Then the future will become “desired” by everyone.
During the strategic planning process, team members must describe in detail the vision of the future state of the enterprise with all its main elements. The more clearly this vision is described, the easier it is to understand this future and communicate it to the entire team. Vision is an appropriate term because... the term itself implies that you must see what the future should look like. When developing a vision for the future of your enterprise, you must consider the strategic goal of your business development. This means you must decide whether you will focus on operational excellence, customer relationships, products and services, innovation, sales and marketing, or channel development. Identifying points of concentration will form a vision of the future and will help you concentrate on selected points in the process of executing your chosen strategy. Choice main goal business or business driver helps determine what knowledge the team must have to achieve its goals. Developing this vision of everyone's desired future business takes at least half a day.
How will we reach the goal?After you have rated Current state business and have developed a shared understanding of the vision for the future of the business, the process of determining how to achieve your goals becomes much easier. This process is often called "gap analysis." This analysis identifies the discrepancies between where you are now and where you want to be.
At this stage, you identify the aspects of your business that you need to change and focus on in order to move from where the business is now to where you want it to be in the future. Although you cannot anticipate every possible obstacle, your goal is to focus your control efforts on identifying the critical parameters that determine the success of your business. The strategic vision you developed in the previous stage helps define these critical parameters. You need to answer the following questions: What parameters of the enterprise must you develop in order to achieve your goals? What infrastructure objects should attract your attention first? What obstacles do you face? What resources do you need?
The answer to the question “How are we going to achieve our goals?” also includes identifying those key parameters showing the results of your activities that correspond to the parameters critical to achieving success. These key parameters create the basis for managing the progress of change in the enterprise, and these parameters may differ from the management methods that you have previously used in your activities. One of the keys to successfully executing the strategy you have developed is managing the measurables of your business. The old saying “You are what you measure” is true in this case. Identifying and measuring the key metrics that describe your business helps you focus on the critical success factors to turn your vision into reality. This helps you implement the changes in your business that are necessary to achieve your goals.
Finally, you must decide whether the organization of your business fits into your chosen strategy. For example, do the compensation programs you use improve the achievement of your goals? Often, a business plan states some goals, but the company’s management stimulates completely different ones with compensation programs. It is important that all structures of the enterprise understand their benefits from the fact that the enterprise achieves its goals.
How will we support the process of constant change?The key to success is constant change to reflect the changing environment. Many businesses engage in strategic planning but then lack the will to implement the chosen strategy and make ongoing changes to their organization. For example, when you return to the day-to-day business of your business after developing strategic plans, you may find yourself caught up in routine and immediate problems. This cannot be allowed to happen. The strategic planning process must develop activities that will provide an environment for the ongoing implementation of strategic plans. This requires some structure and discipline and usually involves constant discussion of what has been achieved.
Upon completion of strategic planning, you need to address those problems and questions that have accumulated during your absence. Only after you have dealt with production crises can you focus on the factors identified in the strategic plan that are critical to your success. A process must be developed to continually implement the elements of the strategic plan to keep the plan alive. Otherwise, strategic success cannot be achieved. In order for the strategic plan to “live”, it is necessary to conduct discussions about the goals set, plans for achieving them and the state in which the company is on the path to achieving these plans. In order to formalize and structure the process of working on the implementation of the strategic plan, it is necessary to perform the following set of works:
- communicate to all company employees the goals set for the enterprise;
- assign responsibility for individual key components of the strategic plan;
- define group and individual goals;
- identify key activities to implement the strategic plan;
- holding ongoing discussions on the progress of the strategic plan.
It is recommended that discussions on the progress of the strategic plan be held at least once every two weeks. This good way in order to renew the enthusiasm that was achieved in developing the strategic plan. Discussing the strategic plan allows for a clearer understanding of the challenges to executing the plan and ensures that team members are committed to the strategic plan. Creating a constant driving force to achieve your goals requires a lot of discipline. Part of business activity should be the constant introduction of changes to the business processes of the enterprise. The introduction of new methods for assessing enterprise performance, new forms of reporting on the progress of work, new compensation plans that coincide with strategic goals, new investment priorities - all this can help in the implementation of strategic plans.
PlanningOnce you have developed a company development strategy, you know in which direction you are moving and how you need to reach your goals. After this, you need to convey the content of the strategic plan to all structures and employees of the company. Many companies do not spend enough time on this information sharing process. However, if the communication process is not well established and the company's employees and shareholders are not aware of the strategic plans, execution of the strategic plan will be very difficult. The contents of the strategic plan must be explained to all owners, shareholders and employees of the business, as well as customers and investors, emphasizing how they can help implement the plan and what they will gain from implementing the plan. Repeat your plans and report progress at every opportunity.
It is necessary to begin the exchange of information immediately after the development of the strategic plan, while all the ideas are still fresh in the minds of all participants. This will also allow all participants in the process to understand what agreements have been reached, to understand what contribution each team member can make, and what prospects await the enterprise. The information exchange process may also include regular meetings to discuss the progress of the strategic development plan, develop corrective control actions, redistribute responsibilities and material and technical resources.
A month after developing the strategic plan, you need to hold a meeting with staff to discuss the results achieved. The manager of the enterprise must explain what has been done over the past period and describe the goals that have been developed. Such a meeting should be motivational. If the meeting is held on an upswing, then the team should have a feeling of success of the enterprise in the future. It is necessary to explain the essence of the factors critical to success and the parameters showing the effectiveness of the company. Need to distribute summary report to everyone present. The main task Such a meeting is to present the developed strategy, create motivation among the team and ensure that all team members contribute to the overall success of the enterprise. Only through the participation of all team members can you achieve commitment to your idea. Your employees need to understand their roles and understand that they are expected to run the entire enterprise successfully.
Writing a business planSometimes, notes taken at the management team meeting to develop the strategic plan may be sufficient to communicate the results of strategic planning. However, a more detailed presentation of all aspects of the enterprise’s activities may be required in the context of the implementation of the strategic plan. Therefore, another effective means of communicating the strategic plan is the business plan. Growing businesses typically lack cash flow. Therefore, developing business plans helps an enterprise determine its financing needs and ways to attract this financing. If additional financing is needed to implement a strategic plan, most lenders and investors will request a written business plan. This plan is prerequisite obtaining financing and is a document useful both for investors and for the founders of the enterprise itself and its employees. While a well-written business plan will not guarantee funding, a poorly written business plan will result in your proposal being rejected.
Before you can develop a business plan, you need to develop a strategy. Although this axiom seems obvious, many entrepreneurs start by writing a business plan. If you don't have a clear strategy, you won't be able to implement your plan or get funding. Investors and lenders have a well-trained eye to recognize when management companies have not thought through the project in detail and/or have not developed a project strategy. Although lenders and investors will consider financial indicators of your plan, they are most interested in the strategy behind the plan. They want to make sure that opportunities are achievable, that plans to achieve goals are good, and that enterprise management is able to implement the plan.
A good plan should convey this information to the reader. While outside consultants can help write a business plan and develop a strategy, the plan must grow from the depths of the enterprise. An effective business plan should be a useful tool for running an enterprise. If the business plan captivates the reader, he/she will want to know more about the opportunity presented in the plan.
An important component of the business plan is financial projections. This data is a quantitative expression of your plans for business development; they are the expected financial result of the implementation of your plans. Many entrepreneurs make the common mistake of starting the development of a business plan by calculating specific parameters. Calculating financial projections that reflect what the reader wants to see in a business plan, rather than demonstrating a strategy, is a recipe for failure. This approach is often called “planning turned on its head.” Profit is not the result of focusing on the quantitative indicators of your business. Profit is the result of your business growing correctly. Making a profit is not a strategy, it is a result. Strategic planning helps you identify the critical factors that will determine whether you will achieve your goal. Demonstrating quantitative metrics should be the end of the business planning process that will show where you are going and how you will achieve your goals. The numbers become a simple financial expression of the plan.
Contents of the developed planOnce you have developed a strategic plan and gathered background information, you can begin to develop a business plan. Although you need to include some standard information in your business plan, you should reflect the unique features of your company and your situation. Keep in mind that for some readers, the information contained in your business plan may be the only information they have about your company. Therefore, you must create a positive impression of your company. You can think of writing a business plan as writing several memoranda on various topics. This approach facilitates the process of developing a business plan and allows you to delegate the functions of developing individual parts of the business plan to different team members. A well-developed business plan shows which budget or balance sheet indicators of the enterprise demonstrate the effectiveness of the enterprise, provides the criteria that management uses to make management decisions, and offers external readers an overview of the direction of the enterprise's development. The business plan should reflect the culture of the enterprise, its values and the distribution of leading roles in the company. The plan should be clear, concise and free of errors. The content of the business plan should be logical, for example, financial projections should correspond to sales volumes and the marketing plan. This may seem obvious, however, there are many situations where a business plan is not logical. Imagine the reaction of a potential investor if, when reading a business plan, he encounters contradictory statements and spelling errors. What would you think of the people who presented such a plan to you?
ExecutionExecution of the strategic plan is what differentiates one company from another. Strategy should be part of your business culture and part of your daily work. One of the most effective methods for implementing this approach is to change how you measure the success of your business. For each of the 5-6 factors that are critical to achieving success and highlighted in the strategic plan, you need to identify those key parameters of the enterprise that you must constantly record. In this case, all changes will be tightly woven into business processes at your enterprise. This may cause you to register parameters that you previously did not notice at all. For example, you may determine that for your business to be successful, it is necessary to maintain relationships with your clientele. Then you can evaluate the quality of these relationships at regular intervals by communicating with clients. To improve the effectiveness of such management, you must share the results of these activities with your team, regardless of whether they are positive or negative, and concentrate your team's efforts on implementing changes that would ensure the achievement of the required result.
Another factor in the successful implementation of the strategic plan is the identification of “strike positions”. This refers to changes that can be made quickly to set the stage for success and provide the impetus for moving forward. It is necessary to identify such “impact positions” and distribute priorities between them. Interim successes must be celebrated to accelerate the implementation of changes. Another effective tool for executing a strategic plan is changing the compensation strategy. Compensation measures need to be linked to performance results measured against the critical success factors identified in the strategic plan. This allows team members to concentrate on certain aspects of the enterprise. These factors and activities should reflect the content of your plan and be consistent with your compensation and benefit structure. This process is also called “levelling”.
Another component of successful execution is the degree to which you stick to the plan. Although small changes to the plan are inevitable, making major changes and frequently changing the rules of the organization can lead to the fact that employees of the enterprise no longer take the measures you implement seriously. The management top of the enterprise not only must support initiatives and pave the way for them, but they need to constantly remind employees of where they need to concentrate their main efforts during the implementation of the plan. It is necessary to constantly recognize successful employees, because... recognition of contribution to the common cause and moral encouragement are also an important component, along with monetary compensation.
Continuous improvementEven after a strategic plan has been successfully implemented, there is always room for improvement. This process of continuous improvement involves analyzing what could be done better, what measures worked better, and what measures did not produce the expected results. We need to ensure that the team is not so rigidly fixated on the strategic plan that it leaves no room for maneuver and change. For example, the strategy may change if it has changed external environment in the form of the emergence of new competitors or changes in economic legislation. Changes can be made through the mechanism of continuous assessment of the enterprise's activities. It is recommended to hold meetings to discuss the results at least once a month and develop course correction measures. A successful strategy includes focus, structure, discipline, intelligence, driving force, commitment, evaluability, compensation, communication, financing, goals and an environment that supports the implementation of the strategic plan. But if this process were simple and easy, everyone would realize their plans, be rich and happy.
