As a professional meeting facilitator who specializes in business, operational and strategic planning, I think it is only fitting that Joe and I conduct an off-site to do our planning. Because of the size, scope and complexity of our business, two days should do it. When done, then we’ll celebrate our new plans and then go to the beach. (Believe it or not, Honolulu was the cheapest place to fly to on short notice as we both needed just a few more miles to make it to USAirways Chairman and Air Canada Super Elite status. What a lovely place to conduct an off-site!).
First, we take a look at the Business Plan – the source document that describes the business that we are in. I call it the “business basics” that should be reviewed and updated every year. The key elements are:
- The Business including a general description of the business, the history, mission, vision and values
- Products/Services including the relative importance and benefits of each product/service line, the life cycle, evaluation (performance, timeliness, ease of use, certainty), competitive comparison and differentiation from other products/services.
- The Market including demographics on your current and targeted customers, your market segmentation, market research and trends, pricing strategies and marketing/sales strategy
- Competitive Analysis including your nearest direct and indirect competitors
- Physical Location of Business including building/space needs
- Management including an organizational chart with key individuals and responsibilities, resumes, strengths and weaknesses. planned staff additions, other resources needed, payroll expenses
- Personnel including Current personnel staffing and needs, future skills required, hiring and training plans, labor pool availability
- Potential Risks and Problems including legal/regulatory issues
- Financial Statements and Projections
The Operational Plan is an extension of the business plan, basically answering the questions: What are we going to do this year and how are we going to do it? The resulting key activities then get folded into the annual budget. I call this “blocking and tackling” – taking what you know to be true about your business this year and then making a plan that takes the business “to the next level.” Typically, these plans forecast incremental improvement in the coming year.
The Strategic Plan, on the other hand, looks beyond the one-year horizon and extends your vision out three to five years (some extend even further out, but they have fairly robust strategic planning processes. Most organizations I work with are keeping to the 3-5 year timespan).
Typically, there is a review of the business basics (some call this an internal scan) as well as an environmental scan – what’s happening in the outside world that could affect the business. We then move into “Strategic Thinking” where we identify where we want to be in the next 3-5 years. It’s a position to be attained (your “vision” of the future) and you aren’t there yet! Which means there is a GAP between where you are and where you want to be. The Strategic Plan is created to close that GAP. It also makes the assumption that you will continue to do what you have been doing through your business and operational plans (I call this “keeping the trains running”). You may opt to stop doing some things, change the way your doing some things and even start doing some new things in order to support the strategic direction of the business.
Rather than think this year to the next, strategic thinking requires you to think long term and then ask, “What do we need to do in order to be successful in that preferred future?” The strategic plan is about breakthrough improvements – figuring out where you want to be – and then determining the strategy to be successful in the long run. These key initiatives and activities are then folded into the long term and operational budgets.
I have been in business for 20 years now – and I plan on staying in business for 20 more. It would be absolutely ridiculous for me to think that I can keep on doing the same things and stay successful. Actually, that’s a “go-out-of-business” strategy! So I’ll invest a few days to work “on” vs. “in” the business and review and update my plans….and then go sit on the beach and celebrate the new year!
Happy new year to you!
- Stretch Your Leadership Teams’ Ability To Think Strategically
- Wikipedia’s Definition of Strategic Planning