Strategic Planning
CFOs, business owners, and managing executives of growth driven companies are focusing on Strategic Planning as a top priority. Today's CFO/Controller Roundtable focused on this topic.
What is Strategic Planning? In simplest terms, it is assessing an organization's "current reality," followed by group consensus of the "desired future," and then defined by outlining the "path to get there." The process ultimately affects the entire organization, but can be effective on financial, production, marketing, sales, R&D, human resources, and growth initiatives. With this initiative base, the process commonly begins by working through a SWOT analysis (strengths, weaknesses, opportunities, and threats), which identifies the organization's "current reality."
Some logistics need to be determined prior to the start of strategic planning, such as: who is on the team, does the team need "strategic planning training," where will the meetings be held, and how will the meetings be facilitated.
Effective strategic planning meetings must have open communication, trust amongst team members, conflict and resolution, ownership/accountability, consensus, and cascading of the group's direction throughout the organization for buy-in. In the action plan, a champion of an initiative must be identified, the action clearly stated, and a means to monitor progress needs to be established. During the time actions are occurring, feedback on progress is critically important to keep the group's focus on key initiatives.
Attendees who do strategic planning most often plan with a long-term vision (ten plus years), a five-year framework of goals, and a one-to-two year plan to address key initiatives. Implementation of the deliverables is key, and attendees most commonly have an annual meeting, with shorter quarterly meetings to measure results or revise tactics. Meeting more frequently than this has not proven beneficial.
Not all attendees have integrated strategic planning in their own organizations. This isn't too surprising considering that this type of planning has historically been done by large corporations and has only recently infiltrated small to medium sized companies. In addition, strategic planning has some challenges. The attendees offered the following challenges from their personal experience:
Getting the right people involved.
In some situations, the key executive was behind this process. In others, the key executive was opposed to the process. To address this, attendees recommended getting buy-in from another top executive with clout, going to the department level and growing it up the organization, aligning the plan with the top person's vision, or starting small with one department and watching other departments jump in after seeing the successes.
More than one attendee expanded the internal group to include outsiders such as the banker, the CPA, and other outside participants with industry experience. Some attendees include team members from all ranks, while others restrict it to only the key executive team. One attendee suggested polling the customers to assure the long-term plan is customer driven, and the customer's voice is heard during the planning process.
Timing.
A very common challenge is getting top management to make the time to be involved. Many times strategic planning is seen as another thing to do, in addition to the long list of daily responsibilities that need to be addressed.
Facilitation.
Strategic planning can be done with or without a facilitator. In some situations keeping the group aligned may require the involvement of an outside facilitator. Those attendees who have used an outside facilitator noted these benefits:
- An outside perspective
- A different approach
- Keeps the discussion away from day-to-day topics
- Shows management commitment to the process
Facilitators may use a process, such as Gazelle's methodology, to organize the discussion and keep the group focused on the mission at hand.
Some attendees have grown and moved away from using an outside facilitator. Some found that after several years of working with the same facilitator, they had become so adapted to the process that they could internalize it, or needed to change facilitators as the group became more sophisticated in their thinking. Others noted cost as a factor. One attendee regretted pulling away from a facilitator too soon, and planned to retain the same facilitator.
The best way to find a good facilitator is personal reference, and several attendees are willing to share recommendations. Another way to address facilitation is to send key people to leadership programs, so over a period of years internal facilitation is successful.
Communication.
Vitally important to the success of strategic planning, some attendees encouraged a very transparent means of communicating to all levels of the organization. Others kept the communication far more detailed in the upper ranks and very basic in the rest of the organization.
Within the strategic planning group other communication issues may arise such as regretting what was said from a political viewpoint, sharing data with all team members, and limited contribution of views that are outside current thinking.
Location.
Those who utilize strategic planning unanimously agreed on the use of an offsite location. The benefits included:
- The social aspects promote relationship buildingwithin the team
- Neutral ground
- Creates an environment dedicated toplanning that is away from daily distractions
- Demonstrates management's commitment to the process
Tried and True Tips.
- CELEBRATE should be the last item on the action plan
- Prepare and plan for the meeting. Consider requiredreading of books that relate to your industry,organization, or specific challenges.
- Get people in the planning mindset by having eachteam member draw up a list of his or her goals for theorganization prior to the meeting
- Beware of consensus before completely discussing the issues
- Don't forget to include new hires in the group. They can bring refreshing new ideas
- Make sure the process does not become merely a budgeting session
- Have a champion for each initiative of the action plan
- Don't go too deep or complex in your action plan.
- Vote on the top 3-5 most important issues. Stage implementation one step at a time and keep the goals reasonable
- Revisit the plan regularly. Don't let the day-to-day get you off track. Make sure departmental efforts are directed toward the strategic plan's goals
- Success breeds success. Broadlycommunicate progress
Recommended reading:
- Good to Great by Jim Collins
- Death by Meeting by Patrick Lencione
- Topgrading: How Leading Companies Win byHiring, Coaching, and Keeping the Best People by Bradford Smart
