It is time to reflect on another year gone, and time to think toward the future. In particular, time to think about the goals, objectives and desires for your company. To some, this may be a chance to start with a clean slate. To others, this may be a daunting task filled with troubling evaluations. Either way, the task of planning for your company’s future is essential. There is no better time to conduct the task than now — as we head into the New Year.
So what is your plan? The answer to that question lies solely with you. Only you know what you want for yourself and your business. Only you know where you want to go and the key obstacles that might impede your plan. Each plan — each strategy — is a case-bycase process customized to the individual entity. Yet, to guide you in formulating your plan, at a minimum, the questions below must be considered, pondered, addressed and mastered.
Who are you?
This is the starting point of formulating your upcoming strategy — self evaluation. This may seem to be a simple question, but it goes deep to the heart of the matter. You only can get your business to “Point B” if you thoroughly know where you are and who you are at “Point A.” So ask yourself — more importantly, answer yourself — the following:First, who are your customers? Where are your customers located? What do they look like — sizes, revenue, locations, requirements, and industries. Are they, and the industries that they are in, growing or in decline? do you serve markets horizontally, vertically or in combination? do your customers exhibit loyalty to your company?
Second, who are your suppliers? Where are they located? What do they do well and what do they do not well? What are their future plans? Who do they serve? Are they committed to you and are they congruent with your company’s current and future needs? (Or, are they just more suppliers so that your company can boast of having 173 different providers?)
Third, who are your vendors? do they fit your model and do they service you well? Are they sufficiently capitalized and can they morph with the changing industry?
Fourth, who is your competition? does your competition perform the same service as your company? do they serve similar or different geographies, industries and customer segments? What do they do better than your company; and what do you do better than your competition?
Where do you want to go?
This is the fun part of the process — the part where you look to the future. So, look ahead — where do you want to be and what are you going to do when you get there? Literally, on your company’s horizon (for instance, in three years), what are you and what is the company doing? What does your company look like? How many employees, how much in revenue and how many offices? What do those offices look like, where are they and what are the employees wearing when they get to work at that time? Seriously, you can only get to where you want to go if you know precisely where you want to be.How do you get there?
You (think) you know who you are and you (think) you know where you want to be at a future time. But how do you get there? You set your action plan and the associated action steps. Therefore, as you think about your overall plan, divide it up into smaller time segments. At each of these time periods, have measurable goals in place so that you can monitor your effectiveness along the way. Of course, with the future there are unknowns. Yet, if you have adequately identified yourself, your strengths and weaknesses, and carefully projected your future station, you will be better equipped to address those uncertainties.The formation of your strategy should be to identify what your company will do and what it will not do over a period of time in furtherance of identifiable, measurable goals. Strategy is a set of integrated choices about your company’s objectives, scope and competitive advantage. In other words, strategy involves choices about what the company will set out to accomplish and for whom, where it will play and how it will play.
But a strategic plan is not sustainable unless there are trade-offs with other positions the company could take. Trade-offs arise for three reasons. One, there may be inconsistencies in the company’s image, reputation or history. Two, different company activities require different configurations, employees, skills, infrastructure and management. Third, trade-offs occur from limitations within the company’s coordination. Trade-offs are critical to strategy. They create the need for choice and purposely limit what a company offers. The essence of strategy is in choosing what not to do. Without trade-offs and without focusing on the appropriate choices for your company, there would be no need for choice and thus no need for strategy.
Now What?
You have “found yourself” and you see your company’s future, and now it is time for another difficult task — implementation.The first step in implementation is to define and to communicate the company’s unique position and strategy to the others in the organization. This is an ongoing battle as some in the organization will want to compromise, relax trade-offs and imitate competitors. Therefore, maintaining focus and installing discipline is essential to your company’s strategy as you will then have a mechanism in which to guide employees in making day-to-day decisions without abusing your time or the time of company managers. Equipped with a clear strategy, articulated and communicated throughout the company, employees will know how to act and react to challenging scenarios without having to ask those above.
Second, it is likely that a well-thought-out plan will identify areas of deficiency in the company. These deficiencies may involve key drivers to the business so in order to reach “Point B,” these areas must develop accordingly. New policies and procedures, new checks and balances, and even new departments may be needed. So, to effectively implement the strategy — to reach your goals — these areas must be addressed timely and comprehensively.
Third, your plan may require funding in order to reach your objectives. If this is the case, then it is vital that your company is in good order. Consult with lawyers to review your corporate governance, your policies and procedures, your investor relations and your capitalization. Also, use the law and your lawyers to gain competitive advantages and to exclude competition legally. Work with your accountants and advisors to solidify your accounting and financial practices. Ensure that your recognitions, your capital structure, your quality of earnings (and costs), and sales practices are accurate and that you can articulate the results to potential lending sources. Of course, if it is money that you seek, be sure to create a funding plan that suits your company, your needs and your strategy. Remember, it is not money that you need. It is the right money that you need.
Lastly, it is necessary to benchmark and monitor your company’s execution of the plan. Are the people effective? Are the goals attainable? do the parts of the organization “fit” in order to provide company uniqueness? Strategic continuity is not static. The company should continue to improve operational, productive and financial effectiveness while strengthening the core drivers that fit the company’s activities and uniqueness. In fact, a well-formulated and communicated strategy should make your company’s continual improvement easier and more effective.
Strategic and action plans for companies are as varied as companies. Whether the plan is to grow a certain measure by a specific amount in a specific timeframe, to exit the business at a future time for a certain return to your investors, or to alter product or industry entry based on required results, each company should be driving toward some end. Though the plans may be different, companies share one thing in common — the absolute need to devote time and energy to the strategy and planning process. The process is time-consuming and may be an unwelcome reality check. But the rewards afforded to the company and employees by the resulting focus are real and measurable. Failing to conduct the process, however, will lead to another year of daily “fire drills” and seemingly endless “wheel spinning.” So this year, instead of choking on stale fruit cake and wondering where the year went, take the time to lay out a plan for your company. That way, next year you can enjoy looking back at how your company improved over the year and how you are progressing along “the plan.”
