Strategic Planning Article

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  

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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.          

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