Strategic Planning as a Concept & Practice
What does Strategic Planning really mean?
By Frank Caputo
Strategic Planning as a concept and practice, has been evaluated and discussed from many different approaches. Typically, the components include what the vision of the company will be sometime in the future.
The compartments of company vision are financial, the size, logistics, breadth of products and services offered, along with the mission specifics of what the organizations purpose is. From that point a strategic direction is established, outlining goals and objectives supported by defined metrics, timelines, and a platform for tracking results.
Indeed, these are all part of a strategic plan. However, what should be contemplated, are the finer details that must be included in order to have the plan play out over time, resulting in successfully attained results. The details are uncovered in the discussions about how we are determining the viability of the strategic plan.
Are our assumptions realistic based on past performance, capability of the current people involved, economic environment, competition, reliability of resources for adding required sales revenues? Is there access to the necessary products and materials to support the strategy? Will there be obstacles from governing bodies within the industry or regulators outside of the specific industry, which stand in the way of success? These are just some of the considerations that should be under discussion when mapping out and executing a strategic plan. Every company will have their own unique elements to vet out in the process.
The key to successful strategic planning is to balance risk and planning, to increase the odds of reaching the goals and objectives of the strategy, in the timeframe allocated to achieve the results.
In this approach, strategic plans are inclusive of quality research and metrics and stress test modeling, combined with simple, yet sophisticated discussions, around what it would actually take to achieve the results of the plan, and whether or not the people and organization can realistically do so in the defined timeframes. The formative question to address is if the plan is truly capable of being fulfilled, and does it push collectively outside of current organization comfort zones in three critical realms? Financially, Operationally and within the key area of Human Relationships. Let’s discuss these three realms.
First financially, does the company have the resources in working capital, cash flow and ongoing profits in the short term, to truly invest in the strategic plan? The needs could be for purchasing additional equipment, hiring additional staff, or upgrading current staff with new employees that are better suited to execute the strategy, as examples. It can also include costs associated with research into product development or expansion to additional markets or any other case specifics. All of these areas require capital expenditures.
Operationally, do we have the right people in the appropriate roles to attain the results wanted in the strategic plan? Is the current operational structure the most efficient configuration moving forward to execute? Are company systems, equipment, software, etc. capable of supporting the strategy?
Third, and certainly an area of impact on every aspect of the business, are the relationships inside the company and with external third parties. Are leadership and support team members in alignment with the strategic plan and agree to the direction and attainability of the goals? Does the company have enough current clients to support the plan, or will it require adding additional customers in similar businesses, or will it require developing new industry or vertical market relationships outside of the traditional markets? Are the current vendors, suppliers, and advisors capable of fulfilling plan needs, or do new relationships need to be established?
In summation, each of the three realms need to be considered and evaluated realistically based on past performance, capability of the current people involved, economic and regulatory environments, competition, along with the access and reliability of resources. Executives that adopt this type of deeper, results and outcomes focused analysis, should significantly be able to increase the odds and attainment of strategic planning goals, now and in the future.
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