How Do You Approach Strategy Planning in Today’s Agile Business Environment?
Strategy Planning may seem like pointless wishful thinking in the face of relentless technological change, disruptive forces in most industries, competition under a shrinking global community and the hunt to seek out differences.
Business operations and competitive landscapes are experiencing change at an ever-increasing pace. As a result, “agility” is fast becoming the new norm for businesses. This very dynamic and agile nature of doing business needs to be managed and addressed appropriately to avoid costly disruptions to business operations; through effective and flexible Strategic Planning.
Now, more than ever before, Strategy Planning is the closest, management will get to gaze through a crystal ball and have a glimpse of the outcomes for the next period.
The benefits of Strategy Planning have been drummed into every business owners’ head for decades. As Management By Objectives (MBO) evolved into Strategy Planning, some have dubbed this evolution as Agile Planning while others still call it Strategy Planning.
However, regardless of the name and forces of change, the process is more important to ensure both new and old forms of Risks, Challenges and Obstacles are addressed as and when they arise. And, the simplicity in which the process of Strategy Planning can be integrated within the day-to-day function of the business. The value in installing this process is the key.
The “VALUE” a Strategy Planning process brings is the ability to understand the business from a perspective of ALL Stakeholders. If applied correctly, it will highlight and alert on all the tangible goals and objectives, such as growth, margins, revenue, etc. But, more importantly, it brings to focus the intangible goals and objectives such as ethics, integrity, loyalty, relations, etc.
These intangible goals and objectives in today’s open & transparent Social Media eco system could potentially be leveraged as growth assets. On the flip side, however, if left unreferenced in this process, these can well prove to be liabilities causing irreversible damage.
A Strategic Plan provides a sense of direction and outlines measurable goals. Used as an integrated tool within the business, it is useful and relevant now than ever before. It keeps check, guide day-to-day decisions, evaluating progress as the business inches forward.
In order to make the most of Strategic Planning, today’s business should give careful thought to its strategic objectives, backing these goals with realistic, researched, quantifiable targets for evaluating periodic progress.
The Strategic Planning Process
The process of Strategic Planning can be as important to a business as the results.
As the focus shifts from JUST financial performance data to a more holistic business performance metrics, the importance of identifying and engaging ALL Stakeholders in the Strategy Mapping and Planning Process is an essential part of ANY business (Big or Small).
The luxury of reviewing and analysing past financial data to gauge and budget for future performance periods is fast becoming redundant. Today’s critical need is for LIVE performance data across all areas of business without compromise.
The generation of this dynamic data across all key areas of a business must be central to the Strategic Plan for any business which wants to achieve its underlying profitability goals and sustainably maintain its competitive positioning.
The Strategy Plan seeks to identify the priorities for the period and enables resources to be optimised. Thus, allowing the business to adapt to changing circumstances, where all actions and tasks are performed proactively rather than reactively as threats and opportunities are navigated during its execution.
A carefully considered and effective Strategy Plan in today’s business environment must address the NEEDS and WANTS of ALL stakeholders. Therefore, prudent to the process of Strategy Planning is to identify all stakeholders, their needs and wants against the business needs and wants.
Approaching and Addressing the Strategy Planning process in this manner, from the outside-in, ensures accountability and sound decision making which accommodates all stakeholders. Priorities and resources are allocated accordingly within the Strategy Plan. This allows for a needs, wants and values driven vision & mission with measurable goals, objectives.
The Vision & Mission
The culmination of stakeholder identification, engagement and clearly defined needs and wants, should lead to a focused vision and mission for the business.
Defining a concise vision and mission is important to any business. Its aim is to synthesize and distil the overarching idea; linking practical strategies and enabling all stakeholders to align the specifics of their actions and decisions with a clear and focused direction.
A strategic vision and mission are defined in a way that is broad enough to guide all stakeholders, and narrow enough to focus their efforts. For Example, “To help the disabled,” is too broad a mission, even for a not-for-profit. “To enable the disabled by linking outsourced services connecting industry with a pool untapped workforce” is a mission that is both general and actionable.
Setting Objectives & Goals
Once a stakeholder driven vision and mission is articulated, the nuts and bolts of the Strategic Planning process can be expressed in measurable objectives and goals.
Measurable goals set specific and concrete objectives expressed in terms of quantities and timelines. These are important to a business because they enable stakeholders to evaluate progress and pace developments. For Example, “To improve customer satisfaction” is not a measurable goal, but “To increase customer satisfaction from 3 to 4.5 stars during the upcoming year” provides a concrete objective to be achieved in a specific time frame.
Actions & Tasks
Connecting these objectives and goals to a well-defined category framework, of actionable tasks and duties assigned to each stakeholder, completes the circle back to the needs and wants of all stakeholders. This ensures informed expectations and buy-in from all stakeholders.
A simple, yet effective, category framework is to define every action or task in terms of a function it plays progressing towards the objectives or goals. The three simple functions for every resource action or task during the course of running the daily business fall either under:
- Fixing & Repair measures,
- Preventative measures, or
- Improvement measures.
More on this in a separate article……
Continuous Improvement & Flexibility
Strategic objectives and goals set during the planning process are a product of information best available at the time, together with the most realistic assessment of what the business can achieve.
However, the key ingredient and an absolute Essential in today’s Strategy Plan is “Flexibility” or “Agility”. This forms part of the organisations continuous improvement regime that involves evaluating objectives, goals and progress both periodically and dynamically. This is in light of the company’s success in achieving its goals and developments that arise as it executes the plan.
For example, if you plan to grow your paint shop business 20 percent during a specific year by introducing related and complimentary hardware supplies, but a formidable national hardware store opens a superstore within your catchment, the business will need to redefine its objectives and evaluate progress considering the effects on all stakeholders.
Building this stage into the strategy planning process ensures the links between stakeholder needs & wants, the vision & mission and the objectives & goals are ALWAYS aligned and in sync.
Despite the overwhelming evidence of the merits of Strategy and Planning; the reality for small businesses couldn’t be more far removed from this process more than ever before.
Less than 30% of businesses ever contemplate or complete a strategy plan, and only a few of these ever actually implement a plan successfully.
Of these, most do it to satisfy regulatory requirements. And in most cases, the content and context both are predicated on pleasing an external party whose aim in the process is a mere tick in the box and a copy writing exercise.
Let’s get it straight, it is no longer a “nice” to have luxury (…..it never was…..). It is critically imperative to invest in Strategy Planning, Development and its Execution to be relevant within your industry, sector or business in general.
The Strategy Planning process is never a project with a specific start and end. It must be a regimented process within a business, just like banking or opening the doors at the start of each business day.
The battle for small business owners, however, is time and resources required to step away from the business enough to plan for success without bias.
But yet, if we think about it, we never aimlessly sit in the car, switch it on and drive off without a destination in mind. We always find time to plan the journey, subconsciously maybe, but we do.
In fact, in most instances we will not only have the destination or objective in mind, but we almost always try to fit in other errands or smaller tasks along the way. More remarkably, we adjust and adopt throughout the journey as the conditions change along the route.
The question therefore is, how does a small business owner effectively plan whilst there is constant conflicting “Cashflow Juggling” and “Firefighting Activities” to attend to?
I am keen to understand the challenges small businesses are facing in adopting measures proven to increase value and address the “it’s easy for you to ………” comments as we drill further on the Strategy Planning Process.
Ketan Shah is a Business Advisor, Management Consultant and Entrepreneur with over 15 years of experience in Strategy Planning, Portfolio Management, Performance Measurement/Management, Project Management and Business Process Improvement. He is especially passionate about Business Strategy, Structure, Management, Operational Planning & Implementation for Growth, Turnaround and Commercialization initiatives.
Moksh Pty Ltd is a Strategic Business Advisory, Management Consulting, Investment & Funding Partner Supporting Turn Around, Growth, Commercialisation Initiatives.