One of the greatest assets a business can possess is a strategic plan. When developed, researched, and executed correctly, it can catapult a business to greater success. The challenge for most business owners, however, is in understanding how to create one that is successful. The process is often times turned into an overly complicated one, requiring so much effort that by the time the plan is complete, the year is half over, the business environment has changed, and the process needs to start all over again.
The function of a strategic plan is to communicate to your entire organization who you are, where you need to go, and how you are going to get there. One of the most effective ways to communicate this vision is through a strategic plan. When implemented correctly, it focuses people on the priorities that will drive your business ahead of the competition. It sets the foundation of corporate culture.
Available to business owners are plenty of planning tools that promise great results. They take you through a series of cumbersome steps and questions, most of which make you lose sight of what you originally intended. Usually, these programs have questions like, "Determine the top 5 external forces which will have a significant impact on your businesses pricing over the next year, 3 years, 5 years." The result of analyzing such questions is typically an overly formal document that no one is inspired to follow.
Fortunately, the process doesn't have to be that complicated. With the proper focus, drafting a business strategy is easier than you would think.
Focusing on the Customer
The secret to creating an effective plan is keeping it focused on the most important, fundamental part of your business the customer. Any plan that does not have an analysis of who buys your products and services is destined to fail.
Understanding your Business
Once you have a firm understanding of who your customer is and what their needs are, stepping back and taking a broad eye view of your organization is a critical next step.
Most business owners focus too closely on the day-to-day tasks and not enough on developing an overall business strategy capable of leading their organization to success.
To really drive business strategy, you must gain a better understanding of your entire business by studying all its components, people, and environments.
Setting the Foundation
Once you have a solid understanding of all the people and circumstances that make up your organization, the next step is to set your foundation. Strong and flexible, an organization can withstand most any force and keep on track to where they are going. The foundation of any good, effective, easy-to-understand plan needs to answer the following questions:
1. Who is your target customer? Are they different than the customers you are presently attracting? Where are the customers heading over the next few years? How are their purchasing characteristics changing?
2. What do your customers need/desire from your business?
3. In the customers' eyes, are you fulfilling this need? If not, what needs to change?
4. Who is your competition? What are your competitors' strengths?
5. From the customer's point of view, what does the competition do better than you? What do you do better than the competition?
Measuring Goals
Once you've analyzed your customer, you'll have a better understanding of what needs to be done to keep them happy and loyal. The next step is to set goals to achieve this. For them to really work, the goals need to be measurable.
Look around and you'll find that many companies have missed the mark on setting attainable goals. With missions like "To be a great place to work and a great place to shop", how would they ever know when they've actually achieved their goal? How can they possibly quantify a great place to work and shop? How can they rally the troops around such a vague concept?
The key is to set goals that work.
General Electric's former chairman and CEO, Jack Welch, was a master at this. The goal he communicated to the entire organization was this:"GE will be the number one or number two in each of its markets. If it can't be number one or two, then it will exit those businesses." With this statement, he accomplished a very important thing he implemented a strategy that everyone in the organization could grasp and understand and work towards.
If you want your business to succeed, then set definitive goals.
Making it Work
For a strategic plan to work everyone in your organization from the president to the managers to the maintenance workers must be championed with executing it. The plan needs to be articulated in a very simple way for the entire organization to understand. Having everyone in your business doing exactly what it takes to bring your business success will drive it to be a front runner.
The time and effort you put forth today will serve you well into the future. The process does take hard work, but the outcome can be dramatic and accelerate your business growth to soaring heights.
Phil Masiello has been President of VALUChain Associates, LLC since 2004 and can be reached at pmasiello@valuchain.com.
Disclaimer: All information on this site is provided for informational purposes only! By no means is any
information presented herein intended to substitute for the advice provided to you by any health care or other professional
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