Let’s assume you have taken the time and effort to create a deliberate and thoughtful business plan for your company. One that has outlined your mission, vision, values, and has definitive business goals and objectives. Good for you! That is certainly the first step. Unfortunately, 90% of companies fail at successfully executing their strategic plans, according to The Balanced Scorecard by David Norton and Robert Kaplan. Seem high? Other reports find that it’s more like 70%, and still others say 3 out of 5. Regardless of the exact figure, the likelihood of failure is high. So why bother?
Customer Satisfaction
How your customers judge you on such measures as quality, timeliness, performance, service, and cost.
Organization Culture, Learning & Growth
The attitudes and work habits of people (including leadership).
Internal Operations
Adequacy and efficiency of internal processes, competencies, technologies, and systems.
Financial Performance
Indicators of financial health, such as return on investment, profitability, and gross sales.
What does the planning process look like?
Strategic planning is the process of developing and implementing an approach to reach business goals and objectives. More than anything else, strategic planning gives direction to your firm by helping you determine where your company is going over the next year or more, how it will get there, and how to tell if it did.
How you go about developing your strategic plan depends on the nature of your firm’s leadership, culture, complexity, size, as well as your knowledge and expertise in strategic planning. Here are a few example methods.
Goals-based strategic planning is perhaps the most common used and begins with focus on your company’s mission (and vision and/or values), goals to accomplish the mission, strategies to achieve the goals, and action planning, for example, task assignment and scheduling of completion dates.
Issues-based strategic planning often begins by probing issues your company faces, strategies to tackle those issues, and your plans of action.
Organic strategic planning usually starts by expressing your company’s vision and values and formulating action plans to achieve the vision while sticking to the values.
At the end of it all, among other results, your strategic plan should:
- State your company’s mission and a vision for its future.
- Embrace, as its ultimate goal, the acceleration of your company’s forward momentum.
- Articulate initiatives that will strengthen its core competence.
- Identify priorities that will guide the future allocation of resources.
- Include a financial plan that envisions a balanced budget.
- Specify procedures for regular assessment of the plan’s implementation and success, and for the continuation of planning.
The truth is, the process of planning itself holds a level of value. To impact your bottom line, however, your plan must be effectively executed.
Ready, set, go!
Let’s start with this, virtually all strategic planning efforts produce a well-structured and nicely written document. The problem, as so many articles, reports, and studies conclude, is that somewhere between 3 in 5 and 90% of companies keep their plans a secret at the executive level. The action part of the plan is completely lost.
Top priority of a successful strategic plan is getting your people on-board. By this we mean engaging employees in the execution of making the blueprint strategy a reality. This involves a clear, consistent, and prevalent message that will provide inspiration at all levels in your organization.
To inspire action and achieve the best results, a well-communicated strategic plan will satisfy four essential employee needs:
Understanding. Employees should know the critical elements of the plan. For example; company goals, objectives, direction, competitive positioning, top challenges, opportunities, etc.
Believing. Employees, especially mid-level managers, need to believe the plan is achievable.
Identifying. Each employee should be clear on how the plan impacts them and their areas of responsibility.
Realizing. This helps employees make the connection to the rest of the organization in terms of resources, collaboration, and interdependent priorities. Realization clearly defines how an employee’s work relates to the success of the whole organization.
Developing the right strategic plan takes an investment, and the results are critical to organizational success. No one knows your business as well as those who work in it every day. Take advantage of the team’s knowledge of the issues and use their creative ideas to thoroughly formulate a strategic plan that will enhance your organization’s competitive position.
Don’t waste your effort by failing to communicate with those who will be responsible for executing your plan and providing feedback on its success for the duration.
What you should know to get started.
Strategic planning is a process which helps focus your organization and aligns your senior management staff with a shared vision that builds excitement, and provides near and long term direction for all employees.
Vision Statement
Aspiration description of what an organization would like to achieve or accomplish in the mid-term or long-term future. It is intended to serves as a clear guide for choosing current and future courses of action.
Mission Statement
Written declaration of a firm’s core purpose and focus which normally remain unchanged, whereas business strategies and practices may frequently be altered to adapt to the changing circumstances.
Properly crafted mission statements:
- >Serve as filters to separate what is important from what is not
- Clearly state which markets will be served and how
- Communicate a sense of intended direction to the entire organization A mission is something to be accomplished whereas a vision is something to be pursued for that accomplishment.
Values
Beliefs that are shared among the stakeholders of an organization. Values drive an organization’s culture and priorities and provide a framework in which decisions are made.
Business Goals
Where the business wants to go in the future. It is a statement of purpose, e.g. we want to grow our business domestically and in Europe.
Business Objectives
Objectives give the business a clearly defined target. Plans can then be made to achieve these targets. This can motivate the employees. It also enables the business to measure the progress towards to its stated business goals. For example, we want to achieve 20% sales increase in European markets within the next 18 months.
Target Markets & Customers (Current and New)
Any entity, person, or business who receives the products and/or services provided by an organization.
Product, Services & Deliverables (Current and New)
Products and services provide the means to deliver value to the customer described as the end-result benefit which is linked to a specific and measurable improvement in the life of a customer.
Competencies (Current and New)
A bundle of skills, technologies, and capability that provide strategic advantage to the organization. They deliver significant value, create differentiation, and form the basis for organizational growth and sustainable success.
Business Focus
A long-term strategic position consciously chosen by an organization in order to add value to its customers (i.e. customer intimacy, operational excellence, innovation)
Competitive Differentiators
A factor within an industry that distinguishes one organization (competitor) from another and which results in direct benefits to the customer (i.e. price, quality, service, speed)
Value Proposition
A decision and commitment to deliver a specific combination of end-result benefits and price to a group of target customers, profitably and better than the competition.
Summary/Conclustion
No one can predict the future. A strategic plan helps you ensure that you are prepared for whatever change you encounter. After all, the only thing guaranteed in life, other than death and taxes, is change. A good strategic plan is an investment in the future growth and success of your business and the people who make it happen. So be thorough, listen, communicate clearly and often, and your strategic plan will provide you with a measuring stick and a blueprint for managing for your success.
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We know that every company has a unique set of challenges. Our perspective can help simplify what needs to be improved and our time-tested methods can provide clear steps toward your performance goals. Contact Liddell today.