Archive for April, 2010

Strategic Planning or A Root Canal – Which Would You Prefer?

As the leader of a small or medium sized business, strategic planning is one of those time consuming efforts that only Fortune 500 companies have time for, right?  Besides, there’s real work to be done instead, right again?

Granted, strategic planning looks simple on paper, but is difficult to do effectively.  When done well, strategic planning will multiply your efforts, focus your teams and achieve results that are not possible without thinking strategically about the future of your company.

There are many benefits to developing a strategic plan for your company.  Here are four primary benefits of strategic planning:

• First, an effective strategic plan allows your organization to chart its own course instead of allowing your competitors to decide what customers they will take while leaving you with the leftovers.
• Second, the goal of the strategic planning effort is to identify not only markets where you can compete, but also to identify market segments in which you can dominate.  If you can dominate a market segment, you are driving what happens in that segment.  You’re not one of the “also rans” left to compete for business solely on the basis of the cheapest price.
• Third, an effective strategic planning process focuses your company on its strengths instead of trying to be all things to all people.  In addition, it relieves you of the temptation to be consumed by fixing your company’s weaknesses.  The real return on investment is not in fixing your weaknesses.  The real ROI is achieved by focusing on your strengths.
• Finally, the strategic planning process forces you to live in the real world.  If a train is headed right for you, an effective plan gives you the time to see it and do something about it.  Do your customers see the strengths that you say you have?  Is the market opportunity as large as your sales manager says it is?  Will there ever be a return on investment for a product that requires a capital intensive investment on the front end?

No doubt, strategic planning is challenging.  It takes time, energy, focus and resources.  However, when it is done well, the organizational and financial benefits will far outweigh the cost of the process.

Improving Organizational Results

Our days are full.  Our to-do lists never get any shorter.  And, time is passing faster and faster every day.  Life as a business leader seems rather complex.

In some respects life is complicated.  However, when you think about your organization’s performance and how to improve it, it really comes down to two questions.

First, are you underperforming your industry?  Are there competitors who are setting new benchmarks for high performance in your industry?  If they can do it, you can too.  Forget the excuses and just focus on how your company can become a high performing company.  First place does not preclude any other company from also achieving the same results.  They’re in first place because you’re not in first place.

Second, are you committed to do something about the fact that you’re not outperforming your competitors?

If not, don’t worry about it.  You’ll continue to be fodder for your competitors to feed on, taking your best customers and leaving you with the high maintenance, low margin leftovers.

If you are committed to do something about not being the industry leader, focus on closing the gap between the results you would like to achieve and the ability of your organization to deliver those results.  What’s working?  What’s not working?  Why is it not working?  Get involved in the execution details to point your company in the direction of delivering improved results.  This means that improving your company’s organizational execution should show up on your calendar in a significant way at the expense of some of the things you’re doing now.

Apply your efforts over time and you, your employees and your shareholders won’t regret it.