Strong business skills alone are not
enough for business owners who
want to reach their full potential. They must implement strategic plans to help
them meet that goal. But, some owners get
so focused on day-to-day operations that
they let the future take a back seat to the
present — and what lies in between.
As hard as it may be to find the time to
plan, they should develop measurable
short-, mid- and long-term goals, link short-term goals with long-term outcomes, develop realistic budgets and financial forecasts,
tie objectives to measurable actions, and
establish road maps for their strategic
growth. That is strategic planning, the
process of developing a methodology and
making it the company’s way of life. How
do they do that?
Smart Business spoke with Ken Haffey, a
partner with Skoda Minotti, about strategic
planning, and how it can enhance a business’s chances of success and durability.
Why is strategic planning important?
It gives business owners an idea of what
they want the company to look like in the
future and how they are going to get there
in the most efficient, effective way. If they
don’t engage in the process, they might find
themselves losing ground to their competitors who do. They may not be nimble
enough or quick enough to make changes
within the organization or to match their
competitors’ strategies as the market
changes around them. They are left on the
outside looking in as opportunities arise —
and pass them by.
Is it an ongoing process?
Yes. One of the key things to remember
about strategic planning is that it is a very
fluid process. It provides a sanity check for
owners to make sure that things are moving forward, rather than stagnating.
Business conditions change; owners have
to change with them. If they don’t have a
plan in place that can be executed quickly
to help them adapt to changes, they will be
ill prepared to function in a competitive
market, let alone survive.
Owners have to establish regular touch
points in their strategic plans to make sure
that things happen in a timely fashion and
that change can follow.
Does strategic planning involve both long-and short-term goals?
Definitely. Plans should go out for at least
24 to 36 months to address the fluidity in
business cycles. They should also contain
components that address the next six to 12
months. In any case, they should reduce
the impact surprises can have on businesses when changes occur. After all, eliminating the adverse impact of surprises is one
of the purposes of strategic planning.
Does it follow specific formats?
Not at all. It can be as simple as writing
notes on a napkin or as formal as sitting
with partners, managers and other key
people to brainstorm, write down ideas
and feed them to a software package
designed specifically to create a strategic
plan. The important thing is not how strategic planning is done; rather, it is that the
process is performed on an ongoing basis
with the company’s future in mind.
How do companies benefit from it?
It results in improved operations,
expanded market share, increased company value and it enhances the ability to take
advantage of opportunities as they come
along. A match between being strategic
and opportunistic is the best place for business owners to be when running a company. The same holds true for managers of
divisions, departments and other units
within the company. And, it is important to
note that strategic and opportunistic must
complement each other. Some people get
caught up in the opportunistic part but
don’t have strategies in place to take
advantage of opportunities when they
arise.
Opportunists without plans find themselves reacting rather than ‘proacting.’ That
is not where they want to be. Strategic
planning also enhances a company’s competitive position. The organizations with
the best strategic plans tend to be those
that react most quickly and most efficiently to market changes. They also tend to be
the ones with leaders who focus on everyday operations and future opportunities
simultaneously. Strategic planning allows
them to do both.
Who should be involved in it?
The primary person is whoever is responsible for the operation of the business.
Depending on the type of organization, others who should be involved include financial, operations, marketing and sales. Some
companies might benefit from working
with consultants to gain an external view
of market forces and how they fit in to the
overall competitive picture. In short, the
process should include the business leaders of the different departments and areas
throughout the organization. The inclusion
of these leaders enhances the chances that
the result will be the organization’s plan,
not the boss’s plan. In fact, that should be
one of the goals of strategic planning.
KEN M. HAFFEY is a partner with Skoda Minotti, a CPA, business and financial advisory firm based in Mayfield Village. Reach
him at [email protected] or (440) 449-6800.
