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The Need for Strategic Planning
Written by: Bill BoyerArticle Overview: Every company should have a strategic plan, no matter what the size. In fact, it is often more important for small firms as they tend to lose focus very easily.
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The Need for Strategic Planning
When I mention strategic planning to owners of smaller companies, I often get a look of bewilderment--and a comment that they thought strategic planning was only for large companies. As a result, I often direct my comments or questions to the discussion of goals for the owner and the company. Goals are really only a part of a strategic plan, but it is a good way to start the conversation about developing specific plans for the future of the company.
Every organization should have a written strategic plan or, as some companies call it, a company vision. A statistic I recently heard was that, of the 500 fastest growing companies listed in INC magazine, about 80% have written strategic plans. But only 20% of all small businesses (with fewer than 500 employees) have a strategic plan.
Strategic plans can be very complex and include a great deal of information. There are many effective consulting organizations that can assist in performing the research to help you better understand your business and to develop the broad goals and specific tactics for achieving your vision.
Excellent strategic plans for smaller companies can be developed internally without assistance from the outside. Who better knows your business than the owners and the employees of your company? You may have to step back and take a different view, but the knowledge is there. These plans do not have to be long and detailed. There are some very excellent plans that are done on one page.
Setting target sales goals for the next few years is not the first step in developing your strategic plan. A good strategic plan must be based on your and your team’s core values. Especially in a smaller company, you probably will not be successful if the values of your business are not aligned with your personal core values. What do I mean by core values? These are the enduring and guiding principles that you will always want to adhere to, no matter what happens. They never change. For example, some of the core values of Starbucks are: passion for what we do, integrity, respect for our partners, and an entrepreneurial spirit.
Once you have defined the core values, your next step is to establish a core purpose. This is the “why” you are in business. And it is not “to make money,” although that should be one of the benefits. It is the value or contribution that you make to your employees and customers, as well as the broader community in which your business is located. To use Starbucks as an example again, their core purpose is to provide an experience that enriches peoples’ daily lives. Another example is Disney, whose core value is to make people happy.
The next step is to determine your major long term goal. “Long term” looks at least ten years out, and must align with the core values and purpose. This will be why you get up every morning and slug it away in your business. It must be measurable. Examples are: to achieve major share of the business in your market, to beat out a specific competitor, to win the quality award for your company every year. And for Starbucks, their goal is “To build a great, enduring company with one of the most recognized and respected brands in the world, known for inspiring and nurturing the human spirit.”
This is the point at which you develop the real strategy: the route you intend to take and the general methods you intend to use to reach your specific goal. These are the steps you will utilize in the next few years. Each step will have a specific measurable goal. It could consist of specific steps to increase sales a certain percentage each year. It could be specific steps to improve your quality program to reduce returns a certain percentage each year. Starbucks’ strategy was to build the brand one cup at a time with the best quality coffee, their own stores, and selective brand extensions.
Having defined the specific steps, you next develop the shorter-term tactics to reach each step. You establish specific tracking mechanisms, with periodic measurement points. Each specific step will have a start date and a measure of success over a specific time period.
True strategic planning/vision is probably one of the least understood--yet most important--concepts in building an organization. Living, working, and refining your strategic plan allows you, and your company, to turn your core values into reality.
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Article Tags: coaching, consulting, goals, leadership, management, measurements, small businesses, strategic planning
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About the Author: Bill Boyer RSS for Bill's articles - Visit Bill's website  Bill Boyer has over 35 years experience working with businesses, from small to major international corporations with extensive experience in operations, distribution and finance. Bill has held CEO, COO, CFO, and other VP positions with Burlington Industries, The Disston Company and Hickson PLC and other corporations. He has also been an individual coach/consultant with many smaller corporations. Bill holds a BS in Industrial Management from the University of Richmond, and is a graduate of executive programs at the University of Virginia. He specializes in helping companies achieve organizational effectiveness and operational efficiency. Click here to visit Bill's website   The Art of Delegating |
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Different Hats
- CEO Sales & Marketing & Leadership Development Company
Strategic Vision 10
Alliances & Growth Strategies 10
Hiring & Managing People 8
Mentoring 8-9
Strategic Planning for Clients 10
Execution of Marketing Campaigns 9-10 (i have great people who do the nitty gritty)
Financial Management 9
Bookkeeping 3 (outsourced as I really hate the fine details like GST0
Administrative Follow Up 6-7 (again have great staff)
Writing & Publishing 9 (getting better all the time!)
Speaking 10 (so I have been told)
Self Promotion 9-10
Web development & Promotion 6-7 (learning more and have brought on players who are 10+)
Babysitting Employees (1 - wont do it, that's why I work so hard to hire and motivate the people I have)
Great topic Kevin!!
Jude
HRPreneur
- Hi everyone,
I am new to the forum and I recently started my own Human Capital (HR) consulting firm called HRPreneur Inc. HRP focuses on making human capital a strategic differentiator for SME's.
Below is a summary about HRP;
Who We Are:
HRP is a Human Capital consulting firm with 30 years of experience that becomes an extension of your company by providing a full array of services to help you create a highly engaged workforce focused on achieving strategic results in order to build a long lasting great company!
Mission:
HRP provides small and medium sized businesses a Strategic HR Business Partner to increase employee engagement, resulting in cost savings, increased productivity and results at an affordable rate!
Vision:
To inspire and warrant SME's reach their full competency!
Cost Effectiveness:
We provide over 30 years of experience at a fraction of the cost at a strategic executive HR business level
You will save between 50% to 60% in costs per year on salary, bonus, benefits, training, office space alone
We will provide you additional cost efficiencies through our services
Services:
• Strategic Human Resources Planning
• Organizational Redesign
• Change Management
• Organizational Culture Development
• Employee Engagement Programs
• Leadership Assessment and Development
• Compensation Design
• Talent Acquisition
• Assimilation and On-Boarding
• Performance Management
• Talent Management & Succession Planning
• Human Resources Due Diligence
• Human Resources Audit
• Full Service HR Outsourcing
Re: How do you make the most of your day?
- Planning, To Do lists, and deadlines all help me.
Also being self critical of my own time management helps me raise the bar.
I still check email too often though.
Re: Essential Leadership skills
- Vision
Values
Mission
Strategic Thinking
Decision Making
Communication
Team Bonding
People Development
Coaching / Mentoring / Guiding / Grooming
Presentation
Thanks
Robert
Re: Success
- I think it was Gary Player who said the harder I practice the luckier I become when it came to his success as a world class golfer. Planning and dedication to a task can make all the difference between success and failure.
MichelleJ
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