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Sunday, 26 April 2015

Looking at Your Strategy? Keep it Really Simple!

Over the years working with many leaders in a wide range of businesses I have seen many strategic plans started (and in some cases completed) with varying success.

Generally the leaders and their teams struggle with what they see as the complexity of the process and how to bring it all together into a coherent working plan.

Many of these plans are based absolutely on financial information most of which is historical with somewhat hopeful projections to support the plan.

The fact is that the strategy, certainly in its early basic phase can be almost entirely narrative withe minimum of financial information save perhaps the intended objectives.

It starts with vision or the dream and in the case of an SME that is Invariably in the province of the leader.

The question is, what does the leader visualise the business looking like at the end of the planning period, say in five years time?

Will it, for example, still generally be in the area of activity or is it likely to add or be something new?  Will the same functions and people still be there?  Will the business still be in the same premises and if not, what will they look like?

Remember, if you don't know where you are going any road will take you there so define the end point objective, that bright shining light that you intend to achieve.

It is useful at this stage to do a SWOT analysis of the current starting point together with a PESTEL (political, economic, sociological, technological, environmental and legal) all of which will give a good view of the starting point for the business and the likely effect of changes over which we have no control.

We may indeed have no control over the consequences of any changes, but we can still anticipate and change course if necessary.

A small diversion at this stage. Notice the word "intend", because the end point needs to be objectives not goals or, worse, targets.
It is a good idea to determine three or four (no more) major objectives that together will take us to the agreed end point.

At this stage we ask the big question, not how do we achieve the objectives but rather, what will we need to do in order to achieve them?

This is not just semantics; that question will offer routes by which we will achieve the objectives.

Please do NOT confuse the strategic planning process with budgeting. My old friend, the late Brian Warnes used to define budgets as limp projections based on uncertain evidence. What we are doing in strategic planning is setting objectives which we in intended to achieve.

A useful technique here is Ishikawa or the fishbone.   If you envisage the skeleton of a fish then the head is the objective and the ribs are the various contributing business functions.

For example, the objective may be to double the size of the business over the next five years.  Decide on the functions of the business that will affect the change such as marketing, sales, technical, finance and so on, and then decide what changes are likely to achieve this specific objective.

By the way, so that everyone is involved make people accountable to a champion of each objective and ensure that the tactics which will flow from the process are carried out in a timely manner.

To recap, start with the vision, decide on an overarching objective split into no more than three or four contributing factors, determine the tactics for each and then cost them all to check viability.

Aim to describe the strategy on one side of an A4 that can then be communicated to everyone in the business. That should answer the question of “where are we going?”

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