I was at another industry event wondering if I should be a wallflower and stay to the fringes. Maybe I should engage people in meaningful conversation. As luck would have it, the organization’s CEO spotted me. They decided they wanted to chat. I was their target. Awesome!
We discussed the association member’s challenge. The CEO stated, 50 per cent of their business members does not have a strategic plan. I thought this strange and asked why. They admitted they were unsure but felt a portion of their members never took the time to look at their business. As I probe deeper the CEO said maybe they did not understand the importance of strategic planning. Besides we’re all busy, who has time to plan, anyway.
Strategic planning helps you look at your business, make decisions and create actions to take the business to the next level. A point that I believe is sometimes missed. There are many moving parts to consider in strategic planning. Often requiring more than a single day to put a plan together.
While I was thinking about strategic planning, I wondered what additional wisdom can I share to help you expand your knowledge on the strategic planning process and the need for a clear strategy for your business.
Here are three things I noted when working with clients over this last 30 years.
- One area business miss is recognizing it takes a team to create and build a proper strategic plan. The mistake companies make in thinking they can objectively meet, discuss issues and determine their strategy. Unfortunately, this does not always work. Teams naturally drift into the weeds, the details, and the operational. A strategic planning professional should focus your team on the strategic and later the tactical reality.
- The other issue is the information needed for developing the strategic plan. When I say information, I mean existing external and internal information. The external information required includes the business environment, industry trends, customers, competitors, suppliers, and so on. Then there is the internal information from employees, managers and executives about the business. Information, that even if you are a small or mid-range business, may not be shared or discussed internally. Getting information helps you create a clear current and future state for your business. This does not need to be complex. There are simple approaches to get the appropriate information needed.
- The final mistake includes not looking at your financials, be willing to discuss the financials, or not understanding your numbers. These are big mistakes, they happen often and need to be addressed. Every business should have a high-level assessment of their financial performance based on their last three years of financial statements. The information should be graphed against industry benchmarks, and specific key performance indicators to understand the business performance.
I find it surprises business owners when I say it takes a team to develop a strategic plan. Oh, don’t get me wrong, they understand team, but often they look at the internal team being a handful of senior people and not all the resources that can help them. Resources that help them make key business decisions and develop an implementation plan for their business success.
Book on Strategic Planning: SET for Success, A Roadmap to Transform Your Business by Richard Lannon
Often when I work with a client, I tell them, I don’t work in a vacuum. From a service providers perspective it takes an engaged client and a team of at least three professionals, someone to do the external and internal high-level research, another person to put the financial analysis of the current and future performance together and a strategic business planner and analyst to guide the process, work with their team, help them make key decisions and put it all together.
Final Thought: The three key issue (do-it-yourself, information benchmarks, performance indicators) mentioned in this blog are only a few challenges faced by business leaders when considering their strategic future. There are others that I will save for future blogs. What you do in your planning, whatever direction or approach you take, please consider your future needs and create your plans right the first time.
It will save you future grief.
Richard
