There are hundreds of approaches to strategic planning. These range from the auto mechanic who ponders how he is going to buy more sophisticated diagnostic equipment to a Fortune 500 consumer goods company that pays McKinsey & Company hundreds of thousands of dollars to create a plan that will allow them to outperform their competitors. For most companies, the first approach is too little and the latter approach is way too much.
As I explained in “Strategic Planning is NOT Dead,” a strategic plan is indispensable for companies that want to:
a. Improve the bottom line
b. Give employees a focus and purpose
c. Tap into the creative ideas of management
d. Create a methodology to achieve performance excellence
I have used a strategic planning tool with my clients that has consistently achieved those goals when management follows through. However, there are many very good approaches to create a successful strategic plan. I share the following 10 Best Practices of Strategic Planning that should be in every approach.
- Advance preparation – I give my clients a Balanced Approach questionnaire that reminds management of potential areas of improvement regarding:
- The Mind – Education and Training
- The Market – Customer Needs
- The Machine- Internal Processes
- The Money – All Things Financial
- Open-minded CEO/President – A persuasive leader, that values his/her employees and their input, is necessary to make the process work.
- Engaged team – A core group of dedicated managers is key to maximizing the benefit of the strategic plan. A team that is prepared to share ideas will always create a more beneficial plan than a team that is reticent to share.
- Facilitator – The planning process is typically more effective if there is an outside facilitator to lead the process, step-by-step. A facilitator is usually better able to get all managers to share their ideas since they will be less likely to think that they are going to offend the boss.
- Off-site location – A planning session held in a comfortable place outside of the office helps managers to disengage from their day-to-day battles and to think strategically.
- SWOT – An analysis of the organization’s Strengths, Weakness, Opportunities and Threats (SWOT) allows managers to freely discuss the things that concern them or the improvements that they have been pondering. There are many ways to do this evaluation but they should include the essence of the four SWOT elements.
- Share Financial Information – Managers must understand the numbers of a company to develop strategy, including number of units sold or produced, gross sales, net income, etc.
- Brainstorm – Encourage all ideas without verbal criticism or reward. It is like mining for gold. Hundreds of tons of dirt must be mined to extract the valuable nuggets. Narrow the strategic choices to a manageable few after they have all been evaluated.
- Make assignments – For each task in the strategic plan, the team will agree who will do it, what they will do, and when it will be done. These assignments are captured in writing and distributed to all team members.
- Quarterly follow up – Nothing prompts action as much as knowing that your team will hold you accountable for the things you said you would do. Quarterly follow-up meetings are the best motivator to ensure that the strategic plan doesn’t just collect dust.
My final thought on strategic planning is to share a quotation from Thomas A. Edison, “Being busy does not always mean real work. The object of all work is production or accomplishment and to either of these ends there must be forethought, system, planning, intelligence, and honest purpose, as well as perspiration. Seeming to do is not doing.”