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Key Elements of Effective Strategic Planning

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Page 1: Strategic planning   key elements3

Key Elements of EffectiveStrategic Planning

Page 2: Strategic planning   key elements3

No Map

No Guide

No Direction

No Map

No Guide

No DirectionSound familiar?Sound familiar?

Failing to plan is planning to fail

Page 3: Strategic planning   key elements3

What Keeps Us From Planning?

• I’m always firefighting• I’m too busy to plan• I’ve done ok so far• I can’t find the time to do what I know I

need to do, much less what I want to do.• Fear of failure

Page 4: Strategic planning   key elements3

What is Strategic Planning?

• An organization’s process of defining its direction and making decisions on allocating its resources, including its capital and people.

• A framework for making choices about products and services provided, markets to be served and capabilities needed.

- Wikipedia- Mike Freedman and Benjamin Tregoe, The Art & Discipline of Strategic Leadership

Page 5: Strategic planning   key elements3

Statistics

• 95% of the typical workforce doesn’t understand its organization’s strategy

• 70% of organizations fail to execute their strategies• 86% of executive teams spend <1 hour/month discussing

strategy• 60% of organizations don’t link strategy to budgeting• The top 10% of large companies surveyed experience

real and material benefits from their planning processes - increased profits, improved cost control, better foresight, improved performance, shared purpose

http://www.missionfacilitators.com/Articles/Organizational%20Development/Tools/Statistics%20about%20Strategic%20Planning.pdf

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Why Plan Strategically?

• Peter Drucker, father of modern management:“A leader’s first job is strategic planning”

• Brian Tracey: “Excellence is not something that happens by accident; it happens by deliberate design”

• Enables your organization to be aligned and to play to your strengths

• Planning reduces risk (as measured by earnings variability)

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Strategic Plan

Sales Plan Marketing Plan

Financial Plan

Annual Budget

Capital Budget

HR Plan

Strategic Plan Drives the Firm

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Elements of Effective Strategic Plans

• Company Vision – What does the future look like and what will your

company look like in the future?What is your purpose, cause, passion & nicheFilter for new growth opportunitiesGuide for phasing out non-strategic activities

Where do you want to go?

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VISION STATEMENT EXAMPLES

• Year after year, Westin and its people will be regarded as the best and most sought after hotel and resort management group in North America." (Westin Hotels)

• "To be recognized and respected as one of the premier associations of HR Professionals." (HR Association of Greater Detroit)

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VISION

• Vision statement can be a one-liner:– “We sell beauty” Charles Revson (Revlon)

VISION: Innovative leadership in beautyMISSION: #1 Retail cosmetics companySTRATEGY: Multiple lines for multiple needs

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An Inspiring Vision Starts with “WHY”

WHY

WHAT

HOW

“People don’t buy WHAT you do; they buy WHY you do it”- Simon Sinek

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Elements of Effective Strategic Plans

• Company SWOT AnalysisStrengthsWeaknessesOpportunitiesThreats

Where are you now?

What are your Core Competencies?

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Critical Success Factors

• What absolutely MUST happen for you to be successful in 2013?

• CSFs are conceptual in nature, not specific

• CSFs typically:Leverage a StrengthFix a WeaknessCapitalize on an OpportunityBlock a Threat

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Critical Success Factors

• Improve Operating Cash Flow• Relocate to enable expansionFinancial• Hire General Manager• Develop New Hiring ProcessHR

• Develop New Customers• Develop Social Media StrategyMarketing• Develop Exit Strategy• Establish Partnership CharterPlanning

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Elements of Effective Strategic Plans

• S.M.A.R.T. Goals Specific Measurable (KPIs) Achievable Relevant to a CSF Time-sensitive

Clarity

Feedback

But Challenging

Gain Commitment

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Making Goals “Stick”

• Write the goal – physically – on paper• Public commitment

– Commit to a friend or supportive person

• Commit to regular progress reports– Written better than verbal– Regular = weekly, biweekly, monthly

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“If you don’t know how you got there, you

probably won’t stay there”

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Elements of Effective Strategic Plans

• StrategiesAnswer the question, “How?” for

each S.M.A.R.T. goal?” Conceptual – not quantitative

Update marketing materialBegin email marketing campaign

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Elements of Effective Strategic Plans

• Action Plans Who will do what and when will

they do it?

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The Planning Pyramid

S t r a t e g i e s

A c t i o n P l a n

G o a l

C r i t i c a l S u c c e s sFa c t o r

Vi s i o n

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The Bedrock Foundation

S t r a t e g i e s

A c t i o n P l a n

G o a l

C r i t i c a l S u c c e s sFa c t o r

Vi s i o n

Owner’s Personal Vision

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Strategic Planning Is A Continuous Process

Plan Development

Quarterly Review

Quarterly Review

Quarterly Review

Planning does not happen all by itself

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Making it Happen!

• It starts with the business owner• Leadership is about coping with and

driving change• “We must take change by the hand or, rest assuredly,

change will take us by the throat.” - Winston Churchill

• Successful strategy implementation requires effective communication, teamwork & accountability

Everyone in the organization KNOWS what the strategy means to them

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HOW DOES A BUSINESS OWNER STAY ON TRACK?

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Here’s Where The Alternative Board Can

HelpThe TAB system includes:1. Monthly board meetings2. Business leadership

coaching3. Business education4. Resource network5. Proprietary web-based

tools including the Strategic Business Leadership planning tool

All designed for Business Owners

Page 26: Strategic planning   key elements3

Thank You!

Tim Stoll, OwnerThe Alternative Board – Metro Baton Rouge

(225) [email protected]