“Any plan imperfectly executed is better than no plan perfectly executed.” -Scott Sorrell
Business planning ain‘t easy - trust me, I know. (Why do you think I became a writer for a living? Because I‘m organized? Able to develop strategic plans? Use basic mathematics properly??? Hardly!!!)
Yet the key to business survival and (we all hope) eventual success comes down to strategy -how you get from here to there, generating the necessary revenues, profits, and cash flows to keep things in good working order. It‘s the same mantra coffee shops, factories and (yes) truckers must follow.
As usual, Professor Jerry Osteryoung from the college of business at Florida State University has some thoughts on this subject, gleaned from years spent teaching and coaching a wide variety of business entrepreneurs. So I‘m getting to let him share his ideas about strategic planning. Professor, the floor is yours:
“Over the last 13 years I have conducted over 100 strategic planning sessions for all different type and sizes of companies. Five years ago, I did a strategic planning session for one company that had some real organizational and profitability issues. This company wanted to meet with me recently to discuss their progress. During this meeting they showed me how they had passed every single one of their five-year goals. They were so proud of this effort and I was proud of them. Unfortunately, this company is unique as so many companies do strategic planning and then file them under ‘dust collectors.‘
The point with strategic planning is that - while the planning process is important - even more important are the processes for implementing the plan and the processes to benchmark the plan against the actual results. Just having a plan is not good enough!
The firms that I have seen most successful with this implementation process are those firms who monitor how they are doing against the plan in their monthly meeting. If they are falling behind, they typically discuss what is holding them back and if the plan has to be revised, the corrective actions they are going to take.
One big stumbling block in the implementation of strategic planning is that strategic planning and budgeting decision are kept separate. The separation of these two functions almost always guarantees that there will not be adherence to the strategic plan. A far more effective process is to start any budgeting process with a review of the strategic plan and discussing how every expenditure must relate to the accomplishment of the plan.
When developing a strategic plan I always, work to ensure that the goals are quantitative and define how they are going to be measured. For example, if one of your goals is to expand into a new market, you would identify the target number of new customers per year from this market. The point being that the goals for any strategic plan must be measurable. Some of these measurements that you can use are typically, sales growth rate, profits, number of employees, market penetration, amount of debt, morale of organization, and community presence. Bottom line is that if you cannot measure it, then it generally is not an effective goal.
If strategic planning and implementation is going to be successful, then it must be communicated to all levels in the organization and not just the upper levels of management. Each and every employee needs to understand their role in achieving the goals and how these goals contribute to the success of the company. Once they understand this, your employees need to be informed on the progress towards the goals and how ‘their‘ company is doing in achieving the strategic plan. This is critical to a successful implementation of the strategic plan.
Finally, it is important is recognize when the plan is no longer viable or operational. Strategic planning is more of an art than a science since the process requires you to predict the future. As we are all aware, it is difficult to foresee change especially in areas where we have no control like the shifts in the economy. This is why it is critical to constantly monitor your plan and adjust to the changing conditions. If the plan needs to be changed or trashed, then this must be done along with a new set of parameters to measure the success of this revised plan. This new plan then needs to be communicated to the staff along with an explanation for the changes.”
Professor Osteryoung is also the director of outreach for the Jim Moran Institute for Global Entrepreneurship within the college of business at Florida State University. He was the founding executive director of the Jim Moran Institute and served in that position from 1995 through this year. He can be reached by e-mail at email@example.com or by phone at 850-644-3372.