The Challenge of Strategic Planning – Are You Ready?
You may have decided that your company needs a comprehensive, formal strategic plan, but are you really ready for the challenge? Just as important as your willingness to plan is your commitment to expend the resources (time, creative energy and money) required to do it right. Proper planning always involves significant resources for implementation. You and your management team should be committed to following through before you commit any time to the first planning meeting.
A recent article by Kerry Capell at BusinessWeek, How Britain Jumpstarts Design (October 3, 2007), describes the government-sponsored process for helping small to mid-sized businesses re-energize their companies through innovative design. The author relates several different case studies in which a company identifies, with some outside help from Britain’s Design Council, ways to renew its products or make its company brand stand out from the crowd. There have been several brilliant and very profitable success stories from the program.
One interesting thing about the process is that the support of the Design Council is not simply a government giveaway. It is quite competitive to qualify for the program. All company applications to the program are reviewed by a panel of experts. No company is allowed in the program unless they have both the willingness and the ability to invest significant resources in product or process design. In short, the Council does not want to waste its resources helping the business with their design planning activities unless the management team and ownership can demonstrate beforehand that they will be able to follow-through with the good ideas that come out of the process.
This same philosophy should also apply to your thinking when you consider launching your strategic planning process. A comprehensive business planning process is bound to help your team develop many new ideas that will help you change your organization for the better. Implementation of these ideas will require management time and creativity (at the very least) and, in most cases, capital resources as well.
It is relatively easy to kick off strategic planning with the intellectually enjoyable discussions about markets, customers, competitors, capabilities, etc. In most cases, it is fun and exciting to begin the journey to examine your business with the tools of a good strategic planning process. It can be very costly if you are not willing to finish the journey with the resources necessary to achieve your strategic vision.
One of my clients learned this lesson the hard way. After completing the first two phases of Simplified Strategic Planning (Business Analysis and Strategy Formulation), the management team believed that their products and services were game-changing entries in the market. They all agreed that they could potentially triple the size of the business in the next 2 years. It was clear that the chosen business building activities required capital. At the beginning of phase three, Implementation Planning, the fiscally conservative owner announced to the team that he would entertain neither significant debt nor ownership sharing as a means to implementing their action plans. All growth would be self-financed from available cash flow. It was clear to all team members that their aggressive plans for growth would be starved for resources and would take at least twice as long to achieve. This so disheartened the management team that two very talented members left the company within the next six months — a huge loss in executive experience and industry knowledge!
This is just one example of the potential negative impact caused by lack of commitment for strategic planning follow-through. There are many other stories of companies that crafted great strategy and then suffered from inadequate support of their plans. Before initiating your strategic planning efforts, be sure that you have the resources and the determination to implement your great ideas.
Copyright 2007 by Center for Simplified Strategic Planning, Inc., Ann Arbor, Michigan
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