This article was written by Bill Boyer, a long-time friend and valued colleague of JASE Group. Bill is the President of Tidewater CEO, a coaching organization for CEO’s, owners and senior managers. He can be reached at email@example.com or 757-375-3454.
It’s the beginning of a new year. If you haven’t already done so, your strategic plan is due for updating. Strategic Planning is critical for organizations. Your plans should be updated at least once a year and more often if market conditions could have a dramatic impact on your direction.
Companies that consistently use strategic planning are more successful and are at the top of their industry. Studies have proven that companies with plans are 12% more profitable, and 64% state that they do a better job of meeting their short term goals because these goals are fully aligned with the company vision. Strategic planning helps companies to be more responsive to change, as the planning process and analysis helps them to anticipate various potential changes.
The plan takes quite a bit of time and involvement from many members of your team. From the very start, the owner/president of your organization, or some other very senior person, should be in charge of the process. Plans can be developed internally, but it is best to have an objective facilitator who has strategic planning skills. This individual is only the facilitator; he does not develop the plan.
Generally, the team is made up of your senior managers, representing all major disciplines within the company. There will be different perspectives. The proper size of the team will be hard to determine. You need sufficient members to get a good cross section, but the larger the team, the more difficult it will be to manage.
Ground rules must be established as there will probably be some tense discussions. Never attack the person, only the problem or suggested solution. Only speak when you are adding value to the conversation. No outside interruptions of any kind should be allowed. Also you will probably recognize that there are a few “sacred cows” where people have gotten emotionally involved with their product, programs, staff, etc. Your team will have to get beyond those. Subjectivity is critical and an honest perspective must be presented. All the cards must be on the table. An outside facilitator can be very helpful in getting through these types of issues.
Be open to any ideas. Give everyone a chance to list their ideas without any team discussion. List all these ideas and each person should vote for his or her top three. Consolidate the voting, present to the team the top ones that should be the focus of your strategic plans.
If you are doing the plan for the first time, the initial step will be to define the core values of the corporation: the why you are in business (not to make money)-the heart of the company. These should never change.
Next, a critical and important step is a SWOT (strengths, weaknesses, opportunities, and threats) analysis. This must be brutally honest. Where do you stand verses your competition? What does the potential market look like? If you do not answer these questions, you are wasting your time and your plan will be “junk”.
Your next step should be to establish a BHAG (big, hairy, audacious goal). That makes is easier to establish major long term goals (again only a few), which are broken down into shorter term and more specific goals that are achievable in some specified time frame. There must be measurement points (Key Performance Indicators or KPI’s) where progress is evaluated at frequent intervals with numerical goals or, if the goals are more general, a % of completion measurement. Responsibilities for implementation and separate measuring processes must be assigned to specific people who have authority in the organization.
You must identify the major opportunities or solutions to significant problems. Keep these to a few major issues. You cannot effectively deal with many. Be sure they are well defined and, if possible, come up with a unique name or acronym for it, so everyone will always be sure of the subject you are discussing.
Once the goals are selected, the real work starts in developing the elemental steps. Most plans are developed for 5 years keeping focus on the BHAG. Once the longer term goals are established, the next step is to define the intermediate targets or subordinate goals that will be required to meet those goals. These intermediate targets should cover three to five years and should use key performance indicators (KPI’s) to measure progress on achieving the goals. The intermediate goals are further broken down into more specifically-focused annual goals and measurements. The next step is to define quarterly goals and measurements. And keep the number of goals limited. KPI’s should be measured routinely to insure that the company is achieving its goals, especially for the shorter term goals.
Once your plans are completed, communicate, communicate, and communicate.
Strategic planning is a very critical process that is challenging and must be effectively managed. It will lead to a more successful company.