Effective Outlook: The Importance of Strategic Planning
By Richard C. Fedorovich, CPA, Managing Partner/CEO
Most business executives are familiar with business planning and the creation of a business plan. But what about strategic planning?
Contrary to popular belief, business and strategic planning are not the same thing. In fact, they’re quite different. Not understanding this is one of the main reasons why companies sometimes fail to execute their seemingly well-thought-out business plans.
Strategy vs. TacticsTo better understand the difference, consider a sports analogy: a football coach might decide that his team’s best chance to defeat its next opponent is to run the ball as early and as often as possible. This would be the team’s strategy. The specific mix of tactics, such as running and passing plays called during the game, would constitute the game plan.
Put another way, strategic planning is about the big picture, while business planning is about the tactics that will be implemented in order to reach the vision and goals outlined in the strategic plan.
The strategic plan should be created and implemented before a business plan is developed. Otherwise, there’s no foundation on which to base tactical steps. The strategic plan should help identify your company’s:
Vision. Where do the owners and executives see the company one,
three, five and even 10 years down the road?
Goals. What are your short-, medium- and long-term objectives?
Mission and values. Why does your company exist? Dig deep to identify
your core reason for existence beyond just making money or delivering
a product or service. Create a short, concise mission statement that
captures your reason for existence. Make sure it’s easy to remember and
can be spoken in clear, plain English — not corporate-speak.
Effective PlanningThere is no one-size-fits-all approach to strategic planning. Each organization should devise a process that works best given the personality of its employees and the corporate culture. However, these general guidelines can help any company implement a strategic plan more effectively:
Do it yourself. Strategic planning isn’t something you can outsource to a consultant. It’s a personal process that should involve all of your key employees and stakeholders. The development process itself is often as valuable as the final document.
Bring in an outside facilitator. It might make sense, however, to bring in an outsider to help facilitate planning sessions. An impartial individual brings a fresh perspective and can see things that you and others inside of your organization miss.
Keep an open mind. Avoid summarily dismissing new ideas or concepts that might seem too far out of the box. Be open to throwing everything against the wall to see what sticks.
Get away. The strategic planning process will likely be an in-depth, roll-up-your-sleeves session that is difficult, if not impossible, to accomplish amid the everyday hustle and distractions of your workplace. Plan on getting away from the office for all or part of a day or two, whether it’s out of town or just around the corner.
Be flexible and adaptable. A strategic plan should not be a static document. Rather, it should change along with business conditions and your company’s environment. A strategic plan from two years ago, for example, would probably need revisiting today, given the tremendous upheaval in the economy and financial markets over the past couple of years.
Make it organization-wide and bottom-up. To be most effective, a strategic plan should incorporate input from everyone in your organization. While it may not be practical to involve all your employees in the details of the planning process itself, you should at least solicit everyone’s opinion on the company’s vision, goals and values. As the saying goes, it’s awfully hard to push a rope. Top-down plans that don’t have buy-in from all levels in your organization are doomed to fail.
###
For more information or help strategizing your company’s future:
Richard C. Fedorovich, CPA, managing partner/CEO
330.762.9785
Email