Guide to Strategic Planning

A Guide To Strategic Planning

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A Guide To Strategic Planning Contents Contents ...............................................................................................................2 Foreword ..............................................................................................................3 UK Business Advisors ..............................................................................................3 The Basics ...........................................................................................................4 The Do's and Don'ts of Strategic Planning ..................................................................4 The Real Definition Of Business Strategy....................................................................7 The New Strategic Planning .....................................................................................9 What is your SWOT? ............................................................................................. 11 Do it Yourself Strategic Planning ............................................................................. 13 The Vision ......................................................................................................... 18 Are You Working On Your Business Or In Your Business ............................................. 18 Visioning - Three Reasons to Incorporate It Into Your Strategic Thinking ...................... 21 That Vision Thing - Strategic Thinking for any Business .............................................. 24 The Secret to Success in Business Planning…plan your work and work your plan............ 26 What Does Strategy Mean To You - The Unspoken Secret? ......................................... 30 Where Will You Be In 2-5 Years?............................................................................. 32 Strategic Planning - Why Should A Business Owner Bother Taking The Time To Have One? ......................................................................................................................... 34 The Execution.................................................................................................... 37 Your Strategy Is Wrong, But That's Ok! ................................................................... 37 Your Action Plan… and how to execute it .................................................................. 38 Developing a Business Strategy is Simple - Executing is a Different Story ..................... 40 Strategic Planning Done Right: Tips to Develop Strategies and Deliver Results .............. 41 Bridging the Strategy - Execution Gap ..................................................................... 44 Strategic Planning – The 2 Gaping Pitfalls ................................................................ 58 Strategic Planning - Helping You Make Those Hard Decisions ...................................... 61 Strategic Planning – Everyone should be involve ....................................................... 63 The Results ....................................................................................................... 65 How do you measure the risks and rewards that are associated with your business? ...... 65 Measuring performance – Results make the difference ............................................... 68 Strategic Accountancy - Making The Numbers Really Add Up ...................................... 70 Prepare For Change ........................................................................................... 72 Strategic Change as a Journey ............................................................................... 72 Organizational Personality ..................................................................................... 75 Change: Cultural characteristics and expectations management .................................. 79 The Market ........................................................................................................ 83 How Easy Are You to Do Business With? Assessing your Structure when Working your Strategic Plan ...................................................................................................... 83 Does Your Operation Fit Your Product Mix? ............................................................... 87 Winning Marketplace Tactics? ................................................................................. 89 The Followthrough ............................................................................................ 92 Strategy is More Than the Boss's Business - It's Everyone's Business!.......................... 92 Where Will Your Strategy Guru Lead You? ................................................................ 94 Strategic Planning - 3 Areas to Focus on When Doing Your External Assessment............ 97 Strategy Review .............................................................................................. 101 Author Profiles ................................................................................................... 104 Acknowledgements ............................................................................................. 107

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A Guide To Strategic Planning Foreword UK Business Advisors are pleased to bring you this free ebook with a selection of articles from independent experts from around the world offering their knowledge in the domain of strategic planning to help you grow and develop your business. Please take time to explore the information enclosed within the next 100+ pages and we hope that you take on board some of the experience that is shared within to your advantage. We welcome your comments on this ebook – please forward your feedback to [email protected]. If you would like some help with your strategic planning – please give us a call on 0870 420 2756 or email us at [email protected] and also take a look at our “Strategy Review” briefing near the end of this book.

UK Business Advisors UKBA: the local business improvement team ......with worldwide back-up. The Pragmatic Approach to Business Solutions Who are we? - We are a group of independent business advisors working across the UK. Accredited by the Institute for Independent Business, we all have hands on experience of running our own businesses. We know what it's like! Who do we work with? - We work with small to medium sized organisations that are working too much "in the business", rather than "on the business"....and who are looking to develop a future strategy, as well as being open to external help and support. What do we do? - We help small businesses grow to become bigger organisations and achieve sustained profitable growth. How do we do it? - With expertise across a wide range of industry sectors and skills, we adopt a hands on, practical approach to the issues facing a business.....working with Managing Director/Owners to resolve problems across finance, sales and marketing, operations, people and management. We develop action based, timed and measured plans to achieve results. We look at where you are now, where you want to get to and how you are going to get there. Why do we do it? - We get passionate about the different businesses that we work with and are driven by making your business (as well as ours!) a success.

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A Guide To Strategic Planning The Basics The Do's and Don'ts of Strategic Planning Rebecca Staton-Reinstein Strategic Planning has made a comeback worldwide. Companies, governmental agencies and nonprofits are all adopting it. Although Strategic Planning has been around for years and the basic tools are well known, many leadership teams still stumble in the planning and execution stages. Basic “do’s and don’ts” will help you lock in success and avoid common pitfalls. Follow the (modified) KISS principle: Keep it Simple and Sustained. Less is more. A successful plan is not measured by the pound. Your goal is to create goals and objectives that focus your work for the next year or two. Limit the goals and objectives to one page so you can manage on the “top page.” Don’t go into greater detail than necessary or set too many Goals or Objectives. Too many details, goals or objectives lead to confusion, conflicting goals, micromanagement and failure to execute. Follow all of the steps as described. Use the planning methodology you choose as it was designed. You chose it because of its reputation. Learn from others’ success. Don’t skip steps or do them partially. If you bought an expensive briefcase, you would not immediately change the handle, put on a different carrying strap or have it dyed another colour. Avoid tinkering with the process, since you have no data to justify your changes. Stay focused on the Mission. The Mission, what the organization wants to do or be, is central for planning and day-to-day execution. Before you accept any goal, objective, strategy or tactic or take action ask, “How will this help fulfil the Mission?” Don’t do things because “we’ve always done it,” or “I think we should do it even though it doesn’t fit our Mission.” Without the Mission driving your decisions, you will miss innovative solutions, drift off course or become reactionary.

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A Guide To Strategic Planning Use the “brain dump” activity to alleviate the urge to begin the Tactical Plan prematurely. You are an excellent tactician and, faced with a problem, you quickly suggest solutions. This is a liability in strategic planning where you and your team have to create high level goals and specific objectives based on the Mission. List every idea the team has. Set these ideas, the “brain dump,” aside until you are ready to create the tactical plan. Don’t begin laying out the Tasks before the Mission, Goals and Objectives are clearly stated. The Mission sets the context for the Goals, which are the context for Objectives, specific, measurable results. Choose tactics to achieve these higher level results from your brain dump at the END of the process. Measure, Measure, Measure! Select useful, significant measurements for all goals, objectives and tactics. What information do you need to make decisions? Revisit KISS: Keep It Simple and Significant. Don’t avoid measurement because it is sometimes difficult to do. Measurement may be difficult, especially when dealing with customer satisfaction, employee morale or effectiveness. Define some way to measure these intangibles so you can gauge progress during execution. Measure the quality of results wherever possible. Quality measures how customers judge your products or services. This provides the best information for strategic decision making and keeps you focused on the mission and customer. Don’t select productivity measures, just because they are easier to define. Important as it is, productivity does not tell you if you are creating a product or service that the customer wants. You can always make junk faster. When you focus on quality, you are more productive, since you reduce costly rework. Provide support, resources, training, guidance, direction and coaching to assure everyone’s success. People cannot perform well unless they have everything they need to do the job. The plan is only as good as its execution, which depends on great people management. Don’t dump people into situations without providing what they need to get the job done. Delegation means understanding what the person needs to get the job done and providing it. You can only hold people accountable for what they can actually control.

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A Guide To Strategic Planning Manage by Fact: We are judged by our results. Good planning sets the stage for good performance. Review results regularly to make decisions and manage. The basic dialogue: “Are we on target?” “Yes” “Keep up the good work.” “No” “What is your plan to get back on target?” Targets are just targets. Look for root causes of undesired results. When you are not getting the desired results, investigate the root causes and modify your plans or targets appropriately. Don’t manage by intimidation, placing blame or gut feel. These approaches don’t work since people may comply but they won’t be fully engaged. Don’t ignore off target data or make excuses. The opposite of the “blame game” is denial. If a goal or objective is not reached, investigate, find the root cause, devise a solution and re-plan. Hope is not a strategy for success in the real world. Strategic Planning works because it disciplines the organization to harness the intellectual energy of all employees and guides the organization in a clear direction. Following these “Do’s and Don’ts” will help you plan and execute successfully.

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A Guide To Strategic Planning The Real Definition Of Business Strategy Art Consoli “Thank you Dr. Richard Rumelt.” I always knew I was good at devising strategies for the business opportunities that came my way, but I never gave much thought to what a business strategy really was. In Dr. Rumelt’s interview with Dan P. Lovallo and Lenny T. Mendonca as presented in The McKinsey Quarterly, he nailed it! Unlike a business plan which is usually done on a repetitive time frequency, a business strategy plan is done when an opportunity or a crisis occurs. Some businesses may go for quite some time without ever having the need to do a strategy plan. Others may do them frequently. At the heart of a strategy plan is the recognition of the opportunity (or the crisis) when it occurs and the understanding of whether the resources available (capital, talent and time) can be deployed to take advantage of the opportunity. Once satisfied that the right resources are available and that the opportunity passes the test of being worthwhile, the business leader has to devise the strategy to create a successful outcome. Dr. Rumelt uses Steve Jobs success with the iPod as the result a strategic plan can produce. In fact Jobs was so good at understanding the real meaning of business strategy; what it was, that it occurred without respect to dates on a calendar and that it depended on recognizing that something was happening, that when he was asked, “What are you doing? What’s the long term strategy (for Apple)?” Jobs replied, “I am going to wait for the next big thing.” And when he understood what was happening with the need being expressed in the marketplace and how the technology Apple was already employing he leaped at the opportunity he saw.

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A Guide To Strategic Planning The strategic plan is what should be used whenever anyone recognizes the situation Dr. Rumelt labels, “value denial.” Simply described this situation is when there is an unfulfilled need that buyers will pay for which no one is offering to fill. His example is the high rate of lost baggage occurrences now happening in the airline industry. Would the consumer pay for a baggage delivery guarantee? Yes. Is such a service being offered? No. Why not? Certainly the airlines could figure out how much they would have to charge for this service which, in a totally ridiculous solution, could be provided by having employees hand place the insured pieces of luggage in a special compartment on the plane and hand retrieve same upon arrival. But this service is not available, the consumer is denied this service. This is a revenue generator the airlines are missing. That’s what true strategic planning is all about; how to maximize the opportunity and minimize the crisis. Such a plan is not done annually; it is done when the opportunity or the need arises. In a well run business (defined here as one with few if any crisis) where the leader has encouraged actively seeking out opportunities, strategic planning should be going on all the time. Besides creating new profit centres this practice will create a much stronger management team and an abundance of mentoring situations which will bring out the best of all involved.

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A Guide To Strategic Planning The New Strategic Planning Shane Busby Most organizations set out their direction in an overall strategic plan. The plan includes some rendition of a cascading goals – actions – evaluation process that is meant to have the organization achieve the financial or organizational success it desires. Unfortunately, most organizations stop short of engaging the correct planning methodology and the detailed analysis required to really create measurable change. If a company creates a strategic plan or business plan that is devoid of demographic projections and financial data, then it has probably defaulted to “motherhood” statements that attempt to portray where it wants to go and maybe includes some objectives, strategies, tactics, program framework and evaluation mechanisms in the process. However, if it does not do the crunching of the numbers and measure where it is before and after the strategic plan unfolds, then how will it know if it has arrived at its goal state? The answer is: it won’t! Too many strategic plans I’ve seen over the years have keyed in on high-level directional statements, nebulous goals, and loosely fitted strategies and tactics. The measurements usually consist of industry standardized metrics, which, at the end of the day may or may not be affected by the strategic since the strategies are not specific enough to create the targeted results they proclaim to create. So, then what is the answer? The answer lies in the work that occurs either before or at the earliest stages of the strategic planning process. The most important work that can be done is to research, itemize, categorize, and analyze the data provided by your operating environment. It is important to utilize environmental or situational analysis models in order to really understand where you are right now. These models should involve a detailed assessment of the current, historical and projected aspects related to the internal and external operating and planning environments of the company. External factors include: political, regulatory, legal, economic, cultural, environmental, social, demographic, market trends, market uncertainties, technological, biophysical factors, and other industry-specific

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A Guide To Strategic Planning factors. Internal analysis should utilize past, present and future data related to people, finance, marketing, technology, leadership/management strength, project management capacity, growth capacity, capital investment and capacity, measured internal growth and scalability. Once you have surveyed these numbers and distilled out the common themes, then and only then should a strategic plan be formed which aligns itself with your organization’s strengths and protects itself against its weaknesses. A visioning process masquerading as a strategic planning process leads nowhere, other than to the creation of glossy documents that all say the same thing. I’ve reviewed strategic plans for a service organization in the public sector that were indistinguishable from a private sector manufacturing company. This should not happen. Executive level management and Boards of Directors need to be aware of the data and figures and how they relate to the organization’s overall strategic direction. Instead of creating separate strategic, business, operating, evaluation, stakeholder, communication plans; why not consider rolling them up into one planning binder. You’ll save paper, and the organization can use this corporate encyclopaedia to chart and navigate its course, instead of having several disparate plans and planning processes that more often than not create duplication, waste, and underutilization of resources.

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A Guide To Strategic Planning What is your SWOT? Terry Hill An effective tool that assesses and identifies opportunities and risks is a SWOT analysis. A SWOT analysis is a strategic planning tool used to evaluate the strengths, weaknesses, opportunities, and threats involved in a business venture or project. Once a clear objective has been identified, a SWOT analysis can be highly effective in the pursuit of the objective. SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. It's an assessment technique that paints an accurate picture of how your business stacks up based on these four factors. SWOT is a simple, popular way to gather and use information in preparing or amending your business plan. It's also useful in solving problems, making decisions and educating staff when change is necessary. In brief, SWOT means identifying:

o o

Strengths--internal factors- such as expertise, innovation, and resources. Weaknesses--internal factors- such as a high level of debt, slow moving inventory, and labour shortages.

o

Opportunities--external advantages- such as a rapidly growing market where demand outstrips supply.

o

Threats--potential external risks- such as natural disasters, competitive price undercutting, and changes in the general business environment.

Calculate SWOT, and you can quickly identify your venture's pros and cons. Aligning internal strengths and weaknesses with external opportunities and threats is essential to sound strategic planning. With SWOT, you know where you stand today and where you are going tomorrow. With SWOT, you can identify and prioritize the issues that will accelerate success. In the planning stages of jump starting your business, SWOT is essential to your business plan--especially if you're looking for capital. Why? Investors appreciate any type of analysis that minimizes their risk. The SWOT analysis identifies internal and external factors that can impact your business success. UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 11

A Guide To Strategic Planning To calculate SWOT, you need to understand the factors--internal and external-that will affect your progress. Internal factors are those factors that are within your control and that take place within your business environment:

o o o o o o

Operational issues--the efficiency of your operation. Staff and employees--the loss of a key salesperson or supervisor. Capacity-- resources available that match supply with demand. Cash flow--the timely flow of revenues to pay financial obligations. Costs--costs of doing business such as payroll, equipment, and rent. Productivity--ability to produce desired number of products or level of service within a given time frame.

External factors are general conditions and environmental factors that are outside of your control:

o o

The general business environment--interest rates and demographics. Economic change--a sudden deterioration in the geographic/regional market or growth in the macroeconomic climate.

o o o o

Industry/market/customer trends- -changes in the competitive landscape. Technology trends--trends that can be used to your advantage. Regulatory environment--changes that can create opportunity. Weather issues--whether you are a tennis pro, a painter, or a landscaper, long periods of bad weather can limit revenue-generating opportunities.

o

Product availability-- manufacturing materials that you count on are suddenly impossible to obtain.

The purpose of the SWOT analysis is to examine and identify all of these factors, (the likelihood that some or all of the factors will come into play), quantify how they can affect your business, and then develop a contingency plan. Examine each of the internal and external factors and develop reasonable responses.

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A Guide To Strategic Planning Do it Yourself Strategic Planning Shane Busby Contrary to what pundits, management consultants, or professional advisors will tell you, it is not necessary to have an externally procured individual or team come in to facilitate and develop a sound, strategic plan for your organization. It is entirely possible, with a little bit of training and initiative, for you to develop a sound, robust, comprehensive strategic plan yourself without taking a Masters level course in Strategic Management. If, on the other hand, you see an externally facilitated strategic planning session as an opportunity for the management team to get together, to bond and swap “war-stories” in a team-building environment, then by all means spend your money. However, for the majority of businesses and business owners who indeed know what their business is, who their competitors are, and what the upside market potential is, outsourcing this imminently doable, in-house, job can be a waste of precious resources. On the other hand, where consultants are extremely useful are: (1) where business parameters are vague, (2) when little to no expertise exists internally to facilitate or accomplish strategic planning, (3) where “turfism” reins supreme amongst senior management, or (4) where the business or organization is so complex that throwing a net over the entire operation or Strategic Business Unit (SBU) is next to impossible. In these and other similar instances, it is money well spent to have your strategic planning outsourced with your input and involvement. This last point, i.e. your input and involvement, is critical to successful strategic planning. Whomever you bring in to facilitate the process will have an idea of what your organization is about, but will not know the whole picture. Consultants will often convey that they know much more than they actually do about your business. Many are so smooth and polished that you will find it difficult not to defer to them – after all, they are the experts, or are they? Regardless of what you have been told and by whom, you know more about your business than the person you are

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A Guide To Strategic Planning contracting with – “university degrees and professional certification do not an expert make”. On the other hand, before I receive hate mail from qualified strategic planners, often individuals with advanced degrees, certifications, and business training are able to structure how you think about your challenges. Sometimes you are so close to the problem that it is not possible for you to step back and take an objective look. This is the advantage of external involvement. Ok, now, back to DIY strategic planning. Assuming you know your business, your market and other aspects of your business environment, strategic planning in-house is imminently doable. The list below numbered one through eight is common to nearly every strategic plan (or should be). You can name the phases differently if you like, i.e., vision = strategic direction, for instance. Strategic planning is a fairly linear process. It is designed that way to ascertain whether a given set of actions will yield measurable, traceable results. Without some linearity, tracing results to actions and on up would be difficult. When you are in your planning process, do not make the mistake of being rigidly linear or unbendingly inflexible. Yes, it is important to maintain your focus on your vision and mission, but if your objectives or strategies are not resulting in movement toward your vision or mission over a period of time, then you will need to at least think about re-thinking your approach. First, begin by assembling key individuals who will contribute to the plan. Write up an agenda using the following headings. Use brainstorming techniques and discussions to elicit ideas from all contributors. Write down everything without pre-judging contributions in order to demonstrate valuation of input. As a group, choose the best, clear statements which describe how your business relates to the heading. Keep the statements as short and poignant as possible. Move onto the next heading. Do not allow individuals who have "been there done that" to short circuit or derail your process. Strategic planning is a critical business activity. Organizations that do not do this business process well run the risk of under-performing, or in extreme cases, failing.

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A Guide To Strategic Planning In the main, the following list of strategic headings will assist as a guide for you throughout your planning process. 1. Vision – organizationally, a simple statement of where you want to be and what you will look like when you arrive in three to five years. 2. Mission – a simple statement of what it is you do (make it specific and yet flexible enough to capture your core competencies and reach your stretch targets) 3. Objectives – simple, short statements (a few) that are specific; measurable; aggressive yet attainable; realistic and reachable, and time-limited (usually beginning with the word “to”) that will have direct correlative impacts on your vision. 4. Strategies – macro-approaches to achieving your objectives. For instance, a non-profit society may have the following strategies aligned with a single objective: Objective: To house 10% more abandoned teen mothers over the next five years Strategy 1: Fund-raise by developing five more events this year than last Strategy 2: Begin planning and designing phases this year Strategy 3: Lobby government agencies to cost-share staffing for three more houses Strategy 4: Add a Board member with significant project development experience Strategy 5: Lobby the United Way and other macro-agencies for contributions 5. Tactics (action planning) – Strategy 1: Fund-raise by developing five more charity events this year Tactic 1:

Meet with existing society managers and volunteers to

brainstorm Tactic 2:

Develop telephone soliciting campaign

Tactic 3:

Mail out flyers and brochures to targeted contributors

Tactic 4:

Organize a celebrity dinner at $200 per plate

Tactic 5:

Involve the business community, meet with Chamber of

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A Guide To Strategic Planning 6. Implementation (execution) – take deliberate action on each item identified on your tactics list. Keep on coordinating, managing, and taking action until you begin to see desired results. This is the most difficult phase and often the one that organizations fall short on. Do not give up too early as success is quite often just a little further down the road than most people are willing to travel. Also, if you see you are not getting anywhere with your actions-tactics, you may wish to add, augment, or change approaches. Give it time though and do not shift gears too soon. Always make sure you continuously scan your business environment and monitor whether your tactics are achieving your desired results. 7. Performance assessment – assessing if your actions are getting the results you want. In addition to continuously monitoring your actions, you will want to devise performance measures (commonly called metrics) to ascertain if your strategies are yielding successes. Your performance measures will need to correspond and be at least strongly correlated (r =.5 to 1.0) so there is a strong linkage between actions and outcomes. Clearly, the efficacy of performance measures will be directly related to your organization’s success. 8. Refinements, updates, adjustments – this process should be done on both a discontinuous and continuous basis (e.g., frequently monitored and at least once per year thorough review). You may need to adjust your overall strategies or even objectives if your organization is not achieving its goals. One of the largest potential reasons of strategic failure is to arrogantly or dismissively neglect to revisit your vision and mission. If any or all of your objectives, strategies or tactics are not contributing to the achievement of your overall vision and/or mission, then you need to rethink either your vision or your strategic objectives or process. So there you have it. Not so difficult, is it. If you follow these simple steps and rules, you will be well on your way to creating your own strategic plan. Remember, strategic planning can be much simpler than it is made out to be. Some of the most profitable companies and most highly effective organizations have strategic plans that state simply what business they are in and how they plan on going after and creating success, i.e. shareholder or stakeholder value.

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A Guide To Strategic Planning One last word -whether you are small, medium, or large organization make sure you develop a strategic plan that is right for your organization. Do not create a generic, meaningless document that no one ever reads. Use it, refer to it often, and above all measure your success with and adjust your course in accordance to it. Finally, remember; if you fail to plan you have effectively planned to fail. Good luck!

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A Guide To Strategic Planning The Vision Are You Working On Your Business Or In Your Business Art Consoli My good friend, Lenny Tumbarello, www.WeTooCanDo.com, gave me the idea for this article. It seems an associate of his sort of criticized him for working “IN” his business. He wanted Lenny to work “ON” his business. This fellow felt Lenny might be spending too much time doing things that could have been “outsourced” for a small cost - thereby freeing Lenny up to focus on the bigger picture, the stuff that would make his business bigger. I am very familiar with this concept. And I think it’s a valid thought process to go through. But you know, I think it’s often misapplied and overrated! In fact I think it may be a big part of what has allowed third world countries to grab a big piece of our economic engine - so big a piece, for so long a time that I worry how and if we are going to get it back. I know Lenny. He made his success in the fast food business - he owned a few stores in Texas. He learned early on that the best way to teach a person how to clean the bathrooms - among other things - was to clean one with the new guy observing and then watch as that fellow cleaned the other one. Lenny did this with each new employee and when he saw an attitude that indicted the new guy didn’t respect the importance of cleaning the bathroom right - Lenny fired him. Right then. Lenny knows that before he can properly train and accurately evaluate his employees he has to master the job he wants done. And I agree. I spent six months learning how to work on boats and motors at a marine service shop when I was considering becoming a boat dealer. When I was COO of a precision parts manufacturing business that made parts for the auto industry, I spent a lot of time in the Detroit area and I learned a lot about the Big Three and the major OEMs. I thought a great deal about the often-

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A Guide To Strategic Planning expressed criticism that the companies were no longer being run by “car” guys; that they were being run by financial types. I agreed. Yes, top management had become more focused on quarterly earnings than the quality and market acceptance of the products. But I missed the point that management was working “ON” the business; nobody in the executive tower was working “IN” the business. Revenues and profits went up (for awhile) as the companies became financing giants and diversified into many non-related businesses but the contributions to both went down from the production of cars and trucks - the core businesses. Seems to me the automakers problems were providing a wide-screen, HDV picture of what happens when decision makers change their focus from working “IN” the business to working “ON” the business. When they do, they can’t tell when their business is failing until it’s - maybe - too late. Lenny’s start in the food service business reminded me of a book I just read, “Heat” by Bill Buford. Bill, a writer for The New Yorker, wanted to learn how to prepare food like a master chef in the finest Italian restaurant in New York. He was accepted as a kitchen slave in Babbo’s owned by Mario Batali and over a period of several years, worked his way up. At the book’s end Bill, having quit his job at the magazine, had just completed the last step of his education. Graduation was symbolically defined when Mario offered to back Bill in his own restaurant. The last step of working “IN” the restaurant business? Bill spent six months as an apprentice in a butcher shop in a small village in Italy learning how to judge, buy and carve beef and pigs. I think when we run past the working “in” part of our businesses we wind up lowering our standards. When we lower our standards we make it easier for those who have less skills and less experience to beat us at our own game.

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A Guide To Strategic Planning Certainly think about how to make your business better. Of course make sound economic decisions about where in your business to spend your time and when to buy somebody else’s time. But there is only one way to know if something is the best and that is to have participated in its creation. Without such participation all you have are the words and actions someone else provides. Did you know that at one time - before it fell from grace - every Disney employee, from the people at the top to the lowliest janitor, everyone - had to spend a day in costume walking around the park? When was the last time you put on one of your employee's costumes?

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A Guide To Strategic Planning Visioning - Three Reasons to Incorporate It Into Your Strategic Thinking Chris Ogden One of the seminal but perhaps least referenced books on strategy is Henry Mintzberg’s “The Rise and Fall of Strategic Planning”. As the title suggests, the book’s central theme concerns the limitations of strategy and strategic planning. Unless these limitations are understood, strategists and planners are doomed to repeat many of the errors of the past. Anyone who has read the book could be forgiven for concluding that even to embark on a strategy project is a sure way to court disillusionment or even disaster. Despite its apparent academic approach – for example, there are 27 pages of citations - the book is readable and persuasive, and contains many golden gems of strategic insight, from the World War I trenches of Passchendaele to Sam Steinberg’s idiosyncratic but successful approaches to supermarket development in 1950’s Canada. Recently, I re-read two of the most significant chapters of this book, dealing with the pitfalls and fallacies of strategic planning. Mintzberg dissects the pitfalls of strategy-making exercises and then goes on to present the three fundamental fallacies: the fallacy of formalization, the fallacy of detachment and the fallacy of predetermination. This discussion takes up 40% of the entire book, illustrating the importance that Mintzberg attaches to understanding and managing the things that can go wrong with strategy. One idea that emerges from these chapters is that creating a vision has a much better track record than creating a strategic plan. The reason has to do with many of the limitations of strategy setting: strategies tend, ultimately to be constraining, and require agreement in detail by a large collective. In practice, this can paralyze action. Vision, Mintzberg says, can prove a greater incentive to action than a plan that is more formally constrained.

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A Guide To Strategic Planning However, Mintzberg’s concept of vision is one that “emerges from the head of single leader, rather than having to be agreed by upon collectively by a group of senior managers and planners”. This concept of vision sounds dated. Indeed, the very act of creating a vision can be the unifying force that inspires a core team over the many years during which the vision is being pursued. Visions are not the same as strategies. Visions ought to have a much longer term bias. I have found that companies talk of horizons of no more than 3-5 years when strategy is discussed and dismiss longer term thinking as being of little value. Yet it is this longer-term, visionary thinking – conceived over at least a 10 year horizon – that is often essential in enabling many of the solutions to a company’s future to be realised. Why visioning is important to your strategic thinking There are three reasons why such long term thinking is both profitable and necessary. 1. A vision inspires and motivates The first reason is one touched on by Mintzberg: a vision, if well done, inspires and motivates people to pursue a goal. A vision that helps people understand what they are striving for as well as the broad changes that are needed to bring it about is a powerful force. This power to motivate and inspire is important because all strategic plans will, once they are in execution, suffer at some point from lack of focus and commitment. The motivational power of the vision is a strong force that strategy leaders can rely upon to re-invigorate the team and the organisation when everyone’s resolve begins to falter. 2. A vision provides a language Second, creating a vision means that those involved develop a distinct language that enables them to talk about the future they aspire to. This language – the specific words and phrases - describes the important concepts embodied in the vision. For example, in the mid-'90s a high-street UK bank wanted to develop a 10-year vision for money transmission – what a comprehensive banking service UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 22

A Guide To Strategic Planning would look like for the movement of both retail and wholesale funds between, and to customers and financial institutions, and how to achieve it. At the time, the Internet and electronic payment schemes were only being talked about. Nevertheless, these technology developments were suggesting that, to be effective in the business of managing money transfers, new long-term shifts in capability would be necessary. Many of these capabilities related to technologies that had not then been invented, such as those for Internet security. One of the key benefits of the visioning exercise was that the core team involved developed a new language for discussing this future world. The significance of this came home to me some time later. The new language meant, for example, that participants, meeting in a corridor a year later, could easily and quickly slip into conversation about, say, a new security initiative that was to be part of the vision. The language captured the important features of the new world, and without it, staff in parts of the bank that had not been part of the visioning process found it difficult to contribute effectively. 3. Vision enables large scale change Thirdly, strategic plans frequently underestimate the effort and timescale involved in making big change. When the goal being aimed at necessitates major change, a vision provides a framework that makes the individual steps more understandable and manageable. Organisations can manage the changes over long-enough time periods that enable staff get to grips with what is needed. In the example referred to above, the vision suggested that large-scale shifts in the skills of the bank would be required. In today’s world, where financial institutions must grapple with complex technology issues such as security and identity fraud, it’s clear that the focus, 10 years ago, on understanding “what we need to become good at” proved to be critical. Only by imagining the world that was coming could the deep skills needed today be gradually put in place. Visioning is not a substitute for detailed planning. It is a key approach that is used to inspire and motivate, to provide a language for discussing the future, and to enable required large-scale change to be successfully implemented.

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A Guide To Strategic Planning That Vision Thing - Strategic Thinking for any Business Terry Bass Whether you are a small business owner just starting a new business or a newly hired CEO of a major corporation, you both have something in common --- that “vision thing”. An idea of creating or recreating a company. There is a feeling of excitement, of opportunities and possibilities, no matter how practical you may be it’s a new beginning and the sky is the limit. So you have a vision. You see yourself down the road envisioning an organization much different than the one today. It is bigger, it is better and you are fulfilled in making it so. It is your vision, your dream, your possibility. And then comes the work and the meetings and the setbacks and before you know it the vision is on the back burner. Your day is handling details, crisis, and all sorts of stuff that get in your way. You started out jumping out of bed full of ideas, empowered to take on the day and now it’s a bit more difficult to crawl out of bed. You may peek open an eye to see if the monster’s that you know are going to get you at work are now in your bedroom. What happened? Quite simply, you put the “vision thing” in the desk drawer, maybe even locked it away. You make business plans that plan on 5 – 7% growth next year. You deal with the issues of the day and the work on your desk/counter and the only satisfaction you get is if your (figurative or literal) inbox/stuff to do is at least no higher at the end of the day as when you started. . Is that really where you want to be? Or would you rather be excited again? Would you like to wake up the day full of possibilities? Do you wish to look at what you do, whether your own business or your own career and be proud and happy for what you do?

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A Guide To Strategic Planning Well, bring back that “vision thing”. Take it out and dust it off. Or what the heck make a new one. Your vision is where you want your business and yourself to be. Your vision is a destination, a place of where you want to go. Your vision is that sunny beach sipping margaritas or climbing in the Rockies or a whole plethora of visualizations! Your vision is what turns you on and gets you excited. It doesn’t matter whether you have your own business or not, whether you want your own business or not. Having an idea, a dream of where you want to go creates motivation and exciting possibilities. Obviously, taking that vision and creating a strategic plan, action steps to ensure you achieve your vision is vitally important. A wise saying first line is Vision without action is a daydream. But take that first step; create a vision of where YOU want to be. Get excited again. And then do what you need to do to make it a reality. It’ll make the day and your life a lot more enjoyable!

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A Guide To Strategic Planning The Secret to Success in Business Planning…plan your work and work your plan. Terry Hill Running your own business is a highly rewarding, but often a risky endeavour. As with anything else, increasing your chances of success begins with preparation. And when it comes to transforming your dream into reality, the key to successfully jump starting your business is simple: plan the work and work the plan. Whether you’re just getting a new business off the ground, expanding the business you have, or purchasing a business, devote plenty of time to planning:

o o o o o o o o

Begin with a discovery process to confirm the viability of your venture. Do your homework. Uncover fundamental objectives, insights, opportunities and risks. Research the market. Examine your offering, market conditions, trends, and the competition. Excavate potential problems. Outline your goals and objectives. Compile the business intelligence you need to create a solid foundation of actionable information to chart your present and future direction.

The next logical step is to develop a plan—a strategic business plan that functions as a living document to define your objectives, guide your business, and take you from Point A(where you are today) to Point Z (where you’d like to be). But remember—a strategic plan is about more than securing funding—it’s essential to jump starting your business. And once you’ve written your business plan, follow it up with an action plan that spells out your short and long-term objectives and how you’ll achieve them. Just remember this—there is no underestimating the power of planning. As the former CEO of Octel and Lucent Technologies notes, “People usually plan their vacations more carefully than they plan their careers. I’m a compulsive planner, but there were times when I had no idea what I was doing.” UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 26

A Guide To Strategic Planning Even when you have no idea what you’re doing, developing and implementing a plan improves your chances of achieving your goals. This article outlines the fundamental components of crafting a strategic plan to take your business to the next level. What is a strategic plan? Strategic planning is the process by which the key stakeholders (you and your partners) in an organization envision its future and develop the procedures and operations that will enable you to achieve that vision. A strategic business plan serves two purposes. First it’s an internal document that defines your goals, strategies, and tactics. Second, it’s a tool for raising capital. However, you need a plan, whether you’re looking for capital or not. Without a plan you won’t know where you’re going and you have no way to benchmark or track your progress. With a strategic plan you have a road map that enables you to look ahead, allocate resources, focus on key points and prepare for problems and opportunities. A well-articulated strategic business plan clearly outlines your vision, goals, priorities, strategies, products, services, and financing needs. It also provides relevant information about your company, your management team, and shortand long-term objectives. Highlighting both the positive and negative aspects of your business opportunity, your strategic plan should look ahead from three to five years. How do I write a business plan? As they say, there’s more than one way to skin a cat. Likewise, there’s more than one way to write a business plan. Formats, outlines, and lengths vary. But they all tend to share a generally accepted format and certain standard components.

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A Guide To Strategic Planning Your plan must be clearly written, logically organized, and convincingly worded. It should target a specific audience. It should outline the details of financing, competition, strengths, weaknesses, and forecasted financial performance. As a rule of thumb, when writing your plan, include the following components:

o

Cover letter—write a cover letter to introduce you and your business plan to your audience.

o

Title page—include a title page that details the content of your plan, your name, address, phone number, names and positions of the executive team, date and contact information.

o

Table of contents—add a table of contents to make it easy for readers to find information.

o

Statement of purpose—include a clearly stated explanation of your company’s goals and how you’ll achieve them. For example, your statement of purpose may be “to provide quality, reliable landscaping services for less in the Phoenix metropolitan area”. Describe your value proposition, whether it’s price, convenience, service or another attribute, how much capital you’ll need, and how you’ll repay it.

o

Executive summary—this is the most important part of your business plan. Include a brief summary that highlights the major points of your plan. Provide background on your business, the market, your value proposition, key team members, projected ROI (Return on Investment), internal rate of return, and current and potential risks.

o

Market information—describe your target market(s). Substantiate statements with facts and supporting detail. Include market research on initial and future markets, key market segments, past growth rates, anticipated trends and changes.

o

Company—describe your company, its type, history, legal structure, industry, market, principals, and revenue size and growth rate.

o

Product/service description—describe your offering, relevant business benefits, stage of development, how your product/services will satisfy a real business need and enable you to compete.

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A Guide To Strategic Planning o

Management team—include detailed information on the core members of your team—the people who will run the company, as well as senior partners, attorneys, financial and business advisors. Include names, titles, experience, skills, responsibilities and compensation.

o

Potential risk factors—include an assessment of the risks facing the company. Describe the worst-case scenario and anything that could go wrong today and in the future. Offer strategies for overcoming risk.

o

Execution/action plan—describe how you’ll translate your business plan into actionable results down to the finest detail. Describe how you will obtain licenses to do business, open an establishment, get products on the shelf, hire employees, and forge partnerships. Describe production schedules, delivery processes, and customer service policies in order to set operational benchmarks to measure progress.

o

Financial information—Include a section that projects future revenues and profits three to five years out. Base this information on best-case, worst– case and most likely-case scenarios. Summarize financial data like cash flow, income statements, balance sheets, banking relationships, terms and rates of loans, financing plans and working capital requirements.

o

Legal preparation—includes corporate bylaws, patents and trademarks, licenses to do business, employment agreements, and customer contracts. Anticipate the legal and documentary setup your business will require. Writing a business plan can seem like a daunting task. However, there are many resources available to help you prepare a sound plan. You can find books in your local bookstore, software programs and templates online and in local computer/software stores or you can work with a consulting firm, a nearby Small Business Development Centre or a local business school.

No time like the present to start to plan your work and work your plan. Happy planning…

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A Guide To Strategic Planning What Does Strategy Mean To You - The Unspoken Secret? Chris Ogden

Most effective strategy processes begin with a stock-take: a review and assessment of the organization’s current products, markets and customers. This is an essential first step to kicking off a good strategy-setting exercise. Yet no strategy process that I have come across conducts an even more crucial preliminary activity – even before the one described above. This is to ask what the sponsor of the strategy process thinks of when he or she thinks about strategy. What, in effect, does strategy mean to you? Everyone leading or facilitating a strategy review should ask this question. The answers may amaze you. And they may make the sponsor quite uncomfortable. The reason is that most people in business have a very different idea of what strategy really means. Unless a facilitator unpacks the organization’s perception about what a strategy means to them, then success is unlikely. It becomes impossible to determine what must be delivered. For some executives, a strategy will be the way they hope to increase the share price over the next year. For others, it will mean sorting out which take-over candidates it should approach. One of my clients saw strategy as determining how to negotiate a management buy-out from the majority shareholder. Still others will see strategy in a purer light: what is the long term future that we can envision for the company, and what is the best route to get there? None of these different perceptions of strategy is wrong. They are the sponsor’s genuinely held beliefs. But each represents a starting point in the sponsor’s mind about why a strategy was seen to be required. And a facilitator of strategy needs to understand these at the start. But there’s even more to it than this.

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A Guide To Strategic Planning As well as understanding what has precipitated the need for strategy, we need to unpick what the sponsor sees as its essential components. Is its emphasis a vision, and if so what is the timescale? Is the focus more towards medium or short-term action – more of a tactical plan in fact? Does it need to focus more on people and the internal culture? Or is the driving issue to do with fast-changing markets? One organization I worked with realised after the strategy was complete that the real objective was to educate the Board and executive team. The unspoken secret in all strategy-setting exercises is that strategy means different things to different people. Each different understanding of strategy is valid, because each organization and its strategy team are different. But these different views of strategy mean that quite radically different approaches to strategy development need to be taken.

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A Guide To Strategic Planning Where Will You Be In 2-5 Years? David A. Goldsmith and Lorrie Goldsmith Often caught up in day to day operations, especially true for management in small to mid-sized companies, it's easy to let strategic planning rest on a back burner, if it's addressed at all. Lack of strategic planning is often due to three factors. 1) time constraints, 2) limited knowledge of strategic planning and its process, 3) little or no understanding of the external marketplace. Because strategic planning is your company's future, it's important to carve out time from the present to secure your business' place down the road. Two years ago I was asked to participate in an evaluation of a assessment tool that would help a President of a firm strategically decide what might be the future of her company. At that time, the company was primarily founded in what was then a huge market of outplacement services. Her company offered everything from orientation of downsizing, resume building, executive placement and personal network development. Candidly, the president noticed a new product with benefits stronger than other in the market already possessed. The product by definition was contrary to her market niche enabling and assisting companies in the hiring and retention process by up to 70%.. By establishing a relationship with the developer, strategically the company was positioning itself for servicing both sides of the business puzzle--downsizing as well as hiring and retention. Little did she know that we would have such a shift in unemployment. Today, that same company has made the shift to what is now a major focus of what they offer. A strategic analysis of the future opened markets and most likely will enhance is profitability in years to come.

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A Guide To Strategic Planning Take another example of a company that ships over 1000 FedEx packages a day and a similar amount of UPS packages with 85% of their business being conducted outside of their own regional markets both wholesale and retail. The firm, based in the "electronics" age, focuses on the repair of most electronic components such as VCR's, camcorders and TV's, in addition to electronics that are related to autos. With the advancement from electronics to computers, this company has only varied is strategic position by entering into another even more competitive very "slim-margined" computer repair business. As companies, such as Best Buy, started to offer their own internal repairs, the repair business found that it was cherry picked on what items or problems to service. Undeniably, the referral company now would take the most profitable and easy work and outsource the more complicated items. More time and skill is needed for an even slimmer market. This company is facing the dilemma of what will their company look like in years to come. Its now easier and cheaper to throw out a 2-3 year old VCR than to repair it. Camcorders and TV's not much better as a repair item as well as most other electronic or even computerized items. The first company made a proactive, calculated move that's paying off to at least open the door to what may arrive as new opportunities where the second made a choice that is leaving the company less competitive and reactive. When looking at your company strategically, it might benefit management to evaluate core strengths and question what opportunities may arrive. Follow and read trend publications and do not follow the heard. In the early 1900's, when transportation was changing, the train industry had the opportunity to purchase and control both air and auto industries. However, they saw themselves in the rail business instead of the transportation industry, and they regrettably lost out on one of the greatest business opportunities ever.

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A Guide To Strategic Planning Strategic Planning - Why Should A Business Owner Bother Taking The Time To Have One? Terry Bass I just don’t have time! This is the overwhelming reason especially for the small business owner why they can’t create their own strategic plan. Not knowing how runs a distant second. So why should a business owner take the time to create a strategic plan? It depends on answering these two questions. 1. Where do you want you and your business to go? 2. Are you heading there now? The first question is usually pretty easy, although often a bit vague. We know we want the company to make money, increase revenue, all that. But what is the destination, whether it’s in 5, 10 or 20 years? Where do you want you and your business to end up? What is your vision of where you want to be? We often have some idea, but are we working towards that? Which leads to the second question. The answer to the second question for the vast majority of businesses (if you’re being honest) is “kind of, but not really”. A typical, even successful business owner is often adjusting their business model to increase and improve business, so that’s where the “kind of” comes in, but are you making decision’s based on where you want your business to be long term? And that’s why there’s a “not really” in the answer. Business planning is usually looking at short term gains, certainly important to do that, but not necessarily recognizing any long term vision. We hope the things we are doing will get us there, but focusing on the now or near term is how the vast majority of small business owners operate. So why should I take the time to create a Strategic Plan for my business?

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A Guide To Strategic Planning Think of taking an extended road trip. You know where you are now and where you want to go. You have a general idea of how to get there, so you just hop in your car and go. Will you arrive at your destination? Maybe, maybe not. The odds aren’t good. Even if you do, it is pretty certain that you will have spent a great deal of time getting lost, side-tracked, frustrated, spending more money and time getting there then was necessary. Doesn't sound like a very intelligent why of taking a road trip, does it? Especially when taking a little time and effort in creating a roadmap for how to get there is the alternative. It also makes the road trip more enjoyable and less stressful for all concerned. And that is exactly what a strategic plan does for any organization. First you create your vision. Where do you want you and your business to be in 5 (or 10 or whenever) years? What does it look like, composed of, feel like? You now have a clear destination of where you want to go. And then you look at your market, your internal resources, what you have and what you need to achieve that vision. What activity you and your organization need to adjust, change or just do in order to accomplish your goals. You have now created an unambiguous roadmap of the things you need to do to get to your destination. So when you have an effective strategic plan, you connect that long term idea, hope or dream of what you want to accomplish and create activities and goals for you and your business that are clear, focused and exciting. An effective strategic plan, besides ensuring your business is headed in the direction you want it to go, provides significant ancillary benefits. 1. Decision making becomes easier. When you are focused on the end result, making decisions becomes much easier. By asking yourself whether this is going to help you achieve your vision or not, the answers become clearer.

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A Guide To Strategic Planning 2. Less stress/fewer crises. Part of an effective strategic plan is to anticipate and explore challenges that may crop up, like the market or internal problems. By reviewing them thru a strategic plan, you either have the answer when the issue appears or you have taken steps in advance that resolve the problem before it ever comes up. You aren’t going to eliminate ALL surprises or crises. It just won’t happen. But what would it be worth to you to eliminate half of them or 75% or 90% of them? Is it worth your time? 3. Excitement. We all get excited when we are working towards some goal that we wish to achieve. Clear direction brings people together to work together as a team. By having a clear vision where we are headed can excite the organization instead of just showing up for work to “get stuff done”. Driving the organization, your business to your definition of success is the responsibility of the head of that organization. And creating and implementing an effective Strategic Plan is a fundamental tool toward doing that. So do you want to take your “dream” and turn it into the reality, a destination to take you and your business to where you want to go or do you want to just cross your fingers and hope for the best? Would it be worth your time?

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A Guide To Strategic Planning The Execution Your Strategy Is Wrong, But That's Ok! Chris Ogden Strategy is going through another of its periodic difficult times. A recent commentator has remarked how the how the life gets sucked out of a meeting when someone declares that the company needs to do some serious strategic thinking. Last year, under half of executives surveyed by McKinsey said they were satisfied with their company’s approach to strategy. Perhaps we expect too much from strategy processes. I always tell clients that the one thing they and I can be sure of is that the strategy they produce will not be perfect – it may not even be right. I say this to be deliberately provocative. My follow-up message is that, because none of us is blessed with prescience, this awareness helps us focus on strategy’s implications. Their strategy has one absolutely critical thing going for it: the team that produced it has worked through all the issues and have agreed to it. They have a deep understanding of how they arrived at the strategy. It’s therefore one that they can execute, and as is likely - adjust as circumstances dictate. Executing strategy is as important as developing strategy. Execution is where the sometimes uncertain ideas debated in a strategy forum get tested. Discovering that some of these ideas do not turn out quite as expected should not be a cause for alarm. It should be the signpost that the organisation can become more mature about strategy – that can, if it chooses, move towards being a strategic learning organization. Of course, there a balance to be struck. Poorly executed strategies will always produce strategies that will never work. A good strategic planning process is essential. But believing that the strategy that the team has laboured on for so long is unblemished is dangerous. The team needs to begin the execution phase with a “confident scepticism” stance. The learning that the team has gone through to arrive at the strategy is just the start. Learning must continue as execution unfolds.

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A Guide To Strategic Planning Your Action Plan… and how to execute it Terry Hill Creating a strategic business plan is a great first step. However, if your business plan gathers dust on a shelf, its value is lost. This is where the action plan comes in. An action plan can help you stay organized, coordinate your activities, and keep your projects on schedule. The action plan specifically outlines the steps or tasks that are necessary to achieve objectives. It includes a schedule with deadlines for significant actions, resources necessary to achieve objectives, and methods to measure these objectives. Preparing action plans addresses potential problem areas, considers the cross-functional impact of the actions, and ultimately increases productivity. It’s the place where the rubber meets the road—the catalyst that transforms your business plan into actionable results. Your action plan sets priorities and describes the specifics of implementing your business plan. The key components of your action plan are long-term and shortterm objectives. Define your long-term objectives and then set short-term objectives—baby steps—that break the larger goal down into easy-to-achieve chunks. Review these mini-goals every three to six months, and keep checking to see if you’re meeting your objectives. Use your action plan to define how you’ll operate your business on a day-to-day basis. Address issues such as how and when you’ll manage research and development, hire employees, serve customers, market your offering, publicize your company, and work with partners and vendors. Your action plan should get down to legal brass tacks as well. Providing detailed information about legal preparation and documents is a must. Describe how you’ll obtain trademarks and licenses, rent space or create a home office; order, install, and maintain equipment; purchase and inventory supplies; market your business, and distribute products and services. In other words, your action plan turns your business plan into a game plan that makes it real.

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A Guide To Strategic Planning How do you execute your action plan? You’ve established your vision, created a business plan, secured funding, and outlined your action plan. Now it’s time to act. So, how do you execute your action plan? Once you’ve identified your long-and short-term objectives, you’re ready to execute using the baby-steps approach that increments the entire process. Want to execute your action plan in the simplest, most success-prone manner? Try this:

o o o o o o o o

Create an action plan based on your business plan. Review the action plan with your team and solicit feedback. Agree on a strategy and a direction. Review your long-and short-term objectives. Break the objectives down into manageable components. Identify required tasks and prioritize them. Begin executing against these goals, taking incremental, baby steps. Break large tasks down into manageable short-term efforts. As each smaller goal is reached, you’ll experience a sense of accomplishment and generate momentum and confidence.

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A Guide To Strategic Planning Developing a Business Strategy is Simple - Executing is a Different Story Nick McCormick Starting is overrated. Have you ever heard someone say, “If I could only just get started, everything would fall into place?” Guess what? It doesn’t! It’s easy to start. Just like it’s easy to join a gym or a weight loss program, it’s relatively easy to get started on creating a business strategy. It’s easy to hire a consulting company to help out. There are hundreds, if not thousands, that would be eager to assist. It’s the implementing, though, that is the difficult part- the day in, day out execution of tasks necessary to achieve the end goal. Consultants are aware of this. After all, that’s why they are consultants. They don’t like to execute either. It’s much easier to tell people what to do and move on. In fact, most count on the fact that you won’t implement successfully, so they can come back and tell you what to do again next year. Most companies don’t have difficulty coming up with a business strategy. In fact some enjoy the exercise so much they take months to complete it! Unfortunately, after the initial announcement about the new strategy, and when it comes time to implement, senior management is through. They wash their hands of the activity and are not heard from again. The effort loses its momentum and dies on a vine. Former CEO of GE, Jack Welch, had it right when he said, “Experts talk as if strategy is high brained scientific methodology… Strategy is simple… Pick a general direction and implement like hell… Ponder less. Do More. Jack also claims it should take days, not months, to come up with a strategy. So, the next time you revisit your business strategy, do your homework. Do a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis on your company and on the competition. Come up with your winning strategy, and then put the A-Team in place to execute it and hold your management team accountable for ensuring its success. Spend the majority of your time, money, and effort implementing.

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A Guide To Strategic Planning Strategic Planning Done Right: Tips to Develop Strategies and Deliver Results Nick McCormick How often has your organization spent months coming up with a business strategy, and paid a fortune to outside consultants for help, only to see the grand plans fizzle out over time? In most cases, attempts are made to retrofit activities performed throughout the year back to the strategy to feign adherence, until such time as it is completely abandoned. A couple of years pass and the process repeats. It’s classic fodder for the Dilbert comic strip. How does one over come this all too common occurrence? Below are some tips on how to approach a strategy and execute it successfully. Developing Strategies and Goals Keep it Simple and Make It Quick - If it takes 6 months to come up with a strategy, there’s a problem. Either it is not a priority, or you are getting too carried away. Set a goal to have the planning completed in one month. After all, this is serious business right? It’s crucial to the success of your organization, so timely completion is very important. The strategy should not be complicated. It should be easily understood by all stakeholders. Make It a Priority - In order to complete this type of activity quickly, upper management must make it a priority to design and implement the plans. There can be no excuses for not completing it. Being “busy” is not an excuse. There must be full preparation and participation in meetings. Realistic deadlines are set and honoured. Those who don’t play along must be held accountable. Look to the Inside - Resist the urge to call on the consultants. Your people don’t have time, right? Problem is, it will take as much of their time to meet with the consultants as it would to come up with the plan on their own. You also want the expert opinion. In most cases, though, your personnel know what needs to be done. They just need the opportunity to put their ideas forward. This gives them a vested interest in succeeding, and does not allow the outside consulting firm to be made the scapegoat. All too often consultants tell you what you already know anyway, or they set you up with the trendy strategy of the day. If you’ve really

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A Guide To Strategic Planning lost your way, outside consultants might be the answer. In most cases, though, the money is better spent on implementation of the plan. Walk the Talk – If a strategic initiative is contradictory, you’ll need to eliminate it. For example, if one of your tasks to grow your business is to establish an employee referral program, you need to make sure that the workers like their jobs. If they don’t, they won’t be very willing to recommend the organization to others. Spend time addressing the morale problem prior to executing the referral program. Communicate Early and Often – Explain to all stakeholders the reason for resetting strategy. Be honest. Nothing turns employees off more than hidden agendas: “Oh, a new strategy. How many people will be laid off this time?” Explain the importance. Lay out the expectations with time frames, etc. Explain why it is important for everyone to participate and let them know what their roles will be. Follow up frequently with updates. Set Realistic Goals – Set realistic and measurable goals for each strategy. Again, don’t get carried away. Developing Initiatives/Tactics and Delivering Ask the Employees - Once the strategy is set, let the employees help with the initiatives and the actions that support them. This gives them a sense of ownership. They are the closest to the ground so they know what will make the clients happy; make themselves more productive, etc. Again, Keep it Simple – One of the main reasons implementation fails is that the plans are unrealistic. There are so many things to get done. Many efforts start, but none complete. To avoid this, pick just one initiative. How do you choose? Don’t pick one that is most easily measured, or that is easiest to achieve. Rather, pick the one that will have the most positive impact on the organization. If a project will take months to complete, break it into measurable phases that take no longer than one month to finish.

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A Guide To Strategic Planning Put a Plan in Place and Execute with a Vengeance – Put a plan in place for the one initiative and complete it by the stated due date come hell or high water. Once completed, pick one or two more and repeat. This process of taking little bites builds up a sense of accomplishment and success, and gradually major progress is made toward the achievement of the strategy. Communicate, Communicate, Communicate – Review the plan in team meetings. Send out e-mail updates. This indicates the importance of the projects and highlights progress and success. Stay involved Big Shots - Upper management must remain involved. They can’t bail out after the strategy is set. They must be actively engaged throughout. It’s a lot of effort to come up with a good strategy. It’s an even larger effort to implement a plan to achieve it. By following the above suggestions, you will be well on your way toward achieving a successful strategic program.

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A Guide To Strategic Planning Bridging the Strategy - Execution Gap Shane Busby Fewer than half of C-level executives responding to a McKinsey on-line survey said they were satisfied with their company’s approach to strategic planning (McKinsey, 2006). Moreover, most managers agree that even where planning processes are adequate, an even more prevalent and serious problem is in “failure to launch” which lies in the gap between strategy and execution. Ultimately, what this means is that senior managers have great ideas and a pretty good overarching vision of what business nirvana looks like, but the enigma remains: how to create an organizational alignment to actually close or remove the gap. So, if the majority of executives know what the problem is, then why are they not fixing it? The following is a suggested list of remedies for poor or slow organizational results. The list is by no means exhaustive, but when taken together will have measurably positive effects on your organization. Some executive level managers, with whom I have shared these ideas, have told me that they would do it, if they only had time. My advice to them was to make time or have someone initiate and follow through for you. Having a clearly defined and effective cadre of action oriented strategies is only a starting point, but an important one in creating action that generates results. Also, it is important to realize the cascading nature of strategic plans and the imperative to consistently refer back to objectives and vision during implementation. Each phase of strategic planning is affected by, and affects each subsequent phase. While strategic planning is both linear and non-linear in nature, the following linear model is used to demonstrate a simple strategic planning process: Vision – Mission – Core Values – Objectives – Strategies – Action Plans, Project Plans and Frameworks – Execution – Monitoring, Evaluation, Refining.

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A Guide To Strategic Planning Now, moving on to strategies which will bridge the gap between planning and execution… 1. Clearly picture what your business nirvana looks like (i.e. your vision) within your operating environment In other words, reaffirm to yourselves the business you are in. If you are in healthcare, you are in the business of promoting wellness, preventing illness, and diagnosing and treating illness when it arises. If you are Apple or Starbucks, you are in the business of creating and marketing (with an emphasis on marketing) lifestyle. In the former case, lifestyle happens to take the form of leading edge consumer electronic devices which are attractive, easy to use, reliable, and reflect and create what customers want. In the latter case, lifestyle takes the form of “funky” relaxation – either alone or with others – associated emotionally and psychologically with drinking coffee in a haven within a high traffic environment. If you are OTIS Elevators, you move people and goods horizontally, vertically, and diagonally through space better than anyone else. If you are Toyota, you create reliable, affordable, attractive, high-value and functional transportation devices for people and goods in the world (Note: these visions are paraphrased by the author’s synthesized memories of and knowledge of these organizations). When you have a crystal clear idea of what you do, what you want to do, and the environment in which you do it in, then you can begin to execute in those areas in which you are competent. If you do not know the picture you want/need to paint and/or cannot convey it to your people or if you doing business in areas in which you are not competent or in a consistently weak position organizationally, then its time for a change. The best means of achieving the results you desire are to capitalize on your strengths and not to focus your energies on your weaknesses. If you do not have a killer strategy and are struggling to retain or gain market share, and there are no killer strategies on the horizon, you might want to seriously rethink your approach. Executing on poor strategy is like canoeing across the Pacific Ocean. You may succeed, but the odds are definitely stacked against you. UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 45

A Guide To Strategic Planning 2. The right people in the right jobs doing the right things, i.e. motivating individuals and empowering teams One of the biggest mistakes in the strategic planning à execution gap occurs in the area of organizational development and its interface with the human capital. This aspect of organizational success is one of the most critical, and yet in many organizations it is the one agenda item left until the end of the meeting or not addressed at all. All the sound strategic planning in the world will not result in effective outcomes unless the organization has the right people doing the right things. No matter what organization we are talking about, all are made up of people. The most highly effective employee is a happy employee, and vice versa. Leading edge technology companies like Google and Microsoft have figured this reality out and continue to leverage it to their advantage and overwhelming success. Secondly, it is important that your people are doing work that engages them. In other words, work that fits with their personality, professional goals, aspirations, desires, wants, and needs. Therefore, a humanistic approach toward encouraging and promoting individuals within the organization into areas in which they are competent, energized, and enthusiastic should be a priority and part of any good strategic execution plan. For organizations who do not know how to do this, I would recommend beginning with Myers Briggs Type Inventory (MBTI) style personality assessment or similar assessments. The process of discovering one’s individual and work personalities can be both entertaining and enlightening for both managers and employees. It also provides individuals with information on where they might fit best in the organization. In the event that one’s personality, professional goals, values, and/or beliefs are not congruent with the organization they are with, it may be better for them to find an opportunity to realize their potential in another environment, rather than trying to mould and shape core beliefs and behaviours to the environment they are in. The latter seldom works for any length of time, and creates cognitive dissonance and stress. If this dissonance and stress is pervasive enough, its deleterious results can echo throughout the entire organization.

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A Guide To Strategic Planning Regardless of organization type, personality inventories should not be used as the basis for dismissal. Nevertheless, both worker and organization need to realize the benefits of alignment and best fit between people and activities. Over the past 10 years, enough research has been compiled on team-building to fill entire libraries. In and amidst the tomes of literature on this topic, the only item I will emphasize and discuss briefly here is this: teams must have a leader with bona fide authority and decision-making power. All of the teamwork buzzwords like inclusion, participative, facilitative, collaborative, synergistic, storm, norm, form, perform and the like mean nothing in the face of a leadership void. This applies to high level teams (e.g., C-level Steering groups) right down to project teams responsible for limited-scope outcomes. Without one readily identified leader (Note: not two leaders), the success of the team will be hard wrought, fleeting, and most of all, unlikely. It is my opinion that this precondition must be met. Be careful about assuming the designated “person in charge” is the one with the actual or exclusive decision-making power. Most organizations have informal networks and reporting relationships that may even pre-empt formal ones. Healthcare is a good example. While hospital administrators have significant authority on resource allocation and administrative activities, physicians (GP’s and specialists) still hold considerable power, and some would say the “balance” of power when it comes to overall operational decisions. 3. Make detailed strategic planning and management part of the integral web of operations and not just an annual or esoteric activity done at the corporate level Detail means that situational information is constantly updated and used as the basis for strategic decisions, and that reasonable, well-thought-through ways of accessing information are available and used to create the actions plans, performance metrics, and dashboard reports. If, after a reasonable period of time has elapsed, you find your metrics unchanged or your action plan un/underimplemented, then you need to regroup, act, adjust and measure. Another paradigm often used is plan-do-study-act-refine. This is the most difficult aspect of organizational behaviour.

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A Guide To Strategic Planning For some, it is less painful to spend valuable time compiling a list of excuses for not taking action, than it is to simply act. Once you have developed an action plan, make sure you act. Most importantly, act now. When developing an action plan, think about the things you need to do and whether or not they will yield the desired results. Always consider the range of outcomes and the urgency and impact of the consequences of those outcomes. For instance, if the aggregate outcomes of a set of actions take you to where you want to go, then act. By all means, discuss it with your boss, your legal department, your finance area or with other experts, but make sure you do it and whatever you do, do it with the right intent for your customers, clients, or stakeholders (whichever is appropriate in your business). You may wish to try to quantify the outcomes and consequences into probability and impact, with specific regard to magnitude of outcome. You will want to avoid “deal breaker” actions that have a low probability of success and extreme impacts on your organization. Alternatively, outcomes with a high probability and magnitude of success and low-risk of negative impact should rank high. Employ whatever methodology you require to make a decision, but make sure you do not get caught up in developing models to the exclusion of taking action. Last, but not least, make sure you consistently refer back to the overall strategic plan, business plan, operating plan, or whichever plan or plans your department is required to follow. Are you meeting your targets? Are your strategies working? Are you objectives SMART (specific, measurable, attainable/aggressive, realistic, and time-limited)? Are the actions you are taking having the desired effect? What could you do better, sooner, more of, in order to take you where you want to go? Go to the level of detail necessary to reduce decision-based risk to a minimum then act. 4. Follow through on items identified in your strategic plan This is THE MOST IMPORTANT indicator of whether or not an organization will realize its strategic vision. Organizations that follow through on their plan, adjust their course from time to time, but continue to take action, will succeed. Those who do not follow through and take action almost assuredly will fail. Yes, by all means, adjust your sails if need be, but make sure that you are out at sea when UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 48

A Guide To Strategic Planning you do this. A dry-docked sailboat is not going anywhere, and no amount of sail adjustment will have an impact. If you are not sure how to follow through on your strategic planning, then find out how. If the timing is wrong to launch your program, then take action to prepare for when the timing is right. Do not, however, use “timing” as an excuse to unnecessarily delay or defer your project, program or strategic initiative. Further “research” and/or “study” are terms often used by government when an unpopular political decision is being faced. If you are reasonably certain and have done the necessary planning, go ahead and launch your project, program, or initiative. 5. Provide adequate incentives for people to make decisions Empower your staff. This means, once your strategy is set and your program and project plans are in place, allow your people to make decisions to move the project and/or organization forward. If you require every decision to be passed by one focal point, this point will become a bottleneck; resentment will ensue, and success will become either delayed or elusive. It is frustrating for competent staff to have to pass everything by a micro-manager. If this is a required, it shouts and breeds distrust to event the most ardently committed employee. Over time, you will lose good staff, and your organization will suffer the consequences. 6. Kaizen – manage through incremental change rather than widespread change Wikipedia describes Kaizen as a Japanese Management concept which, directly translated, means: change for the better, or change for improvement. In English, it is embodied in the management philosophy of Continuous Quality Improvement (CQI), upon which many firms (mostly manufacturing) have focused in recent years. Kaizen is used in the Toyota Production System (TPS), which over the past year or two has come into vogue in management circles as a panacea for what ails the organization.

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A Guide To Strategic Planning It is implicit in Kaizen that all company employees will engage in the removal of waste and duplication, and that all will contribute to the betterment of the organization. Three main tenets of Kaizen are: (a) Consider the process and the results (not results-only). (b) Engage in systemic thinking of the whole process and not just that immediately in view (i.e. big picture, not solely the narrow view). (c) Learning, non-judgmental, non-blaming (because blaming is wasteful) approach and intent. The Kaizen approach has clearly been effective worldwide. However, there are very real barriers in North America to implementing this approach. For instance, organizations who announce they are now using Kaizen, but do not offer any support through training or by providing rationale for the change, often fail. Secondly, Kaizen is easier to implement in “collectivist” v. “individualist” cultures. The operative principle behind Kaizen is to move toward a “one for all and all for one” style of operating. Western cultures are more individualist than collectivist, and therefore focus more on “one for one” and the “all can buzz off unless they are useful for the one”. Hence, Kaizen was formulated within and is used most effectively by Asian and other more collective cultures. Nevertheless, Kaizen as a principle and practice can be implemented with successful results if the conditions are right and the organization implementing it is ready for it and has readied its employees. Creating and conveying the emotion of pride in craftsmanship and output is a critical aspect. Organizations unable to instil this key psychological construct in their employees will have difficulty implementing Kaizen and/or TPS tenets into its operations. At the very least, an organization which takes an interest in its employees will see dividends not experienced prior to embarking on the program. In essence, any action-based program which achieves measurable, positive results is desirable. 7. The importance of communications, public relations, and giving a word of praise to your employees The importance of communications and public relations (C/PR) cannot be overstated. In order for any bridging of the strategy-execution gap to occur, it is UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 50

A Guide To Strategic Planning imperative that an organization have not only sound external communication strategies, but that it’s internal C/PR strategy is above reproach as well. Ensuring that your corporate strategic plan either implicitly or explicitly includes employee recognition, and outlines methods to deliver this message, is critical to success in the 21st Century. People want to believe the work they do is both valuable and valued; that they, themselves are valued; and that both they and their work are appreciated and critical to the overall success of the organization. There are exceptions to this rule, but in the main, most people respond favourably to praise. Corporately, an organization needs to ensure the products or services it creates are indeed worthy of praise and that this praise and other reward systems are in place. Do not for a second think that financial rewards are enough to bring all employees to a place of pride in their work. Creating a C/PR strategy that strongly and consistently reinforces the positive and affirmative beliefs of employees about the organization is critical. It may be possible for an organization to have a deep-seated pride in the quality of product or service it provides, but in order to retain this pride over the longterm, a sound internal C/PR strategy will need to be crafted and implemented consistently over time. 8. Removing functional and structural “silo-ism” and “turfism” One of the largest and most insidious contributors to the gap between strategy and execution is found in functional “silo-ism” and “turfism” that exists in most organizations, and particularly in mid-to-larger sized enterprises. Turfism is a term used to describe the concept the notion that at one or more levels in the organization, there exist managers who are so risk-averse that they hoard information, people, and processes in order to ensure their continued existence via the continued existence of their functional or structural domain. This turfism is most often the result of personal insecurity or habits and ultimately a poor self-image (either personally or within the organization).

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A Guide To Strategic Planning Silo-ism is a cousin of turfism in that, structural or functional silos or stovepipes are often created by turfism which allows for flow of information within the silo. However, little to no information crosses the silo barrier to departments outside the silo. A silo can either be a functional area (i.e., Finance, IT) or a sub-area within the silo. A silo can also be represented cross-functionally like a strata, chain, or enclave of managers who refuse to share information. There is no simple way to combat either turfism or silo-ism without taking direct aim at the cause. Turfism grows like ivy and with it, a creeping paralysis that infects all it comes into contact with. If these organizational illnesses exist in your organization, recognize and remove them as soon as possible. Earmarks of turfism and/or silo-ism include: one person making all the decisions in a specific program area or SBU; lack of cross-functional communication; staffing growth far exceeding the relative functional responsibilities or value of the functional area; unhappy, isolated, fearful, tight-lipped and/or vitriolic staff; and high quality but below average volume of production and outputs/outcomes. These are only some of the symptoms of silo-ism or turfism. Be aware of it and take purposeful action to remove it once it is discovered. 9. Pay attention to core business functions and operations i.e. return to what it is you are doing rather than becoming fragmented or diluted Every successful organization goes through cyclical periods of expansion and contraction - much like our economy. A good management team must be able to accommodate these vicissitudes and avoid allowing one functional area to become pre-eminent during an “up” or a “down”. Irrespective of how important the Finance, IT, or HR department is in relation to your organization, you are still in the business of producing and serving your target market. When the dust settles you are still responsible for growing your business by capturing market share in existing or developing markets, or in developing markets outside of your primary markets. This emphasis on market

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A Guide To Strategic Planning share means that customers are buying your products and services, which falls directly within your operational and marketing areas. So, while Finance may have a critical role in acquiring additional resources to expand the business and controlling and managing revenues and costs, it does not specifically generate business. It may facilitate growth, but it does not, in effect, cause it. Information Technology is a support service area which can facilitate cost reductions or improvements in efficiencies or effectiveness (but often results in absolute cost increases in the cost of doing business). Over the past 10 years, we see more and more organizations viewing IT as a core business area, rather than a support area. This is detrimental to the ongoing operation of the business, since IT is important, but does not usually, in Peter Drucker’s definition of business, “create a customer”. The HR department is also important area and is instrumental in hiring the right people for the right jobs at the right time. However, it too, is simply a support service area for the operations and marketing group. Therefore, be clear and careful about assessing the business you are in and which area should be leading growth. Also, if you are horizontally or vertically integrating into businesses outside of your core business area, you will need to monitor these operations closely to ensure that they indeed contribute to your growth and prosperity. Acquisitions and mergers may lead to enhanced organizational synergies and/or profits, but they may also result in ongoing fragmentation and cultural ambiguity which may very well detract from the organization’s primary business or mandate. Remember, it is your marketing and operations departments that do most of the executing, so unless they embrace your strategy, you may indeed have a problem. 10. Evaluate your progress in terms of how well you are meeting your strategic objectives. Larger organizations are equally as prone to erring in this regard as start-ups. Strategic goals are sometimes so esoteric, generic, or vague that it is impossible to know what success looks like let alone martial the resources necessary to achieve it. Furthermore, it may be difficult to ascribe gains or performance experienced to any one or more strategy or decision. It is therefore critically UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 53

A Guide To Strategic Planning important to break your metrics down to the most basic measures of success. Each department should have its own set of metrics and be responsible for reporting its success on no more than a quarterly basis. Naturally, some businesses are set up to do this more easily than others, but either way, it is important to set quantifiable goals in order to achieve measurable success. However, do not make metrics your gospel. While they are an important aspect of organizational performance, they are still only one aspect. Metrics are a sound way of quantifying aspects of production or service performance, however, it is extremely difficult for metrics to sufficiently measure the overall effectiveness of an organization that is either growing or shrinking in accordance with cyclical ups and downs. Furthermore, the overall quality of an organization and its products/services (particularly services) are sometimes not readily quantifiable. Be mindful of these factors and that there is a multiplicity of causal factors behind every metric. 11. Know your business culture and execute strategies within that culture Early in my career, I had the experience of working for a large organization which had little respect or regard for employees. The organization was risk-averse in the extreme, with few sound decisions were made during my tenure. The decisions that were made, were often the result of “group think” and frankly debatable in terms of their strategic efficacy. Senior management of the organization was peculiarly risk averse and often change was avoided. When change was implemented, it was done in such a haphazard way, that profound and lasting animosity toward the organization was the result. The expression of professional opinion was also rare, as the fear of job loss was prevalent, as was being ostracized by other managers within the organization. Though roles in the organization were stressful and the pay mediocre, words of praise were few and far between. As a result, a union mentality developed in which a schism between management and the worker was created. Over time, this gulf widened, with management having an intrinsic distrust for employees

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A Guide To Strategic Planning and employees an intense distrust and even dislike for management. Negotiation was position-based rather than interest based. Despite the overall negative, oppressive environment, a few bright spots existed. These departments had strong leaders who understood the value of praising staff who did their jobs and who went above and beyond the call of duty in completing their assigned responsibilities. These people were able to create an environment where employees were encouraged to speak up about how to improve their department’s processes, procedures, and overall operations. Not only were their suggestions “listened to”, they were “heard” and acted on immediately. Needless to say, jobs in these areas were highly coveted and openings rare. Isn’t it shame that the rest of the organization could not have grabbed onto some of the practices of these higher performing areas. Over time and as a result of a massive (and poorly planned and executed change management initiative) many of the managers left or were let go. Those that remained were security oriented, process driven and frightened. The organization continues to limp along, though successes are few and far between. This need not have been the case. There were ample opportunities for senior management to change the culture of the organization. Unfortunately, as good managers and others left and were replaced by new recruits, the remaining managers (i.e., the risk-averse, controlling, process-oriented crowd) oriented and these new staff. The cycle continued, and continues. In this organization, any amount of strategic planning will not result in successful performance outcomes as there is a complete misalignment, even disconnect, between strategy and execution. Massive, top-down change will be required in this culture to make a difference. Whatever the culture of your organization, you have three key choices: (1) make due with what you have and tailor-make your decisions within the cultural limitations, (2) initiate massive cultural change and marry these to corporate strategy, and (3) make strategic, incremental cultural changes and evolve and associate strategy and execution activities with these changes.

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A Guide To Strategic Planning 12. Two words that can rejuvenate an organization – change management Change management has come to be associated most closely with IT projects over the past ten years. However, the field of change management contains principles which transcend any one or number of projects. With the right change management approach and a sound communications and internal public relations program, organizations can overcome great hurdles in their efforts to succeed. While no change management process is perfect, by virtue of the fact that the organization takes the time to plan and manage change, it demonstrates to it stakeholders (employees, customers) that it is serious about wanting to improve conditions and performance. Wherever possible, change planning and management should be implemented when embarking on any project, program, or overall organizational change. Remember Lewin’s model: unfreeze – change – refreeze. In conclusion, there are a multiplicity of reasons why a gap or gulf might exist between the strategic intent and plan of an organization and the strategic outcomes related to implementation. This disconnect may have many causes, yet can be boiled down to a very antecedents. An organization is aggregately only as good as the people it employs, it’s inward and outward understanding, and the decisions it makes. If an organization’s strategic plan is clear, well thought through, reasonable, and respects and values the contributions of its most precious resources – it employees – then there is a good chance it will be a good performer or at least well on its way. Employees need to be enfranchised to contribute and to have those contributions valued. While people are the most important aspect of bridging the strategy-execution gap, having good people is not enough. The organization must be diligent and thorough in its intent and its research. Demographic, financial, marketing, and other predictive and evaluation metrics are required to assess and leverage the growth and sound aims of the organization. The organization must have detailed knowledge of its economy, marketplace, growth potential, and position in its industry. Furthermore, it needs to evaluate its performance regularly and UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 56

A Guide To Strategic Planning empower it employees to take the right action (to reduce duplication, waste and redundancy) and to adjust or correct changes in course over time. In order to retain and maintain talent, a sound, internal C/PR strategy must be used to create a feeling of “belongingness”, unity, and pride. Finally, like any key business process, there needs to be a balance between strategic planning and execution. Where planning occurs in the absence of execution or execution occurs in the absence of planning, difficulties are sure to follow. Do not forsake one for the other, but rather keep both in balance and learn and adjust as you go. Whatever you do, avoid spreading or inducing vagueness, ambiguity, and fear throughout the organization – you will thank yourself for it and the results will speak for themselves. Last, be sure to understand your culture and how change management practices (including internal communications and public relations) can be used to effect change. Most people respect fair, decisive, and sound thinking and action. It is important to write down what you intend to do (in a strategic plan) and then employ strategic action to achieve your intentions. Remember, failure to act is the primary cause of business failure.

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A Guide To Strategic Planning Strategic Planning – The 2 Gaping Pitfalls Terry Bass 80% of successful businesses have strategic plans for their organization. Even then, Strategic Plans can be less effective, even become superfluous due to two significant errors that even large corporations may make. The first is YOU, whether you are the owner, CEO or the Executive Team. The second is doing Check Ups on the plan after its implementation. The absence of YOU in the process It doesn’t matter whether this is for a one person company or for a large corporation. It doesn’t matter which Strategic Planning model that you use for your organization. YOU must be involved in ALL three stages of the Strategic Planning process. The 3 stages are – 1. Knowledge gathering. This is where you determine what the vision of the organization is, in other words where you want it to go. You also look at your resources and the marketplace. 2. The actual Strategic Planning process. This is where you determine HOW you’re going to get where you want to go, creating your own roadmap. During the process, it will be determined what resources you may need, etc. to achieve your goals. 3. Carrying out the Strategic Plan. OK. Now you have the plan in your hands. It’s time to launch. Most organizations don’t wish to be bothered with the 2nd stage. They hire consultants to come in, interview (stage 1), disappear and then ta-da, your consultant returns with a 400 page strategic plan that THEY created that YOU need to carry out to get the results you said you wanted. Let’s face it; you’re not going to read that 400 page report, so they may give you a 20 page summary and a mind numbing PowerPoint presentation for you and your team. So is this plan accurate? Is this plan what you want to do? Does this plan accurately reflect optimal use of your resources? UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 58

A Guide To Strategic Planning Do you fully agree with the plan and what you’re expected to do? Are you going to effectively carry out this plan? The answer to all of these questions is…maybe, maybe not. So what happened? Stage 1, the knowledge gathering stage, you’re involved. And then when it comes time to take that knowledge and use it to make the most effective path forward for your organization, what happened? You’re not there. So put YOU in stage 2, the actual process. It may be you alone. It may be a team. But when done correctly, by putting YOU in stage 2, you develop a strategic plan that is not only for more accurate in it’s detail, but since YOU created it, when it comes time for stage 3, carrying out the plan, YOU and your team have bought into where you want to go and exactly what you need to do to get there. If in a team environment, going through the process allows the team to build stronger appreciation for each other’s strengths and contributions, providing improved results throughout the organization. Check Ups For Your Plan The second gaping pitfall for any Strategic Plan is after it’s been launched. The cheering crowds have moved in, the band has been paid off, the balloons and streamers have been cleaned up. Chances are you’ll start out right on target. But think of a road trip. You need to keep your hand on the steering wheel otherwise the car will veer off the road. Same with the strategic plan. What happens when you hit a road block and now you have to turn in a different direction? You need to figure out how to get back on course! This is what happens with the best laid strategic plan. Stuff happens. Markets change. You lose a prime contributor. There are a million things that can occur that change the course of your plan. So you have two options. The first is to throw the plan away and give up. Proof that it doesn’t work.

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A Guide To Strategic Planning The second option is to periodically do a check up on the plan. Look at your measurable goals that you have and determine where you are now. If you aren’t where you planned on being, why not? And then look at what you need to do to get back on track, just like that road trip detour, remap what you need to do to get back on plan. By periodically checking on how your plan is doing, you can stay on your path to reach the vision of where you want your organization to be and you can make those corrections long before they become too big to resolve and sabotage your plan. Thinking strategically, by being fully involved in the strategic planning process and by periodically checking up on the plan’s progress, you greatly enhance the prospect of your organization successfully achieving the vision that you desired when you began the process.

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A Guide To Strategic Planning Strategic Planning - Helping You Make Those Hard Decisions Terry Bass Business owners/leaders are supposed to be able to make the "tough" decisions. Really, it's in your job description. But we are still human. There are also the tough decisions that may need to be made that we aren't sure about the consequences. We might have a good idea, but we're not sure. And that's where a Strategic Plan helps support you in making those tough decisions. Any organization that goes through a Strategic Plan gains clarity. Clarity on the ultimate goal. Clarity on the direction needed to be taken. Clarity on precisely who needs to do what. And finally, clarity on what resources is needed to accomplish it all. So you will look at your resources, your facilities, your processes and your people. You will take a hard look on what will support your plan, what changes need to be made to achieve the plan and what just doesn't fit. Let's focus on the last one. Let's say you are a business owner. You have an employee that is doing an ok job. That's it, just ok. They don't particularly put themselves out, but they do show up, do what they are told to do and while they may not excite the customer, they don't get them mad. So they're ok. But you really, really would like someone a bit more energized and focused. Sound familiar? The problem is that since they are doing an ok job, you don't feel that you can do anything about it. Enter the strategic plan. After going through the plan, you now look at that employee with greater clarity. When it was ok to get through the day, the employee was acceptable. Now that you have a plan to take your company to a new level of success, it becomes glaringly clear that this employee won't be an asset in achieving that, but will actually be an impediment to the plan and business succeeding. Things have become clearer. Something must change. That change is your decision. That may NOT mean you need to get rid of that employee. But you do need to take a long, hard look. It could be that you need to have an honest conversation on the new direction of the business and whether UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 61

A Guide To Strategic Planning the employee wants to fit into it, along with the things they would have to change. It may mean training. It may mean changing your relationship to get that employee on board. There are alternatives then just firing them. The bottom line is that for the new plan for the business to succeed, everyone must be on board, and resources like that employee will need to change. Period. Clarity. This is only one example. But it all centres on ensuring that all the right resources are in the right place to ensure the success of the strategic plan and yes, that means change. Resources, whether they are facilities, equipment, or employees need to be aligned with the company's Strategic Plan. Each element is part of a whole working in the same direction to ensure the plans and organization's vision and goals. Think of the image of one of those rowing teams, oars aligned and together pushing the boat further in the right direction. Now envision one oar sitting in the water causing a drag. At minimum, it would force everyone else to compensate and work harder, more likely it would be far more disruptive resulting in chaos and failure. So it is with a resource that is not aligned with your organization's direction. Creating a drag, causing more work, possibly resulting in failure. By understanding where you want to go and what you need to do to get there, you bring clarity over those hard decisions that you need to make. And while they may be difficult actions to take, you have a much greater understanding of both the rewards and the consequences of taking that positive action for the good of your business.

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A Guide To Strategic Planning Strategic Planning – Everyone should be involve Connie L. Knieper The best strategies are often those created by the people involved in executing them. It is important that everyone contributing to success be involved in the planning stages. The amount of participation and when they contribute may vary depending upon the particular issue and stage of the development process. Here is a way to allow everyone an opportunity to participate and acknowledge their value to the company. Strategies developed to complete simple, routine tasks are easily handled by the people executing them. They have an intimate understanding of what can and will interrupt the flow of progress as well as facilitate it. Their “hands on” experience enables them to connect how one action will affect another and contribute, or not, to the overall objective. These are the most valuable people to involve so that the success is maximized. The extent of participation may be limited to the amount of influence their particular contribution has on the process or system itself. Whenever possible, involve as many people as you can without interrupting the flow of business. Realistically, it is not feasible to include every single person from start to finish. By allowing feedback everyone can be involved to some extent. Any person responsible for implementing and/or managing the system must be involved from the very beginning. Most, if not all, the information needed to review, redraft, and rewrite a strategy is known by them. Limiting the participants in the group minimizes disagreements so that solutions can be found and agreed upon more quickly.

Once the group agrees on a tentative plan,

involve the rest of the team. Sharing drafts with the other team members ensures they have an opportunity to participate and contribute, regardless of their position. Allow them to give feedback and opinions freely; many times ideas are brought up during this stage that may not have been known before.

What was anticipated to be a permanent

strategy might be amended in order to increase the success of the strategy.

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A Guide To Strategic Planning This is an opportunity to “test” the efficacy of a new or revised system before it is implemented. It is a perfect way to let people know how valuable they are to the business and learn of other knowledge or skills they might possess that are not being utilized yet. Take advantage of this opportunity to introduce the change, increase its’ effectiveness, and help people to prepare and adjust. All feedback and opinions should be taken to the group. Each one should be reviewed and discussed. Let the employees know this took place by explaining why their suggestion was or was not included in the strategy. This reinforces their value and increases their willingness to participate in the future.

To increase the success of a strategy, include the people responsible for completing the tasks involved. Let employees know they are valued and gain priceless insight from the “hands on” experts.

It is not necessary to interrupt the

flow of business, request their feedback once an initial draft is prepared and review it then finalize the plan and implement it.

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A Guide To Strategic Planning The Results How do you measure the risks and rewards that are associated with your business? Terry Hill Entrepreneurs are risk takers by nature. Whether it is the formation of a new venture or the expansion of existing business, entrepreneurs face different types and degrees of risk before any rewards can be realized. In pursuit of their dreams, entrepreneurs come to realize the delicate balance that exists between risks and rewards. It’s a given fact that starting and running your own business is inherently risky. In fact, according to the Small Business Administration, the risk of failure is extraordinarily high for entrepreneurs starting new ventures. Nearly 10% of all firms fail each year and nearly 61% of manufacturing firms close their doors within the first five years of operation. The small business failures are sobering statistics. So, before you “bet the farm” on that new business venture or the expansion of your existing business, calculate and understand the potential risks and rewards. First, it’s critical that you understand and assess how much risk you can tolerate in your new venture or the expansion of your existing business. Make sure you have a realistic view of your business opportunity and the upsides and downsides associated with pursuing it. The rewards for launching a new business or expanding an existing business, however, can be great. Studies show that entrepreneurs account for a large proportion of the country's wealth and entrepreneurs have higher savings rates than that of traditional workers. It is important to determine how much risk you can withstand in a new venture or the expansion of an existing business. Before you even consider launching or expanding an existing business, you need to have strategies in place to offset potential losses or unforeseen challenges. As you assess your potential risk factors, be brutally honest and consider these questions: UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 65

A Guide To Strategic Planning o

How many years can you go without making a profit?

o

Can you tolerate possible financial loss?

o

Can you survive the loss of all your invested capital?

o

Have you taken steps to mitigate risk with insurance?

o

Are you sharing personal risk with investors?

o

Have you set aside savings to cover potential losses or dry spells?

o

Do you have a contingency plan if you lose a key client or employee?

o

Can you afford to risk your capital, services, and reputation?

A feasibility study is a great tool that can help you to assess risk and reward. It provides a detailed investigation and an analysis of factors that influence your project to determine whether or not the project is viable. The study examines the economic, marketing, technical, managerial, and financial aspects of your proposed business idea. The feasibility study is based on a cost benefit analysis of your actual business, and the study is used to support your decision-making process. A feasibility study is an effective way to safeguard against the waste of resources of time, people, or money that may be exhausted before an idea or project is deemed viable. Whether you are applying for a SBA business loan, seeking funds for expansion or plant modernization, or deciding which steps come next in growing your business, a detailed feasibility study will give you the professional support that you need to make your case. A thorough feasibility analysis investigates the impact that each of following issues can have on your idea or project:

o o o o

Economic (labour, utilities, transportation, economic impact, etc.) Marketing (availability, plans, competition, targets and potential, etc.) Technical (site, equipment, modernization, constraints, etc.) Financial (cash flow, costs)

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Managerial (assessments, recruiting, training, and development)

The result of the feasibility study is a thorough analysis of the feasibility of your proposed business idea or project. If your idea or project is deemed feasible from the results of the study, then the next step is to proceed with a formal business plan.

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A Guide To Strategic Planning Measuring performance – Results make the difference Connie L. Knieper If you want to get from here to there in 12 days, with only £1000.00 you need to create a strategy and make it to happen. Beginning with the end you plot backwards to the starting point what actions and/or events must occur and when. The strategy is the course of action formed according to the goals and limitations. As you move forward results are carefully monitored. The same is true in business. Goals are set, limitations identified, a finish date assigned, and strategies carried out to accomplish the goals. Performance is measured and compared to the past and the desired results to determine progress status. Results are what make the difference. The purpose of measuring performance is to monitor results and drive future growth. To determine which results to track for an activity you must understand its purpose. Every department and operating procedure has a purpose, something that it is intended to do. It wouldn’t exist otherwise. Identify the purpose and how it affects the overall goal of the business. Start with major departments organizing them into different categories.

Next to

or below each category define very specifically the responsibility of each department. This is the major function or purpose of the department. For instance, the customer service department is responsible for maintaining customer satisfaction. Departments exist in all businesses regardless of size. Identify them so performance standards can be set and results can be measured. For example, the function of the sales department is to sell. Performance is measured by how much they sell. Within each department there might be sub-groups. Maybe the sales department is separated into different groups according to the type of products they sell. Expand the organizational chart to identify the different groups that might be

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A Guide To Strategic Planning present. Again, identify the major function of each group in the same way as the departments. Assign a performance standard to each major function. The performance standard is what absolutely must be done in order for the job or function to be completely satisfied. A new employee is required to be proficient at the end of the 90-day trial period. The performance standards are then translated into numerical values. Determine the value based on past performance and comparing it to the business goal. The performance standard value is the difference between these two numbers. As time goes on the standards change to promote continued growth. Essentially measuring performance is transforming major functions into numerical values so that results can be measured and monitored. It serves to evaluate results so that problems can be identified and resolved, good performance acknowledged, and growth promoted. The values are easiest to compare and understand in a percentage format. Use any format that is most convenient and understood by the people involved. Organize the information in a chart that contains the goal along with past and current results. Most importantly show the overage or shortage as it relates to the goal. Results are what make the difference. The only way to make informed and appropriate decisions now and for the future is to know the results of what is happening. Performance monitors give the results of strategies to verify forward progress and identify where change is necessary. From there it is just a matter of continuing to do what works well and improving or eliminating things that don’t.

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A Guide To Strategic Planning Strategic Accountancy - Making The Numbers Really Add Up Chris Ogden Strategy and accounting: could two words taken together produce more yawns from business managers? Accountancy has long laboured under the arcane “bean counter” image. Accountants are seen simply as bearers of financial news – and frequently not always good news. Psychology also plays a part – accounting departments are seen as control oriented rather than ones that are looking for growth opportunities. And accountants are often too inwards-focused: concerned simply with this company’s numbers and not enough on comparing the numbers with the competition’s. We don’t need to spend too long trying to understand why this situation has arisen. In part it’s due to accounting departments that are content to see themselves simply as reporters. But perhaps the biggest culprit is senior management and its strategic governance processes. When the financial focus is on simply accounting for profit and cash flow, rather than understanding what has caused these results, then we are heading for trouble. What is needed is to re-instate accounting to it rightful place – one of the key pillars on which strategic thinking ought to depend. What are the tell-tale signs that accountancy is falling down on its strategic role? Apart from the ones noted above, look out for:

o

Where decisions about key business directions are taken without reference to financial performance indicators such as cash flow and profit;

o

Where accountants report to strategy meetings but are not asked to explain the business trends that might have generated the numbers;

o

Where marketing departments develop strategies without road-testing these in financial terms;

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Where senior management is willing to sign-off new strategic moves without forecasting the impact in terms of value-creation.

Changing this benighted view of accounting will require effort from more than the accounting department. Just as marketing staff need to be able to discuss the company’s financial results, so accountants needs to be able to debate the organization’s marketing strategy. Serious effort needs to be made to understand each other’s language. Here are some initial actions to consider to address the situation:

o

Institute a change program at Board level to ensure that future strategic governance can deal more effectively with corporate accounts;

o

Re-vamp accounting departments to also provide insightful information about what is happening in the business;

o

Build stronger links with the providers of customer and market Management Information in the company;

o

Build financial models that explicitly connect strategy to financial impacts;

o

Build training courses on key financial measures for the other departments in the company;

Such efforts will pay-off over time. The captain of a naval destroyer understands exactly the capability of the engine room and where the precise application of horsepower will have most effect. Accounting departments need similarly to see themselves as guardians of the information that drives the engine room of the business.

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A Guide To Strategic Planning Prepare For Change Strategic Change as a Journey Chris Ogden We've seen the scenario before. It's the kick-off planning meeting for your highprofile strategic change project. The Chief Executive has been wheeled in to give the call to arms. The Sponsor has reiterated how important it is and how the future of the company depends everyone's efforts. The door closes. The strategy leader and the team rolls up its sleeves to begin the work. And then the questions start ... I've frequently been asked to facilitate strategy or change planning sessions that follow this familiar pattern. And while I felt that I and the sponsor had a good grasp about why the project was being undertaken, it often became clear that the members of the strategy group were not so united. Doubts about "what this exercise is really about" often came quickly to the surface. Some wondered if the Board was unhappy about overall performance. Others were convinced that HR was really driving the agenda because of perceived issues with recruitment. On another occasion, the issues were more about where the emphasis of change should lie. Was it important that the company change its internal culture? Should the emphasis be on building a new strategic competence? Or were these sessions really concerned about enhancing the customer experience? Comments and concerns such as these should not be dismissed lightly. They reflect something that is very relevant to the task in hand - namely, the direction that the company should take. At the same time, the last thing any strategy or change facilitator wants is to open a Pandora's box of endless debate. Strategy or change planning isn't an intellectual exercise. It's done for very real and commercial purposes: the company has to change or else it's going to fall behind. So how can these concerns be dealt with, or, even better, used to the advantage of the sponsor or facilitator?

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A Guide To Strategic Planning The key thing to remember is engagement. When people voice concerns, the one positive thing that can be taken from the situation is that they are engaging in the process. They are not just sitting back and letting someone else take decisions while in private deciding that they will sabotage it later. The facilitator or sponsor therefore needs to use this engagement productively. Facilitators and sponsors of strategy and change can utilize the concept of "strategic change as a journey" to harness the energy behind this latent debate. Over the course of the planning process, the planning group finishes each working session with an anonymous voting event to provide a group view about the real focus of the process. Each day, as voting continues, a fascinating group view usually emerges. This shows how prejudices held at the start of the process shift over time, as people become more confident that the planning process is addressing the real needs of the enterprise. Properly organized, this voting process can also be great fun at the end of a hard day's planning. Participants start to see strategy or change planning as an exploration. Individual members of the team can privately compare their own perspectives of this journey with that of the group as a whole. In the time between working sessions, members reflect on these comparisons and can move into the following workshops with altered perceptions and a renewed commitment to the process. At the start, people can have wildly different views about what is wanted and what senior management expects. As they go through the process, they start to see how the group is changing its thinking, and how they compare. The process proves to be a powerful way of achieving real buy-in from the team. Of course, strategic change facilitators and planners need to have the confidence to allow this engagement. The skill lies in enabling debate whilst also providing leadership and ensuring that the process does not go off-course. But those in this leadership role also need to allow sufficient flexibility to ensure that team members really feel that their views have counted. In one engagement with a global IT services enterprise, the shift in focus for a week-long change planning session was remarkable. Initially, the perception of UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 73

A Guide To Strategic Planning about a third of the participants was that the emphasis of change needed to be on the company's internal culture. Within a few days of discussion however, the emphasis had shifted to radically improving the customer relationship. The group developed an internal consensus which proved to be more robust than previous attempts at planning. Having arrived at this position through their own debate, they were prepared for the hard efforts that were to follow to improve the customer relationship. What had started as a dispirited group of individuals without a unifying purpose became, over the course of a week, a strong and committed group that could carry the customer change mantra to the wider enterprise. Strategic change as a journey provides a creative approach for ensuring that strategy and change planning processes really do harness the energy of the group. As the team sees how its collective views evolve and mature over time, they develop a strong commitment to making sure that implementation is a success.

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A Guide To Strategic Planning Organizational Personality Shane Busby Like individuals, organizations have evolving, adaptive, strategic, and rule-based personalities which act on and respond to changing internal and external environments (a mouthful, to be sure). The past 15-years have seen significant advancements in new technology and marketing strategies. These strategies have [respectively] decreased costs and increased revenues across industries and sectors. Yet, there is one predictor of organizational success which is often underemphasized or completely overlooked in the march toward market pre-eminence or performance management improvements. This critical component I call organizational personality. Defining Organizational Personality: An organization’s personality is the hierarchical lens through which information is collected, filtered, and acted upon. It is the gestalt of all people, processes, and customs in an organization which cannot be understood by distilling it down to individual personalities without losing its essence in the reduction (though some personalities have greater impacts than others). Yet, it is even more complex than this. The organizational personality is the manifestation of how an organization senses, perceives, interprets, assesses, evaluates, and acts upon business opportunities and threats in the environment. Most successful organizations have a strong outward competitive focus as well as a nurturing inward focus. Imbalance or misalignment in these two key organizational components can create immediate success, but over time creates challenges – sometimes insurmountable. Forward-thinking, high performing organizations recognize the importance of balancing these two key strategies and the value of spending significant time and resources to build and strengthen their inner cores to create a sound, aligned organizational personality. Personality and Strategy: A few companies like Google, Apple, and Microsoft are able to balance a strong outward-looking strategy with a sound inward-looking strategy. The casual, corporate, ambience within these organizations signify well-developed

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A Guide To Strategic Planning organizational personalities, which have been leveraged to capture market share based on employee creativity, innovation. Combine this internal strategy with superior marketing and business strategies; profit sharing; and steadily increasing stock values and you have a recipe for long-term internal and external success. Everyone likes a winner. These companies take calculated risks based on empirical data and marry it with proven “gut instincts”. This approach creates successful outcomes and engenders confidence, which builds on itself and is leveraged to continue capturing, retaining, and growing market share. Despite the appearance of their corporatecasual cultures, make no mistake, these organizations are outwardly aggressive and highly competitive (just ask their competitors). Their “laid back” appearance belies their savvy, strong, well-developed understanding of who they are, where they are going, where they fit in, and what success in their respective industries looks like. These companies consistently demonstrate not only sound strategic thinking, but how important it is to have a good organizational personality. A summary of common internal strategies which lead to sound organizational personalities are as follows:

o o

A strong, clear, well-defined, growth-oriented vision A pervasive, consistently reinforced cultural ambience which fosters creativity, autonomy, innovativeness, and “best practices”

o o

Clear internal rules and operating requirements Internal solidarity through an “us vs. them” paradigm (which can be highly effective in a competitive business environment)

o o o o o

Exemplary financial and psychological income and reward systems A high degree of carefully calculated risk taking Fearless action in the face of changing in business environments Confident in leading change and an unwavering belief in “right strategy” Strong internal locus of control, i.e., self-directed, autonomous, and independence of thought and action

o

A laser-like focus on vision and goals throughout the entire execution process

o

Ability to generate and maintain interest and enthusiasm in employees and customers

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Driven to respond to consumers needs, wants, and desires, i.e., a strong marketing focus which creates a “buzz” when launching a new product or service

Improving Performance through Personality: Senior managers tasked with improving or managing organizational performance need to begin by asking the critical questions of what their organization’s personality is and how it can be improved or changed to create both internal and external effectiveness, efficiency, and accountability. If the organization’s personality does not foster a sense of growth, opportunity, and stability internally for its employees, then chances are its employees don’t like it much either. Eventually, your value chain [including your services/products] will begin to reflect your organization’s personality. If your organizational personality requires changing, it is useful to begin by identifying each element along the organizational personality continuum. The eleven components of the continuum are listed below. For each item below, ask the five “why” questions in order to drill down to first principles. Once first principles and their magnitude have been unbundled and ascertained, and you have a good idea of why your organization is the way it is, you can begin to take action. 1.

Risk Behaviour: risk averse v. risk-taking

2.

Locus of Control: internal v. external driven

3.

Personalization: emotionalized v. pragmatic and impersonal

4.

Confidence: high vs. low strength

5.

Attention/focus: focused v. fragmented/fleeting

6.

Assertiveness: push v. pull

7.

Competitiveness: competitive vs. cooperative

8.

Consciousness: self-awareness vs. lack of awareness or apathy (don’t care)

9.

Philosophical Strength: ideological vs. contextually driven

10.

Arousal: high vs. low and degree (e.g., anger/distrust vs. contentment/satisfaction)

11.

Enthusiasm: interest vs. apathy

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A Guide To Strategic Planning When you have assessed your internal environment using these continuums, you will be able to predict what change management process will work best. No change process works without some turmoil, but if you want to minimize turmoil, you will need to employ a strategic approach to understand the personality of your organization. As a final note, it is complex (but not impossible) to undertake an assessment of the personality of a multinational or global firm with geographically interspersed strategic business units (SBUs). The organization often operates with diverse ethnic, social, and cultural environments and expectations. Nevertheless, the exercise of determining organizational personality is useful, and in this instance, it will be useful to reduce your analysis down to the SBU level. Once you have determined the personality of each SBU, it will be easier to find integration points and subsequent linking strategies to synergize cultural differences across multiple sites. Remember, strategy without execution is like a canoe without a paddle.

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A Guide To Strategic Planning Change: Cultural characteristics and expectations management Shane Busby Our species is the collective and summative product of all change that has come before us. The current iteration of humanity is the result of change which has either been foisted on us by our environments, our circumstance, or by others. Our environments and circumstances cause us to adapt to change. Alternatively, leaders (business, politics or other) who have seen the power of change and recognized the power in wielding it, have shaped humanity. Over the past 15 years, with the implementation of IT, we have seen an evolution of the field that some call “change management”. Do not make the mistake in believing that change management is a new phenomenon. Change and managing change have been around since the dawn of time. Change is likely the most disruptive and powerful force underlying and constantly operating in both the lives of individuals and organizations. Individuals who do not adapt or create change in their own lives, quite often end up stagnating, whereas organizations who do not embrace, adapt to, and harness change end up extinct. So, how do we use change processes to effect positive change? The practice of change management has grown, more or less, out of the field of Organizational Behaviour and Organizational Development (OBOD). In OBOD, change is recognized as an adaptive and powerful tool and if used properly, can mobilize business interests in strategically successful ways. More and more, change management has been used as a tool to strategically introduce and manage business systems. Change management in Information Technology (IT) is clearly a Petri Dish for studying change - how to plan it; implement it; manage it; and control it. Rolling out large scale system changes often occurs in environments with already established systems and processes. Changes to the “old ways” are almost always threatening for those who are or will experience the change. Even if the “old ways” are limited or defective, they are often seen as better than the change

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A Guide To Strategic Planning coming down the pike. This attitude can be pervasive and often stems from multiple abject failures that have occurred in the IT area, but is likely just a natural human response to any disruption (change = disruption for most). The results of a poorly planned, executed or followed-up change process can be lasting intransigence; slow or non-adoption; high, continued, and/or inappropriate reliance on temporary project staff; political fallout (small p or large P, depending on the environment); and permanently negative attitudes within the change environment. Many of these items can be avoided or minimized if change is planned, executed and followed-up in a rigorous and strategic manner - prior to, during, and post project rollout. There are a number of ways in which to minimize disruptive change and to make change work in your organization, these are: 1.

Understand the culture and the sub-cultures of the organization, and most importantly, understand the differences. A “gung-ho-let’s-get-it-done” management culture might set the right context for change, but if that culture is married with a highly-unionized, “gimme-my-paycheck-it’s-clockin-out-time” culture then you have a recipe for disaster. Yes, sometimes change requires draconian measures including prescriptive direction, but always these should be the last resort. In any case, articulating a commitment to change is required by the organizational leaders. If change is not communicated frequently and effectively, the “change” will fail.

2.

Engage the change audiences – use appropriate strategies for each layer of audience that will be required to adapt change or is responsible for the change.

3.

Manage expectations – do not paint a picture that the change will solve all the problems of the organization. If you promise a “windows-based GUI and then deliver a “green screen”, anything you say after that will be tossed out the window.

4.

Whatever you do, train and facilitate; train and facilitate; train and facilitate… get my point? Half or more of success in any new environment is: UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 80

A Guide To Strategic Planning knowing what to expect, being prepared for it, seeing it when you are there, and being confident to handle it when you experience it. 5.

Identify “influencers”, and build in appropriate methods of persuading them that change is for the best, and will make their jobs easier or more productive or simpler, or reduce errors, etc. Buy-in will need to occur with most of these folks if change is to work.

6.

Identify additional benefits for high-power (informal or formal) end-users. For instance, if a system will better allow physicians to track patients or access lab results in hospital, but these benefits will occur in subsequent modules and rollouts, then they will need to hear this message early in planning and consistently hear it. If physicians are the end users and if they have not blessed the system or changes, then the change will be problematic and may even fail.

7.

Expect and plan for the IT project team supporting the project for a period of time, post-rollout. A “cut and run” approach will only exacerbate an already tenuous and volatile environment. Phase the team’s presence out gradually, i.e., as the number of calls on the log sheet diminish.

8.

Do not set arbitrary, artificial deadlines that will create unnecessary and stressful results if not met. If the Project Manager has not been able to deliver due for legitimate reasons, then rushing to implementation without due regard to “change”, may result in long-lasting employee intransigence, ill-will, and increase the probability of failure for future project implementation and change processes. Whatever change is occurring, and the success of that change will echo through an organization and a culture of adversity to change will ensue. If this happens, no change management process or number of contracted change managers will be able to rectify the situation (though some will claim to). I leave you with an age-old truism: “change is the only constant”. Virtually every change process will be disruptive (even the positive ones as they typically shock us out of our complacency). Virtually every change process will be met with “push-back” from at least a few employees. Virtually every change process can UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 81

A Guide To Strategic Planning be handled better. It’s up to those who envision change to make sure it is done properly – plan it out, execute, refine, and follow-up, and above all communicate the change as positively, directly, simply, realistically, and urgently (where applicable).

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A Guide To Strategic Planning The Market How Easy Are You to Do Business With? Assessing your Structure when Working your Strategic Plan Terry Bass How easy are you to do business with? When looking at your organization through the Strategic Planning process, it is essential to do an internal assessment of this very question. Every business has competition. Your cable TV provider may have cable TV for the area locked up, but there are other providers offering the same thing just a different way like satellite, antennas with that provider and if desperate bunny ears. This is essential to remember since a significant reason why people don't start doing or changing their business is because they felt it was difficult to do business Have you ever left a message with someone to give you a call back and they didn't? What was your response? Did you doggedly pursue them or say, "forget it, if I'm not important to them, move on to their competition"? If a customer or potential customer has to jump through hoops to get to you, guess what, they won't. Even worse, it becomes emotional. You've just taken a potential customer, made it difficult for them to do business with you and you irritated them, if not made them mad. Could they still do business with you? Sure but you now have to dig yourself out of a hole and work harder to get or keep that business because of simple mistakes. Below are 10 simple questions you need to ask yourself.

o

If they don't have your business card, how easy is it to find you?

Let's keep this simple. Have business cards. Always have business cards. They don't have to be super fancy, but they need to be professional looking and accurate.

o

What do you have for contact info? Do you have alternatives?

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A Guide To Strategic Planning Don't just have one means of contacting you. Internet addresses are a must in today's world. If you are the only person in the company and the only contact number is the office line which you are never near, how are you dealing with that?

o

If you're not available, how quickly will they get a response?

People usually don't mind going into voice mail or dropping an email that doesn't get an immediate response. They DON'T accept too long of delays. How long is acceptable? It depends on your business and your competition. If you are in a really competitive business such as real estate or banking, do you want them left hanging too long?

o

Are you're hours of operation normal and if not, do they know it?

I had a cruise consultant that worked 2 ½ days of the week and different hours during those days. It made me crazy. In her case, a simple solution would be to send me a note with a card that I could keep by my phone with her business hours and oh, by the way, this person or that person could help you also. Just remember if your hours are too much out of whack with theirs, that could be a deciding factor and not in your favour.

o

If you have a website, is it easy to use and easy to contact you?

Another simple question. Everyone in any business should have a website. Even if you are working for someone, for a couple of bucks a month have www.johndoecares.com. Put a picture, contact information and a link to your company's website and you're done. If it's your business, you can still keep it simple with hours of operation and what you do and why you are different. Even if you have a lot of information, each page should be easy to look at, not too laden with text and simple to move around in. Remember that the website is you. So if the potential customer is having a difficult timing getting around or understanding your website, they are having a difficult time with you.

o

If you have marketing material, is it easy to understand and clear on how to contact you?

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A Guide To Strategic Planning Like the website, you need to judge how much information is needed. If the purpose of the material is to get them to call you, then look at providing the minimum needed to capture their interest that will make them want to contact you. You want enough information to hook them, but not too much that they just toss it in the round file.

o

If you're on vacation or out of the office, does your voice/e mail reflect that?

Simple (and frequent) mistake. Think about the client that emails you with a question and it goes into a black hole. Very frustrating, even if they do find out two weeks later you were on vacation. What you need to do is relevant again to your industry. It may be acceptable just for a bounce back that states" you are out until such and such a date, and if it's an emergency (always have that line) they can contact Alice Associate at xxxxxxx or you on your cell at xxx-xxxx". You may need or want someone to check both your phone and email frequently. Bottom line is NEVER leave a customer or potential customer without an alternative, because THEIR alternative is your competition.

o

If they have a problem with your services, do you confront the issue or try to avoid it?

You are allowed to make mistakes. You really are. You WILL however be judged on how you DEAL with that mistake. Acknowledge the issue, apologize for their inconvenience, RESOLVE the issue, take steps to ensure that it won't happen again and then move on. Believe it or not, taking those 5 steps will take less effort and consequence then trying to avoid the issue.

o

If you "sense" an issue/problem, do you confront the perception or avoid it?

This is the "before the stuff hits the fan" moment. You see a mistake before the customer does or you sense the customer is displeased with something but you don't know what it is. Deal with it. If it's the customer out of sorts, ask them if there is an issue. If you are the proactive one, it shows you care about your relationship and it's important to you that everything is good between you. The customer will eat it up!

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A Guide To Strategic Planning o

Do you ensure you are "on time" to every scheduled meeting and if not, do you do anything to make up for it?

It doesn't matter whether this is a phone call scheduled or face to face. If you are late you are telling them their time is not that important to you. A very bad place to be. Always make sure you have their number handy, so if you are running late, you can late them know as quickly as possible. If it's going to be significantly late, let them control the situation by acknowledging the importance of their time and if THEY want to reschedule. Abject apologies when you do arrive are always appropriate. These are 10 basic questions looking at areas how your customer (or potential customer) does business with you. It should never ever be a challenge or chore for someone that uses or wants to use your product or services. By ensuring smooth access and service for your customer, you continue to create a positive, professional environment where people want to do business with you.

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A Guide To Strategic Planning Does Your Operation Fit Your Product Mix? David A. Goldsmith and Lorrie Goldsmith Is price the reason people purchase from you? Maybe it's delivery or quality. In determining where to position a company, leadership has to address the issue of what to offer and promote to the company's customer base. Let's take a look at companies involved with some type of manufacturing. Manufacturers, as part of strategic planning, must create a product with enough margin in order to create a profit. In simple terms, the organization develops a product and then must be able to create the product in a facility conducive to its creation. The breakdown may be as follows: **Job Shop - Individual units that tend to be very customized and require highly skilled labour **Flex or Batch Shop - Groups or products are created with similarity between products. **Line Shop - Mass production where most likely automation and repetitive tasks are necessary. Labour is not as skilled as craftsmen but as operators. In all three examples, each area must compete in different markets. If you needed to purchase a specialized part for a custom built steam generation plant, you might use a Machine Shop (a type of job shop) that can deliver the product you need with in the specifications. In this scenario, you realize it's a one of a kind item and the final product must be perfect. A job shop would be well perfect for your needs. On the other hand, if you were in need of a more standardized product in large quantities, such as 200 t-shirts with your logo on them for your employees, a job shop would most likely give you a price that would be way out of line with expected value. A batch flow or flexible manufacturing facility would offer the delivery, quality and price that would be more subjective to competitive forces and have tools in place to manufacturer larger quantities. Quality of the vendor will be important yet getting a reasonable price is a larger part of the equation. Lastly, commodity items like surgical needs and semiconductor chips are made in high volume with little difference between products from vendor to vendor. (Note: New products to market are not yet commodities) At this point, a

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A Guide To Strategic Planning case of paper from Staples, Viking or Sam's Club will give you white paper to use in your copier. Price and develop ability are often the important variables. If you are creating products that move on the scale from single units to commodity, your pricing, delivery and service may be valued at different levels and your strategic plan should emphasis these variables.. Customers will expect to pay more for the customized individual unit since they realize the work involved. Do not short change your profits by pricing as if you are in a commodity business. Line shops on the other hand are operations with little variation in finished products. Day one of the month and day 15 are still cranking out yo-yo's. Streamlining to fit price and inventory levels to meet delivery are critical while again, quality is a given. Evaluate your operations check to see what type of business you actually offer. Trying to be one business and set-up like another is death. Are you in line with competition? Ask yourself what you do, how you do it, and to whom you sell? A great book on manufacturing concepts that reads like a story is THE GOAL by Eliyahu M Goldratt. The concepts can apply to any type of business........and it's easy to read.

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A Guide To Strategic Planning Winning Marketplace Tactics? David A. Goldsmith and Lorrie Goldsmith Your objective is to either enter a market or to compete more profitably in your existing market. The process by which you reach your objective is Strategic Planning. This article examines two areas of strategic planning: market qualifiers and order winners. When determining your company's winning marketplace tactics, it's important to look at the following four steps: 1. Determine your market qualifiers. 2. Assess how your company measures up. Do you have what it takes to qualify at this time? Will you have the assets and employees to at least compete? 3. If or when you qualify, how do you win sales? 4. Is this the right market after all? Determining your market qualifiers involves a close look at a number of areas, ranging from equipment and personnel to capital, location, and size. What do competitors have that allows them to compete in the arena? Once you've determined base-line needs for competition, take a close look at your own firm. Do you have what it takes at this time. If not, how long will it take to obtain the necessary qualifiers and at what cost? It's often well worth the up-front expense of hiring outside help to assist in this assessment phase, as a number of optimistic executives look at this area subjectively rather than objectively. Fifteen years ago, I started a small manufacturing operation that had a capacity to compete on quality and deliverability as long as quantities fell within a particular range. We were small and could not realistically approach the 2,000-20,000 unit orders. In order to compete on larger-sized orders, we had to invest in automated equipment and staffing, and move operations to a larger facility. This enabled us to move from the "small run" market" to the "mid tier," yet we

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A Guide To Strategic Planning remained in the same industry. Accounting had to be able to sustain the new monetary demands of a growing company and to accurately report on activity in order to measure true profitability. Once you have what it takes to qualify to compete in your market, do you know what to do in order to win sales? Order winners place you in a position over your competitor, giving you the edge and the sale. An engineering firm may qualify to compete by having the necessary staffing and talent: it may win an account due to being ISO certified. A pizza shop may qualify to compete by having a convenient location and the right items on the menu: it may win orders by having great tasting recipes. On the other hand, a pharmaceutical company may qualify with production, distribution and sales: it may lose it's winning edge by lacking FDA approval. Finally, look back at the market itself and define your primary and secondary markets. Analyses, financial and functional, should tell you if these are the correct markets for you. Make sure that you aren't choosing a market, because you don't know what other market to choose. It's surprising how many strategic plans never tie functionality to markets. Markets are chosen simply because they are thought to be "where the money is." In outlining your market, you might find that there are other markets that may already make you a stronger competitive force, because you need not expend capital, only modify order-winning strategies such as a stronger marketing campaign or better technical support staffing. Upon analysis, management might find that margins may also be stronger. Remember that when you develop and initiate a strategic plan, the bottom line is your #1 factor. Winning marketplace tactics come from being brutally honest with yourself and from doing your homework in order to best address the four steps outlined above. Helpful Idea List For your convenience, you'll find a partial list of examples of order winners and qualifiers. For any particular market or industry, each may be defined differently. In the automotive industry, price may be the qualifier, and in a petroleum distillation process, price may be the order winner. UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 90

A Guide To Strategic Planning o o o o o o o o o o o o o o o o o o o o o o o o

Delivery (speed or reliability) Quality (accuracy) Defect Rate Design Technical Support Technical Support On-Line Brand Name Web Site Web Site with e-commerce Price R&D Certification Capacity Warehousing Sale Reach Distribution Product performance Product reliability Aesthetics Range of Products Depth of Inventory Location Lead Time One Line Ordering

NOTE: Price ... Where margins are low price is a order winner.. Where margins are high price is not an order winner. Customers in high margin items are just looking for a range to fit their needs and will purchase if it is "competitive."

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A Guide To Strategic Planning The Followthrough Strategy is More Than the Boss's Business - It's Everyone's Business! Chris Ogden Strategy is more than the boss’s business – it’s everyone’s business! Though few would admit it - even privately – many CEOs often feel ill-equipped to lead strategy within their organizations. Our corporate culture breeds an expectation of the all-powerful and capable CEO. After all, getting to the top isn’t easy. It’s natural for employees to assume that “the boss knows where we are going”. It’s his or her job isn’t it? But we should not be surprised that CEOs feel insecure about strategy. Most CEOs, especially those new to the job, have arrived at the top of their organizations after years in operational roles. When your mental horizon has been days or months, it’s hard to reorient thinking to work in terms of years or even decades. Business strategy is also too-frequently regarded as something that is done by exclusively by the CEO or the Board, often behind closed doors. Well, some strategic moves – such as planning a takeover – are clearly sensitive and should be treated as such. Of necessity, they need to be considered by the Board because only the Board is paid to take the kinds of risk associated with takeovers. But developing a long-term vision for the organization and planning the markets, products, geographies and internal capabilities that can achieve that vision needs a different kind of process. Long-term thinking is beyond the capability of any one person. And CEOs and Boards are often disengaged with real customer-facing issues. The solution for the CEO is to stop seeing strategy as something only he or she can devise. Yes, they have to make it happen. But they don’t have to have all the UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 92

A Guide To Strategic Planning ideas. Real understanding of what works, and what doesn’t is gleaned at the coal-face: dealing with customers, making manufacturing processes work or streamlining internal processes. And “what works” – or doesn’t – keeps changing with the fast pace of business. Good ideas about future products or services are not always generated in the Boardroom. Strategy is about making money – not today but in the longer term. Understanding how the current business model works is the starting point for strategic thinking. And finding new sources of high-margin revenue is a continuous process needing creative input from all levels. Strategy is therefore everyone’s business. Keeping the company growing and profitable is everyone’s business. Leaders need to sketch – to “paint pictures” of possible futures – but also to engage key players to contribute. To make it all happen, CEOs need to develop the skill of leading and facilitating strategy setting rather than believing that they must devise every aspect themselves.

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A Guide To Strategic Planning Where Will Your Strategy Guru Lead You? Chris Ogden When faced with the challenge of strategy development, Chief Executives or strategy teams will often turn to the latest ideas coming from the established strategy consultants. There is nothing wrong with this. The top strategy houses are always refreshing their strategic methods. Sometimes they strike it lucky and devise an approach to strategy that takes the market by storm. Those seeking guidance on how to structure a strategy process will find much to inspire them in these methods. But a note of caution is also due. It’s as well to understand the mindset and approach preferred by a particular guru before engaging them to help you. Strategy experts are only human, and each has developed an approach to strategy based on certain concepts about how it is best performed. They are also in business to make money. There’s nothing wrong with that but it also means they would like to use and refine a particular method again and again; that way, the process gets refined, becomes more repeatable, and is capable of being facilitated by more junior (and less expensive) consultants. All of this means that gurus are not the same. They have their biases and preferred approaches. Over the last ten to fifteen years a number of different strategy methods have become popular. Here are some that show how firms differ in their approaches: Strategy as Mindset In the early 1980s, Kenichi Ohmae championed the concept of the "strategic mindset" – the idea that strategy is a state-of-mind that needs to be fostered within the management and staff of an organisation. Strategy exercises are important, but they, too come and go. What’s more important is that the organisation thinks strategically – both today but as part of the established "way of doings things". Organisations that build this strategic mindset capability are more able to thrive in a turbulent world because they have learned the capacity for continuous reinvention.

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A Guide To Strategic Planning Strategy as Business Reengineering Business Reengineering burst on the scene in the late ‘80s. Michael Hammer and James Champy were widely seen as its originators. Its premise was that the way the business is currently organised – its processes – may not fit the purpose of the business. The processes are neither effective (they are not the right ones) nor efficient. Business reengineering forces the enterprise to reorganise how it achieves its business purpose. At its best, reengineering can also encourage the enterprise to rethink the business it is in. Strategy as Business Model Innovation The dot-com era forced many companies into radical rethinks about the business they were in and how it could be changed. Innovation was the keyword. "Bluesky” and "clean-slate" thinking were encouraged. The idea of a business model was a concept at a level above and beyond business process redesign. Business model innovation asks more fundamental questions: what business are we in; what business should we be in; and, most importantly, how does this business make money? Gary Hamel’s book “Leading the Revolution” exemplified this approach. Strategy as Vision This approach asks long-term questions of the business. How do we see ourselves in ten years time? What will our business environment look like then? What are the big transitions we need to go through to create this future world? Strategy as Vision accepts that the future is, ultimately unknowable, but helps us paint alternative futures (using scenarios) and estimate the likelihood of their occurrence. This approach works well when long-term change is foreseen and where big shifts in internal competences might be necessary to achieve the vision. Strategy as Scorecard In the late ‘90s, measurement was king. The Balanced Scorecard was its strategic expression, and Kaplan and Norton were its prime exponents. Strategy as Scorecard placed the strategic emphasis on tracking and measuring progress to a strategic goal. The goal could be expressed as a balanced set of measures or Key UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 95

A Guide To Strategic Planning Performance Indicators (KPIs). Kaplan and Norton deserved recognition, in part, from pointing out that KPIs needed to encompass more than simple financial indicators. Customer and relationship measures were examples of these wider measures. Strategic thinking came from identifying the KPIs that were relevant to the business and charting a course around maximising their value. Since the ‘90s, Kaplan and Norton have evolved the method to provide a richer strategic approach using "Strategy Maps". Strategy as Value-Analysis and Creation This approach to strategy emphasises a deep analytical approach to answer the question: "what makes a business operating in this sector successful?" If this can be understood, and my company can be benchmarked against the best performing businesses, then areas where we are not performing well can be isolated, analysed and improved. Such a deep analysis stems from econometrics and one of its prime exponents was John Kay in his book "Foundations of Corporate Success". These examples of alternative approaches to strategy are not hard and fast. There are overlaps – for example between Strategy as Vision and Strategy as Business Model Innovation. But they do illustrate the many different starting points from which strategy work can commence. The important point for companies thinking about how to get started in strategy is to understand where your strategy advisor may be coming from. Inevitably, strategy consultants have their preferred methods. So, ask your potential advisor to describe their thinking about strategy and what practical approach they might recommend for you.

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A Guide To Strategic Planning Strategic Planning - 3 Areas to Focus on When Doing Your External Assessment Terry Bass When creating a Strategic Plan for your business, understanding your external market is essential to creating that roadmap for where you want to go and the things you need to do to get there. By having a clear view of the market, you can more accurately define the Opportunities for your business as well as the Threats. The 3 important areas to focus on is the 1. Customer - who are they? 2. Competition - What are they doing? 3. Trends - Where are your customers, your industry and the economy headed? Large companies spend big bucks hiring consultants to research these areas. Those in the smaller arena often have a good "feel" for these areas, but every organization needs to clarify it for better understanding. The first area is knowing thy customer. Should be easy, but the better you understand who they are, the better you can service them or expand your business. So WHO are they? Can your customers be defined by age group, gender, income, education level, their living situation (owners, renters, live in condos, etc)? Are you dealing with people in a specific income level, geographic area or family situation (kids, parents living with them, married)? You probably have a range of people, but who spends the most dollars, who do you connect with better and maybe close business with more? Who do you want to do business with? We obviously would all like wealthy clients that drop big bucks in our lap, but if that's not who you are doing business with, who is it now and why is a group you might want, NOT doing business with you. So understanding who you are dealing with now is essential for understanding who you want to deal with in the future.

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A Guide To Strategic Planning The clearer idea you have of exactly what makes up your customer is a HUGE plus for planning the future of your business. You will then make more focused, effective decisions about advertising, changes in the business and direction of where you want the business to go. Also understanding what you're customers are buying is important. Are they buying a solution to a problem? Are your clients buying a benefit, an evening out, something that strokes their ego? The product is almost immaterial, understanding why your product is purchased is essential. Truly effective marketing can then tap into that emotional reason rather than the practical. A good example of this is car advertising. They don't typical talk of technical specifications; they show images of zooming down the highway, driving over rocky terrain in the great outdoors, and families piling out of the mini-van to a soccer match and so on. Being clear from the customer's perspective of WHAT they are buying and what that means to them emotionally gives you strong leads to how to continue to position your business. The second area is the Competition. It's always fun to beat your chest and boast that your competition sucks. But guess what, they're probably doing the same thing in their meetings! So do an honest evaluation. What does the competition do better than you, as good as you and worse than you. Make a chart and really understand it. Understand that your clients/potential clients may not be making charts, but they are figuring those answers out on their own. If you are offering the same product/service at around the same price, WHY should they do business with you as opposed to your competition? And please don't say we provide better service! Because everybody says that. Prove it. Go deeper. Define exactly what it is that makes your service different from the other guy. Is it something that really will make a difference to the client? If it is, yell it out from the rooftops. If its not, you need to look at your business and your competition a little harder. The third area that is critically important to creating a strategic plan is for your business to understand the trend. Understanding trends is like surfing. You have no control over the wave, but the skilled surfer sees it, prepares for it, sets themselves up to catch it and then rides it keeping in mind that it wont be forever UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 98

A Guide To Strategic Planning and a new wave is out there. So it is with trends. The business that understands not only how to ride the wave, but be prepared for the next one, will have a winning strategy. As mentioned previously, there are 3 trends to watch. Your customer. Their needs and interests. Sometimes you can predict it and sometimes you can't. There is huge business graveyards filled with companies that didn't get this. Some understand it. One business that comes to mind is Tyco, who produced the beanie baby. They ran with it, but didn't expand the business to such an extent that when that fad tanked, they were able to survive the change. An example of what has been problematic has been some units in the breakfast industry. Bagels and the market for that exploded throughout the country in the early 90's. Bagel shops were competing on opposite street corners in some areas. No more. So understanding where you fit in to not only the customer's present needs and interests, but where it will fit in their future is essential to guiding your business to the future. Your industry. Where is your industry headed? Right now, in 2007, the entire housing industry is in flux. Are you in a business or position that is vulnerable to outsourcing? Are you in a business that can benefit from organization's outsourcing? Having a good idea of where your industry is headed puts you in the driver's seat. Lastly, the economy. Is your business affected by that? Do you have the ability to make yourself invulnerable or at least protected from that? An interesting company is called the Darden Group. They own Red Lobster and Olive Garden chains as well as two others. Darden Group has a plan that answers the economy's swings. They position (price, variety of food, etc) themselves, so that if the economy is doing well you'll see people who now have extra money in their pocket will go to their restaurants. If the economy starts going down, you may lose that clientele who may stay at home or at least eat out less frequently, but the restaurants food and environment are still nice enough that you will gather in the people that may have been previously eating at higher priced venues, but now still want to go out, but not spend as much. So as far as they are concerned, the tables get filled. UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 99

A Guide To Strategic Planning So is your business economy proof? If not, what do you need to do to make it more so? These 3 areas are essential to understand in building your future. The clearer your answers are to the questions poised the clearer roadmap you can make for your organization. And if some assumptions were incorrect or the future changes beyond our expectations, that's ok. You are focused and aware of the challenges and better positioned to make what changes you need to ensure your success. By being clear in where both your Opportunities and possible Threats exist, you can better ride the wave creating a healthier, stronger future for your business. The essential essence of a successful Strategic Plan.

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A Guide To Strategic Planning Strategy Review In order to support businesses with achieving sustained profitable growth, UK Business Advisors have put together a simple but effective strategic review aimed at companies with over 5 people. There are nearly 4 million businesses in the UK. Every year nearly 400,000 are formed with nearly as many failing. Most businesses stay small or plateau at a certain level without being able to grow. So what distinguishes a successful business?

o o o o o o o o

Knowing your strengths and weaknesses Having targets in place Plan covering all aspects of the business Effective measurements in place for the business performance Ensuring that product and service offerings meet the needs of the market Ability to create a competitive edge Efficient, clear and consistent business processes Inspired and driven leaders

Getting back to your core competencies and strengths in order to focus and build upon them is where we can work with you to provide you with that competitive advantage and get back to that vision you had for your company. In its’ simplest form – where you are now, where do you want to be and how are you going to get there through an action based plan.

o o o

Do you have a shared vision for the business, or has it been forgotten? Are you struggling with growth or profitability issues? Would you like to make a step-change in revenue and profit growth?

This strategy review could help your company make a step change in its performance, productivity and profitability. Typically a medium sized business has developed a basic business platform. However, it may not yet have a full team of effective leaders or a clear strategy for growing the business.

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A Guide To Strategic Planning Our review will develop an agreed Business Development Proposal, which will identify the key steps needed to move the business forward, such as:

o o o o o o o

Vision & Mission The Marketplace Sales & Marketing Operations Resources Finance Actions

What do we actually do? Plan: Agree the intended outcome in advance with the MD and senior management team. Request some preparatory work prior to the strategy day. Assess: A review of where your business is at now within finance, sales and marketing, operations and resources, where you want it to be – your vision, how you are going to get there given the market conditions. What are the business issues and how can they be resolved. What are some of the key performance indicators and measures to put in place to measure success? Feedback: A Business Development Proposal is facilitated with the management team. Typically this will be up to half a dozen initial objectives for immediate development and implementation.

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A Guide To Strategic Planning What happens next? We complete the Business Development Proposal outlining:

o o o

Prioritised actions Expected benefits Costs of our involvement to make this happen

Typically this will entail a couple of days a month helping to drive the business forward. In the early days our involvement may be more intensive but this very much depends on what you want to do.

To apply for a strategic review for your organisation, please get in touch with us via any of the contact details below.

UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 103

A Guide To Strategic Planning Author Profiles Terry Bass has worked in businesses large and small, ending his corporate life as National Training Manager in 2005. Since then he has founded his own company Chadons Resources. Terry brings his experience, enthusiasm and straightforwardness to supporting individuals and their careers/businesses. As seen in his articles, Terry often brings a unique or imaginative (and oftentimes humorous) perspective to the task at hand to help people focus and be motivated in improving their business, their careers, and their lives. Chadons offers services including coaching, speaking, goal setting/achievement and skills development designed to make real changes for real positive results. http://www.chadons.com/ | [email protected] Chadons Resources | 2337 W. Winnemac Avenue | Chicago | 60625 Phone (773) 769 1992

Shane Busby, BSc. MBA, is the principal of the firm. Shane has 16 years of experience in providing advice and services to individuals and organizations in the healthcare sector. Prior to opening the Firm, Shane served 12-years with the Ministry of Health in British Columbia in both consultancy and management positions. He has specialized knowledge in services and programs for seniors and has participated on several provincial committees and working groups dedicated to healthcare policy, strategy, finances, and legislation. http://www.busbyplans.com | [email protected] Busby & Associates Consulting | Vancouver | BC | Canada P h o n e ( 778) 338 5325 | Fax (778) 338 5326

Art Consoli held eight corporate positions with Johnson & Johnson before starting his first business. He went on to build over twenty businesses from patents or ideas or from businesses others couldn't make successful. These ranged from starting a veterinarian drug company to taking over a steel fabricating company to developing the first manufactured home subdivision to qualify for every private and government assisted mortgage program in Arizona. He also did ten workouts for lenders and owners; the last was a $30 million, 300 employee, precision parts manufacturing plant that made parts for the auto industry. Consoli's unique background and skills allow him to speak and write about how someone with limited experience can do a self-evaluation which will let him decide which business opportunity is best, how to evaluate opportunities and gain control over the one which offers the greatest potential and then manage that business to success. http://www.businessstrategyartconsoli.com | [email protected] Art Consoli | P O Box 9666 | Scottsdale | AZ 85252 Phone/Fax (480) 949 7125

UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 104

A Guide To Strategic Planning David Goldsmith is President and co-founder of MetaMatrix Consulting Group LLC. Over the past 20 years David has founded or co-founded nine businesses ranging from distribution to manufacturing to advertising. In 1999, David sold his 14-year-old Syracuse, NY based Image Promoters, Inc. which he co-founded in 1986 to Proforma Associates, a 400-location franchise. He has been a consultant to various industries including telemarketing, high tech, logistics, retailing, hospitality, tourism, and manufacturing. Working with business owners, and corporate and mid-level management, David rapidly creates strategies that win in the marketplace. www.metamatrixconsulting.com | [email protected] MetaMatrix Consulting Group LLC | 8248 Barksdale Lane | Manlius | NY 13104 Phone (315) 682-3157 | Toll Free (888) 777-8857 | Fax (315) 682-0509

An author, speaker, and consultant, Terry H. Hill is the founder and managing partner of Legacy Associates, Inc., a business consulting and advisory services firm based in Sarasota, Florida. A veteran chief executive, Terry works directly with business owners of privately held companies on the issues and challenges that they face in each stage of their business life cycle. Terry is the author of the business deskreference book, How to Jump Start Your Business. He hosts the Business Insights from Legacy Blog at http://blog.legacyai.com and writes a bi-monthly eNewsletter, "Business Insights from Legacy eZine." http://www.legacyai.com | [email protected] Legacy Associates Inc | 8223 Championship Court | Lakewood Ranch | Florida 34202 Phone (941) 556 1299 | Fax (941) 929 2976

Connie Knieper resides in the south eastern Michigan with future plans to migrate to the north and live in her dream house, a log cabin. She enjoys spending time with family and friends, and she loves many outdoor activities, such as boating, gardening, fishing, hunting, snowmobiling, or just relaxing in the hammock reading a book. Connie describes herself as an optimistic, enthusiastic person. She has very high expectations of herself and is extremely organized. When she is given a task or responsibility she gives wholeheartedly to it and aggressively works to accomplish it. Her greatest strength is developing and organizing plans to achieve goals. Her greatest weakness is being too direct. http://www.goalachievements.com/ | [email protected] Goal Achievements, L.L.C. | P. O. Box 751 | Lakeland | MI 48143 Phone (734) 645-0599 | Fax (734) 954-0094

Nick McCormick is a principal of Be Good Ventures, a management consulting company and author of "Lead Well and Prosper: 15 Successful Strategies for Becoming a Good Manager" http://BeGoodVentures.com | [email protected] Be Good Ventures LLC | 102 Patrick Henry Dr | Downingtown | PA 19335 Phone (610) 518 2126 | Fax (610) 518 2127

UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 105

A Guide To Strategic Planning Chris Ogden assists organisations in devising, leading and managing strategic change. With an established reputation for original ideas, he has been a keynote speaker and an invited think-tank contributor. He has facilitated management group strategy workshops for large multinationals in many European countries, the U.K. and in North America. Chris is also a qualified executive coach with a specific focus on the development of the necessary skills and confidence to lead strategic change. http://www.business-next.com | [email protected] BusinessNext Ltd | 16 Laurier Road | London | NW5 1SG | U.K. Phone +44 (0) 20 7428 0502 | Mobile +44 (0) 7836 317 419

In 1989 Dr. Rebecca Staton-Reinstein discovered $1.2 million of annual waste in a major US company where she worked and implemented a successful solution to eliminate it. What was ground breaking about her initiative was that no one else had analyzed the existing data and discovered the story that they told. For over 20 years "Dr. Rebecca" has been helping companies as a manager, leader and consultant discover their own stories and create improved business value and results from them. http://www.AdvantageLeadership.com | [email protected] Advantage Leadership | 633 NE 167th St., Ste. 1015 | North Miami Beach | FL 33162 Phone (305) 652 3466 | Fax: (305) 652 3866

UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 106

A Guide To Strategic Planning Acknowledgements A big thank you is worthy of www.ezinearticles.com without whom this publication would not have been possible. Through searching their archives of material relating to strategic planning, it was possible to identify and contact all the authors that have made contributions to this ebook. For further articles on strategic planning, please visit http://www.ezinearticles.com/?cat=Business:Strategic-Planning

UKBA Business Advisors Ltd | White House | 66 Altwood Road | Maidenhead | Berkshire | SL6 4PZ Phone 0870 420 2756 | Fax 0709 280 8482 | www.ukba.co.uk | [email protected] © UK Business Advisors Limited is registered in England & Wales, company number 0528 8512. No unauthorised use of any of the contents of this ebook is permitted - All rights reserved 107