Almost all good strategic planning processes start with reviewing the internal and external environments. It’s important to know what’s going on inside a company (by way of core competencies), what competitors are doing, what the industry is doing, and what world trends are. This is the background for reviewing whether incremental, next-generation or breakthrough ideas are needed and appropriate innovation capabilities are available. Lists of proposed products, services, and projects that could become a part of a company’s business and marketing portfolios are created. The next step then is the actual comparison of projects by looking both at their fit within the marketing plan and if technical capabilities exist. The last step is to summarize and review the choices that are being made. The “Strategic Planning Process” figure shows this process.

Although almost all consulting organizations and companies practicing good strategic planning agree on these four steps, the underlying methodologies often differ. Work within the Industrial Research Institute’s Research-on-Research Subcommittee found the best strategic planning methodologies have the elements illustrated in the “Strategic Plan Elements” figure.

This figure illustrations in a bit more detail how the plan develops from an environmental view (human resource, technical platforms, etc.), down through specific projects, to finally audits to ensure a company is building on in core competencies, and that the projects selected are consistent with the economic value each of them is creating for the organization.

When reviewing the projects one has lists of incremental projects that typically Strategic Business Units of a large Corporation (SBU’s) have brought forward from projects requested by key customers. Technology road-mapping that shows how next-generation projects support marketing releases over time. When summarizing all these different proposals, one of the best methods was found to use Star or Spider diagrams to be discussed later in detail. This was based on research conducted at California State University Long Beach by Betty White.

When undertaking these planning efforts it’s important to remember that the objective of such planning is to continuously develop a clear sense of strategy throughout R&D, marketing, business, manufacturing, and intellectual property organizations. This understanding sets the context for R&D, marketing, IP, and other activities. Clear roles, responsibilities, and processes for setting, validating and refining strategy with extensive cross functional participation throughout the planning process is essential.

As the technology strategic plan comes together it must be tested for its integration with the business strategic plan. A simple model for business strategic planning is shown in the “Elements of Strategic Plans” figure. It has four steps to the process.

These elements are listed in the order that they should be developed. Notice that this approach is at first very inward focused. This is designed to understand fully an organization’s core competencies so they can thoughtfully be built upon and leveraged to future advantage. When it comes to the impact on the technology strategic planning, the biggest element to remember is to use these perspectives for insight on how to change, not on how to continue to do the same old thing! Success depends upon really exploring such questions as “What assets do we own?” in the fullest extent. Remember all tangible and intangible asset categories. Remember too that some assets “owned” can really be licensed or so heavily obligated to a company that they are “owned” in a planning context. Examples are exclusive relationships with suppliers, customers, and partners. It is good to use Figure 3.7.5 as a template and fill out in detail the elements underneath each question. Summarizing the bottom elements, sometimes using a SWOT (Strength, Weakness, Opportunity, and Threat) matrix for each can be a powerful planning tool.

Methodologies for various types of technology strategies and portfolios will now be covered. These include methods that plan for products in the market place that are at various stages of the development along the technology maturity curve. Important for most businesses is the ability of a plan to ensure the products in the pipeline are properly scheduled for release in order to ensure smooth product transitions that meet both revenue objectives, and the sales force and manufacturing organizations’ ability to execute on the new products and services. A technology plan should discourage and dissuade others from entering the market as competitors. PWC (Product Innovation Best Practices) recommends a plan should include outsourcing products and services with the following characteristics: possesses inherently (1) low yields, (2) inherently problem prone, (3) excessive overhead demands (total cost accounting may be necessary to quantify this), (4) different processes from the bulk of moneymaking products, (5) excessive setup, tweaking, and delays, all of which cost cause low equipment utilization, (6) products “revived from the dead”, (7) where a better performing and easier to manufacture product can be obtained from others, (8) low unit sales and revenue, (9) products with limited futures that don’t fit with future strategies, or (10) those that have low or negative margins as measured by total cost accounting or EVA methods described beforehand. At first glance this seems like a significant list but it serves as a good checklist both before one starts strategic planning and then again at the end to make sure that the plans are really going to produce the intended business results.