Jeremy Gray – Practical Solutions to Difficult Problems
Episode 2 Introduction to Strategic Planning
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Strategic planning is an art rather than a science. This is the first of three shows that will provide guidance advice and tips on how to write a strategic plan. The objective is by end of the three shows you will have the tools you need to develop a strategic plan that is relevant to your company and your employees
Planning is indispensable. Although circumstances will change without a plan you will not be able to react to the reality of the business environment.
Scenario planning is of little benefit. It's just not possible to foresee all potential scenarios.
Strategy is about choices, your strategic plan reflects the choices you have made.
But document rejected choices they may become relevant if circumstances change
Make your strategic plan a living document. A plan that is prepared then filed is useless.
A strategic plan describes why your company exists and where it is going.
Writing a mission and vision statement is important.
Some examples of mission statements from well known companies include:
Mission statement: To create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles.
Vision statement: To accelerate the world’s transition to sustainable energy.
Mission statement: Create groundbreaking sports innovations, make our products sustainably, build a creative and diverse global team, and make a positive impact in communities where we live and work.
Vision statement: Bring inspiration and innovation to every athlete* in the world. If you have a body you are an athlete
Mission statement: Offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.
Vision statement: To create a better everyday life for the many people.
Ensure every employee understands the mission and vision of your company and to understand the role they play in accomplishing those missions and visions.
Strategic Planning vs Tactical Planning
One of the ways a strategic plan differs from a tactical plan or budget is in the duration of the planning period. Tactical plans or budgets tend to have shorter timeline than strategic plans.
My recommendation would be for a three year strategic plan unless there are strong reasons for a longer time line.
A second difference reflects that a strategic plan looks at the company as a whole. It reflects where you want your company to go in the future.
A further difference is the level of financial detail in a strategic plan compared to a budget or operating plan. Some business experts argue that a strategic plan should not have any financial forecast as it is Strategic and not tactical.
Whether you decide to have financial targets or not it is important to understand the costs associated with your strategic objectives. All growth initiatives come at a cost whether it is financial, manpower, or capacity. The A in SMART goals stands for Achievable. Do you have or can you access the resources you need to implement your strategic goals?
The final difference I will cover in this segment is the level of reporting. You probably measure performance against your budget or operating plan monthly.While there should be progress towards some of your strategic goals each month a monthly review is too frequent. I would suggest quarterly or semi-annually.
Who should be involved in Strategic Planning
Starting with you as the CEO or business owner. Your involvement and leadership in the strategic planning process is critical. You have a difficult balancing act to achieve. You must provide guidance on where you see your company going but you must not become the loudest voice in the room
Every department or function should be represented. Sales, Marketing, Operations, HR R&D etc. Usually the representative will be the department leader but also consider if including a high potential employee on the planning team could be a development opportunity.
Although the team should be limited in size the departmental leaders should hold smaller meetings with their employees to solicit ideas, to report progress and discuss some of the options being considered to get the employees feedback.
Join me next week 11:00 AM Sydney 8:00 AM Singapore and 7:00 AM in Ho Chi Minh City when I will cover how to prepare a strategic plan that actually works. How does strategic planning help your business? What skills does a Strat planner need? What Strategic Planning is not? Why do strategic plans fail?
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