STRATEGIC PLAN - Major Steps, Take The Company's Planning Pulse
The firm can use a checklist approach to gauge the current sophistication of its planning process and the extent to which its planning suffers from traditional planning problems. Obviously, the companies that face the greatest challenges are those that (1) lack a strategic orientation to their business, (2) conduct only annual business planning, and (3) continue to be plagued by the traditional planning problems.
An example of the checklist approach is:
* Do the firm's senior executives have a strategic orientation to the business?
- knowledge of critical variables that determine the firm's success
- understanding of which variables can be controlled
- systematic approach to the management of the controllable variables
* What kind of planning does the firm currently conduct?
- one-cycle planning (annual budgeting and forecasting only)
- two-cycle planning (functional planning, annual budgeting, and forecasting)
- three-cycle planning (strategic planning)
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Outside of the business related factors, does the firm have the appropriate mindset, thinking, and emotional behavior to drive successful strategic planning?
The strategic mindset understands trade-off. The strategic mindset is
willing to sacrifice customers and is willing to forgo making customers
happy if they're not profitable customers. The strategic mindset is
willing to turn down current opportunities for growth if those
opportunities are not wholly consistent with the long-term strategy.
This means that as the Leader, you have to learn to say "NO" - a lot! In
any business, there are countless opportunities to invest money, to
incorporate new technologies, to add new features, to chase a new market
segment, to respond to a competitor. There's constant pressure from all
directions to blur, homogenize, and imitate in the name of
"opportunity." So, while you are developing and reinforcing your
strategy - communicating how you are different and what you are willing
to give up in the name of strategy- you must also have the
self-discipline and courage to be the enforcer of those limits. Only by
setting limits can you truly be unique. And without being unique, you
will have no competitive advantage.
The hallmark of strategic thinking is making those crucial trade-offs.
You must have the willpower to turn away some customers, pass on some
opportunities and abandon some markets in order to focus on what you do
best.
