Strategic and Business Planning - Close but no Cigar
John, my husband, is an occasional cigar smoker. And as with any small vice, over time his desire for the smooth, mellow taste of a really good cigar has increased (Something, I assume only other cigar aficionados can appreciate). Based on my observation as a non-appreciator, the difference between a not so good cigar and a good cigar is about $20. So, John has concluded that if he can't have a good cigar, he had rather not have one at all.
And the same can be said about strategic planning and business planning. A business plan is the goals and action plans the company will implement in order to accomplish the goals during a defined time period. However, a business plan will not ensure a smoothly running company unless a strategic plan is the basis for the business plan.
A strategic plan is the overriding, big picture description of a company and what its mission is. Ownership often defines the mission of a company as making money, but there are many underlying layers to that seemingly straight-forward mission. Ownership may want the company to be its legacy, its retirement, its job, a preferred place of employment, a way of giving back to society, etc. So the strategic planning process must first determine what ownership wants the company’s mission to be. Next, it’s crucial to establish the necessary architectural structures, processes, procedures, and products/services to enable the company to accomplish its mission.
The process of strategic planning requires management to create or remind itself of the company's mission. Then, management must conduct a thorough examination of the company's products, organizational structure, financial, marketing, selling, inventory and distribution processes. The examination is to assess whether the current systems and processes are hindering or enhancing the company's ability to accomplish its mission.
Through in-depth discussion with employees, management should determine what is working, what should be eliminated and what should be added to systems and processes in order to ensure the company’s long-term success in accomplishing its mission – its reason for being.
Questions the Strategic Planning Process Should Answer
- What is the core value or mission of the company? What does the company stand for? This definition helps determine what product categories and or companies should be targeted for development or acquisition.
- Exploration of Existing products and/or services – Do these products and/or services fulfill the company mission? Should more products and/ or services be added? Should some products and/or services be removed?
- Exploration of company and product positioning with its customers
- Exploration of current marketing and selling processes
- Examination of current organizational, financial, distribution processes and inventory channels with potential to maximize sales and control the sales process.
- Do the current systems fulfill the mission?
- Would different systems better fulfill the mission?
- What systems need to be replaced? What should the new systems include?
- What can the company afford at this juncture?
- Reality check on current industry standards for testing and diagnostics.
- Are we up-to-date on industry certifications?
- Are there new techniques that can generate revenue?
- Is the training plan current?
- What does a stress test of the company (busiest time versus slowest time), show about the business infrastructure?
- Is technology working to the company’s advantage?
- Are real-time results consistently available for better management decisions?
- How will mobile platforms improve performance? Can the company afford them at this time? If not, when?
- What are other high performance companies doing both inside and outside the industry?
- What is available within the industry? Should the company join an industry association or alliance?
- What industry events should management attend? What publications should management subscribe to?
- Are there local networking groups available for companies from different industries?
- What information is available on-line?
- Has the company exploited its strengths?
- If yes, what is a new strength that needs to be built?
- If not, what is the company going to change in order to maximize strengths?
If creating a business plan is daunting, maybe the crux of the issue is the lack of a strategic plan defining the company mission and model. Without knowing why the company exists or the business model ownership has in mind, determining goals is impossible. Without an overriding and model, goals can be set that are meaningless. Goals might be established that actually are counter to the desired mission or that don't move the company closer to its desired model. Translated this means - any goal will do. And as a true cigar aficionado knows, that doesn't apply to cigars so it certainly doesn't apply to companies.
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