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What’s the Plan, Stan?
If you don't know precisely where your business is going, any avenue will get you there
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CONNTACT.COM
10/14/2002
By: Melissa Nicefaro
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Just about everyone has “a plan.”
Just as at the end of every rainbow is a pot of gold, at the end of every well-executed strategic plan is more money. Every company looks for ways to bring in a bigger pot of gold while minimizing the rain. So for the rainstorm that is day-to-day business, the umbrella can be a strategic plan.
A strategic plan is a highly recommended - if not essential - business practice. But as with many daunting tasks, the most difficult part is getting started.
“You can't have a strategy until you are very clear about what it is that you want to be,” says Ronald Storer McMullen, director of entrepreneurial studies and associate professor of management at Quinnipiac University. He also consults with small businesses, helping them draft strategic plans.
“I think everyone should have one,” McMullen says. “If they think hard about what it is they do and why they do it, they'll probably discover that they do elements of a strategic plan.”
Carol Cheney, president and creative director of her own marketing firm, Cheney & Co., in New Haven, agrees that crafting a strategic plan is a good discipline, and that many companies and individuals already go through some form of planning process without calling it a strategic plan or formally writing it down.
“I wouldn't want to say that just because you don't have a folder that says “Strategic Plan” on it, you aren't engaged in some sort of disciplined planning process,” Cheney says. “I think it's good for people to do planning because it would be very hard for people to manage growth without it. How do you know if you're doing better or worse?”
The bottom line, of course, usually reveals whether a business is doing “better or worse,” but in the context an entire industry, if you don't have some kind of pathway to follow, you may get lost.
“Even thinking about my own business, we do have elements of a strategic plan, but they are not all in one little cubbyhole called 'strategic plan,'” acknowledges Cheney.
Most businesses have some form of business plan, but a strategic plan is much more focused on how to put operations in line with objectives. McMullen says the goals vary from business to business: “What are the values of your business and what are you trying to achieve for your company? Is customer satisfaction really important to you?”
Those are strategic objectives. “Generally, you think of strategy in terms of impact on competition and your position in whatever it is that you're doing,” McMullen says.
But to start, you need to know exactly what it is you want to accomplish. When helping companies write their plans, McMullen says he has to be sure, and the company has to be sure, what it is that they are about. It's a process of finding one's self and purpose.
“I need to know what are they doing, why are they doing it and what's in it for them?” McMullen explains.
Cheney, who deals with a greater number of institutional clients than commercial or corporate accounts, says a strategic plan is a catch-all phrase, a comprehensive plan that looks at everything from facilities and staffing and products or programs to finances, marketing and sales.
“It's a multi-pronged plan where you attach goals for a three- to five-year period to specific action steps that you want to take to meet those goals,” says Cheney. An example of such a goal might be a university wanting to add a new offering - say, a distance-learning program - no later than a specific year. In order to achieve that goal, the school will need to hire a certain number of faculty members and staff to support them; it will need additional information technology support and infrastructure; a marketing communications plan will need to be in place to promote the new program; and the school will need to draft financial objectives in terms of how much it's going to cost and how many people are going to be attracted. A strategic plan would also call for a method for future evaluation.
“If you were to get to that goal year,” says Cheney, “you'd have to take a look at how well you did with it.”
Often (but not always), strategic planning is tied to a mission statement. It might also be tied to conditioning or a corporate statement. “Something that a friend said that I think is really important to remember is that 'plan' is a verb and not a noun,” Cheney explains. “Planning is an active process and a written plan can only be like a budget - necessary.
“You have guidelines and in order to take advantage of opportunities and to deal with external factors that are unknown - such as a downturn in the economy, or maybe an upturn - you have to remain nimble and flexible and not feel that tied to the written document,” Cheney cautions.
This is precisely why many businesses are shortening their strategic plans from a three- to five-year plan cycle to one- or two-year plans. “It's really a way of trying to organize resources and plot them out on a timeline and use that as a general guide to moving forward,” Cheney says.
McMullen says he looks for tangible indicators that a business is doing what it set out to do, how a business interprets those measures. “Your objective may be just to maintain the customer base you've got and not necessarily grow,” says McMullen. “Are you losing customers? If you want repeat customers, are you getting them?”
As in many long-term relationships, one of the things businesses gain when they start going through the strategic-planning process is a return to focus. “You forget about the things that got you into it in the first place and you get involved in the doing of it,” McMullen says. “Strategic planning pulls you back from it, for an objective look and can make the view new again.”
Once focus is renewed, a business can start working on efficiency.
“Once you see how all the different pieces of what you are doing relate to what you're trying to get done,” McMullen explains, “You can see that you are doing some things that are not a good use of your time, and they're not taking you where you want to go.”
If businesses curtail or reduce those wasteful activities, they begin to become more efficient, thus gaining traction on the bottom line.
“You become more streamlined and more efficient in the way you go about doing what it is that you do,” McMullen says. For some people it may just be a confirmation that they're on track and doing what they've set out to do.
The strategic-planning business became complicated over the past year by a weakened economy, as many businesses scrambled to save things that were not salvageable. As murky as the economy is now, it may in fact be a bit easier to plan, according to McMullen.
“You know what you have to do, what you have to save, what you can probably increase, and you can be more cautious and deliberate in the planning process,” he says.
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