“STRATEGY – THE ROADMAP FOR THE FUTURE”
What will your business be like in three years? In five years? As CEO, are you prepared to cope with changes in the economy, new or more aggressive competition or the unforeseen demands of customers and suppliers?
No one can predict the future. But rather than sit back and wait for it to happen, effective CEOs anticipate what lies ahead. The orderly process needed to meet the challenges that inevitably will occur is called strategic planning.
A good strategic plan reflects the values of the organization, creates a future vision and provides direction on how to get there. It inspires change in behaviours, in products and/or target markets and clearly defines threshold criteria for achieving success. In a nutshell, a strategic plan establishes the road map for future organizational success.
The success of any strategic planning initiative is dependent on five key elements:
- 1. Involving the Right People - top managers and employees that are willing and able to contribute meaningfully to the process. The organization is strengthened through the teamwork, vision and the shared ownership of success that results from creating a plan together.
- 2. A Comprehensive Planning Process – that looks inside and outside the business; examining the business processes, the business environment and competitors from 360º to define a unique competitive strategy and achievable goals for the business.
- 3. CEO/Executive Commitment – setting the future course of the business is arguably a CEO/Owner’s most important responsibility however failure to execute the plan and follow through on agreed upon initiatives is often the major cause of why some plans fail to deliver as expected. A CEO/Owner must possess or acquire the necessary skills necessary to not only build the plan but to ensure it is implemented
- 4. Clearly Defined Accountabilities and Review Process – strategic initiatives and action plans are the outputs of the planning process and must be assigned to managers with clearly defined timelines. A review process must be established to hold managers accountable for delivering on their commitments and to monitor progress against established targets.
- 5. Effective Communication – staff at all levels of the organization should understand the purpose and strategic goals of the organization. Communicating the plan will help align tasks, prioritize competing activities and build a shared commitment toward desired results.
The fundamental elements of business - customer expectations, regulatory requirements, and the actions of competitors - are always in flux. If an organization fails to anticipate or prepare for these changes, it loses valuable lead-time for dealing with them.
Strategic planning is critical for any business; large, small, well established or newly emerging. Studies indicate that 75 percent of small businesses fail within the first five years due to a lack of an overall plan and direction and limited knowledge of the competition, the marketplace and the economy in general.
Often established businesses achieve a level of success and then stall. There are many reasons why this can occur. The most prevalent are: resistance to change on the part of both management and staff, lack of knowledge and skills to manage change, ineffective organizational structures, out of date business processes, poor monitoring and review mechanisms, lack of accountability, follow-through and/or reinforcement, poor cross-functional teamwork.
The essence of strategic planning is the establishment of a direction for the company (values, vision and goals) and a decision about how to get there (the strategy, key strategic initiatives and detailed action plans). The strategy is critical. It is essentially defines how the company is going to compete – what it will do that will differentiate it from competitors that will result in winning new business, retaining existing business and deepening existing customer relationships.
In any organization, certain "nay-sayers" not only question the value of strategic planning, but may actively deride it. If this attitude becomes part of the corporate culture, it can prove deadly. Watch out for short-term thinking, leadership fatigue, complacency and deeply ingrained traditional outlooks.
The lack of a comprehensive strategic plan directly impacts a company's work force. Employees who sense aimlessness within an organization may suffer morale problems because, as far as they are concerned, the future is uncertain, unpredictable and out of control. These depressing conclusions can only be interpreted as a threat to employment, which adversely affects productivity.
If a strategic plan doesn't help focus energy and guide staff toward a shared goal in an ever-changing world, it's not doing its job. Creating an effective and workable strategic plan takes effort and discipline. The results, however, are well worth the effort in that a good plan, properly implemented will drive future organizational success through a series of well thought out, fundamentally sound set of business decisions.
In summary, the development and implementation of a strategic plan is a critical business activity in that it:
¨ Provides Direction and the Action Plans
It establishes in a clear, concise and in a strategically sound way a) the direction / destination the organization and its individual operating units and b) how this will be achieved.
¨ Prioritizes and Aligns Activities
Strategic planning is about making choices, establishing priorities, allocating scarce resources and coordinating these to achieve desired results and the company’s vision.
¨ Defines Accountabilities
It defines clear lines of accountability for the achieving expected results on the agreed upon strategic initiatives.
¨ Enhances Communication and Commitment
In clarifying the vision and the accountability to achieve the vision, it increases the alignment of all organizational activities and fosters commitment at all levels.
¨ Provides a Framework for ongoing Decision Making
All decisions should support the strategy, and therefore, the strategy and the strategic initiatives are the reference
Although the strategic planning process culminates in publication of a plan, it doesn't end there. Strategic planning is an ongoing business process. To be truly successful, it must be integrated into the continuous management process and become part of the fabric of how the business operates.
Prepared by