Do you know where your company is
going? What will your business be like in
three years? Will you be a few steps closer
to realizing your vision?
No one can predict
the future. But if
you don't change
anything, will the
future be any different
than the past?
Probably not. But one sure-fire way to
impact your company's future (and profitability)
is to dust off an old tool the
Strategic Plan.
A company's strategic plan is the "game
plan" management has for positioning the
company in its chosen market arena, competing
successfully, satisfying customers,
and achieving good business performance.
Most business owners and executives have
a myriad of excuses for not having a formal
strategic plan. I've heard everything from
"We're too new," "We're not big enough,"
to "We've never had one, why start now?"
If these excuses sound familiar, here are a
few interesting facts: Studies indicate that
50 percent of new businesses fail within the
first 18 months due to a lack of direction
and roughly 90 percent of all businesses
lack a strategic plan.
If you are part of the 90 percent, ask
yourself: Could your company be more
focused? Could you be more effective?
Could your employees be more efficient?
And most of all, could your company be
more successful? Most of us would probably
answer "yes" to all of the above. Here's
how each part of a strategic plan will
change how you answer these questions.
Vision: It brings focus
You get what you focus on. Everyone
knows this, but most companies are busy
tending daily urgent problems, and not
focusing on long-term important aspects.
Unless your staff can focus on a common
vision, the company will go nowhere. A
strategic plan helps direct energy and
guide staff toward a shared goal in an
ever-changing world. Orit Gadiesh,
chairman, Bain & Co., sums up the
importance of focus: "In the current environment,
companies can't afford not to
have a set of guiding principles a
vision that communicates 'true north' to
the entire organization."
Mission, goals and objectives:
They empower employees
Vision is useless unless it can be channeled
in a way to empower your employees.
The mission statement, goals and
objectives are the road map in a strategic
plan to do this. A long way from being
just a paragraph on the wall and bullet
points in a memo, these are the primary
guidelines for leading the organization to
higher levels of performance. They provide
the framework for independent decisions
and actions initiated by departments,
managers, and employees into a
coordinated, company-wide game plan.
Strategy: It saves time and energy
Once the mission, goals and objectives are
clear you can establish how you are going
to achieve them. A strategy provides the
vehicle and answers the question "How are
we going to get there with the available
resources?" Strategy focuses on how to
achieve performance targets, how to outperform
your competition, how to achieve
sustainable competitive advantage, how to
grow, how to satisfy customers, and how to
respond to changing market conditions.
Basically, strategies keep your whole company
acting together while strengthening
the company's long-term competitive position
in the marketplace.
Execution and evaluation:
It ensures success
All the best missions and strategies in the
world are a waste of time if they are not
implemented. To be truly successful, the
plan cannot gather dust on the bookshelf.
Know what your end result looks like and
where your milestones should be. Plan
your near-term actions and evaluate every
quarter. Are you where you thought you'd
be if you had been on target? Or, if you're
off target, by how much? The course correction
to put you back on track becomes
your next action plan.
If done correctly, a strategic plan is a
living, dynamic document. Strategic planning
becomes a process that is ongoing
and never-ending, changing as the market
and your environment changes. A strategic
plan drives your business and must be
integrated into every fiber of an organization,
so every employee is helping to
move the company in the same direction.
When your company has a clear plan
and takes appropriate action, you get
"traction" to take you from where you are,
to where you want to go!
Erica Olsen (erica@m3planning.com) is a
business development and a strategic planning
consultant. She writes a monthly column
for Northern Nevada Business Weekly.
