What Is a Strategic Plan and Why Do You Need One? PDF Print E-mail

Part 1

By Wayne Rivers

Big companies take it as an article of faith that a strategic plan is a necessity, not a luxury. They’ve gone light years beyond even asking the question “do we need a strategic plan?” Strategic planning takes time, energy, and focused effort to coordinate the actions of groups of people whether their number is 50, 150, or 1,500. The ultimate goal for a strategic plan is to enable your team to focus on a small set of desirable, clearly articulated outcomes in order to produce desired results. After all, if the team doesn’t know the tune, how can they hum it all day along with you?

Entrepreneurs don’t usually start out with strategic plans because their internal drive for success is so powerful, so compelling, and so motivating. It’s usually everyone else who needs the plan. But make no mistake, the leader(s) benefits from having a carefully crafted plan as well. Strategic planning with the major decision makers and managers in your company allows an entrepreneur – even one who has never needed a strategic plan before – to gain the following benefits:

•   New insights from other peoples’ perspectives

•   Identification of the challenges as your best thinkers see them

•   New ways of thinking about old problems

•   Alternatives beyond the resources the entrepreneur has traditionally brought to bear

•   Training benefits. In fact, strategic planning is one of the absolute best training tools for getting next generation family business leaders up to speed

•   Buy-in from others on the team

•   A sharpened focus on critical success factors for pushing the company forward

•   Analysis from others’ perspectives on the feasibilities of new goals and objectives

•   Identification of challenges and barriers

•   Forced choices; that is, since not even the most ambitious and talented entrepreneur can realistically say “let’s do it all,” the strategic planning process requires the team to narrow down a huge menu of potential choices to a manageable few thereby increasing the focus of everyone on the team

The biggest benefit of strategic planning comes from the actual PROCESS ITSELF! It’s the process which drives everything else; even the final planning document itself is less important than the “all for one, one for all” process of thinking through the strategies.

The main purpose of strategic planning is to identify future challenges and describe the actions you and your company intend to take to burst through them. Don’t worry; there is no need to rush out and buy the latest software or latest college professor’s book. Old fashioned, step-by-step strategic planning still works pretty darn well. In fact, even a bad plan is better than no plan at all. Bad plans can easily be made better, and as you practice planning as a team, you’ll get better and better at it. A few of the must have components of a strategic plan might be called the four D’s:

1. DIAGNOSIS. Diagnosis must identify challenges, issues, and problems facing the company. Diagnosis requires brutal honesty.

2. DEFINITION. Specifically defining the issues comes first, then the critical fixes for solving the problems identified in diagnosis must be defined as well.

3. DETAILS. Details are embodied in specific action plans for the firm which will overcome the obstacles diagnosed in item #1.

4. DIFFERENTIATION. Your strategic plan must identify what makes you and your company different from the competition. If you’re simply solving customers’ problems in the same way as everyone else in your industry, what is the compelling reason for doing business with your firm? There must be some way for you to clearly articulate what makes your firm unique in the marketplace.

In the “New Normal” economy, strategic planning is more important than ever as businesses do more with less. If you’re not pulling your best thinkers together regularly to have them help you come up with innovative marketing, execution, and financial ideas, you’re potentially missing big opportunities.

 

What is a Strategic Plan and Why Do You Need One? Part 2

 

Wayne Rivers is the president of The Family Business Institute, Inc. FBI’s mission is to deliver interpersonal, operational and financial solutions to help family and closely-held businesses achieve breakthrough success.
April 2011