The Garrison Report #2005-12

Creating a Strategic Plan

Last month's issue of the Garrison Report explored the concept of strategic planning, and focused on developing your SWOT. You can review that report at www.TedGarrison.com/resources/garrison-report/2005-reports/what-is-strategic-planning. If you completed that analysis, you are ready to begin to develop your strategic plan.

The five key parts to an effective strategic plan consist of the vision statement, the mission statement, the objectives or goals, the strategies and the prioritized action plans.

Some people argue that you don't need both a vision and mission statement. The author disagrees. The vision statement is what the company wants to achieve for itself. This is critical because unless a business takes care of its needs and desires, it will lack the passion necessary to be a great business. This is true even of nonprofit organizations. For nonprofits the passion revolves around their particular cause. There is nothing wrong with wanting your business to grow and prosper. Therefore, your vision should create the image of what you would like to see the business grow into. A business needs this direction, or it will flounder.

In contrast, the mission statement describes why the client wants to use your service. Your clients aren't interested in how your company prospers; they are interested only in what your company is going to do for them. For that reason the importance of the correct mission statement can't overemphasized. The purpose of a business is to find a need and fill it. If you do that better and more effectively than your competitors, you will thrive. The key is selecting a mission that you are both good at and have a passion about delivering. Being good at it should be obvious, but the passion is just as important because that is what's necessary to carry you through those dark days that every business experiences. The passion would give you the boost to fight through the obstacles and challenges that separate the average company from the great company.

The vision statement and mission statement are related and, therefore, must be compatible. For example, unless your business is determined to deliver high value for your clients, it's unlikely that the business will create high value for you. In addition, the two statements provide the parameters for all other decisions within your organization. In essence, every decision, action or selected objective must move you toward the achievement of those two statements. They keep your company focused on its overall goal.

The mission and vision statements should reach out five to ten years. Anything shorter will cause you to vacillate too much, but anything longer is impractical in our rapidly changing world. Ten years from now, the best opportunities may not even be imagined today.

The challenge is that both the vision and mission statements are too broad to implement without breaking them down into manageable steps. This is no different than any construction project that is broken down into project milestones. Milestones make the process more manageable. Large, complex ventures can be overwhelming because they appear to have so much to do they can almost paralyze the participants. Therefore, they need to be broken down into manageable tasks. In strategic planning these are referred to as objectives. The objectives should reach out about three years in order to provide some consistency without losing their current focus.

The average company should develop between eight and 11 objectives. Too many and a company will lose focus. However, too few and the company will not be measuring enough factors. The objectives should be selected from across the entire company, such as financial, sales and marketing, operations, human resources and others as appropriate. For example, if you monitor only financial issues, it may appear you are on target to achieve your goals. However, in the process you may be destroying employees' morale, causing several key people to quit. When they leave, the former profits may disappear and leave your plan in disarray. The key to the success of any strategic plan is that all stakeholders must be taken care of fairly, or the losers will sabotage the plan.

The strategies are simply the specific methods to achieve each objective. There should be one strategy for each objective. Each strategy should be outlined and developed in sufficient detail to insure the company will be able to provide the necessary resources and possess the necessary skills and knowledge when needed. However, the strategies shouldn't be planned in infinite detail. The reason is simple: as conditions continue to change, the strategies will need to be adapted to those changes. Creating a detailed plan up front wastes time and money since much of that detailed planning will be thrown away. Further, the more time and effort people put into a plan, the more they resist changing it even if the change is needed. This can convert potential positive energy into counterproductive actions.

This doesn't mean that strategic plans aren't required to have detailed plans. However, the place for the detailed plans is found in the final step—the prioritized action plans. The prioritized action plans should cover a 90-day period and should provide all the necessary actions to keep the objectives on schedule. For example, if a particular objective is to be completed in two years, then the prioritized actions plans must include the steps necessary to be completed within the next 90 days to ensure that the objective is completed on schedule.

The action plans are executed at the tactical or department level. They convert the strategies into doable steps. In essence, the strategic goals cascade down through the organization. The action steps should adhere to the SMART principle: Specific, Measurable, Approved, Realistic and Time bound.

When you are formulating your action plans, you need to ask the question, "How will we achieve these goals?" The actions steps will provide the who, what and when to achieve the action plans. Once you have identified the various steps, you should ask, "Can this step be broken down into sub-steps?" This will ensure all steps are broken down to their simplest level. This is similar to the work breakdown structure used in project management.

One of the most important tasks in developing the action plan is to ensure that the necessary resources are available. A plan without the necessary resources is merely a dream. Therefore, management is responsible for planning ahead to ensure that the necessary resources will be available whether needed in the current set of action plans or future action plans. Unless management thinks ahead, the necessary training, the proper people, the funds or the company's capabilities may not be available when needed.

The keys to creating an effective action plan include keeping it simple, involving the people who have to execute the plan, specifying roles and responsibilities and making it flexible. Keeping it simple should obvious. The plan needs to be understood by everyone, so avoid complex plans that only confuse people. Employees rate being "in on things" as the second most important motivator for them. Therefore, it makes sense to include those who must implement the action plans in developing the plans. One of the biggest causes of failure results from the lack of clear roles and designated responsibilities. When this occurs, tasks often go undone. Finally, any plans should be flexible because as you begin implementing them, things will happen that will require adjustment. This is no one's fault; it's just the reality of the real world. Therefore, good plans are living documents.

You are now prepared to move your company forward. Good luck.

 

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