Monday, May 9, 2011

Strategic Plan: The Process of Developing and Implementing One for Your Business

Woody Allen says that “Relationships are like sharks; if they don’t move forward they die.” I would like to add one more category of things that also have to move forward: Businesses. To move forward, you have to know where you are going.
Successful entrepreneurs and business owners develop and implement a strategic plan to identify improvement opportunities, define profit improvement avenues, and set goals. Strategic planning has 5 parts namely: internal assessment of the business, external assessment of the business, management and leadership planning sessions, implementation of the plan and finally evaluation of how the plan is going. Let us then look into each of these phases.

Internal Assessment: Where are we now?
 A strategic plan is basically a road map to the future and it is logical to start by asking yourself: Where are we now? To answer this question, the company has to ask:
What are our strengths and weaknesses?
What are we good at?
What are our competencies?
What do we perceive as threats and opportunities? And what are we currently doing right?
What are we currently doing right means a number of things. It means identifying all the company’s critical components and processes such as product development, order fulfilment, human resource management and customer service. The company must then ask: How good are we at product development? How well are we fulfilling orders? Are our employees satisfied and productive? And then it has to decide how important each of these components and processes are to the company.
If a process or component is important and is not being performed well then it is a target for improvement.
External Assessment: What is Out There?
No business operates in a vacuum therefore apart from looking inward at the company’s strengths and weaknesses you have to look outwards also. Who are your competitors? What do the consumers want? What factors influence the market place? These are critical questions that you must answer to gain clarity of the environment and start thinking outside the box.
Management and Leadership Planning Sessions: Where Do We Want to Go?
This is the emotional heart and soul of the strategic planning process. It is where the introspection and investigation of the previous two parts come to fruition. It is where the data and the analysis get mixed together with the key ingredient –the human factor. When you take data and analysis and mix it with the human factors of creativity and enthusiasm, you get the potent mix: the strategic plan.
Implementation Plan: How Are We Going to Get There?
After a plan has been agreed upon, it must be realized. In follow up meetings, detailed plans have to be developed for each strategic goal complete with timetables and budgets.
Evaluation of the Strategic Goals: Review! Review! Review!
It is essential to keep revalidating the assumptions of a company’s strategic plan during the periodic reviews. The value of reviews is inestimable, because no matter how carefully you plan and implement, there is bound to be something that you and your team did not consider. And that something can hinder even the best conceived and best implemented plan. These reviews should be held at a minimum of twice a year. During these meetings, progress is measured, performances are evaluated and the company’s goals are reassessed in the light of the ever changing business environment.
What happens once you achieve your strategic goals? You develop a new strategic plan.
I would love to hear your comments.

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