More about Strategic Planning

More about Strategic Planning

If we don't change the direction we're going, we're likely to end up where we're headed" - Ancient Chinese proverb

It's STRAP season, so let's talk some more about it ....

When we spoke about Growth, under "Grow YOUR Business" (see http://www.boundlesscoaching.com/Article%20Grow%20your%20Business.htm), we listed the strategic element as one of the pillars on which you want to build your company. A business without a robust strategy is like a boat that leaves port without a predetermined destination - you can have the most sophisticated navigation technology, but if have not determined what your ultimate destination is, you may end up lost in the middle of the ocean (surrounded by sharks).
The strategy of the a company determines the destination, and partially, how to "get there". Based on the strategy, then the tactics can be developed and executed.

There are some aspects of the strategy that are critical, the strategy MUST BE:
- Clear
- Executable
- Funded
- Sustainable
- Consistent
- Flexible
- Global if required

And it must be supported by:
- Clear and consistent Tactics
- Commitment (senior team and "the rest")
- Accountability
- Execution (early Wins are crucial as they fuel the execution of the rest of the strategy)

The process to develop, document and execute a company's strategy is called "Strategic Planning". The strategic planning process occurs yearly, and the prior year(s) strategy and tactics are reviewed, analyzed and updated as required. Sometimes companies make big changes in their strategies from one year to another. That normally happens for three reasons:

1) A new CEO was hired (it's true! it happens!)

2) Someone or something is causing the company "to suffer" (for example, a competitor is taking market share) and decline will continue unless the company changes direction

3) A major disruptor (like a new technology: MP3, Laser, WiFi,for example) creates true new opportunities for new products and services which did not exist before, causing many companies to change strategy to encompass, or fight the disruptor

So, let's discuss this in more detail, specifically around the impact caused by competition. Strategic Planning is one of the most critical processes for any company. Sometimes we think that "STRAP", as we call it, is only reserved to large companies. The reality is that, a solid strategy builds the infrastructure on which the entrepreneur can build any company. Strategies are not rigid, and, in fact, they should be adjusted yearly, if the initial strategy proves inadequate. Yes, you will hear that STRAPs span over three to five years, but hey, at the speed this world is moving, you better keep an eye on what's going on out there. In a year, for example, competitors may launch new products that could threaten your strategy, or they could drop their prices dramatically. An acquisition could drastically modify the rules of the game. For example, let's say that, before the acquisition, your company holds 43% of the market, and the other 57% is shared between two other competitors, let's call them A and B. So now A acquires B, and, overnight, your company went from largest player to "first runner up". How do you feel about that ...? At this point, you may want to, or may have to change your strategy. PC makers went through that process some time ago, when Compaq was acquired by HP, Gateway by ACER, and Dell still holding strong, but losing market share.

Have a Good Business!

Hector

hector.barresi@boundlesscoaching.com
http://www.boundlesscoaching.com/
Phone: 775-200-2864