strategic planning article
TRANSCRIPT
Strategic Planning Finding the best approach for your business
By Bill Marden
Strategic planning is among the most widely examined and discussed topics in business today. Countless books and articles outline endless theories, models and approaches, all designed to help organizations find success through use of systematic planning processes. While many leaders have leveraged these ideas and techniques, others may feel overwhelmed by the topic, find that their current planning efforts no longer meet their needs, or simply avoid the planning process altogether. Among the more common scenarios are:
• We’ve always been successful without a plan
Ø Leaders sometimes undervalue the planning process – choosing to rely on their instinct
and entrepreneurial skills to lead their organizations into the future. Some entrepreneurs and business owners are actually uncomfortable with the entire concept of planning, fearing the plan’s structure will limit flexibility or interfere with day-‐-‐-‐to-‐-‐-‐day control of the business.
• We don’t have the time or resources -‐-‐-‐ our business is too demanding and dynamic
Ø Leaders may feel overwhelmed by the complexity of the process – perhaps recognizing
the merits of business planning, but are so focused on the daily challenges of the business that planning never becomes a priority. For these businesses, strategic planning is often viewed as a bureaucratic exercise that is disconnected from the reality of running a business.
• Our business already utilizes a very sophisticated process – Why change?
Ø Some organizations have developed very elaborate planning processes, gradually adding
layers of complexity in their pursuit of a better mousetrap. While some businesses find this path successful, others may become so focused on the planning “process” itself, that it becomes an “end result” rather than a “tool” to achieve results. For these businesses, a periodic review of the process may be necessary to expose inefficiencies and clarify direction.
• Our process works well for meeting short-‐-‐-‐term objectives, but we really don’t have a good
long-‐-‐-‐range plan (Or Vice-‐-‐-‐versa)
Ø Good plans, and leaders, need to be both nearsighted and farsighted, balancing long-‐-‐-‐ term vision with the discipline to execute short-‐-‐-‐term objectives. Some leaders find themselves skewed toward their comfort zone – either managing short-‐-‐-‐term objectives or envisioning the future. These leaders pride themselves on “running a tight ship”, but
Creed Business Solutions, LLC 13411 W. 128th Terrace Overland Park, KS 66213 Phone: (913) 940-‐-‐-‐6767 [email protected]
may find that they are sailing in the wrong direction. Others leaders have great ideas and vision – but struggle to achieve results. Usually, the activities and culture of the organization reflect the direction of the leader, and may be imbalanced and in need of adjustment.
• Our approach has been beneficial, but we’re ready for a change
Ø Often, business leaders realize their organizations are just “working the ‘status quo’ harder,” and find it’s time for a change and a fresh approach. If the management team is beginning to view the planning process as a burden, or as an exercise that merely adds additional work to an already busy schedule, it may be time to regroup.
Without a change, each of these scenarios will likely result in a gradual decline in performance, missed opportunities, or exposure to unforeseen risks that negatively affect the future of the business. Fortunately, there are simple solutions to each. Successful planning processes vary widely in scope and complexity, but at their core, they share common attributes. In assessing the organization’s approach to planning, worry less about the latest trends and terminology, and consider starting with the basics. Whether taking the first steps of a new planning process, or revitalizing an existing one, it’s important to identify the most critical elements of strategic planning, and ensure that they are embedded into the process. While proceeding with the next step, consider the following: • Strategic planning is a tool to help achieve results
Ø Never get so bogged down in the process that we lose sight of its purpose. As with most management tools, planning is a “means” to an “end”. Leaders should regularly monitor the process and the planning team to ensure that their short-‐-‐-‐term objectives remain consistent with the overall vision and long-‐-‐-‐range goals. It’s also important to recognize when the process is off-‐-‐-‐track, and re-‐-‐-‐focus the planning efforts. Those teams that plan with a purpose feel energized by the process, and the positive results that follow.
• One size does not fit all
Ø While benchmarking other planning systems and models can be helpful, it’s important that each organization customize a process that fits their unique culture and approach to leadership. Rather than “force fit” a complex, cookie cutter approach, start with the basics, find a level that feels comfortable, and build complexity as the need arises. Over time, you may benefit from exploring more comprehensive analyses of economic forecasting, industry and competitive dynamics, environmental risks and trends, horizontal strategy, vertical integration, or other advanced strategic planning initiatives. However, by focusing on the core strategic questions, the demand for additional detail and complexity will likely evolve naturally. The result will be a more effective and efficient planning process that better fits the organization.
• Simple is often better
Ø Whether starting from scratch, or revisiting a more comprehensive process, focus on the core questions:
ü What do you want the business to look like in 3-‐-‐-‐5 years? 5-‐-‐-‐10?
ü What are your current strengths, weakness, capabilities, risks, etc.…? ü What is the gap between where you are today, and where you would like to be? ü What are the most important “next steps” toward closing the gap?
The answers to these questions should serve as the foundation of your plan.
• Long-‐-‐-‐range visions and plans are essential – but never perfect
Ø It’s imperative that organizations take time to envision their future. While it’s impossible to anticipate all variables you’ll face over the next 5-‐-‐-‐10 years, it is a critical component of any successful process. An organization will never achieve its true potential by merely stringing together a series of short-‐-‐-‐term plans.
• Don’t worry about losing business flexibility
Ø Strategic planning is largely about being pro-‐-‐-‐active, rather than reactive. Don’t be too concerned about restricting your organizational flexibility or decision-‐-‐-‐making ability. Successful business leaders are always in control their strategic direction. The plan is merely a tool, and should not “control” your business. While some level of control is important to execute properly and achieve results, internal and external variables will inevitably change and effective leadership teams will adjust accordingly. Remaining nimble is an important attribute of a successful business. Proactive organizations anticipate change, consider options, and are better positioned to manage unforeseen events than those that simply react after the change has occurred.
• Take time to brainstorm – involve others
Ø A well-‐-‐-‐facilitated brainstorming session can be one of the most valuable parts of the process. While effective daily communication may be the norm in your business, setting aside time to brainstorm on important business topics is essential to improvement. It’s also important to involve individuals outside the usual sphere of decision makers who can bring a different perspective to the discussion. As many studies on paradigm shifts reveal, it’s often difficult for those experts in the “center” of your business to see the possibilities, and it may be the ideas and input of those at the “edge” that result in the biggest opportunities.
• Honestly assess your business
Ø Even the most successful leaders occasionally make inaccurate assumptions regarding the strengths and weaknesses of their organization, and misjudge the perceptions of their key constituents (Customers, employees, shareholders, rating/regulatory agencies, etc.…). Challenge the leadership team to be honest in the assessment of the company and their functional areas, including identifying the blind spots. Get input from others. The result will be a more accurate assessment of the gap in front of you, a more accurate plan, and a greater likelihood that you will achieve your objectives.
• Focus on the drivers of your business
Ø One of the most important outcomes of business planning is the identification of the key business “drivers”. Most businesses define ultimate success by measuring improvements in such things as shareholder value, revenue or market share, economic value, or profitability, The reality is that these outcomes are the result of identifying and successfully managing the key processes and variables that drive the business. Successful planning processes identify and prioritize the important business drivers that lead to these results, and include action plans that focus on the right level of activity. If the correct drivers are identified, prioritized, and managed, the important “end results” will be a natural by-‐-‐-‐product of these efforts.
• Find balance in your annual business plan
Ø An annual business plan should reflect the “next best steps” toward the achievement of the long-‐-‐-‐term strategy. Most plans will include initiatives that will be completed within a 12 month planning cycle. However, some changes require a more extensive plan and cannot be implemented over the course of a single calendar year. These initiatives should be broken up into manageable components, perhaps beginning with research, data gathering, assessments, modeling or other sub-‐-‐-‐activities required at the front end of a major change initiative. Annual business plans should reflect a balance between immediate initiatives and initiatives that plant seeds for future development.
• The importance of execution and follow-‐-‐-‐up
Ø Much of this article is focused on the “development” of short and long-‐-‐-‐range plans, with an emphasis on ensuring that the company is headed in the right direction. However, a good plan with poor execution will obviously limit results. Breaking down strategic initiatives into manageable components, assigning responsibility, establishing accountability and incentives, monitoring progress, and adapting to environmental changes are essential components of any successful planning process.
• Intangible benefits
Ø Consider the intangible, and often overlooked, benefits of a good planning process. The process should also be a tool that helps engage management and employees in the business, and leverages the workforce in the development of the future. An organized process that includes well facilitated meetings and discussions can be a critical tool in educating employees, developing teams, building a strong culture, and identifying high potential employees. As a communication tool, it can serve as a platform for management to communicate important business information, provide a forum for cross-‐-‐-‐functional teams to partner toward the achievement of objectives, and a communication process to solicit ideas from employees throughout the organization. The process is also a great way to demonstrate the values and reinforce the personal attributes that are important to your business.
Conclusion Initiating efforts to implement, improve, or refresh a strategic planning process may prove to be one of the most important decisions an organization can make to ensure long term success. It’s easy to procrastinate, put the initiative off until things slow down, or table the effort until the next planning cycle or board meeting. The reality is that most successes in business are the result of efforts that occurred months, or even years, prior to the achievement. Delaying action today will almost certainly lead to a delay in future results. Consider the level of urgency many organizations apply toward current business results, and leverage the same urgency and passion toward initiating a planning process that will plant the seeds for tomorrow’s success. A month delay at the front end of a change may seem tolerable, but a month delay in achieving the end result can seem like an eternity.
Copyright © 2011-‐-‐-‐2015 Creed Business Solutions. All rights reserved.