3/12/2014

The Elements of Powerful Strategic Planning

If a company is lacking direction and reacting to market changes, a strategic plan provides a sense of cohesion and concentration.

By Jeffrey T. Bowman

If a company is lacking direction and reacting to market changes—economic, competitive, or technological—a strategic plan provides a sense of cohesion and concentration. The plan can bring unruly and out-of-sync functions and departments into alignment and help to focus on sharing actions to achieve a unified goal.

There are many precise procedural models of how to develop and execute a strategic plan, and they often are detailed—or, depending on your perspective, excruciatingly detailed—at what could be described as highly granular levels of specificity.

Following are some brief comments on the elements of strategic planning. These points are not comprehensive or complex; they are selective and presented from a high-level view that reflects experience from decades of strategic planning, each one highlighting areas that deserve special emphasis. This discussion is not a step-by-step, how-to guide. Rather, it is what to consider and keep in mind for a powerful result.

Goals – Start with the End in Mind

According to the Association for Strategic Planning, the first best practice criterion of a strategic plan framework is using “a systems approach that starts with the end in mind.” That means establishing your goal first. Existing detailed mission and vision statements may provide the initial, general planning goals for organizations that have them in place. A vision statement, such as “We will be the U.S. leader in managing automobile claims and, overall, we will hold the number one or number two position in every international geographic market in all of our related businesses,” becomes the unifying platform for the plan. The vision becomes the destination and dictates behavior. Once the overall goal is established, the strategic plan can begin creating the supporting subsidiary goals.

Research – Planning the Plan

The research for a strategic plan can include a huge number of variables, and an early required decision can determine what the essential areas are for investigation. Financial performance, products, economy, the market and competitors, political and regulatory changes, technology (assistive and disruptive), talent management, climate, dealings with clients, and the company’s culture are just some of the potential areas to dig into.

Taking an “outside in” approach is an important element of the research process. If they are available, it can be enormously helpful to review third-party studies to have a better understanding of how industry and stock analysts—and in some cases, academics—view the company, its operations, and market position. This usually applies to larger companies, where these types of reports are more regularly and easily obtainable.

Input – Before, During, and After

Continuous feedback should be factored into a strategic plan at all of its stages, from when the need is first put forward to after the final version lands on desktops or in email inboxes. Throughout the process, iterations should be circulated to different levels of the organization for comments, and the individual or team building the document should be open-minded about incorporating changes from any level. Astute insights, creative ideas, useful information, and helpful suggestions can come from anyone regardless of their tenure or rank within the company.

Analysis – Rigorous and Objective

An objective analysis often can be corrupted by bias. The analyst may state not what the research and analyses actually show but, instead, what they want the results to be. People often are too willing to write what they think leadership wants to see. To overcome bias, it is better to have a team conduct the analysis rather than just one individual.

Transparency – Share and  Socialize at All Levels

A cultural change for many companies is sharing strategic plans and goals throughout the organization, even down to the most junior employee levels. This broad sharing is still exceptional; it should be more common among many more organizations. Plans often are kept within senior executive ranks, and when plans are not generally known, employees at middle or lower levels tend not to care what other areas of the organization are doing. Simply put, there cannot be shared support of goals if the goals are not shared. Sharing must occur across business units, departments, and functions, and at the regional, state, or country level. Some organizations even go beyond broad internal sharing to providing basic versions of strategic plans to individuals outside of the company (such as to shareholders, bankers, and industry and stock analysts) so they understand corporate priorities and have context for the company’s decisions and actions. The plan is usually provided externally by putting it on the organization’s web site via downloadable or emailed PDF files or through printed hard copies.

Urgency – Act Now and Act Faster

When developing and later implementing a plan, it’s important to act with a sense of urgency. Have specific goals with fixed deadlines—the first deadline being the delivery date for the initial draft. Create a firm date to share the first iteration of the plan, share it with direct reports and team members to set expectations of accountability, and meet that deadline.

Unambiguity – It Can Never Be Too Clear

Plans have to be specific and unambiguous. If you’ve stated a supporting goal or tactic and it’s open to different interpretations, then it cannot be acted upon. You must clearly define what needs to be done so it is easily understood by anyone reading the plan. There must be a general understanding of all the goals and the actions that must be taken to achieve them.

Execution – Real and Achievable Goals

Be realistic about the plan’s execution, recognizing there are limitations on what can be accomplished with available resources and fixed time limits. Be certain that goals derive from the mission and vision, they are sensible and achievable, and execution over a single or multi-year period can be reasonably accomplished and is not unreachably aspirational. The plan can be thought of as a script with many parts; everyone is assigned a role, and it is one that they should be able to perform.

Accountability – People Know Their Responsibilities

A quotation attributed to former British Prime Minister Sir Winston Churchill (but never confirmed) suggests that “however beautiful the strategy, you should occasionally look at the results.” Often the biggest issue with a plan is translating it into executable goals that can be achieved so people then can be held accountable for meeting those goals. Business units, teams, and executives are held accountable for the results that should come from the plan, and the outcome of their activity is benchmarked against the goals they were given. Be certain people understand what they are accountable for and create financial incentives that reinforce goal-oriented behavior.

Freshness – Never Let It Get Stale

Plans must always be dynamic and kept current; you cannot have a changing environment and a static strategy. A strategic plan is a living, evolving document. Note how recent your plan is. A plan may not need major revisions every year, but it should be revisited and updated annually at the least.

Strategic planning should be considered as essential as insurance and similar for several reasons: It offers protection against challenging circumstances; it can help ensure the survivability of the organization; and it should be renewed annually.   



Jeffrey T. Bowman was president and CEO of Crawford & Company, an independent provider of claims management solutions. He has been a CLM Fellow since 2012.

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