The Upper Head Way The way that makes you think twice.

Strategic Planning | Business

Imagine yourself behind the wheel of a sports car. You’re traveling along a winding road. Where are your eyes? Hopefully they are focusing on the road ahead, at your anticipated route, with only an occasional glances at the rear view mirror.

Leaders are like drivers. They need to spend most of their time looking at the road ahead, trying as best they can to anticipate every turn and pothole. Looking in the rear view mirror too often could spell disaster.

Strategic planning is the purview of senior leaders in an organization, their attempts to predict and influence the future. Its creation is the product of a combined effort of the board and senior management. It is a long and arduous task, but the benefits of a documented strategic plan go well beyond the plan itself to include the discussions that take place as a result of the research, soul searching, and decision making.

Any reasonable organization is likely to take up to a year to develop a strategic plan if one does not already exist. Those that have been through the process will do one in probably half the time, or less, as they have a framework and a process already in place.

Creating a strategic plan requires stamina, hard work, an open mind, and discipline. These steps will lead planners to the desired outcome:

Step 1: Get Organized

• Call a meeting of a cross-section of senior people with influence and announce your intention. Let them know the purpose, the benefits,
  and the steps you intend to take to create the plan. Be realistic about the process and the work required, and what you will do with the plan when it is complete.
• Create your volunteer team. The team should consist of:
  • representatives of key stakeholders such as employees, the union (if
    any), and even key customers
  • representatives of major functions and divisions
  • people with complementary skills and personalities
• Create a road map of the steps you will take to complete the plan. Set a realistic time line for completion of each major part of the plan.
• Get commitment from each of the members to provide regular monthly updates and attend decision-making meetings.
• Understand who will be using this plan (for example, board, shareholders, investors, financial institutions, employees). Based on their
  needs, create a broad outline of the final report. This will give you a good indication of the work to be done. A table of contents will provide the highlights, enabling you to focus on the big picture without getting embroiled in small details.
• Next, filter the details further into possible subheadings and possible appendices. Understanding who will be reading the plan will give you a clue as to the level of detail you will be producing.
• Prepare the work plan. Decide who will be researching and documenting each section of the report, how they will do it, when it is expected and the resources available (consultants, travel, etc.).

Step 2: Examine and Evaluate the Current Situation

• The most common approach is to do a SWOT analysis: strengths, weaknesses, opportunities, and threats.
• Be objective in your analysis. This analysis will bring you to the realization that leading organizations:
  • have a strong cash position, with access to contingency funds
  • are sensibly financed, with a prudent mix of equity and debt
  • have above-average profitability in terms of return on capital invested
  • shoot for rapid growth in revenue
  • target faster-growing market segments finance
  • develop strong product or service brands
  • devote substantial resources to innovation by encouraging risk taking and research
  • compete on service rather than price
  • work hand-in-glove with customers and respond with lightning speed to their needs
  • attract and retain top people and invest in their development

Step 3: Develop Your Vision

• The vision is the dream that the key leaders have for their organizations. It is the goal statement that should inspire employees to strive
  toward it. It should tug at the heartstrings of those who read it and propel them to join the cause to make it happen.
• Creating a compelling vision is no easy task. Knowing whom to involve adds to the complexity. As a general rule, employees look to leadership to provide the vision, although the more mundane mission may involve more rank-and-file people.
• Creating a vision takes time. The process can be expedited if you:
  • Consider vision statements from other organizations. Decide what
    you like about each and what you don’t like.
  • Put yourself in the position of a visiting alien. If an alien visited
    your company in, say five years, how would you like the alien to
    describe your organization?
  • Collect ideas and identify key words.
  • Have a subcommittee create a draft for everyone to review.
  • Fine-tune the draft, making sure that the statement gives a clear
    sense of the organization in terms of size, physical appearance, and
    activities. Confirm with key members of the leadership team that
    each of them buys into the statement.

Step 4: Develop Your Mission

• The mission statement describes the nature of the business and how matters are conducted on a day-to-day basis. The mission will be specific enough to give everyone reading it a clear picture of:
  • what the business does
  • whom it serves
  • what it provides
  • how it does so
  • where it operates
  • what benefits accrue to stakeholders

• The mission statement is a team effort. It is created with input from senior managers, all of whom have had a chance to contribute their ideas. The process goes more quickly if the following steps are taken:
  1. Review the mission statements of a variety of organizations, distinguishing
     between those that people like and those that they do not.
  2. Establish a template for each person to use. The template will
     identify the key features that are required in the final statement,
     including the nature of your business, whom you serve, how you
     serve customers, and the benefits for all stakeholders.
  3. Have each person create his own mission statement.
  4. Post these statements on the wall for everyone to see.
  5. Discuss the statements, identifying those that people like the most.
     To avoid giving preference by seniority, do not attach names to any
     of them.
  6. Pick the best elements.
  7. Have a small team craft a proposed statement from the group’s best
     ideas.
  8. Have the whole group approve the draft or modify it so that a
     general consensus is achieved.

• Post the mission statement in a prominent place to make everyone aware of it. Consider having rollout meetings to explain it to employees, why it is important, how they fit in, and their roles in making it a reality. Where possible, have each person sign his or her name on it to symbolize buy-in.

Step 5: Develop Objectives

• Create broad objectives using the information gathered from inside and outside the organization. These will cover the needs of all stakeholders, such as profitability and market share for shareholders, quality of work life for employees, and service excellence for customers. The objectives will also reflect the underlying reasons for running the business.

Step 6: Review Your Values

• Values describe our attitude and behavior toward the operation of the business and its relationships with society at large, customers, suppliers, employees, the local community, and other stakeholders. Many organizations have no documented values. Others have values but they are largely ignored. Either way, the internal research will reveal gaps between how you want to behave and how you do. This should lead to a discussion on the behaviors you expect, which should be documented.
• Decide how to ensure that the values are practiced more consistently on a day-to-day basis. You can, for example, build those behaviors
  into the performance review system so that employees who practice them are rewarded for doing so.

Step 7: Set Goals

• Goals are more specific and more time-based than objectives. A simple formula for defining goals is to ensure that they are specific, measurable, agreed upon, realistic (yet challenging), and time-based (SMART).
• Goals should be established for factors such as market (size and share), products, finances, profitability, utilization and efficiency, innovation, and learning (people development).

Step 8: Create Strategies and Plans

• Generate strategies by which the mission and objectives will be achieved. These can involve the business as a whole, including such matters as diversification, organic growth, or acquisition plans, or they can relate to primary matters in key functional areas. Here are some examples:
  • ‘‘The company’s internal cash flow will fund all future growth.’’
  • ‘‘New products will progressively replace existing ones over the next
    three years.’’
  • ‘‘All assembly work will be contracted out to lower the company’s
    break-even point.’’
• Develop a specific plan to achieve each goal. For plans to be achieved in the next twelve months, list the tasks, who will do them, and when
  they will be done. For medium-term goals, state the quarter during which they should be done. For long-term goals, state the year in which they should become a reality.

Step 9: Develop Indicators to Track Changes

• Identify indicators to track your progress in categories such as quality/ service, timeliness/responsiveness, costs/value, health and safety, and morale.
• You should not have more than two indicators in each category. Otherwise you’ll spend too much time on data collection, leaving little time for analyzing, planning, and taking corrective action.
• Ensure that your chosen indicators relate specifically to the intentions
  outlined in your mission. The best indicators in each category will be those that are:
  • easy to collect
  • accurate
  • already being collected
  • measurable
  • something the team can influence
• If you have picked an indicator that is not being measured, set up a data collection system and get your people to take responsibility for collection.

Step 10: Document the Plan

• When writing the plan:
  • avoid unnecessary jargon
  • economize on words
  • use short, crisp sentences and bullet points
  • check spellings
  • concentrate on relevant and significant issues
  • break the text into numbered paragraphs, sections, etc.
  • relegate detail to appendices
  • provide a contents page and number the pages
  • write the summary last
• Get a qualified outsider to review your plan in draft form and be prepared to adjust it in the light of his or her comments and experiences.
  Although outsiders can provide objectivity and assist in fine tuning the plan, it is essential that they not be permitted to change the recommendations, as the content needs to be owned by the plan’s creators.
• If presenting the plan to outside stakeholders, ensure that the document has an executive summary, a table of contents, appendices, and numbered pages. Finally, package the report with an attractive cover to give it a professional look.