Building a Strategic Plan, Part II

Jul 26, 2011

Editor’s note: This is the second in a series of articles exploring the Startegic Planning process and its role in business success.

Part I   Part III   Part IV

The simplicity of strategic planning is not to oversimplify the process but to realize that the steps are as easy as 1.) Where is my company now?; 2.) Where is my company going?; and 3.) How will my company get there?

Last time we explored the various facets of the strategic planning process. Now we’ll explain how to begin the actual planning itself.

As with any logical plan, there are steps to follow. A variety of critical actions need to be addressed in a logical sequence:

  • Develop a mission statement that defines the company’s core purpose or why the business exists.
  • Develop a vision statement that explains the direction of your company. This is an open design that features how you’ll devise your future look based on your vision.
  • Develop a value statement that will clarify what your stand for and believe in.
  • Develop a SWOT analysis that assesses your company’s particular strengths, weaknesses, opportunities and threats.
  • Develop a competitive advantage statement that defines what your company is best at and what you company can potentially do better than your competition.
  • Develop strategic objectives that connect your mission to your vision. What are the key activities that you need to perform in order to achieve your company’s vision?
  • Develop short-term goals that convert the strategic objectives into specific performance targets. These can also be set as priorities or initiatives that are effectively and clearly stated and specifically measurable. Ask yourself, “What are my one- to three-year goals and how am I going to achieve them?”
  • Develop action plans or items that set a tone for implementing your goals. Are your action items comprehensive enough to achieve your goals?
  • Develop a measurement system. What are the key performance measures you can track in order to determine if you are achieving your goals?
  • Develop a financial assessment that determines if your strategic plan makes financial sense. Do your estimated financial projections exceed your estimated expenses?

Building Good Habits

The purpose of strategic planning is to help your business make good decisions. To do that, don’t think of strategic planning as a once-a-year exercise, but instead embed the process into your company’s day-by-day activities.

Holding regular meetings helps focus your goals on accomplishing your company’s view of your top priorities and thus moving your company up the ladder. This is where discipline requires both thought and communication.

Consider annual, quarterly and monthly meetings in your overall strategic planning approach. Ideally, you should hold them at an offsite location without the standard day-to-day disruptions such as unscheduled visitors, telephone interference and the likelihood of you needing to answer emails.

Here’s a layout of how each meeting can look:

The Annual Planning Meeting

During this yearly session, the team reviews how well it’s executing your business strategies and achieving set targets. The review process can go as follows:

1. Start with a review of your mission, vision and values. Provide evidence that these statements are current and still relevant to your company and its direction.

2. Assess the long-term business assumptions and conduct a traditional SWOT (strengths, weaknesses, opportunities and threats) analysis. This step provides a current understanding of the marketplace and the true capabilities of your company.

3. Identify long-term strategic objectives. Quite often these stay the same for several years, with just a few modifications. Your strategic objectives are the big mileposts on the way to your company’s vision statement.

4. Set short-term goals and action items if possible. Normally the team does not spend time on the details; instead, assign a goal to a team member who can then flesh out how it will be accomplished.

5. As the manager of the strategic plan, collect all the work completed in this session and compile it into a final document. Distribute copies of the complied document so that everyone knows what they are responsible for achieving.

The steps for you as manager are:

  • Get ready and organized by identifying specific issues and choices within your strategic planning process.
  • Articulate the mission and vision by stating why the company exists and what the endgame represents.
  • Review your strategic position by gathering information to develop an understanding of your critical issues.
  • Help set priorities by identifying the approaches for addressing critical issues including your competitive advantage, select strategies for customer development and retention, and long-term goals and objectives.
  • Organize the plan by developing a coherent document outlining your complete strategic plan as a reference and a one-page strategic plan for communication purposes.
  • Present the plan as a communication tool where everyone within your management team, and others deemed appropriate, receive a copy. Identify the plan leader, and within the team provide additional elements specific to your overall plan for review and discussion.
  • Identify you next actions by making the plan tangible to each team member and outlining everyone’s responsibilities. Develop action sheets for executing the plan for each team member and a scorecard for measuring results.
  • Hold everyone accountable as you monitor your plan by reporting performance metrics on a monthly or quarterly basis. Assess the measurable goals, set up systematic processes for reporting, and communicate each person’s responsibilities as you regularly monitor, evaluate and adapt throughout the planning process.

The Quarterly Planning Meeting 

I also suggest you maintain a quarterly planning update as standalone meetings that can last from two hours to half a workday to discuss the following items:

  • Any changes in the operating environment
  • The meeting of specific goals
  • A scorecard report
  • Modifications that may be needed to enable progress

The primary question at these sessions can be, “Based on what we know today, what are the most important and impactful items that the organization needs to accomplish in the next quarter to achieve its annual priorities and targets and move closer to attaining its envisioned future?”

It is at the quarterly meeting that the plan manager should update the strategic plan and distribute the revised plan accordingly.

The Monthly Planning Meeting

During the monthly meetings, which should last from 30 to 60 minutes, key team members report on the progress they have made toward goals they are responsible for, including updates on metrics in the scorecard they have been assigned.

The agenda should include 10 to 15 minutes to work on one specific topic, or on one of the quarter’s priorities where decisions need to be made. Once defined, the topic should be carried to conclusion. I recommend you not waste time debating on several different topics that cannot be brought to conclusion.

Moving Forward

Strategic planning is an unpredictable process. That’s why the more times you review your plan and monitor its course, the easier it is to keep it on track.

Next time, we’ll explore how to make the planning process go smoothly with tips to help move it along with less uncertainty. Also, we’ll review the notion of future forecasting and the elimination of doubt from your plan.

Additional information concerning evaluation of market attractiveness and business strengths will be discussed, as well as creating you business matrix by product and/or service.

As aftermarket businesspeople, we have a responsibility to our company to make things flow as smoothly as possible. Some aspects of this strategic planning process may seem foreign to you, and I appreciate your position.

Enjoy the ride as you revamp your business strategies and continue to improve your company position within our industry.