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5 Lessons for Growing a Business
Originally published: 12.01.08 by Theo Etzel
"If you don't know where you want to go, then any road will take you there," says the rabbit to Alice in Disney's "Alice in Wonderland" when she was faced with a directional decision. The same can be said for business leaders trying to plot the future of their companies. If you don't have a plan, than your business may not go exactly where you might have intended had you thought it through. Outlining a plan and a vision of where you want to go is critical to the success of the organization. A strategic plan for the organization is a key document if, and only if, it is a living, breathing document to be used frequently.
A few years ago I made a business plan. I put a lot of effort into it. It was pretty, had colorful charts, nice graphs, lots of writing and predictions. For the life of me I don't know what I did with it. Frankly, I never looked at it again. It's gathering dust somewhere like dinosaur bones in a museum. I felt great when it was done. But it didn't do
When you prepare a plan and then find that circumstances dictate a revamping of that plan, you might become anxious. It is natural to feel torn between sticking to the original plan no matter what and making adjustments as market conditions change. However, over the years I have come to understand that adjustments must be made to various parts of a plan since the world around us changes constantly. Parts of the plan will stand the test of time and parts need to be re-evaluated and re-engineered to respond to those changes around us. If you make a plan and put it on the shelf, you end up with a fairly expensive (it's your time, energy and missed opportunities) dust collector as I did.
So what exactly is a strategic plan? While no two plans will ever be assembled or viewed the same, the nature of a strategic plan has common ground. It is the large, overview of the business and a projection of your desire for its future. In business parlance, it's the 40,000-foot look down on the business. In other words, it's the big picture. On a timeline this would include the past, the present and the future of the company—where we were, where we are, and where do I see the business in years to come. Not surprisingly the "were" and "are" are easier to define than the future. My previous articles refer to my "muddy crystal ball," and that would hold true here. Just how far into the future you want to project comes down to personal choice and judgment. I might not feel comfortable looking 25 years ahead, but five to ten years out may be more practical. Again, since this is to be a process and not a snapshot document certain aspects of the plan will change as time goes by.
Strategic plans are the bigger goals of the company and involve references to time frames, money, resources, personnel, location and other core features of a business. For example, you may want your company to expand the retrofit/replacement market over the next two years. This would be stated in terms of expected dollar increases in years one and two, projections of personnel needed to handle the increase in volume, and benchmarks to see if the plan was on the expected track.
Note that this type of plan does not go into the specifics of how this is to happen. The how should be developed by the key persons responsible for the execution of the work. An owner of a football team may want to go from cellar to stellar in a couple of years as a goal. The head coach may pick the strategy for any one game e.g., an aerial attack or a ground game. But it is typically the special teams coaching staff that is tasked with developing the play-by-play execution of that plan.
Neither the strategic plan nor the tactical plan can be developed in a vacuum and devoid of each other. They must go hand-in-hand and require constant communication and feedback to be effective. This is truly the time we are working on the business and setting aside the in the business focus. It is also some of the most difficult time to justify to ourselves if we do not understand the importance of future planning.
We really need to start calling this strategic planning to indicate the ongoing nature of the refinement and work-in-process that this becomes.
How often you review the overall strategy you have laid out is a function of the speed of change around you. You might agree that we have seen rapid market changes in the last six months. Therefore, the review process to check if you are still headed down the right course and that your goals still fit the market conditions needs to occur more frequently than in fairly stable times.
In this case, the size of your company is not the determining factor for success. Rather, it is the ability to adjust your plans—both strategic and tactical—to adapt rapidly to the market conditions around you. I'm not advocating abandoning all plans at every change you encounter, but corrections in a timely manner may make the difference between survival and extinction in the quickly changing environment in which we live. In their book, "It's not the BIG that eat the SMALL… it's the FAST that eat the SLOW: How to Use Speed as a Competitive Tool in Business," Jason Jennings and Lawrence Haughton make a great observation that the traditional thinking that big companies always dominate small companies is quickly going by the wayside. Their contention is that fast, nimble companies can outperform the slow-to-react ones. Seeing trends ahead of others and having the willingness to act upon those trends will lead to winning the race. They believe, as I do, that change for the sake of change or, speed without direction is reckless and hasty. The direction comes from having a strategy in place and goals set.
For the planning process to be effective, communication is essential. This is not a hand of cards in poker that you play close to your vest. Sharing the strategic plan with your team is critical to having everybody understand where you want the business to go. This facet of the process can be one of the hardest to master, because the message needs to be repeated regularly for new people who come on board. They won't know your vision for the future of your company. Even veterans of your organization need to be reminded of where you want to go. In times of rapid change, people want to know the plan to get a sense of security. I've struggled with this myself, and I am increasing my efforts in this area as well.
The old adage of "what gets measured, gets done" is also true in the strategic planning process. A plan with benchmarks and a review of where you are relative to your benchmarks leads to better decision-making. More than likely this involves budget versus actual numbers or key performance indicators.
During the review process you may need to adjust these numbers along with the strategic plan. Also, this is a very timely way to measure the tactical plan and its effectiveness in heading toward the strategic goals. The road from where you are today to where you want to be is not always straight. In fact, I believe that the straight road would lead right over a cliff and into the abyss. It's the curving road that navigates around the mountain's edge. Adjustments in the plan are necessary along the journey.
I've been discussing strategic planning for business, but that same high-altitude view can be used for your personal life also. Step back and look at where you want to go, what you want to be doing, and by what age you see these things coming to fruition. Certainly, as business owners and leaders, these personal goals can have a direct impact on the strategic planning of the business. The reflective nature of this at the personal level can have a life changing impact on people.
Like almost anything, starting a planning process is the hardest part. Keep in mind that most people are hungry for direction. The key is sitting down away from the office and talking about the future and what that can look like. Write some of these things down and then ask the question: "What do we have to do today to position our company to look like that in the future?"
It's a working-it-backwards process in the beginning and then a check and balance process along the way. The adjustments become easier to understand as the benchmarks are met, and missed. Be aware that the strategic planning process will, inevitably, lead to personnel shuffling. You may find that not everyone is meant to follow your plan. Companies can not afford to have people pulling in alternate directions from the overall vision of the leadership. While this is especially true in tougher economic times, it should be practiced in good times as well.
Strategic planning needs to be an activity, not a static display on a shelf. Sharing the message and vision is the leader's job. Everybody needs to know where they are headed.
Simply remember the three R's as the key to making a strategic planning process live in your company: reviewing, refining, and repeating the plan, all in a timely fashion. Just saying it will be so does not make it happen. Implementation of the tactical and practical "how to" components is what makes the strategic plans come to life and allows goals to be more than mere dreams.
Theo Etzel is the CEO of Naples, Fla.-based Conditioned Air. He is a seasoned business executive and passionate entrepreneur who believes in providing the highest level of customer care, services and products to his clients. For additional information, visit www.conditionedair.com.
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