Strategic Planning is the most important function of a CEO or business owner. It identifies where a company wants to be at a defined point of time in the future and what actions it is going to take to get there. Strategic Planning is critical to the growth and success of every company. And if the company has a Board of Directors, a formal strategic planning process enables the Board to have a significant impact on the company’s overall direction and on-going performance. For a company of any size, strategic planning is the “roadmap” to future success.
The strategic aspect of the planning process is to understand the current operating and performance situation of the company and the relationship to the outside business environment, the vision and mission of the company as identified by the executive management of the company, the resources and structure to achieve the roadmap goals, and the summary of how the outcome strategic plan will impact the future of the company. The structure of the strategic plan is designed to carry out strategic thinking, direction, and action that leads to the achievement of consistent and planned results.
Consequently, having skills to execute the planning process for any company is critical to the long term viability and success of the company. The process of planning includes the selection of the planning team, clarification of team member roles, careful structuring of the planning meetings, and the guiding of the team through the process itself.
In embracing the importance of strategic planning to achieve both short term (1-3 years) and longer term (3-5 years) results, there are 4 key issues to recognize:
- It is essential the process be led by the owner or CEO and the executives as well as managers in the company understand and use the planning process.
- There must be organizational commitment to both the planning process and the implementation of the plan; all the participants in the process must see the benefits to themselves personally as well as to the company as a whole.
- The planning process is as important -if not more important –than the content of the plan itself.
- The planning process is never done. It is part of the overall process of managing the company and the planning process is an ongoing process rather than an annual event.
Recognized internationally as the most practical book on the subject is, “The Executive Guide to Strategic Planning,” written by Patrick Below and his co-authors George Morrisey and Betty Acomb. This book was recently named by the Chinese Productivity Center as “one of the ten best books on U.S. Management.” Patrick Below is a long-term resident of Madison and over the past 30 years with his company, CEO Consulting Services, he has built a very successful domestic and international consulting business in this field of strategic and operational planning.
The unique approach to strategic planning in the below method for any sized company is a total framework for depicting the organization’s planning and control system. There are three specific processes that make up the ‘Integrated Planning Process’ framework:
PLANNING PLANNING MANAGEMENT
As part of the Integrated Planning Process, the strategic plan focuses on the basic nature (mission) and direction (strategy) of the organization. The operational plan concentrates on how to implement the strategic plan and produce short-term results. The results management component is concerned with comparing performance with plan (both strategic and operational) and ensuring the achievement of results. Even though each component serves a different purpose, each of the components is fully integrated with each other. The strategic plan fits into the Integrated Planning Process as an activity that is developed at a point in time whereas the operational plan and results management defined within the strategic plan are implemented over a period of time, usually 1-3 years.
Specifically, there are 7 elements that make up building the Strategic Plan:
1. Organization mission
2. Strategic analysis
4. Long-term objectives
5. Integrated programs
6. Financial projections
7. Executive summary
A strategic plan must be seen as a living document clearly communicated throughout the company and should not be a “fluffy” document that ends up collecting dust on a shelf and wasted time and energy in its development. The purpose of planning is not to produce plans; it is to produce results. A strategic plan needs to be the result of a productive process of committed executives led by the business owner or CEO of a business –irrespective of its size –to provide the thinking and planning for the future success of the company allowing for the detailed operational planning to achieve short-term outcome results. It should also define measurement performance criteria representing the long-term success goals for the company.
No company has the option to hope it will be successful; every company must have a management committed and disciplined process of strategic planning to create a roadmap to both short-term and long-term business and financial success.
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