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Strategic Planning for Sustainability
If you look closely at companies that have sustained their operations and profitability over decades, you will note many common attributes. Among them: the ability of their owner (or management teams) to adapt to ever changing business environments, keeping themselves ahead of their competitors. The way they grew their businesses in the past was good enough to get them where they are today, but they had the agility to transform themselves into new areas of growth and profitability in order to move past what would have otherwise been stagnation, or in some cases, an eventual demise.
- Baseline Analysis – This is where the process of strategic planning starts. It sets a baseline and common understanding of where the organization is today in terms of trends in sales and profitability, core competencies, developing competition, and markets/industry segments/customer base(s) served.
- Participation – Getting business unit level, customer facing or other front line resources involved provides a broader perspective as well as creates a sense of ownership among the rank and file. A “top down” approach runs the risk of failing in its implementation due to lack of “buy in” throughout the organization.
- Set stretch goals –Although it might result in some “eye rolling” among the management team, it gets everyone out of their comfort zones and generates some out of the box thinking.
- Flexibility – The best strategic plans allow the flexibility to evolve. They are not set in stone, and are tweaked as needed.
- Culture and Values –If strong, these define and guide corporate culture and can also provide a differentiating competitive advantage (internally and externally).
- Diversify Core Competencies – A single core competency may have been critical in leading the organization to where it is today, yet it is important to challenge the organization to diversify into multiple core competencies over time.
- Communication – After setting your strategic plan and vision for the future, communicate, communicate (and then communicate again) throughout the organization.
- Balanced Scorecard Approach – Measuring results is key. Balancing the metrics among financial, external (customer satisfaction, market penetration, etc.), internal (new product development, technology deployment, core competency development, etc.), and compensation (bonuses and other variable based pay structure) are an example of how alignment can be achieved around the strategic plan.
- Accountability – Why bother to go through the process if you have not bought in yourself? Owner (or executive level) support is critical to creating a sense of urgency, accountability and path for transition.
- Outside Involvement – Many companies, especially in the middle market, do not have the skill sets or an established process to plan strategically. While an outsider won’t know your business as well as you do, the right resource will challenge the status quo while providing an often needed third-party perspective and insight.