Time to look at where the company's headed

We have arrived at that sometimes dreaded time of the year when companies go through their strategic planning activity.

Many businesses will conduct this as an internal exercise while others will bring in a facilitator to lead the process; still other companies fail to plan at all, allowing market conditions to direct their future.

Strategic planning forces management to look at:

• Where the company is.
• Where the company wants to be.
• Develop a plan to get there.

A side benefit of the strategic planning process is improved communication as each department presents its view of the next year.

Strategic planning typically begins with a review of the corporate mission and vision statements to see if they need to be modified or if they truly reflect who the company is, what it does and clearly identifies the customers served.

If the mission and vision are clear and accurate, the strategic planning process can begin.

Each department within the company needs to develop goals that fit into the SMART acronym:

Specific: The goal is precise and stated in performance terms.

Measurable: Achievement of the goal can easily be calculated and determined.

Achievable: The goal is a stretch but still attainable.

Relevant: The goal is linked to performance requirements of the company.

Time-bound: The goal identifies a concise time frame for completion.

Here are some examples:

• By the end of the second quarter of 2008, we will increase the advanced engineering services, as demonstrated by a 10 percent increase in value added revenue.
• By Sept. 30, 2008, we will increase sales of our extruded plastics operations, as demonstrated by a 15 percent increase in sales revenue.
• By the end of fiscal year 2008, we will significantly improve the accuracy of the budget process, as demonstrated by 90 percent of our functional areas being at or under budget.

Using the SMART methodology enables each department to identify their stretch (but achievable) goals for the next year, how those results will be measured, when the results will be attained, and how these department goals support the grand strategy of the organization.

Force field analysis

Following the identification of goals, some organizations go through a force field analysis to identify the driving forces required to achieve those goals and a look at the restraining forces that could prevent those goals from being accomplished. By looking at the force field, contingency plans can be drafted that include methods for increasing the driving forces, decreasing the restraining forces, or crafting a blend of both.

Action planning starts

From here the action planning takes place where individual activities will be listed, the person responsible for those tasks will be identified, and dates for completion will be targeted. Here is where accountability comes in and a systematic review process is created.

Individuals identified as responsible for certain activities will be required to report progress. Those updates are typically provided each quarter during the next year.

If goals are not achieved, an analysis is conducted to determine what may have changed. If the goal is important, adopting a modified strategy may be the solution.

Diligence required

Quarterly reviews require responsible parties to be diligent about the strategic planning process.

Strategic planning is vital to the continued success of a business by focusing the internal resources of the company on the goals that will insure sustainability.

Taking the time necessary for strategic planning is important to every business, make it important to yours.

Bud Gayhart is interim director of the Center for Innovation and Business Development at UW-Whitewater.