Ten Rules for Strategic Planning Success

  Are you considering undertaking a formal planning process in your company for the first time? Perhaps you have gone through a planning process but didn't see much advantage or results from it? Maybe you have been told by a wise advisor that you need to do a strategic plan but you have heard so many negative things about strategic planning that you are skeptical about its real value. Even better, have you had a really great experience with strategic planning and just want to improve on that experience? Well whatever your planning experience and whatever your reason for being on this site, if you want to learn how to have a successful strategic planning process with great payback then you are at the right place.

I am a very strong believer in planning. As a consultant and advisor, I have been working with growing businesses since 1982 and I owned my own manufacturing company prior. I have seen the difference that planning can make on a company.  Successfully growing a business is not an accident. Although everyone can think of exceptions, most truly successful businesses got there by developing and executing a well thought out plan. Unfortunately, planning in many companies is a totally foreign concept. I truly believe that no business that desires growth and profitability is too small, too different, too wise, or too savvy to not benefit from undertaking a strategic planning process. I have seen transformations and rebirths of tired companies, new directions set for fast moving companies, and new ideas and concepts that enabled companies to leapfrog their competition.

However, before undertaking a strategic planning process it is important to understand that not all planning processes are equal. Planning methodologies differ and can greatly affect the outcomes and results. More importantly, the methodology used can mean the difference between simply producing a plan document and producing results beyond the plan; results that truly drive the organization.

After observing as well as facilitating the planning process in many organizations and then seeing the results of these efforts, I have identified what I consider to be the most important rules for maximizing the return on your strategic planning investment. I refer to them as the 10 Rules for Strategic Planning Success.

Rule Number One - Plan for the Plan

Rule number one may seem really obvious considering that the intent of this process is to produce a plan. The first rule is to Plan for the Plan. This rule ensures that the process is well thought out before you just dive in. It should help you not only get off to a good start but also help keep the momentum throughout the process. In planning for the plan, the planning methodology is determined, the members of the planning team are selected, and a timetable for completion is set. As another rule states, communication plays an important role in the success of the planning process so this is also the time to develop a communication plan for the planning process.    

Rule Number Two - Understand the CEO's Role in the Process

As rule three will state, team involvement in the process is crucial, however, the CEO or owner also plays a major part in the success of the planning process. Rule number two is therefore to Understand the CEO's Role. Inherent in the strategic planning process is the establishment of the company's vision. In a closely held business, it is the CEO's privilege and responsibility to set and communicate the vision. (This should be a top priority for the CEO even without a formal planning program.) The CEO's role doesn't end with simply defining the vision. He or she must be an integral part of the process itself. They need to guide the process and ensure that the momentum and enthusiasm is maintained. The hardest part of their involvement however is often the requirement to listen and to accept input from the rest of the team. If the team should perceive that their involvement is "not real" and their input is not respected than the process will fail.

Rule Number Three - Maximize Organizational Involvement and Communication

The impact that a strategic planning process can have on your organization is driven by the level of organizational involvement in the process of developing the plan. My personal objective is to get as many people in the organization as possible, in some manner, involved in the process. Rule number three then is to Maximize Organizational Involvement and Communication. It would not be possible or practical to try to get everyone in the organization on the core planning team. It is possible however to get the majority of the organization involved in some component or phase of the planning process (for example in functional or location specific planning). Communication is the other key to keeping the organization "in the loop" and feeling involved in the process. Communication needs to be ongoing throughout the process but done in a manner that fits your company culture. It is important that the organization understands what strategic planning is, why it is being done, what it entails, what will be expected of everyone, and what the communication process will be.

Rule Number Four -  Never let them laugh at your mission statement

A basic of any strategic planning processes is the development of the company mission statement. Once developed, many companies take their mission statement and proudly display it on plaques hanging in their lobbies and offices for all to see.  I read them whenever I see them, they are interesting and can tell me a lot about the company. I know I am not the only person though who has read one of these while waiting in the foyer of a company and thought to myself; I am either in the wrong company or they hung up some other company's plaque by mistake.  These experiences have produced my fourth rule Never let them laugh at your mission statement. The mission statement, although there are many who feel that it is simply a "soft and fuzzy waste", can actually be quite useful and important. That is providing it reflects reality. It can help a company define and maintain its focus and its culture.  Anyone who reads the mission statement, whether it is management, employees, customers, or vendors should be able to tell what kind of company it is and know that the mission statement reflects reality. No laughing out loud, no snickers, and no comments like "who are they trying to fool?".

Rule Number 5 - Don't shortchange the investment in the internal and external analysis

Once the mission statement is developed, the next step in most strategic planning processes is to assess the current and future situations. This usually includes a thorough analysis of the internal and external environment that could directly or indirectly affect the future success of the plan and the company. Unfortunately, in a desire to move into ‘real planning", this step in the process is often shortchanged. The importance of the information gathered in this process cannot be overestimated.  Understanding gained about the company's internal strengths, weaknesses, critical success factors, and core competencies are critical to a successful plan. Knowledge of the external environment, competitors, markets, and customers can help avoid missing the mark with the company's competitive strategies. Based on the importance of this phase, rule number five should be a hard and fast one Don't shortchange the investment in the internal and external analysis.

Rule Number Six - Develop strategies that build on your core competenciesSince this is strategic planning, you will need to develop strategies. There is certainly not room in this article to try to discuss strategic options that a company has, the types of strategies that need to be defined and developed, or even the definition of a strategy (which is no simple task). What I do have room for is rule number six. This rule helps tie some of the results of the internal analysis to the strategy development. The analysis should have confirmed what the company is really good at; what are its core strengths and competencies. Doesn't it make sense to develop strategies around those strengths? Core competencies and strengths possessed by your company, ones that are truly valued by the market, can through the right strategies, be the foundation for establishing sustainable competitive advantages. Rule number 6 Develop strategies that build on your core competencies can truly help create competitive advantages that could differentiate your company for years to come.

Rule Number Seven - Provide a report card with measurable performance objectives

How do you define success? An integral part of every planning process needs to be the establishment of performance measures that will enable you to know if the plan is successful and meeting expectations. If sales increased 10% last year is that good or bad? If the plan was to increase by 20% we certainly missed the mark. Without performance objectives that can truly be measured, we could be celebrating a win when we should have been analyzing the loss. Rule number seven Provide a report card with measurable performance objectives reminds us that to measure success you first need to define success.

Rule Number Eight - Make the Plan a Usable Document

Like most documents, policies, or procedures at you company, if your strategic plan is filed or placed in a notebook book on the shelf, it is soon forgotten and seldom referred to. To maximize the benefits of the plan, your management team needs to use the plan as an active management tool. They won't do this unless you follow rule number eight and Make the plan into a usable document; one that is s concise, easy to understand and easy to refer to.

I have found that the best way to make the plan into a usable document is to get it all onto a single page. Obviously all of the backup materials and analysis can be kept in your strategic planning books or files for periodic reference. The actual plan though, including the mission statement, goals, performance objectives, and strategies need to be summarized on that one sheet. (If you would like to receive a sample of the single sheet document I have used in facilitating strategic planning processes, let me know and I will send you one.)

Rule Number Nine - A Goal Without A Plan Is Simply A Wish.... And A Strategic Plan Without Implementation Is Simply Not Worth It.

I doubt that anyone really undertakes a strategic planning process with the idea of developing a plan but not implementing it. However, many planning processes seem to end that way. Unless the process includes a specific method or plan for implementing the results, there is only a slight chance that the plan will become fully implemented. Like with so many other good ideas that are developed in growing businesses, everyone is so busy doing what needs to be done to run the business everyday that these very important, but not critical to today's shipments, tasks get pushed aside.

Rule number nine A strategic plan without implementation is simply not worth it dictates that the development of the strategic plan should be only the first part of the planning process. The second phase needs to be the development of the tactical action plans required to implement the company's strategies and to achieve its objectives.

I recommend that each functional area of the company be responsible for developing their own particular function's action plan. This functional planning process, driven by the strategic plan, also provides an excellent opportunity to involve many employees who were not on the core planning team. Not only does this provide the team with a strong buy in of the function's action plan but also a basic understanding of the company's overall plan and goals.

Rule Number Ten - Make Strategic Planning A Management Routine And A Part Of The Company's Culture

If you really want to maximize your return on your investment in a strategic planning process, the process needs to be able to provide benefits for many years after the initial plan has been developed. Your company and the world around it are changing. Things that can have tremendous affects on your business are changing faster than ever before. Your plan, to continue to be effective, needs to be consistently monitored and must change as required to meet changing competition, markets, technology or anything else that could make the plan ineffective.

 

Rule Number Ten Make strategic planning a management routine and a part of the company's culture tells us that by making a part of the routine and the way you manage the business, you can keep the plan updated and fresh. To accomplish this will require that you determine a strategic plan follow up and update schedule. Many companies follow a practice of holding quarterly review and follow up sessions with the planning team. These sessions usually concentrate on the various functions' tactical action plans. These companies then will usually hold an annual strategic plan review and update session to modify if necessary, the actual plan.

Review and Conclusion

Hopefully, these 10 Rules for Strategic Planning Success will help those of you who have completed strategic planning processes in your companies improve the successes and the outcomes from the process the next time you attempt it. For those of you who have successfully resisted doing strategic planning, perhaps these rules will convince you that done correctly, strategic planning can provide benefits that far outweigh the risks, returns that will be worth the investment in both time and energy that you will need to put into the process, and can actually help ensure that your company becomes and remains a winner.