Strategic Planning Insights from our Chairman
I have taken the liberty of bolding and underlining key points in my strategic planning article. If you would like to discuss any of the concepts and how to apply them in your business, I welcome the conversation.
Regarding overall Strategic Planning – Look at where your company is today given the many current unprecedented economic/financial challenges. Envision where you want to be in the near and longer term future. When doing more of the same will not get you there, maybe it would be best to once again focus on fundamentals.
Simply put, strategic planning determines where an organization is going over the next three to five years, how it’s going to get there and how it’ll know if it got there or not.
Companies need to be very careful that they do not confuse budgeting and tactical one year planning with Strategic Planning.
Strategic planning overall serves a variety of purposes/needs to include:
Clearly defines the purpose of the company and establishes realistic goals and objectives consistent with the company’s mission.
Communicates those goals and objectives to the entire organization.
Helps to develop a sense of ownership of the plan throughout the company
Ensures that the most effective use is made of the company’s resources by focusing on the key priorities.
Provides a base from which progress can be measured and establishes a process for informed change when needed.
Brings together everyone’s best and most reasoned efforts have important value in building a consensus about where a company is going.
Provides clearer focus of organization, producing more efficiency and effectiveness
Increases productivity from increased efficiency and effectiveness
Bridges and builds a strong staff and board of director’s team.
The Strategic Planning process can be relatively simple, but needs to include the following major steps:
Take an overall business thought inventory analysis – SWOT (Strengths, Weaknesses, Opportunities, and Threats) – helps you look critically at your organization. It is a tool to help produce a good fit between a company’s strengths and its opportunities.
Profile your customers – what are our customer’s needs, motivations, and characteristics? How do you uniquely provide value to your customers?
Write your goals and objectives – realistic goals and objectives are stair steps to your mission and vision.
Once you have completed your goals and objectives, it’s time to do a resource assessment. Prioritize key goals by asking: Does implementing the goals make financial sense? Do you have the human resources to achieve your plan? Do you have the necessary financial resources to achieve your goals?
Take action – basically write a to-do list for each goal.
The result of a well-developed and executed strategic plan is to develop a competitive advantage. That is, what can your company potentially do better than any other competitor?
State your purpose – a mission statement is a statement of the company’s purpose. What is our business? What are we trying to accomplish for our customers? What is our company’s reason for existing?
Visualize the future – a strategic vision is the image of a company’s future – the direction it is headed, the customer focus it should have, the market position it should try to occupy, the business activities to be pursued, and the capabilities it plans to develop. What will the business look like in 5 to ten years from now?
Keep score – with a scorecard, you can actively track your progress on a monthly basis.
Make strategy a habit – leaders devoted to the successful implementation of the strategy and plan is the key.
The Strategic Plan is a living document. In general it does not have to be perfect or 100 percent complete to start using.
The strategic planning process should be carried out more frequently in an organization whose products and services are in an industry that is changing rapidly. On the other hand, if the organization has been around for many years and is in a fairly stable marketplace, then planning might be carried out only once a year and only certain parts of the planning process need updated. Consider the following guidelines:
The strategic plan is usually part of an overall business plan, along with a marketing plan, financial plan and operational/management plan.
Strategic planning should also be done in preparation for a new major venture, for example, developing a new department, division, major new product or line of products, etc.
Strategic planning should also be conducted at least once a year in order to be ready for the coming fiscal year (the financial management focus of an organization is usually based on a comparative year over year basis).
Strategic planning should be conducted in time to identify the organizational goals to be achieved at least over the coming fiscal year to include resources needed to achieve those goals, and potential financing needed to obtain the resources.
Jim Baka is Chairman of Family Business Leadership Partners and is a family business advisor, helping leaders with strategic planning, financial planning, succession planning, family management development, building family teams, conflict resolution and individual coaching. Jim can be reached at 414.412.2557.