In our most recent blog entry, we discussed the importance of strategic planning. In this entry, we wanted to provide you with more tips on how to develop a strategic plan. A strong strategic plan set the course for the future of the company, and is a well-constructed and useful document. Here are some important things to consider:
- A good strategic plan takes into account profitability and risk. Look at the Strengths, Weaknesses, Opportunities, and Threats (“SWOT”) for the company. Make a list for each category then rank the importance of each item and assign a priority level to each. The strategic plan should focus on the priority issues.
- Conduct internal and external audits to understand the marketplace, the competition and to learn about your own competencies.
- Decide what your long-term goals are; they will set the direction for the company. Define what must be achieved for the company to be successful.
- A good strategic plan is done “top down” and “bottom up”. Meaning executive management must provide assumptions but front line employees must validate and offer feedback. Each department must write their plan based upon these premises
For example, management assumes sales will grow 10% per year for the next five years. The sales department may disagree, saying only a five percent growth is possible. Management then must make a choice. Does it lower the projection or can it provide additional resources to the sales department to achieve the 10% sales growth goal?
- Strategic planning needs to be done on a company wide basis. A good strategic plan should be inclusive because it is necessary to have employee buy-in. This promotes tapping in to employee talents, enhances communications and aligns employees with the corporate mission.
- Schedule an offsite strategic planning meeting to kick-off the process and to foster honest discussion amongst the management team.
- Use budgeting software that allows each department to input its financial data and allows for “what-if scenarios”
- Use an outside facilitator to assist in the planning process to provide an objective opinion
- A good strategic plan is built using an iterative process, meaning this is not a once and done project An iterative process achieves a desired result by means of a repeated cycle of operations. Each attempt gets closer to the desired final outcome.
- Do not underestimate how long a good strategic planning process will take. Many companies underestimate the time it will take to construct a strategic plan. It is not a one-day project and should not be rushed.
- The final strategic plan must have measurable goals and financial forecasts. The plan must also define who is responsible for each action. It also must provide a detailed plan of how time, resources and capital will be allocated.
- The plan should be monitored on a yearly basis, and updated when necessary This requires the plan to have annual targets and financial forecasts. Whenever possible, the assumptions of the strategic plan need to be integrated into the annual budget process.
NJMEP can help with the strategic planning process. Our experienced facilitators can guide you through the process and help facilitate critical discussions.
Contact NJMEP to learn more. Schedule a free evaluation by calling us at (973) 998-9801 or connect with us at https://www.njmep.org/contact-us/