Planning for the future

BY DAN HALVERSON

When you bring up the term “strategic planning” to most company owners, you normally get some hesitant stares and mumbled words. Most owners think strategic planning is only for large companies and the time and resource commitment is too large for them to bear. If done properly, it does not have to be so at all. When most companies really think about how much time they think about and discuss all of the future needs of the business, it probably adds up to more time than an actual planning process would take.

Many companies think they have a strategic plan, but what they really have is a one-year operating plan or budget. A strategic plan looks at all phases of the business over a longer time horizon, normally five years or more. It helps companies set a long-term direction that drives short-term activities and behaviors, and helps allocate time and resources to future endeavors, challenges and opportunities that are out there. We all hear “be proactive, not reactive” all the time — a strategic planning process makes you do just that. You can plan for more than you think you can.

Strategic Plan

Simply put, a strategic plan is a document that helps a company set priorities and specific goals, and makes sure that all stakeholders (ownership/investors, employees) are working toward understood and communicated longterm targets/goals.

Starting Point

A best practice before you start the strategic planning process is to take a look at the current state of the business — where are you at right now? A strategic assessment process that looks at all of the functional areas of the business to determine what the current state of the business is will be a valuable exercise before you start looking at a long-term plan.

Planning Team

Most firms, no matter what size, normally have a leadership/management team of about five people — president/owner, human resources, sales, operations, etc. You may want to expand that team to include folks such as IT, purchasing, quality, etc., to gain more ideas and insights to the plan. You may also have a trusted advisor you want to be on the team.

Role of Ownership

It is critical the owners of the business make it clear to the planning team why this process is important to the business and that it is a development opportunity for all concerned. It also shows commitment to the business by the owners and can create some real teamwork between the planning members about how they have been entrusted with this very important process.

Other Considerations

Many companies try to accomplish a strategic planning process in a couple of days during their management retreats. This normally does not work. Many ideas will come up during the planning process which will require some more research and reflection, and there is no way to do that in a compressed time. The planning process should be spread out over several months, meeting occasionally to give some mental “downtime” and reflection time before meetings.

The first step of any planning process is to review and redefine the mission, vision and values of the business. The mission of the business is “who we are.” The vision is “who do we want to be.” The values are the core principles that guide the business. These all should be simple, straightforward and understandable to all inside and outside of the company.

A strategic plan is a living, breathing document. It is not a book on shelf. Every year you must drop off and add on a year to the plan, to reflect any challenges and/or opportunities that may have come up that may alter the strategic direction of the company. The plan is also the basis for your yearly budgeting process — they must be aligned and in sync with each other.

Strategic planning, if done properly, is a tremendous team building activity and helps the business operate as an aligned team, facing, confronting and proactively addressing the opportunities and challenges that the ever-changing marketplace will inevitably be throwing at us. And that changing marketplace will likely be changing more rapidly than ever going forward. PB

Dan Halverson Director of Operations, Impact Dakota danh@impactdakota.com