Question of the Day: Why Do So Few Companies Excel at Strategic Planning?

Key Question: What Are the Fundamental Steps for Effective Strategic Planning? First of all, strategic planning calls on two of the most critical disciplines in the family business world: professional leadership and discipline. Actually it’s the same thing. Leaders provide the necessary discipline to get the high priority jobs done. Let’s go a little deeper.

Overview

Principals of both the Academy of Family Business and it’s sister company, LeadershipOne, Inc. have facilitated, lead, conducted, taught – you name it – hundreds strategic planning engagements over the past 30 years. We have some pretty good insights into what a successful outcome looks like. And yes it comes down to the quality of leadership, and add some good knowledge of the process, to achieve the desired results.

My colleagues who are involved in the executive training/development process can pretty well tell by the end of a training and implementation engagement the pending outcome and the its quality. It will be determined by the quality of the family business leadership. Full stop.

Most family businesses start as small entrepreneurial led enterprises that can and often do grow into major businesses. However, along the way we usually see a metamorphosis form entrepreneurial to professional management and leadership. The entrepreneurs don’t go away. They just enhance their abilities with knowledge and training to develop professional direction to their enterprise. It’s an exciting thing to see and experience. Professional leadership bursting forth that enables the realization of strategic planning. What a victory that is! Especially for the business owners.

Strategic Thinking Makes the Difference

Most senior executives are increasingly concerned with creating a successful future for their businesses. Despite this appetite for success, many businesses are "going hungry." There are no easy answers. Change is creating greater unpredictability in the marketplace. As a result, traditional management strategies no longer ensure a high probability of success. In response to the rapid change occurring in the general business environment, individual companies need to design management strategies that will remain dynamic. Strategic thinking is essential to business success. Appreciating the potential value of a strategic plan is easier when the role and importance of strategy is understood.

What is Strategy?

Essentially, strategy consists of the processes and guidelines necessary to achieve goals. We define strategic planning as a comprehensive process, involving all levels of management that anticipates and guides the future of an organization.

Let’s take a look at the key steps involved in preparing a strategic plan. There are seven.

1.     Situation analysis  helps you determine where you are starting from. This information should identify what your priority changes and improvements should be.

2.     Values determine what drives everything else in the organization.

3.     Vision statement identifies where you want to go and what you are building.

4.     Mission statement describes the purpose for which your products, services or business exists.

5.     Strategies set the direction, philosophy, values, and methodology for building and managing your company.

6.     Goals need to be measurable and support achieving the vision.

7.     Projects are the specific actions the business must implement to achieve its goals. Action items should be important, significant and contribute to the growth of your business.

The CEO and senior management team are critical to the success of this process by providing the vision and drive to make it a cultural imperative within the organization. Normally, the CEO leads the senior management team through the process of determining the items bulleted below on behalf of the organization. However, some management teams have now assumed much of the CEO’s function in leading the enterprise through this process.

• Where we are right now

• How we got here

• Where we want to go and why

• How we will get there

• Who is responsible for what

• When it should be done

The information developed through this process enables the leadership team to make timely, strategic decisions that help set the direction of the business.

Having the leadership team go through this exercise is an essential step. They need intense commitment and focus to develop a strategic planning process that continuously improves providing better direction. That is true leadership! We can show you the type of leadership models that will help you create and implement strategic planning to successfully enable your company’s key strategies. To learn more about the Academy of Family Business, our curriculum and our coaches, please email us at: info@myAFB.org