When done effectively, strategic planning is among the most potent competitive weapons a company can have. Planning helps everyone better understand the departmental and companywide objectives they're developing, while the plan itself keeps everyone on track. If you don't have a plan, employees won't know where they're going, let alone how they're supposed to get there. Here's a round-up of definitions, tips, and techniques to help you get the most out of your strategic-planning efforts:
Goals and strategic planning. No doubt your company has long-term goals. You aspire to be #1 in your market, or the quality leader, or the low-cost provider. You seek 20% sales growth or 10% earnings growth every year. You want to make the Fortune 500 - or the Inc. 500. The strategic plan shows how you're going to get there over the long haul. It positions the company in the marketplaceand establishes a context for the annual plan.
Annual planning. The annual plan maps out this year's objectives. The process followed by Interroll Corp. is pretty typical. Managers gather for all-day sessions. They review the previous year and assess the external environment. They examine the company's strengths, weaknesses,threats, and opportunities (SWOT analysis) and map out five strategic objectives. Thencomes the nitty gritty: detailed sales forecasts, account by account and month by month. Marketingplans and budgets. Budgets for cost centers. All the numbers get assembled into what districtmanager Martin Clark terms a "planned P&L by product class for each month" - in other words, amonth-by-month picture of what's supposed to happen during the year.
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Using the annual plan. Don't let it gather dust. The point of planning is to get everybody readingfrom the same page - which means they'd better be looking at that page week after week and monthafter month.
Copyright © 1999 Open-Book Management, Inc.