ETD: 839 SPECIAL REPORT "Strategic Planning"
E-Tailer's Digest
etd_post at gapent.com
Thu Dec 2 13:29:51 GMT 2004
E-Tailer's Digest --- Everything for the Retailer
Issue #0839 December 2, 2004
George Matyjewicz, Moderator mailto:georgem at gapent.com
Published by: GAP Enterprises, LLC. http://www.etailersdigest.com
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CONTENTS
[1] Greetings
[2] "Strategic Planning"
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[1] Greetings.
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Hi All:
I have had many requests from organizations who want to learn more about
Strategic Planning. What is it? Why do I need it? How is it different
from Long-Range Planning? Doesn't Enterprise Risk Management accomplish
the same task? What does Yogi Berra have to do with Strategic Planning?
So I decided to publish one of my white papers on this important subject.
Strategic Planning is mandatory for ALL organizations - large and small;
service- or product-oriented; profit- or not-for-profit; government or
private sector; publicly-traded or private.
If anybody needs help with Strategic Planning, please contact me
mailto:georgem at gapent.com?Subject=Strategic_Planning
This report will remain for posterity at our Special Reports site
http://etailersdigest.com/resources/Specials/index.htm If you have
something that would be of interest to our list members, please send it to
me. The article should be 1,500 to 2,000 words on anything to do with
retailing/etailing.
Let's hear about your business, which will remain for posterity at
our "Members: Who Are You?" site.
http://etailersdigest.com/resources/members/index.htm And we have a form
there for you to tell us about you. As I said when I first proposed this
idea, we have "known" each other for a long time, yet we often don't know
anything about each other. So, tell us who you are and what you do.
Now, let's get to everything for the retailer.
Sincerely
George Matyjewicz, PhD
Chief Global Strategist, GAP Enterprises, Ltd.
mailto:georgem at gapent.com
http://www.etailersdigest.com
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[2] SPECIAL REPORT "Strategic Planning"
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+ + + + + S P E C I A L R E P O R T + + + + +
"Strategic Planning"
By George Matyjewicz, PhD
Chief Global Strategist
GAP Enterprises, LLC
“When you come to the fork in the road, take it.”
That great philosopher Yogi Berra had a favorite “yogism” that seems to be
the mantra of many organizations: “when you come to the fork in the road,
take it.” Put another way, if you don't have a strategic direction for
your business, you can take any road.
The advent of the Sarbanes-Oxley Act of 2002 (SOX), forced organizations
to implement a financial risk management process. Many went beyond SOX and
implemented an Enterprise Risk Management (ERM) solution – state
objectives, identify risks that will prevent the organization from meeting
those objectives, establish controls that will mitigate those risks and
implement action plans to ascertain that the controls are in place.
Organizes should go beyond ERM and establish Strategic Planning - the
process of developing and maintaining a strategic fit between the
organization's goals and capabilities and its changing marketing
opportunities. It involves defining a clear company mission, setting
supporting objectives, designing a sound business portfolio, and
coordinating functional strategies.
Strategic Planning forces you analyze your strengths and weaknesses and
identify opportunities and threats that affect your corporate
objectives. This is also known as a SWOT (Strengths; Weaknesses;
Opportunities; Threats) analysis. Strengths and weaknesses are internal
factors over which you should have control. Opportunities and threats are
external to your business, over which you may not have control. Your goal
is to match your resources and capabilities to the competitive environment
in which you work.
The statement of not seeing the forest because of the trees is often the
story with business owners/managers. One day runs into the next which runs
into the next. When a manager spends most of his/her time "fighting fires"
in the workplace, i.e., reacting to problems, it can be very difficult to
stand back and take a hard look at the big picture.
To succeed, managers must stay focused on the organization’s ultimate goals
and objectives. Lose sight of those goals and objectives and you will most
likely fail.
Your strategic plan must be simple, realistic and attainable to give
management and staff an opportunity to think strategically.
A strategic plan should not be confused with a business plan. You need
both. A strategic plan is not the same as an operational plan. The
strategic plan identifies your vision and objectives. An operational plan
carries out the strategy as defined in the business plan.
How does Strategic Planning differ from Long-Range Planning? Long-range
planning generally means the development of a plan for accomplishing a goal
or set of goals over a period of several years, with the assumption that
current knowledge about future conditions is sufficiently reliable to
ensure the plan's reliability over the duration of its implementation.
Strategic planning assumes that an organization must be responsive to a
dynamic, changing environment. Strategic planning involves anticipating
the future environment, while making decisions in the present. This implies
management staying abreast of changes in order to make the best decisions
it can at any given point – manage and plan strategically.
Workshops. Strategic Planning should be conducted in a series of workshops,
preferably offsite at a retreat, with all key parties involved. The
workshop should be a brainstorming session with everybody
participating. Focus on realistic SWOT issues that affect your
organization, not the latest buzzwords in the industry. Then analyze those
issues and narrow them down to fit your organization.
A workshop needs a facilitator, boards for recording SWOT issues, and
attendees of equal stature, i.e., all line managers together; all c-level
officers together; etc. The boards should be on brown paper, which can be
hung around the room using masking tape. This gives members a true clear
picture of your organization. Boards should have sections that contain:
A. Vision or Goals and Objectives. This should be a top-down approach,
i.e., the CEO identifies three goals for the organization. Each business
unit manager then identifies his/her three goals which must complement the
CEO’s goals.
B. Corporate Values. Identify the values and ethics that your
organization honors.
C. SWOT (Strengths; Weaknesses; Opportunities; Threats) issues – internal
and external factors that affect your organization.
D. Key Strategies. What strategies will you consider to accomplish your
goals?
E. Strategic Action Programs. Develop action plans to be assigned to the
responsible parties, e.g., CEO – develop a corporate business plan; CFO –
develop a detailed financial plan; COO – identify resources needs to
execute the plans; Board of Directors – bring on more qualified BOD members
to advise management; etc.
The best way to conduct such a workshop is to have each of the major
categories on a separate board, and the SWOT to be separated into four
boards – one each for Strengths, Weaknesses, Opportunities and Threats.
Workshops like this should take 1-2 days for each group. Keep the
discussions going and encourage interaction and a wealth of input. The
strategic plan should not take longer than two or three months to
complete. Otherwise you lose momentum, and the planning effort will fail.
Each meeting should be scheduled at most two to three weeks apart when
planning. It's too easy to lose momentum otherwise. Attendance must be
mandated from the top down. The CEO needs to issue a clear mandate on the
importance of strategic planning. And the CEO must be involved in the
planning process.
You may want to consider using a facilitator from outside of your
organization if:
1. This is your first strategic planning exercise.
2. Previous strategic planning was not deemed to be successful.
3. There is no one in the organization that members feel has sufficient
facilitation skills.
4. No one in the organization feels committed to facilitating strategic
planning for the organization.
5. An inside facilitator will either inhibit participation from others or
will not have the opportunity to fully participate in planning themselves.
6. You need an objective voice, i.e., someone who is not likely to have
strong predispositions about the organization's strategic issues and ideas.
Typical Planning Meetings. A brief strategic planning process, as an
example, might include 4-5 planning meetings which results in the creation
of a top-level strategic plan, that is later translated into a yearly
operating plan. To be effective the planning meetings should be held
offsite, preferably at a retreat. And agenda should be issued ahead of
time to inform members of what is expected so they can plan and bring ideas
to the meetings. They must be productive meetings.
1. Start with a half-day retreat where the board chair and/or chief
executive kicks off the project and explain the benefits of strategic
planning and the organization's commitment to the planning process and
identifies who will be involved. The facilitator presents an overview of
the planning process. The team then begins the next step in planning –
identifying the corporate goals and objectives, and the goals and
objectives of the business units. The corporate ethics and values must
also be defined. Team members are asked to think about SWOT before the
next meeting.
2. The next meeting focuses on SWOT. When this is finished and before the
next meeting, a subcommittee is charged to draft the key strategies needed
to accomplish the strategic plan. This document is distributed before the
next meeting.
3. In the next meeting, planners exchange feedback about the
strategies. Feedback is incorporated in the document and it is distributed
before the next meeting. The team must then discuss the plans for develops
the Strategic Action Programs, which must be developed and distributed
before the next meeting.
4. At the next meeting, the team reviews the Strategic Action Programs and
exchanges feedback about the strategies. Feedback is incorporated in the
document and it is distributed before the next meeting.
5. At the next meeting, the Strategic Action Programs are finalized to be
submitted to the CEO and the Board of Directors for final approval and
implementation. Management will use this document to establish a yearly
operating plan which details what strategies will be implemented over the
next year, who will do them, and by when.
During this process, various subcommittees might be formed to gather
additional information and distribute it before the next planning
meeting. Be certain that meetings are well organized and conducted in an
efficient manner to ensure realistic expectations from the planning project.
When should an organization conduct Strategic Planning sessions? When to do
Strategic Planning will be different for each organization. If yours is
a business whose products and services changes rapidly, then you need to
schedule Strategic Planning more frequently than an organization in a
static or stable marketplace. For example, if you are in the fashion
industry, you may need to schedule strategic planning once or twice a
year. Or if you are a startup, you definitely need to plan more than once
a year. You need to pay close attention to details, i.e., goals, values,
strengths, weaknesses, opportunities, threats, responsibilities, timelines,
budgets, etc. You should always try to capitalize on your strengths and
improve your weaknesses.
Strategic Planning should be done
1. When an organization is just getting started. The strategic plan
should become part of the business plan, along with a marketing plan,
financial plan and operational plan.
2. In preparation for a new major venture, for example, a new product
line, creation of a new division, merger or acquisition, etc.
3. For most organizations, at least once a year, to become part of the
business plan and related subsidiary plans.
Who should be involved in the Strategic Plan? You need a champion – an
executive familiar with the company's principles and practices. The
executive should be respected in the company, able to enforce the
disciplines required by, and know what to expect from Strategic Planning.
Typical candidates for this position include the Chief Strategist (or Chief
Global Strategist), Chief Executive Officer, Chief Financial Officer, Chief
Marketing Officer or even a Board of Director.
In any event, ALL key players should be involved in creating the Strategic
Plan. Strategic Planning should be conducted by a planning team.
With the planning team, you should consider:
1. The CEO should drive development and implementation of the plan.
2. Establish clear guidelines for membership, for example, those directly
involved in planning, those who will provide key information to the
process, those who will review the plan document, those who will authorize
the document, etc.
3. A member of the board of directors needs to be included, since they
have a primary responsibility to account for the strategy of the organization.
4. Ensure that as many stakeholders as possible are involved in the
planning process.
5. Be sure to include those who are responsible for composing and
implementing the plan.
6. Involve an administrator who can arrange meetings, record key
information, organize visual effects; record the plan as it is being
developed, etc.
How do you ensure implementation of your Strategic Plan? Often strategic
plans end up as an exercise in futility – a document is produced that ends
up on a shelf. The organization ignores the valuable information depicted
in the strategic plan. It is critical that the CEO and Board of Directors
are behind a strategic planning process and guarantee its
implementation. To ensure success consider:
1. Involve those who will be responsible for implementing the plan.
2. Be sure the plan is simple, realistic and attainable. Get a buy-in
from all team members.
3. Segregate the corporate strategic plan into smaller strategic plans,
e.g., a strategic plan for each business unit; one for each department; one
for managers responsible for processes, etc. Action plans also need to be
developed into smaller segments.
4. In the action plan, identify who is to do what and when and include
regular review points. Communicate the action plan and review process to
the organization to ascertain the job gets done. Assign one key executive
to ascertain that the plan is enacted in a timely fashion – that it stays
on target. Place huge emphasis on the importance on feedback.
5. Translate the strategic plans actions into job descriptions and
personnel performance reviews.
Getting started. How does an organization begin to develop a Strategic
Plan? First you need to identify the players – who will be involved, and
what do you expect them to contribute? We use forms to assist in the
planning process. The forms help stakeholders organize their thoughts and
focus on the task at hand. It is mandatory that stakeholders focus on this
important task, and provide input to assist the entire organization. An
offsite retreat, planned properly, works best. Participants need time to
contribute and time to think about the next steps. Hence, summaries and
follow-ups of prior meetings are critical.
Summary. Strategic Plans are guidelines, not hard-fast rules. It's OK to
deviate from a plan, as long as you understand the reason for the
deviations and update the plan to reflect the new direction. Strategic
Plans may not be the panacea for success, but it will help you take the
right fork in the road.
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About the author. George Matyjewicz, PhD is Global Strategist of GAP
Enterprises, LLC. His dissertation “Just In Time Payments And The New
Global Currency For Conducting Business In A Global Economy” was compiled
from 3+ decades experience in the business world. He was formerly
President/General Manager of a global digital currency company with
customers in 190 countries and Chief E-Commerce Officer for a global
giftware company where he experienced Strategic Planning issues first hand.
He was a Principal/Partner at a top 20 U.S. CPA/Consulting firm. He is
regularly published as an expert on global business, finance, technology
and implementation and writes and publishes E-Tailer’s Digest online and in
print, which reaches 50,000 retailers worldwide.
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