YOUR SUCCESS TAKES PLANNING
Did you know that having a strategic plan is the best way to bring focus and direction to your organization AND drive growth at the same time? According to a recent study by M3 Planning, a nationwide leader in on-demand strategic planning services, businesses that use strategic planning are 12 percent more profitable. The results from the 2006 M3 Planning Strategy Benchmark of 280 firms in the United States found that by just adding strategic planning to a business’ activities, organizations can experience an increase in net profit. Those firms whose top management had a high commitment to execute strategic planning reported an 80 percent increase in sales volume during that year, and firms whose top management had a lower commitment reported a 59 percent increase. (For more information or to view full results see the report.)
It’s important to stress here that successful strategic planning is a continuous process. It isn’t just a one-time event; you need to make it a habit. It’s easy to get lost in the process, especially when you’re also in the middle of your organizations’ everyday operations, and in the coming weeks we’ll share some suggestions that should help you embed successful strategic planning concepts into your organization. Consider them an easy-to-follow Strategic Planning Process Checklist to help keep your team on track.
First, you should “Get Ready and Get Organized”. This may sound elementary, but you’d be surprised by the number of businesses that sabotage their strategic planning efforts by poor preparation. Take your time here; this is about your past, present and future. Identify the specific issues and choices your strategic plan should address. You should start thinking about where it is exactly you want your organization to go. (i.e. Start thinking “big picture” and “end game”) Determine your organizational readiness. (i.e. Do you have complete commitment and support from top leadership and key management? Is yours a culture that is open to looking beyond the status quo to find new ways of doing things?) Create your planning committee (i.e. Who will you rely on to implement your strategic plan? Who will be you plan administrator and who will be your most valuable players?). And finally, identify the information which must be collected to help make sound decisions. (i.e. What reporting is necessary to access your current situation and measure your efforts in reaching your goals?) A plan is only as good as the information on which it’s based. Don’t rely on assumptions or hunches; you can never underestimate the power of preparation and research.
ARTICULATING YOUR MISSION AND VISION
In addition to strategic planning being a continuous process – something that you need to make a habit - the process is also circular as opposed to linear.
The requisite starting point is your mission
statement. A mission statement, we all know, is a statement of your
company’s purpose or its fundamental reason for existing, but
it should also serve as both a guide for day-to-day operations and the
foundation for future decision-making. In other words, it should determine
your primary business and organization purpose AND be the roadmap in
a strategic plan to empower your employees to be more effective. It
should be specific, short, sharply focused, and memorable. The mission
statement of Olsen & Associates Public Relations is “Dedicated
to improving and optimizing public perceptions on behalf of our clients.”
If the company doesn’t live up to this mission, it has no reason
to exist.
You should think beyond bullet points on a memo or a posting on the
break room wall. Instead, think of your mission statement as the primary
guideline for leading your organization to higher levels of performance.
It should provide the framework for independent decisions and actions
initiated by departments, managers, and employees into a coordinated,
company-wide game plan.
Your vision, likewise, should provide long-term direction while it delineates what kind of enterprise your company is trying to become and infuses the organization with a sense of purposeful action. Identify your corporate values. Create an image of what success will look like. Your vision statement needs to be something you can achieve at some point in the future while also serving as a unifying focal point for everyone in the organization – like a North Star. Develop one that’s far reaching but attainable. A vision statement can be as far reaching as 100 years or as short as five. It just needs to work for your company and the industry in which you operate.
Here are two examples of visions that were very lofty at the time they were established, but they don’t sound so crazy now:
- “We will put a man on the moon before the end of the decade and bring him back” (President John F Kennedy)
- “A computer on every desk and in every home using great software as an empowering tool” (Microsoft)
Together the mission and vision statements function to clarify why your organization exists and what the end game is. In this way, your mission and vision should drive every action and initiative on the road to where you are going and provide a constant reference point to keep your strategic plan on track.
IDENTIFYING YOUR STRENGTHS AND WEAKNESSES
Previously in this column, we discussed the first
two steps in the strategic planning process –1) getting ready
and organized, and 2) articulating your mission and vision. What follows
next in that process is reviewing your strengths and weaknesses.
You may already be familiar with the trusted business planning tool
called the SWOT, but as a quick review, SWOT is an acronym that stands
for Strengths, Weaknesses, Opportunities, and Threats. These key factors
are crucial in assessing your organization’s strategic position.
You’ll want to build on your company’s strengths, shore
up the weaknesses, capitalize on any opportunities and recognize any
threats that may exist.
Your organization’s strengths encompass everything that your company does well. Ask yourself what the company’s capabilities, skills and resources are that you can draw on to execute plans and actions. Consider your human and organizational capital, the company financial resources, and operational processes. This should be your assessment of what’s working in your organization. To see if your organization is making the grade, go to The Business Report Card at www.mybusinessreportcard.com.
Your weaknesses, conversely, encompass those things that are holding your company back from achieving your goals or serving customers. Ask yourself what might be hindering your organization from reaching its full potential. What are the impediments to your success? Maybe your technology management is outdated or perhaps your employees aren’t working together optimally as a team. Or consider your employee retention rate. Does your organization spin its wheels hiring and training employees only to lose them within a short time?
It’s worth noting
here that it is equally important to assess your strengths and weaknesses
from the point of view of your customers. It’s very likely that
your organization could be conducting more business with your existing
customers by looking at your operations through their perspective. Additionally,
once you’re armed with this information, you can make strategic
decisions that raise your worth in the eyes of those customers you value
most.
Along with the internal assessments of your organization’s strengths
and weaknesses, reviewing your strategic position also includes evaluating
external opportunities and threats in the marketplace. There are issues,
trends, and events that can conspire to positively or negatively impact
your business, and reacting proactively will better help you determine
your strategic position.
Opportunities that exist may be political or social, or they may be
environmental or technological. Consider the graying of America. Does
this development dramatically increase your potential market? Or consider
the increasing diversity of the population. Is there an untapped market
out there for you?
Maybe the opportunities are in your industry. If there are big startup costs or regulatory hurdles associated with your industry it could be an opportunity for your company to capitalize on its established business presence in the marketplace by expanding its offerings or product lines.
Of course, conversely, these same factors that may be opportunities could also be threats. What if the ageing population spells the demise of your market share? Or what if your company hasn’t already addressed meeting the demands of an increasingly diverse population?
Some of these issues may never have a bearing on your business, but it’s important to keep in mind that your operating environment is the outside circle influencing your business. And don’t forget to ask for help – objective input can help you see parts you may have missed.
To better evaluate your strategic position use our SWOT tool.
AGREEING ON PRIORITIES
Once you have identified your strengths and weaknesses as part of reviewing your strategic position, it’s important that you get everyone involved in the strategic planning process to agree on priorities. This next step should be fairly easy, but don’t underestimate the value of consensus. The one concept that most business owners, executives, and managers forget is that the lack of a decision results in more derailments of the mission than any other cause.
Don’t get caught up in a search for a single method of evaluating all the strategic choices that may be in front of you. There is no single fail-safe method. Instead, set some parameters or rules that are specific to your operating environment and use them to evaluate your strategic choices. Some categories of rules might include the following:
- PRIORITY RULE: You may prioritize some opportunities over others based on their connection to reaching your vision.
- TIMING RULE: You may prioritize opportunities based on how much money you want to see returned in a set time period.
- BOUNDARY RULE: You may prioritize every opportunity based on whether it is aligned with your organization’s core mission and values.
- HOW-TO RULE: You may qualify opportunities by first sketching out potential implementation strategies before committing to them. If you can’t clearly define an action plan, you know that trying to execute it will likely go poorly.
At this point, you will also need to divide your choices into two groups – those that have internal implications and those that have external implications. Internal priorities include everything related to productivity improvement such as employees, operations, technology, and anything else that deals with the internal operations of your organization. External priorities, meanwhile, include everything that’s related to revenue generation such as entering new target markets, new product lines, and partnering with other organizations. Grouping your priorities like this helps you to compare similar things when making trade-offs which are likely as you proceed. For example, choosing between investing in new technology or hiring new people are both expense decisions with similar outcomes, while choosing between entering a new market or implementing a succession plan aren’t directly related.
Finally, you’ll also need to pare your
options down to a select few. You should strive for three to five internal
and external priorities. If you have too many, you may lose focus as
your plan becomes too big. If you find it hard to limit your priorities,
consider creating a “someday” list of priorities that are
important and deserve attention some day.
Now, you should be ready to starting organizing your plan which we’ll
tackle in the next newsletter. In the meantime, keep in mind that agreeing
on priorities is all about maintaining focus. There are a lot of bright
shiny ideas and trends out there in the business landscape to distract
your attention, but successful strategic planning requires focus. Remember,
success is not a matter of chance, but rather success is a matter of
choice.
