I have been getting requests ever since I wrote an article on the external sources of information for strategic decision to write this article on the needed information for strategic decision-making. While writing that post, I erroneously assumed that people looking for sources of information already knows what information they are looking for, boy was I wrong.
So, to cover that gap, this article on what information do you need for strategic decision-making is produced. Therefore, you need not send me anymore message as you now have a response from me.
To begin, let us start be gaining understanding on why information for strategic reason is needed in the first place.
Strategic decisions are critical choices made by an organization’s leadership to determine its long-term direction and objectives. These decisions often have a significant impact on the organization’s success and can influence its competitive advantage, financial performance, and overall sustainability. To make well-informed strategic decisions, you typically need the following types of information:
Information to Enable Market Analysis:
Market analysis entails a lot of tasks and activities ranging from establishing or disproving the existence or otherwise of a market. I will not be going into details but below are arears that you need good quality information on.
- Market size, growth trends, and potential.
- Competitor analysis, including strengths, weaknesses, and market share.
- Customer demographics, preferences, and behavior.
- Regulatory and industry trends that may impact the market.
So many literature are out there about SWOT analysis, therefore I will not be adding to that ocean of resources. However, I need to say that the below aspects are where you need information on for strategic purposes.
- Strengths, Weaknesses, Opportunities, and Threats related to your organization.
- Understanding your internal capabilities and external factors.
Finance no doubt is the life and oxygen of any organization. Whatever you do, you need good financial information if running a successful business is what you aspire. The problem is that many people find it very difficult to know what kind of financial information is needed for this purpose. Hence, find below the kind of financial information that you should be investing your time into acquiring.
- Current financial performance and historical data.
- Projections, budgets, and financial forecasts.
- Cost structures and pricing strategies.
Industry and Competitive Intelligence:
We now live in a world where the availability of data is no longer a problem – all thanks to the concept of big data. So, here are the kind of information that you should get busy with as you dive into mining those data.
- Industry trends and benchmarks.
- Competitive analysis, including products, services, and strategies.
- Emerging competitors and disruptive technologies.
Information on Internal Capabilities and Resources:
The greatest weakness in the business sphere is the weakness of not knowing what capabilities lies within an entity. All other efforts would amount to nothing if the already existing internal capabilities within a business were not understood. Your quest for information that will help you understand a business internal resources should revolve around the under listed.
- Assessment of your organization’s human resources, technology, and infrastructure.
- Identifying areas of expertise and core competencies.
No business operates as a silo island. Many stakeholders operate in any given business environment. Make sure that you spend your energy gathering and gaining insightful information about the following.
- Feedback from employees, customers, suppliers, and shareholders.
- Understanding their needs, concerns, and expectations.
One of my mentors popular saying is ‘I feel sorry for anyone who lacks risk assessment skill’. It took me some years before I realized the hidden gem behind this saying. Allocate more resources to the following areas when seeking information for risk assessment.
- Identifying potential risks and uncertainties in the market and the organization.
- Developing contingency plans and risk mitigation strategies.
Legal and Regulatory Information:
One of my favorite TV drama is ‘Law & Order’. Remove legal and regulatory aspects of things and observe first hand chaos for yourself. Your information gathering activities should focus more on the listed:
- Understanding compliance requirements, legal restrictions, and industry-specific regulations.
- How changes in laws and regulations may impact the organization.
- Relationship between political economy and business organizations.
Information on Technological Trends:
- Assessing the impact of technology trends and disruptions in your industry.
- Evaluating the need for technology investments or digital transformation.
Global and Geopolitical Factors:
Having a narrow tunneled vision is as good as not having a vision at ll. Focusing only on your immediate environment is tantamount to shooting your organization on the foot. Be sure to gather information that relates to:
- Global events
- Trade policies, and
- Geopolitical situations
What Customers are Saying Through Feedback and Surveys:
The kind of information that you seek here is subject to many factors. Just do whatever works well for you. At the very least, sniff these kinds of information
- Gathering input from customers through surveys, focus groups, or social media.
- Understanding their satisfaction, needs, and expectations.
Environmental and Social Responsibility:
Everyone gets excited once environmental topics are mentioned – even me. Research on these at the minimum:
- Consideration of environmental and social impact, sustainability goals, and corporate responsibility initiatives.
- Climate change summits
Strategic Goals and Objectives:
Here, your focus should be on clarity.
- Clearly defined organizational goals and objectives that the strategic decision should align with.
- Prioritization of these goals based on their importance.
There are instances when the objective is to gain reasonable information given too many uncertainties. If you find your business in those situations, you may lay emphasis on:
- Considering different scenarios and their potential outcomes based on various strategic choices.
- Sensitivity analysis
- What ifs
It is a very bad idea to only explore one option when seeking for the best cost management strategy.
- Evaluating the costs and benefits associated with different strategic options.
Second Opinion and Consultation:
Be sure to tailor your research towards:
- Seeking input and advice from experts, consultants, and other stakeholders.
Ethical and Moral Perspectives:
- Ensuring that the strategic decision aligns with the organization’s values and ethics.
Change Management Possibilities:
Until date, change management situations remain my top candidates for seeking strategic information. So many things can crop up at any time without making any grand announcement.
- How organizations plan to implement the strategic decision and manage the associated changes.
- How the decision fits into the organization’s long-term vision and mission.
Monitoring and Evaluation:
- Setting up Key Performance Indicators (KPIs) and metrics to assess the success of the decision over time.
Remember that the specific information required for a strategic decision can vary greatly depending on the nature of the decision and the industry in which the organization operates.
It’s essential to gather as much relevant and accurate information as possible and to involve key stakeholders in the decision-making process to ensure a well-rounded and informed approach.