confusion for a while.
How effective would your favorite sports team be if they never created plays and reviewed them regularly to determine their rate of success? What if your team never reviewed recordings of their opponents’ games to learn about the competition? What if the coach just said “do a good job” with little guidance? What if the players were assigned positions but were not given clear direction on how to interact with the other players in order to score points or defend against the competition scoring points.
All of this sounds silly. However, that is just what many small businesses do. Many managers and their staff are left to figure out what to do each day, which may or may not align with what the other managers are doing. Often, departments within an organization battle one another more than they cooperate.
Without a clear understanding of the company’s goals and objectives, how are investment dollars allocated? Most often, the projects of those with the loudest voice or those of the most-liked manager get chosen over projects that could potentially offer a better outcome for the company as a whole. It is as if everyone is paddling in a different direction leaving the boat going nowhere.
Develop a Game Plan (Strategic Planning)
In today's highly competitive business environment a firm must engage in Strategic Planning that clearly defines objectives and assesses both the internal and external situation. The company must formulate strategy, implement the strategy, evaluate the progress, and make adjustments as necessary to stay on track.
The Mission Statement describes the company's business vision, including the unchanging values and purpose of the company and forward-looking goals that guide the pursuit of future opportunities.
Guided by the business vision, the firm's leaders can establish measurable financial and strategic objectives. Financial objectives involve measures such as earnings growth and sales targets. Strategic objectives are related to the firm's business position, and may include measures such as market share, customer satisfaction and reputation.
Many organizations do not provide a clear mission and vision for their employees. This results in work that is not aligned with the intended purpose of the organization. The cost in wasted effort and customer dissatisfaction is enormous. Therefore, it is crucial to get everyone rowing in the same direction.
A company must analyze its environment both internally and externally. An internal analysis will identify the company's strengths and weaknesses and the external analysis will identify its opportunities and threats. This is known as a SWOT analysis.
The industry must also be analyzed. A useful framework, The 5 Forces Model, was developed by Michael Porter. It evaluates barriers to entry, supplier power, customer power, substitute products, and industry rivalry.
With the information learned from the environmental analysis, a company can match its strengths to the opportunities identified while also addressing its weaknesses and external threats. During this stage, a clear set of recommendations, with supporting justification, is developed. These actions should be effective in solving the stated problems, practical (can be implemented in this situation, with the resources available), feasible within a reasonable time frame, cost-effective, not overly disruptive, and acceptable to key "stakeholders" in the organization.
- Growth Strategies
- Vertical Integration
- Horizontal Growth
- Mergers, Acquisitions, & Alliances
- Stability Strategies
- Turnaround, Sell Out, or Liquidation Strategies
- Competitive Strategies
- Low-Cost Leadership
- Broad Differentiation
- Best-Cost Provider
- Focused Low-Cost
- Focused Differentiation
- Growth Strategies
The strategy is implemented through carefully designed programs, budgets, and processes and procedures. Successful implementation relies on buy-in and motivation of the staff to achieve the objectives. Clear communication of the plan and the reasoning behind the strategy must be conveyed in order to gain the support necessary to realize those objectives.
No plan is perfectly designed or communicated. The implementation of the strategy must be monitored and adjusted as needed.
- Define Measurable Parameters
- Define Parameter Target Values
- Measure Performance
- Compare Performance to Standards
- Revise As Necessary
Bagley Consulting works with your team during each step of the Strategic Planning process to create a clear game plan for your organization. By building and exchanging insights, we help clients align their company with long-term objectives while effectively managing risks. This creates opportunities to succeed by leveraging existing resources. From one-on-one coaching to executive team strategy sessions, our consultants give you the structure and guidance needed to take your business to the next level.
Schedule a visit now to discuss how to develop your strategic plan.