Is Strategic Planning a luxury in today’s business conditions?
Strategic Plans normally addresses the business, and its requirements for periods of between 3 and 5 years. Given the recent turbulent trading conditions, many business management teams are reluctant to engage in a detailed, time-consuming planning exercise that many see as being out of line with reality and largely an academic exercise.
A Business Plan, in the traditional format, will still be required for businesses raising finance and/or where a major strategic decision needs to be made e.g. an acquisition or the purchasing of equipment. In a business that is not engaged in such strategic decisions, business strategy should not be reduced to short-term, fire-fighting decisions that are not aligned to any overarching plan.
The alternative is a Strategic Action Plan covering periods of 12-18 months.
The importance of goal setting is well covered in a litany of business management books. The reason for this is that goal setting WORKS! We all know that we have a goal, business or personal, and if we can really get motivated by it, then we can achieve great things. Clearly defining the goal, and having a picture in our head of what things will look like when the goal is achieved, helps us through the difficult days. Just talk to anyone that focused on losing a stone in weight so that they can fit into that special outfit, and got there, and you will know what I mean.
We can do the same for our business. The key is to set a goal, make it something we REALLY want to achieve, and keep focused on it.
There are two key elements in keeping focused on the goal. The first is to share the goal with those around us – our management team, employees, and anyone else that has a part to play in achieving the goal. The second is to put Key Performance Indicators (KPIs) in place to help us monitor our progression towards the goal.
It also helps if we break down the goal into its component parts i.e. objectives.
An objective is the most important part of the Strategic Action Plan. An objective is a clearly stated, measureable target of how to achieve the goal. Key Performance Indicators help us define how we are doing in achieving each objective. A business should have objectives around business elements such as
– Operational Costs
– Staff Turnover
– Client Retention
– New Sales
– Service Levels
The difference between a ‘good’ objective and a ‘bad’ objective is in how the objective is defined i.e. an objective to ‘Contain Support Costs’ is an example of a bad objective. An objective to ‘Receive ISO certification by next March’ is an example of a good objective. The more specific the objective is, the better it is.
Once the objectives have been agreed, plans can be developed to achieve those targets. These can then be used to motivate employees and enable the business to measure their progress towards the goal. One thing is true – businesses that can clearly define, articulate, and execute their goals are well positioned to compete and succeed.
So – do you have a goal?