strategic planning 101, strategic planning definition, process, and best practices

strategic planning 101, strategic planning definition, process, and best practices

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What. Is a strategic. Plan and why. Is it important, a strategic. Plan defines what, your organization. Stands for it defines. The market, where you compete, and how. You compete, in that market. It's. The definition of the goals you're going to pursue and more. Importantly, the initiatives. You're going to pursue to, achieve those goals, it's. Also going to help you allocate, your very, limited, resources, to, pursue those initiatives, and reach, those goals. Why. Is a strategic, plan so important, first, it provides focus, for your efforts, and your limited, investments. It gives. Your team something, to rally around and be excited, about and lastly. It helps you identify the risks. And opportunities you're. Going to face in the market and then, plan for those risks, or exploit. Those opportunities. There. Are three principles, of strategic. Planning that you should follow first. Set. A clear direction and stay, in your lane versus. Meandering. And pursuing. Strategies, that change, every, year. Second. Say, no to distractions. It's, very easy to get caught up in the wow, that looks like a cool initiative let's, pursue that. The. Third is making sure you diversify. Your bets you, have limited pools, of money and people. And time, making. Sure you don't put all your eggs in one basket and, instead, pursue, initiatives. That, are spread across different, time, horizons different. Markets, and different, products, and if. You follow these three principles of, strategic, planning you're going to have a clear direction that. You're able to follow over, time and achieve, your goals. You. Strategic. Planning takes, a lot of time and a lot of energy it is a high, resource. Type of exercise. Unfortunately. Many, times that, process, can be a worthless pain, I've seen. Strategic, planning processes, devolve. Into analysis. Paralysis, we. Continue, analyzing the, market running financial. Scenarios and looking. At data and numbers ad nauseam. And the, problem is we never advance the plan, some. Processes, can be extremely, cumbersome. Too, many people get involved too many iterations of, presentations. Too, many levels of approval and the. Worst thing that can happen with a strategic, plan is everybody. Puts in all this effort and then, it gets archived, put, on a shelf and never, looked at again. Now. There are some warning, signs that, you can look for to determine if, your strategic planning, process, is flawed. First. Initiative. Proliferation. Do, you have to use multiple, pages, just, to add up all the different initiatives, you're thinking about pursuing. The. Second, risk is thinking, too small all, the initiatives, that are on your list are really, small incremental. Improvements. To your business, and don't, really advance, you to your strategic goals a, third. Is thinking, too big all the initiatives, are huge, and everything, has to line up perfectly and, it's a really large bet that, you're taking, with the organization. Sometimes. You can do what I call starving, the kids many, organizations. Have a large, profitable.

Business Unit and then they have a lot of smaller ideas that are going to be more rapid growth and the. Risk is you invest all your resources in, the big known, business, and you, starve, those smaller businesses, the, problem, is you're starving, your future in doing so and, lastly. I call it the random initiative, generator, you, look at all your initiatives, and they all seem, really great but, when you try to figure out where they're taking you there's, no clear direction, so. Take a look at your strategic planning process, ask, yourself, if you're showing some of these sin, and make, sure you set direction. So that you can pursue initiatives, that will add value and help, you reach your destination. You. Strategic. Planning is an inherently, simple, process, there, are some major tools, and steps, that you're going to follow as you pull, together your strategic plan. First. You need to set, direction, and stay, in a lane that begins. With articulating. The, vision the, mission and the, goals of, the organization. Once. You've set that destination, it's important, to define the organization's, core competencies. What, are you great at and how are you going to compete in the market, the. Next step of the process is defining, strategic, filters this, is the heart of the method these, filters. Are going, to be the objective, functions, you're trying to achieve there'll, be the evaluation. Criteria you'll. Use, as you analyze the initiatives, that you are or are not going, to pursue. Next. You're going to say no to distractions. You're, going to stay focused you'll. Use tools like a 2x2, matrix to, evaluate, which, opportunities, should we pursue and which one should we avoid, you'll. Take all the initiatives, on your list and run, them through those strategic filters, to identify the ones that are high value, and high potential. And the, ones that should be avoided. Next. You're going to draw, the line. Strategic. Planning is about focus. And you'll, have your list of initiatives you're going to identify the top ones the bottom ones and resource. Them appropriately, and only. Work on things above, the line for, which you have resources. The. Third phase of the strategic, planning process is, making. Sure you, have a diversified, portfolio of. Initiatives, and then. Executing. The strategic, plan, you'll. Look at your initiatives, in terms of are they long-term, short-term, do. They balance, your core competencies. Are they balanced across products, or markets, or services, you'll. Look at your portfolio and how it evolves over time and, lastly. For execution. Making sure you've got the right resources, assigned. To the right projects, and then, iterating. As the market, Changez and as, you complete initiatives. Along the way so. As you go through the strategic planning process there. Will be major tools and frameworks you'll, apply at each step and you're, going to come up with a very clear plan with, a prioritized. Set of initiatives. You. When, you run your strategic planning process. It's important, to be aware that there will be times you're working together as a team and people. Are off on their own doing, individual, work, the. Typical, cadence of a good strategic, planning process, will have people working individually, doing some pre-work then, you'll come together as a team and work on things like your vision your mission guiding. Principles, then, the team will go away and do individual, work to, evaluate some initiatives, they'll, come back together to go through a prioritization, meeting, they'll. Go away again, as individuals, and do deeper analysis, on initiatives, and come, back together to do final planning, and resource. Allocation and, the. Deliverables, that come out of this strategic planning process. Will, be a strategic, plan in the form of a document, you'll. Have a defined set of core competencies. For what your organization. Is great at you'll. Have a prioritized. List of initiatives that you're going to pursue and an. Implementation. And sequencing. Plan where you've identified which, initiatives, when, and what.

Resources Are we going to allocate but. Just remember, that your planning, process is going to be a balance between working. Together and working, as individuals. You. As you. Begin your strategic planning, process. It's important, to assess the market you're competing in a, classic. Tool for doing so is Porter's. Five forces. First. Look, at competitive, rivalry how. Many competitors, are in the marketplace how, do they behave how are they distributed, by market, share how, do they go to market what are their core competencies. Second. Look at the threats, of new entry, so, there's the existing, set of competitors, are there new competitors. Who will enter the market, evaluate. How much does it take to get into the market well I have to build huge factories, or can I just launch a website to compete against you so, understanding, those threats of new entry. Next. Look at the threat of substitution. You. Have your products, what other products. Can meet that need for your customers. Understand. What, customers, are buying not necessarily. What you're selling. Then. You have to evaluate buyer. Power, so, these are your, customers, buying, from, you are, you. The big player in the market or are, your, customers, next. You need to look at supplier, power the, people who are providing raw. Materials. And inputs, to your business, are they, big are they small how, much power do they have from a pricing standpoint. And by. Looking at all five of these, dynamics. You'll be able to identify, where. Are the major threats, where, are the opportunities that, we can pursue, and it. Can generate some, interesting. Insights, when you're rigorous, about going through this process so by doing this, assessment of Porter's five forces across. Your entire market. And your organization. You'll, be able to identify where, the major threats, and opportunities. Are that your organization. Faces. You. Another. Tool you can use to assess, the environment you're competing in is called a SWOT analysis, and SWOT. Stands, for strengths. Weaknesses, opportunities and. Threats and. Typically. It's drawn on a grid. For. Strengths, and weaknesses, those are typically, within, your own organization. Capabilities. You have or, don't, have as far. As, opportunities. And threats. They can either be internal. Or external. Market. Facing, opportunities. And threats, as you. Build a SWOT analysis, you'll want to have the team together and have people throw out their ideas and it's generally, a brainstorming. Session, so. Perhaps we start our SWOT analysis, and we look at our strengths, and our strengths consist of the, brand's we have how. Efficient. Our supply, chain is the. Strength of our sales force and how well they sell our products, safety. Within our manufacturing. Plants, are recruiting. Information, technology, and maybe, our financial, position then. I look at weaknesses, and ask people where are our, gaps and we, may have gaps in our expense, reporting, process, our, information. Technology desktop. Support, for our laptops, our, digital, marketing program, our intern, program, and our, acquisition. Integration, skills now, we start looking outside the organization. At our opportunities. And threats, that we face opportunities. Might be the growth of social media and how we can take advantage of it the bankruptcy. Of Acme, one of our main competitors, our. Ability, to sell third-party. Products, through our supply chain and an, opportunity, to do couponing. Of our, products, at retail. And then last we look at the threats that we face within, the market as well as internally. We, may have threats of our customers, are going to push us on pricing, our competitors. May be poaching, our talent we're thinking, about it the weather in Ohio where we have some of our operations. Maybe a threat Acme. Being bought by one, of our competitors, could, be a threat and also, economic trends. That we face cause, our, products, are a consumable. And they're discretionary, by consumers, so if the economy, worsens, our sales could go down and once, I've looked at that total, picture I'll have, a better sense for the strategic environment that, I'm going to be building my strategic plan, in.

You. When. You set direction, for your organization. As part of the strategic, planning process there. Are four elements to doing so, articulating. Your mission your, vision your, guiding principles, and your, goals a, mission. Is why, does your organization, exist. What. Is its purpose in the world the. Vision, is then saying if we're fulfilling that purpose at some. Point in time where. Are we going to be what, do we want to achieve what, do we want the organization, to look like at some, future point. Your. Guiding principles, are the rules you want your team to live by how, do you want people in the organization, behaving. Especially. When the boss isn't around, what. Are the lenses you're going to look through as you try to evaluate decisions. And. Lastly. Your goals try. To quantify, these it, may be X, number, of customers, by, a certain, date or dollars. Of revenue dollars. Of profit, a margin. Percentage, being, able to put out hard. Numbers, by, a certain, point in time to. Orient, the organization, and say here's, what we're shooting for. Some. Of the pitfalls that I've seen during, this step of defining where you're going, first. Many, vision, statements, and mission statements, are way, too long, I've seen, some that have spanned multiple, pages, to the, extent, possible make. Them short, clear. And free, of buzzwords. Next. Your guiding principles, need to be clear, enough that everyone. In the organization. Understands. Them and can, apply them even. To the smallest actions. And, last. Your goals need to be aggressive. But, pragmatic. If they're. Not aggressive the organization. Isn't going to push itself, they're, not going to innovate to try and fill that gap between where, they are and where the goal says they should be if the. Goals are too aggressive and you're not pragmatic, people, will look at the goal and say there's, no way we can achieve that and they just give up so. As you define it for your organization. And set, out that, mission vision. Guiding. Principles, and goals you'll. Be providing, clarity, for, where you want the organization, to be in the future. You. When. You go to set direction, for your organization. You need to clearly, articulate. Your mission your. Mission is why the organization, exists. It, should be a cultural. Reflection. Of your values, your, beliefs and the philosophy, of the organization. Try. To make sure your mission statement is clear, brief, and understandable. To everyone. Employees. And people, outside the company, your. Mission should clearly. Specify, what, business, your organization. Is in and where. You compete, and you. Should word it in a manner such, that it can serve as a rallying point for the organization. People. Should be excited. About living that mission. Let. Me share a few examples, that you may be familiar with the company's but not necessarily, their mission statements. EBay's. Mission, to, provide a global, trading platform, where practically, anyone. Can, trade practically. Anything. Johnson, & johnson be. The world's largest and, most comprehensive. Manufacturer. Of health, care products, serving. The consumer. Pharmaceutical. And professional. Markets. Intel. Do. A great job for our customers, employees and. Stockholders. By, being the preeminent, building, block supplier, to, the computing, industry all. Of, these are simple, sentences, they, clearly, articulate. What, business, the organization. Is in and where. They compete, it. Helps everyone in the organization. And outside, of it know, what this organization stands. For and what, its total purpose, is. You. Another. Element of setting, direction for, your organization. Is articulating. A vision a, vision. Should. Provide a clear picture. Of where. You want to be as an organization, in three, to five years, why. Three to five years anything. Less than three ends up being too tactical. And people, don't focus on generating. Big ideas. Anything. Further out than five years, there's too much ambiguity.

In The market it's hard, to see that far into the future because, the world can change so. Much so. Defining, what your organization, is going to look like three to five years from now can, provide a very clear target, for, people to shoot for, when. You build your vision statement first. Articulate. What value, your, organization. Creates, let. People know here's. Why we exist and here's, how our customers benefit. Your. Vision should be ambitious, but realistic. Ambitious. Because it'll push the organization. To innovate, and be, aggressive, and push hard however. You, need to make sure it's realistic, so they don't look at it from day one and just, give up, that. Vision needs to be something, worth doing, to win people's, commitment you want your team excited, about delivering, on that on getting, to that destination. When. You articulate, the vision try to figure out how you're differentiated. From your competitors, and, lastly. Make sure that vision statement is concise. A few, critical, words. Allow. Me to share a few great, vision, statements. McDonald's. To. Become the world's easiest. Quick-service. Restaurant choice. For, customers. Starbucks. To, be the premier, purveyor, of the finest, coffee in the world and. Microsoft. To, create software that empowers, the users of personal. Computers, all. Of these are big, ideas but, they clearly scope, here's, what we do here's. The market, we do it in and here's, how we're different from, our competitors and the, entire organization. Knows what. They're working toward so. When you articulate. Your vision think. Three to five years out and put. Something aggressive out there that people can be excited, about. The. Last two elements, of, direction for your organization. Or, articulating. Your guiding, principles, and your, goals. Guiding. Principles, dictate how you want the organization to, behave, especially when, your leaders aren't around you're. Setting out a principle, that an associate, can use when they're confronted, with a situation where. They don't know what to do what. Lenses, do you want them looking through as they're evaluating. Those decisions, because. If you have clear, guiding, principles, the. Actions, they're going to take will, be consistent, with the, direction of the organization which. Ultimately helps. You achieve that. Vision and mission in, terms. Of your goals you're, going to set out those metrics, those things that after a year two, years five years you'll. Look back and say we achieved, those, goals, try. To make them as measurable. As possible. It can be a dollar, how, much revenue how much profit it can be a number, of new customers that, you add, those. Guiding, principles, and goals need, to be clear, enough that they guide behavior, help. People behave in a manner that's consistent with. The, organization's. Mission and those. Goals should, be driving you to achieving, your vision over time they. Need to be aggressive, and, pragmatic. So you get that balance, of I know I can achieve this but I'm not really, quite sure how, I can get there so I need to innovate and push to be able to do so, let. Me share some ideas around what guiding, principles, can be some, guiding principles I've. Heard that are great are things. Like would. I give this to my family the organization, was in the consumer, packaged goods industry. And when, people were trying to figure out whether they make an ingredient change. To a product or a packaging. Change to the product, they, asked their people to step back and say if you made that change would you be comfortable giving, that product to your family if, the answer was yes go ahead and make the change if the answer is no stop, immediately. Other. Guiding principles, I've heard be, net exporters, of talent, this. Is how we want our managers, in the organization, to behave being, a net exporter of talent, means, bringing people in, helping. Them develop helping. Them grow challenging. Them and building, their skills and then, once they've reached that next level push, them off to the next team send, them to the next great opportunity.

In Front of them and then. Bring in more people behind them and the net effect of that is you're, generating, more talent, for the organization, then, you're bringing it now. Think of the behaviors, that this can lead managers, to take they. Won't hoard talent, anymore the notion that I've built somebody, and they're a high performer, but you know what I'm going to discourage them from going to the great, new role would. Run counter to this guiding principle, so. By putting this principle, in place that, organization, is going to achieve that goal of having a more talented. Organization. So. Think about what you want your organization. To look like in the future how. Do you want your associates, to behave, and then, be able to put in place a principle, that they can understand, when they're faced with a decision. Now. In terms of goals laying. Those out very, clearly, and then sharing, them across the organization, but letting the organization, figure out how to get there so. Think about what the goals are of your organization. What's, the vision where, are you trying to go and what, set of goals will help you get there and by, articulating them, clearly the, organization, is going to drive in the right direction. You.

2019-04-22 05:08

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