Last month, we tackled the first three of my 10 rules for successful strategic planning — plan for the plan, understand the CEO’s role, and maximize involvement and communication.
These rules focus on getting the planning process off to a good start. For most business owners, successful growth is no accident. It’s the product of hard work, but more important, strategic planning. This month, we look at the next four rules, which address plan development.
4. Never let them laugh at your mission statement
Many companies take their mission statement and proudly display it on plaques hanging in their offices for everyone to see. I’m not the only person who has read one of these while waiting in the foyer of a company and thought that I am either in the wrong company or they hung up some other company’s plaque by mistake.
These experiences have led me to believe that the mission statement — although believed by many to be a soft and fuzzy waste — can actually be useful and important, providing it reflects reality. A mission statement can help a company define and maintain its focus and culture.
Anyone who reads the mission statement (whether it is management, employees, customers or vendors) should be able to tell what kind of company it is and that it reflects reality. No laughing out loud, no snickers, and no comments like, “Who are they trying to fool?”
5. Don’t shortchange investment in internal and external analysis.
Once the mission statement is developed, assess current and future situations. Include a thorough analysis of the internal and external environment that could affect the future success of the company. Unfortunately, the importance of the information gathered in this process is often underestimated. Understanding gained about the company’s internal strengths, weaknesses, critical success factors and core competencies are critical to a successful plan. Knowledge of the external environment, competitors, markets and customers can help avoid missing the mark with the company’s competitive strategies.
6. Develop strategies that build on your core competencies
Since this is strategic planning, you need to develop strategies. There is certainly not room in this column to try to discuss strategic options a company has, the types of strategies that need to be defined and developed, or even the definition of a strategy (which is no simple task). But I can say that your strategies should combine some of the results of the internal analysis to the strategy. The analysis should have confirmed what the company is good at.
With the lone exception that what the company is good at is not what the customer wants, doesn’t it make sense to develop strategies around those strengths? Core competencies that are truly valued by the market can be the foundation for establishing sustainable competitive advantages that differentiate the company for years to come.
7. Provide a report card with measurable performance objectives
How do you define success? An integral part of every planning process is establishing performance measures that will enable you to know if the plan is successful. If sales increased 10 percent last year, is that good or bad? If the plan was to increase by 20 percent, your company certainly missed the mark.
Without performance objectives that can be measured, you could be celebrating a win when you should have been analyzing the loss. In order to measure success, first you need to define success.
The biggest complaint from companies who feel their strategic planning process was not worth the effort is that the plan was never implemented. The last three rules, which will be presented next month, are intended to help ensure that your plan becomes more than a dusty book on your shelf.
Joel Strom ([email protected]) is president of Joel Strom Associates Inc., Growth Management. His firm works exclusively with closely held businesses and their owners, helping them set and achieve their growth objectives while maximizing profitability and value. He can be reached at (216) 831-2663.
