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Five Ways Strategic Planning Builds Capacity And Capability

Guest post by: Joe Evans

Article Overview: By September 2011, Borders Books will close their doors forever. The company will liquidate all of its assets and deliver pink slips to approximately 11,000 employees. Meanwhile, as a result of smarter strategies that recognized and accounted for changing dynamics in their marketplace, competitors like Barnes & Noble have fared much better. How can two such similar book store giants end up on such divergent paths? Examination of the downfall of Borders Books reveals strategic errors that arguably led to its demise. Such is often the result of ill-conceived strategies that failed to zig when the market zagged.

Five Ways Strategic Planning Builds Capacity And Capability

By September 2011, Borders Books will close their doors forever. The company will liquidate all of its assets and deliver pink slips to approximately 11,000 employees. Meanwhile, as a result of smarter strategies that recognized and accounted for changing dynamics in their marketplace, competitors like Barnes & Noble have fared much better. How can two such similar book store giants end up on such divergent paths? Examination of the downfall of Borders Books reveals strategic errors that arguably led to its demise. Such is often the result of ill-conceived strategies that failed to zig when the market zagged. Harnessing The Power Of Strategic Planning Strategic planning helps identify market trends and customer preferences, then attenuates strategy to programs that address those trends and preferences accordingly. It establishes the correct architecture for fiscally responsible growth, and - second only to superb execution - is the single most important determinant to organizational success. Success largely depends on an entity’s ability to build internal capacity and capability as a result of having planned for it to occur.

Strategic planning does the following:

• Point 1: It helps define strategies that further the mission of the organization with capacity to grow successfully. A thorough strategic planning process identifies potential growth markets that can be investment opportunities for the organization’s resources. Such markets can become the next generation of revenue sources and replace those that are becoming saturated, undergoing fundamental changes that pose risk to the business or may be experiencing decline.

• Point 2: It identifies the correct organizational priorities through structured analysis of initiatives and forces alignment of spending with those ordered priorities. For instance, as early as the 1990‘s, Barnes & Nobles noted the growth and popularity of online book sales and e-books. The company adopted a strategy to become a player in online book sales and invested in programs to make it a major player in sales of books over the Internet. It paid off. Their early entrance into online sales arrived in time to capture market share and establish a beachhead. Likewise, Barnes & Noble developed the Nook to strategically position themselves with the market segment preferring to read e-books. Instead, Borders Books ignored the market trend, outsourcing its online sales to competitor Amazon. That turned out to be a big strategic blunder for Borders. They also pumped money into physical plant capacity to support distribution of physical books, despite the declining market, and updated their retail store across their large network.

• Point 3: As described in the previous point, strategic planning aligns spending to programs that further the execution of the organization’s strategy. More subtly though, strategic planning relates to hiring decisions. Hiring practices must address needed capacity to support strategic programs by supplying the business with talent that is delivered at the right time and with the right skills. The operational plans, within the strategic planning umbrella, should spell out those requirements. Additionally, strategic planning yields the benefit of adding accountability into job performance and tying incentives to the completion of goal-related initiatives. Clarity regarding roles and responsibilities relative to plan goals requires people who have sufficient incentive and understanding to execute to that plan. Employees that understand what is being done, the reasons why, when to do what, and how they can contribute become empowered team players.

• Point 4: Almost everyone thrives on having structure in our lives, especially in our work. A strategic plan helps motivates management as well as employees by giving them structure and direction. Stronger line-level managers and employees benefit the entire organization by improving upon the execution within the business operations while being a major part of the many strategic “goal-supporting” initiatives the business relies upon for fueling the future vision.

• Point 5: Ultimately, strong strategic plans help strengthen culture with improved and channeled energy. Organizational performance indicators and metrics help provide the ability to control and manage, as they signal the need for evaluation and analysis early when corrections to implementation tactics can be made more easily with fewer cost implications. With proper management controls in place, this approach allows those closest to the action to respond quickly and appropriately when it is needed – always operating within predefined spheres of control and in concert with the strategic goals. This allows them to embrace the vision and fully participate in the tactical execution.

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For permission to use or reprint any portions of this copyrighted article, contact Method Frameworks at articles@methodframeworks.com.

About the Author:

Joe Evans is the President and CEO of Method Frameworks. Joe is a published author, frequent speaker and recognized expert in corporate strategic planning. To contact Method Frameworks about scheduling Mr. Evans about an upcoming speaking engagement, visit www.methodframeworks.com/business-speaker or email requests to media_relations@methodframeworks.com.

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Method Frameworks is a leading business strategy and management consulting company, based in the Dallas / Fort Worth area and serving clients nationally and internationally.

Discover our capabilities and learn why Method Frameworks is the strategic planning partner chosen by Fortune-500 companies and small businesses alike. Let us show you how to realize 140%+ ROI on your strategic planning efforts through our unique Plan4^SM process that brings together strategy and execution into a powerful plan. Plan4 is our proprietary business planning process that involves an integrated set of actions designed to help companies gain sustainable advantage. Download our brochure to learn more about Method Frameworks and our services or download our Plan4 Planning Process Overview.

You can contact Method Frameworks at 877-317-5264 (877-31PLAN4) or follow this link to request a meeting with a planning consultant. Check our articles and blog often at www.methodframeworks.com to get many more planning tips and information about our Plan4 process.

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