You may not know all the challenges and opportunities that lie ahead for you and your company, but having a good strategic plan in place can guide you through those highs and lows. Having a plan can help you meet your mission, communicate your priorities and make stronger decisions. A strategic plan can also help you avoid making costly business mistakes.
“An effective strategic plan should provide a framework that is useful for decision-making,” says Kathryn K. Epps, Ph.D., interim director of the School of Accountancy and assistant professor of accounting at Kennesaw State University’s Coles College of Business. “You should be able to base key decisions on whether different alternatives support your strategic plan.”
Smart Business spoke with Epps about how to develop and implement a strategic plan.
How do you develop a strategic plan?
Strategic plans should be developed with the objective of meeting your mission and overall objectives. You should analyze your mission statement to make sure it reflects your organization’s true purpose before beginning any planning. The plan should be developed in conjunction with key employees who will be responsible for carrying out the plan, along with other stakeholders who may provide useful information.
A common method to use during strategic planning is the SWOT analysis, looking at the organization’s strengths, weaknesses, opportunities and threats. This can be useful in determining your company’s priorities that will be included in the final plan.
What key items should you include in a strategic plan?
The plan should include overall goals and measurable action steps for each goal. These detail how the goal will be met and the analysis of that process. For example, a goal to increase sales is difficult to measure. The goal does not state how much you want to increase sales, the area in which the sales increase is desired and when the increase is expected. A more detailed and measurable goal might state, ‘increase sales of primary product lines by an average of 1 percent per year over the next three fiscal years.’ You need to include steps that can be measured to align company resources with goal attainment and allow for accountability toward goal completion.
You should also look into the future with your plan. You have to determine when the goals will be met and communicate target dates for individual initiatives of the plan. You may want to establish a long-range plan, looking out over five years or longer, or just focus on a shorter period of time, from between two to four years.
The key ingredients of a good plan include the mission statement, overall goals, action steps to achieve goals, goal assignments, time frames for deliverables, and specific programs and/or initiatives to develop to implement the action steps. The level of detail required to establish programs and initiatives is not included in the strategic plan but established in policy and procedure manuals or operational plans.
The plan should not address day-to-day operational issues. However, the goals developed can be used to establish company policies. The goals need to be clear, measurable and visionary in order for the plan to be useful.
What problems should you be aware of during the strategic planning process, and how can you mitigate those?
One problem is that the process itself is often not well defined. Once the planning team members have been identified, you need to establish how long the planning process will take and the responsibilities of each team member. You also need to determine how information will be communicated among team members, what information resources will be available, and how the team will obtain input from other employees as the plan is finalized.
Many organizations rely on either in-house or external expertise in the strategic planning process. Business consulting organizations can assist with the organization of the process, gathering of information for benchmarking purposes, and guidance of the team toward final resolution and plan dissemination.
How do you implement the plan?
Your employees need to be aware of the plan and the resulting action steps and initiatives created during the planning process. The plan should be communicated by top management to signify its importance and the role it will play in prioritizing areas of improvement or change. Key managers and leaders should also discuss the plan with employees with an emphasis on how the plan will specifically shape the individual divisions of the company.
The finalization of the strategic plan document should be viewed as the beginning and not the end. The strategic plan should be considered in all business decisions and proposals to make sure they support the plan and its overall goals. The plan should also be flexible enough to support business decisions in varying economic conditions and levels of customer demand.
The strategic planning process should also establish the time frame and process to compare plan goals with actual results. If the plan goals have not been met, you need to determine the causes and if a realignment or reassessment is necessary.
Kathryn K. Epps, Ph.D., is the interim director of the School of Accountancy and assistant professor of accounting at Kennesaw State University’s Coles College of Business. Reach her at (770) 423-6085 or [email protected].