Strategic Business Planning:
It's Now the #1 Business Priority
by Al Grafstrom

If you can honestly admit you don't know where your business is headed, you can at least be certain of two things. One, that

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you're not alone, even if your company is a large one. And two, that if you want to maximize your profits, you must correct this indecision, even if your company is a small one.

These are the general conclusions we can draw from a couple of recent surveys on business priorities. In one study of nearly one thousand firms, conducted by a management consulting firm and the trade group National Small Business United, it was found that while only 28% of firms surveyed had strategic plans, those that did had an average of 100% higher profits. Not surprisingly, the larger (100-499 employee) companies had strategic plans more often (57%) than did their smaller (0-99 employee) counterparts (23%).

And another survey, this one from the Foundation for Excellence in Consulting and Management, an affiliate of the Association of Management Consulting Firms, found that academics, managers and consulting firms alike consider business strategy the most critical business issue for the next five years -- overshadowing the categories of "human resources," "organization," "global business," "information technology" and "marketing/sales." So why has business strategy become so important?

In a word: Competition.

In a global economy that keeps reinventing itself, companies that stick to a haphazard path are more likely to suffer consequences, and suffer them more quickly. There's no longer much room for lost leaders, unprofitable lines, low quality products and poor customer service. If you don't give customers what they what, and if you don't honor your own strengths and weaknesses, your chances of success will plummet. For the sake of clarity, let's define business strategy as, "The establishment of long-term goals and the adoption of the resources necessary to carry out those goals." It sounds simplistic, but a strategic plan is anything but simple, and despite what some corporate managers seem to think, anything but wasted time -- unless of course you're going to write a 6" tome and leave it collecting dust on the shelf, a monument to bureaucracy. To work, your plan must be a "live" document that people refer to often and that keeps your company on a well-mapped path. Here are some of the key ingredients to creating such a plan:

Open Your Mind and Your Doors
Just as a national politician has little idea what is going on in Podunk -- the top manager of a firm may be unqualified to speak clearly about the financial or competitive ramifications of reinventing a product line or re-engineering a process. To create a "live" document, you must get input from the people and departments who know why things are or are not working. To do this, you must open your mind to new ideas and open your doors to input from all levels within the organization. For our clients, we like to hold initial strategy sessions outside company walls, using a less restrictive environment to brainstorm ideas and dissect each department's perspective. Before getting to that session, we ask department managers to talk with their front-line people to gather as many details as possible.

Examine Your Strengths and Weaknesses
Do you really have the talent and ability to produce a new high-tech widget for the global market? Do you really want to produce that widget at all, and do you even want to go global? Answering questions such as these help develop your plan along with your identity in the marketplace; all companies are not destined to do the same thing. Establishing your identity by being true to your strengths and weaknesses can make you more valuable to specific customers, and develop your standing in niche markets. In the Foundation for Excellence survey, respondents said the most important business strategy components for the near future were "gaining a better understanding of your customers" and "new products and services." You can't move forward on either of these fronts without knowing who you are.

Make Your Plan Flexible
A "live" document is one that changes along with market demands and economic realities. And the most successful strategic plans are ones that are routinely reviewed and updated. But being flexible doesn't mean taking unneccesary detours. Detours drain company energy, but recalculations result in strength and responsiveness in the marketplace. Once your plan is written, you can establish periodic review dates, and be open to changing direction if warranted, but not without serious thought and input. Hopping on a new bandwagon can be injurious to your company's health; analyzing new trends and sifting the fads from the substance can mean long-term company well-being. How do you begin the strategic planning process? By deciding, first of all, that you're willing to let go of old ways of doing things in favor of a strategy that accepts who you really are, and then leverages those assets for maximum company value. With the global economy becoming more circuitous daily, if you don't have a roadmap, there's just no telling where you may end up.

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