"Throw out the strategic plan! It’s no good now that the economy has tanked."
That’s a natural reaction to a strategic plan built on assumptions about the future which may no longer hold true. For many businesses, confidence in a company’s continued steady growth and profitability probably cannot be sustained, at least for the short term.
So what’s a company to do? Trash the culture of planning, hunker down in a survival mentality and just wait for tomorrow’s mail to bring in some orders? No, just the opposite: difficult times scream out for planning. The benefits of initiating or revisiting a formal planning process in today’s economic environment far outweigh the costs.
Take back control
This business is yours to manage now and in the future. A clear, definitive plan based on today’s market realities returns control to the company instead of leaving it to the whims of market forces. In tough times, people need, expect and respond to the structure that a well thought out plan provides.
A client recently lost a major customer, representing almost 50 percent of its business. The management team didn’t just throw up their hands in despair. They sat down and developed a plan to recapture the customer while increasing revenue from other markets. The plan involved hiring a specialist in an emerging market and enhancing relationships with the lost customer. Additional customer service offered taking over inventory replenishment with automatic ordering. The customer came back.
Going through the hard work of preparing a strategic plan develops organizational confidence in the future. When crisis hits a company, the future looks foggy. No one knows where to go or what to do. Planning helps management make the difficult decisions and design ways to implement them. When everyone knows what the end goal is, what their responsibilities are, and what others are expected to do, a sense of camaraderie with a can-do attitude arises. Employees realize they are not alone, and they have the resources and skills needed to succeed.
Fear drives the current economic downturn. People don’t know what to expect, with more negative announcements arriving daily. Employees fear losing their jobs, no matter how reassuring the company leadership may have been.
Having a definitive strategic plan tells the organization what’s going to happen and what results to expect. Though the news may not all be good, minimizing uncertainty is a big plus. Reporting progress against the plan develops confidence in leadership and lets people share in both the good and bad news. A sound strategic plan is an excellent communications tool.
Build the team
Working together, discussing alternatives and having input in tough decisions bring people together. Through a successful planning process, barriers between departments fall and old grudges are laid to rest. With equal participation and understanding of all points of view, a stronger team emerges, committed to each other and to making the plan happen.
Planning focuses effort on the organization’s principal goals. With quantifiable measures to track progress in achieving the plan, employees know how to spend their time and resources. The knowledge of the plan and its priorities permeates the organization.
In nearly 30 years of helping organizations develop their plans, we have seen hundreds of success stories. Exploiting new markets, enhancing manufacturing efficiencies, reducing costs, superior customer service, offering unique technologies and creating new products are all initiatives that have propelled significant profitable growth. Discussions in a planning environment established priorities, husbanded resources and laid out the program to implement.
The strategic planning process looks where the company is today, where it wants to go and how it’s going to get there. This oft-told mantra actually works and works well.
No one knows the business as well as the people running it. However, an outside facilitator has experience in the process and can push gently for greater in-depth analysis and thinking. A facilitator keeps the participants on target, while ensuring the result has the acceptance of company leadership.
Planning should be an exciting, creative, constructive process that brings out the best in an organization. The process forces managers to face difficult decisions, make commitments and have a sound roadmap for the immediate future. It should be a positive experience with participants eager to contribute, criticize and be criticized, while investigating new approaches for success in today’s business environment. Understanding of and confidence in the future are powerful motivators.
Given the urgency and volatility present today, the resulting plan may not be perfect. However, it will provide direction and work priorities with the ability to make mid-course corrections. It is ever so much better than no plan at all.
Good luck and please plan your future.
Charles Krause is the president and chief executive officer of Krause Consultants Ltd., a management consulting firm, and owner and managing partner of the Milwaukee Wave professional indoor soccer team. He is the author of "Fastrack Business Management: The Minute MBA."