Strategic Planning - Strategic and Tactical Planning

By Bill Gaw

Strategic planning is a business process that many companies employ to identify their critical success factors that set the course for future growth and profits. Lewis Carroll in "Alice in Wonderland" makes a good case for it: "Would you tell me, please, which way I ought to go from here?" said Alice. "That depends a good deal on where you want to get to," said the Cat. "I don't much care where...," said Alice. "Then it doesn't matter which way you go," said the Cat.

Like most business processes, the key to success is in the effective implementation of the plan. Companies that do a good job of developing and executing their strategies can create a competitive edge that provides increased market share and higher gross profit margins. Organizations that turn their plan into a "dust collector" upon an executive bookshelf will never achieve their full growth and profit potential.

Most criticism of strategic planning is aimed at the planning process. They question the validity of a plan that has been based on market "guestimates", the questionable valuation of the depth and breadth of competitors and an optimistic assessment of the company's internal strength and weakness. The fact that strategic plans can be overly optimistic is not the core problem. Although the criticism may be appropriate, it puts the focus for improvement on the wrong end of the process - it's the implementation task that is critical to producing positive results and it's here where most companies fail at strategic planning.

Rational strategic plans poorly implemented will produce limited positive results. On the other hand, overly optimistic strategic plans, effectively implemented can produce results beyond everyone's expectations. This being the case, what is the key to effective implementation? In one word - commitment!

Companies that are good at strategic planning build commitment to the planning process and to each of the strategies within the plan. They build commitment throughout the organization, working with people from all business functions to build commitment before, during, and after development of their strategic plan.

Winners begin early in building commitment to the strategic plan. Suggestions are encouraged from managers at all levels, from key executives who will participate in the planning sessions, and others who will share responsibility for implementing the resultant strategies. Together, they surface issues that will require changes in business process and/or culture and identify those constraints that will need to be overcome if implementation is to be successful..

During planning sessions, key executives from each functional area are all encouraged to participate and contribute to the plan. These executives develop strategies that build on organizational strengths and consider resources required to accomplish those strategies. They assure that a key executive "owns" each strategy and commits to a time schedule for its accomplishment. The key executives give thought to resource planning - realizing that human resources are the key to making positive things happen in difficult, complex business environments - and they commit accordingly.

Following the development of their plan, those responsible for implementations develop their own "tactical plans." These action plans, when coupled with self-directed work teams, are major contributors to a successful Strategic Planning implementation. Teams use their plan to manage, to make decisions and to grow their business. Periodically, they review their "tactical plans" to monitor and report on the progress of implementation - keeping the plan "alive" by revising strategies and tactics when necessary.

Finally, to assure successful implementation of their strategic plan, they work on the planning process itself. The planning group continuously "fine tunes" the planning process to assure that inputs from all business functions are given their due consideration and to assure that buy-in and commitment to the final plan is at all levels of the organization.

So, why are most operations management teams outside of the strategic planning process? Why do many line managers view strategic planning as a make work project that produces little or zero value to customers? Maybe, it's because they did not participate in its development nor did they buy-into its validity - let alone commit to the execution of its strategic objectives. In short, they're not connected to the process! To achieve a company's full growth and profit potential, CEOs and business owners need to assure the active participation of operation management in their strategic planning process. Professional assistance is available from Business Basics, LLC, why not give us a call.

About the Author: Bill Gaw (http://bbasicsllc.com/BillGaw.htm) is the founder of Business Basics, LLC and a "been there, done that" lean enterprise advocate. He is the developer of six e-training packages and seven e-training modules published to help individuals and companies reach their full growth and earning potentials. Bill's "Back-to-Basics" e-training materials won't be found in the books at Amazon.com. Neither in the library of APICS nor in the Harvard Business School Press. You can, however, review them all at http://bbasicsllc.com Article Source: http://EzineArticles.com/?expert=Bill_Gaw

Strategic Planning - Seven Reasons Why You Must Have a Strategic Plan

By Pete A Turner

You're a busy entrepreneur and small business owner. You have heard a lot about strategic planning, but figure it's for big business. Besides you just don't have the time and/or resources to spend on planning. You have a business to run and right now things are going okay. So why must you have a strategic plan? This plan doesn't have to be a lengthy document or involve a great deal of expense or time, but it does need to be well thought out. Need convincing? Below are seven reasons and benefits:

• A plan helps the company focus on the important things: This allows allocation of limited resources to those activities that will provide the most "bang for the buck".
• The organization now has a road map showing where the company is going and how it's going to get there.
• Your workers get a better understanding of the company's direction and goals: They feel part of the team and take ownership in the success of the plan.
• The company identifies it's strengths and weaknesses: Every company has it's strong points and it's weakness, knowing which areas in a company need help and which are your strong area allows you to go with your strengths and at the same time work on those that need improvement.
• A plan identifies and analyzes available opportunities and potential threats: This helps the company to prepare for the future, seizing on opportunities and guarding against threats.
• A strategic plan sets specific goals and objectives: A company now has a clear define path to success.
• Develops a monitoring system to measure progress: A monitoring system will quickly identify areas needing attention before they become major roadblocks and allows you to keep a score card.

Why do you need a strategic plan? Because without one your company is at risk from both internal and external threats. Can a plan prevent future threats? No, but by identifying threats makes your company better prepared to handle unforeseen crisis. Just as important it will allow you to take advantage of opportunities. Lastly a good strategic plan will save you time, expense and better conservation of limited resources rather than no plan that has the company reacting instead of anticipating and planning.

Coach Pete is a Life and Business Coach and author of several books including " The Bike of Life". Coach Pete draws on his sixty years of living and business experience to help his clients "ride" from the ordinary to the extraordinary. For more information and free tips visit my website @ http://www.onelifecoach4u.com Article Source: http://EzineArticles.com/?expert=Pete_A_Turner

Business Finance - Strategic Planning

By Helen Cox

Whether you are starting up your business or expanding it you will need finance in order to do so. This is especially relevant to new businesses that are just starting up. There are numerous avenues that you can approach in order to gain this start up finance and there are many different forms of it open to you; choosing the right finance that will benefit your business most is the important thing.

There is a saying that states 'it takes money to make money,' this applies so much to new business ventures. For your business to become a success you will need a large amount of money to start off with that can be used to get your business set up. This money will be used to buy equipment, pay the rent on your business property, employ your staff and ensure that you have enough stock to get your business going as well as being used to pay the first few months of all your bills.

Two of the main reasons why many new businesses fail to get anywhere beyond the starting point are due to inadequate business capital and poor management skills, which is why raising money is so important in the early start-up stages of business.

Some ways in which people choose to fund their business idea is by using savings, but realistically not many of us have that sort of cash tucked away, which is why we require outside help. You could opt to borrow money from friends or family if they have the financial resources to help you or you could take out a credit card for the specific use of funding your business. All of the financial options that are open to you can be split into two sections, either debt finance or equity finance. Debt finance is classified as being money that is borrowed from varies different aspects. This is finance that is required to be paid back.

Some examples of debt finance include:

• Bank loans

• Credit cards

• Overdrafts

• Leasing

• Asset financing

All of these are the borrowing of money in one form or another and they will require monthly repayments that will have added interest. Most people however use their bank as the first call of gaining start up finance regardless of the fact they are going to end up paying more money back.

There are disadvantages and advantages of using a bank loan to fund a new business idea. However the disadvantages of having a bank loan to fund your business start up far out-weigh the advantages. The benefit of using a bank loan for business finance include being able to organise a repayment holiday meaning you only have to pay interest for a certain amount of time and you don't have to turn over a share of your profit. The disadvantages however are that bank loans have strict terms and conditions and can cause cash flow problems if you are unable to keep up with your monthly repayments. Also bank loans are often secured against assets and you may be charged if you decide you want to repay your loan before the end of your loan term. The other form of finance; equity finance, is often more overlooked than it should be when in fact equity finance could be just the answer that your business is looking for. The main forms of equity finance come from business angels and venture capitalists. Equity finance is money that is invested into your business in return for a share of the business. With equity finance the advantages out-weight the disadvantages and equity finance is a lot more helpful to small businesses than bank loans are.

Some of the advantages of equity finance include your investor being committed to your business and intended projects, they can bring valuable skills, contracts and experience to your business and they can assist you with strategy and decision making as well as often being prepared to follow up funding as your business grows. Two disadvantages of equity funding are your business may suffer as you are spending time securing your investor deal and the investor will own a share of your business.

The one thing that you must do when choosing your business start up finance is to use a finance option that is most suited to your business needs.

Helen is the web master of Angel Start-ups, experts in all aspects of Business Finance Please feel free to republish this article provided a working hyperlink remains to our site Article Source: http://EzineArticles.com/?expert=Helen_Cox

Executive Strategic & Business Planning

By Jean Oursler

Executive Strategic and Business Planning

Business owners and leaders today have found that developing a strategy and using an implementation plan are far more effective than leaving the future to chance. Furthermore, developing a strategy, a vision, a mission, and a specific plan of action contribute to long-term, sustainable success.

The Process

The Strategic Planning process provides a format for developing specific strategies, converting those strategies into a business planning process, and establishing measurable and attainable organizational goals. It is a process that involves not only determining where a company wants and needs to go, but also how it is going to get there.

Critical Issues Addressed in this Process:

• Business Philosophy
• Vision and Values
• External Assessment
• Market Analysis
• Customer Value Analysis
• Product/Services Analysis
• Organizational Competitive Analysis
• Trend Analysis
• Internal Assessment
• Customer Responsiveness Analysis
• Internal Resources Analysis
• Organizational Communication Analysis
• Organizational Strengths and Weakness
• Marketing Plan Objectives
• Sales Plan
• Critical Organizational Success Factors
• Financial Projections
• Action Plan

Outcomes from this Program Include:

• Increased Market Share
• Maximized Return on Your Intellectual Capital
• Increased Shareholder Earnings
• Strengthened Focus on Attracting, Servicing, and Keeping Customers
• Defined Strategic Direction
• Corporate Values Developed and Sustained
• Motivated Employees
• Resources Allocated
• Success Defined
• Teams Created
• Guidelines for Delegation and Decision Making Provided
• Pro-Active Management Promoted
• Trends and Technologies Identified
• Sense of Purpose Created

If you are the owner, executive of any business these critical questions must be answered rather sooner than later, they may affect the future of your company and its directions.

Does your organization need a new direction?

Jean Oursler owner of J. Alden & Co. a business consulting firm, offering organizational assessment, strategic planning, and business analysis. For more essentials on business consulting go to: http://www.jaldenco.com Article Source: http://EzineArticles.com/?expert=Jean_Oursler

Strategic Thinking Vs Strategic Planning

By Brice Alvord

Strategic thinking is often described as reflective dialogue about the future so that one can avoid pitfalls as well as take advantage of opportunities. It is a process whereby you learn how to make your business vision a reality by developing your abilities in team work, problem solving, and critical thinking. Strategic thinking requires you to envision what you want your ideal outcome to be for your business and then works backwards by focusing on the story of HOW you will be able to reach your vision.

Put another way, strategic thinking is the ability to think systemically, with a whole systems perspective which often transcends what the organization is currently engaged in.

Strategy

Strategy is a term that comes from the Greek, strategia, meaning generalship. Strategy is what you do and it is, in many respects, where you invest your funds and resources. A strategy is a long term plan of action designed to achieve a particular goal, most often "winning". Strategy is different from tactics or immediate actions. Strategies are intended to make the problem or problems easier to understand and solve.

Strategy is about choice, which affects outcomes. Many organizations survive - and do well - for periods of time in conditions of relative stability, low environmental turbulence and little competition for resources. Over time, virtually none of these conditions prevail in the modern world for great lengths of time for any organization. Therefore, we have the need for strategic management.

Strategic management is necessary in situations where an opponent blocks the way to an objective. Strategic Thinking breaks the chains that currently anchor you in survival mode. Strategic thinking requires that you take a critical look at the underlying factors that lead to successful strategic planning.

Strategy should be adaptable rather than a rigid set of instructions which is why strategic thinking is so important.

Thinking

Thought or thinking is a mental process that allows human beings to model the world and to deal with it effectively according to their goals, plans, ends and desires. Thinking strategically is not a dry or boring way of thinking, on the contrary, it is a creative, and powerful skill that energizes people and prepares the person and their organization prepared for the unknown future.

In strategic thinking, there are four viewpoints to take into consideration when forming your business strategy:

• Environmental view
• Marketplace view
• Project view
• Measurement view.

On the other hand strategic thinking is about synthesizing, about using your intuition and creativity to formulate anunique perspective or vision of where the organization should be heading.

Planning

Planning is the organizational process of creating and maintaining a plan. It involves the process of thinking about the activities required to create a desired future on some scale. As such, it is a fundamental idea or behavior. This thought process is essential to the creation and refinement of a plan, or integrating it into other plans.

Strategic Planning on the other hand is a discipline, which can include innovative elements but essentially focuses on the rigor of making sure how to get from one position to another without falling off the cliff.

Strategic planning is about analysis. In other words, it is about breaking down a goal into steps, determining how the steps could be implemented, and identifying the possible consequences of each step. Many people assume that strategic planning, strategic thinking, and strategy making are synonymous. To the contrary, strategic thinking is a complimentary and critical addition to the process of strategic planning, implementation, and management.

Unfortunately, few strategic decisions are made in the context of a formal process. This typically happens because a company's most important strategic decisions are often made as developments unfold. The use of a formal process for strategic thinking and effective execution is crucial to effective performance improvement and productivity enhancement. Maintaining competitive advantage requires an action plan - the allocation of responsibility for different outcomes to specific people who are passionate about seeing them through, and the development of appropriate incentives to motivate the right kind of behavior.

Effectuve execution of strategy requires an understanding the link between planning and strategy development. It requires broad-scale and effective information gathering, clarification of the mission and issues to be addressed, exploration and development of alternative strategies, and an emphasis on the future implications of present decisions.

This requires the determination of "what are the necessary thinking patterns to handle the paradigm shift that are associated with change?" The best intelligence comes from inside organizations that can influence the success of your project. A SWOT analysis is crucial to any strategic thinking process! It helps define the attendant goals developed as a result of the strategic thinking process

Goals

Creating a strategy for any organization involves defining goals and intermediate and short-term objectives,. Your goals are the broad results you wish to achieve over the long term. Your objectives should flow naturally from your goals.

Be clear on the goals and outputs, make the "SMART"

• Specific
• Measurable
• Agreed-Upon
• Realistic
• Time-Specific

In addition:

• Ask yourself what things are important to the organization?
• What perspectives do senior managers have toward organizational priorities, and more specifically, your work team
• Which of your priorities or goals have the best chance to be viewed positively at any given moment.

It is critical to ask if the right thing is being done within the context of the organization's strategic direction (mandate, vision, mission, core values and goals and objectives (expectations).

Conclusion

Strategic thinking is pretty much like viewing a movie - it allows you to see things from "higher up. Strategic thinking is an attempt to think through as many "results" that come from our actions that defeat our purpose.

Strategic thinking is an ongoing process rather than a one-time event. Strategic thinking is not always easy nor should it be. Strategic thinking involves synthesis, using intuition and creatively forming, a shared vision, of where the organization should be heading if it is to survive and prosper in the current and future market place.

Brice Alvord has over thirty years experience as an internal and external performance improvement consultant. He holds a BA in Sociology/Psychology from Central Washington University and an MBA degree from City University of Seattle. He is the author of over two dozen books on continuous improvement and training. For more information, visit our website at: http://www.aleragroup.com Article Source: http://EzineArticles.com/?expert=Brice_Alvord