May 25, 2011
Writing Your Strategic Plan
BY Mary Mahoney
Pick a school of thought, and you’ll find “the definitive method” for writing a strategic business plan. Truth is, you can adapt an existing model or build your own by picking and choosing the elements that best suit your circumstances.
One element, however, is not optional: the element of time. Your plan must be executed over a defined period, typically from one to five years, depending on the dynamics of the industry and segments in which your company competes.
Let’s compare personal computer manufacturing and steel-making. For the last quarter century, we have witnessed the relentless advancement of new features, benefits and underlying computer technology. Each year, new computers and software were introduced that made earlier models obsolete.
Consequently, customers came to expect major new features and benefits with each new model of computer, whether it was a faster central processor, greater capacity for random access memory or a more robust video card. Those manufacturers therefore faced a very short time horizon in their strategic plans.
Case in point is data storage. Five years ago, we all yearned for hard drives that spun faster and held more data: 500 GB, 750 GB, 1 TB and more. Now we look to “the cloud” for virtual, web-based storage, making on-board hard drives nearly passé.
For steel-makers, five years isn’t necessarily long at all. It can take at least that long for a such a company to raise the capital investment, design and procure equipment and prepare plant infrastructure to facilitate a major production upgrade.
Long or short, the duration of time specified in a strategic plan represents the deadline by which success or failure will be measured. Time holds everyone in the organization accountable.
The website Small Business Notes suggests strategic plans include the following five components: 1) business purpose, 2) organizational goals, 3) strategies for reaching each goal, 4) action plans to implement strategy and 5) monitoring plan implementation.
The business purpose is akin to a mission statement, which I explored in an earlier blog. A mission statement states why the business exists and what it seeks to achieve.
Organizational goals are endpoints, known in corporate-speak as “deliverables.” Defining goals involves making hard decisions to focus the organization’s energy around limited, finite objectives.
Frederick Nickols and Ray Ledgerwood developed what they call The Goals Grid to help establish strategic goals. The grid seeks yes-and-no answers to two basic questions for every goal: “Do you want something?” and “Do you have it?”
If you want something that you don’t have, your goal is to obtain or “achieve” it. If you want something you already have, your goal is to keep or “preserve” it. If there’s something you don’t want and don’t have, your goal is to “avoid” it. If there’s something you don’t want but have, your goal is to get rid of or “eliminate” it.
An alternative process is to prepare a SWOT analysis, which I discussed in an early blog, to identify your company’s strengths, weaknesses, opportunities and threats. (You can conduct SWOT analyses both for your business and your competitors.)
The process of establishing strategies for each goal involves explaining what the organization will do and how it will do it. This part of the plan is subject to on-the-fly revisions as different ideas are tested and either succeed or fail.
(Donald Rhodes of the Georgia Small Business Development Center Network urges companies to integrate “feedback loops” into their strategic planning process to ensure a “continuous flow of information to facilitate the evaluation of the goals of the company so that corrections may be made during the appropriate timeframe.”)
Action plans describe specific, measurable activities that will be employed to implement each of the above strategies.
Monitoring implementation can be as rudimentary as putting checkpoints on a calendar or as sophisticated as evaluating multiple metrics. The purpose is to track progress toward implementation of each goal. Missing a deadline or checkpoint should signal the need to re-evaluate the strategy and action plan.
According to the website Small Business Resource, the completed strategic plan should be visionary, conceptual and directional. The company’s operational plan, on the other hand, should address the short term and be tactical, tightly focused, implementable and measurable. A strategic plan must be realistic and attainable, the site says.
The Center for Management & Organizational Effectiveness urges companies to involve their strongest employees in the plan’s development as a means of establishing an internal constituency. The rollout should be followed by biannual employee meetings to clarify the plan’s direction, make adjustments and respond to questions.
For additional reading, the U.S. Small Business Administration offers a 25-page primer entitled Strategic Planning for the Growing Business by Scott Safranski. An 89-page book, Strategic Planning: Fundamentals for Small Business by Gary May, can be downloaded as an e-book from Amazon.com or Sony’s Reader Store.
J. Robinson Group helps clients assemble custom strategic business plans, navigate the process and monitor effectiveness for the duration. Our expertise, objectivity and impartiality enhances planning credibility across varied constituencies.