A strategic plan is a guideline to a strategic goal that considers the macro and micro business environment. Begin planning by understanding the goals of the primary stakeholders – the CEO/President… perhaps key shareholders … and key employees. What do they want the business to look like in the next 3-5 years? Quite often in mid-sized businesses, their goals are constrained by historical boundaries. If the business has grown by 3-5% during the past decade, they may be satisfied with similar growth in the future – without regard to factors that may dramatically affect the Company’s performance.
During the past two decades, the world has become more global. Business relationships that would never have been considered are now routine – even for those mid-sized, middle-America companies in – e.g. Muncie Indiana. Such relationships are possible because of the Internet, improved communications and information processing, and other technological advances not even conceived 20 years ago. Today, business strategy is limited only by the CEO’s imagination and the ability of the organization to execute in a highly competitive global environment.
The challenge for strategic planning today is to break the bonds of history and tradition, and consider the global environment as your market. Consider that both resources and competitors may not be in the next town, but rather 6,000 miles away – not China, but perhaps in Africa… or the Philippines… or? As a business owner, you may never have considered it possible to compete with the low cost manufacturing in China. Today, however, we have low cost 3-D printers that may eliminate the need for a 90-day logistics pipeline required of a China connection.
During the past few years, smart phones and tablet computers have revolutionized business processes. How have you considered how these processes can impact your business?
As you strategize, consider not only the competitors in the marketplace, but also the vendor resources that may be available. Communications and appropriately shared data bases may now allow joint ventures or partner relationships that previously were impossible. Complimentary product lines, such as capital goods and service organizations, may combine resources to seamlessly meet the customer’s needs.
Strategic planning is often referred to as ‘blue sky’, which alludes to the unconventional thinking. To prepare an effective ‘strategic plan’, you have to establish measurable goals and accountabilities. To do an effective plan, you also need to associate financial results with expected actions. Without financials, there will be little credibility…Good luck!.
CFO Insight LLC