RSM Resources

How long would it take to find a copy of yourcompany’s strategic business plan? Your answer may tell how well that plan isbeing used.

Despite the best intentions and the time that goesinto crafting a strategic business plan, experts say it tends to be underused.A true working document can help an organization focus on important issues,maintain management consensus and adapt to marketplace shifts.

Typically, a strategic business plan is theblueprint that helps bring an organization’s vision to life over a three- tofive-year period.

While the contents may vary depending on the needsof the organization, most strategic plans include the following categories:

• Market and competitor analysis. This section provides an opportunity to better understand the current state of your industry, analyze key business issues, define target customer groups and demographic trends, identify new markets to be tapped, and segment marketing strategies to existing and potential customers.
• Environmental analysis. This section evaluates the external environment in which your business operates. Most businesses have little, if any, influence or control over economic, demographic or political trends. Understanding the environment and making informed strategic assumptions will allow you to develop a plan that incorporates these factors.
• Mission statement. By definition, your organization’s mission should not change from year to year. However, an annual review allows you to either reaffirm the mission or assess possible future challenges. Significant internal and external changes could, in fact, alter an organization’s mission.
• Assessment of critical risks and problems. This section should review the most critical risks facing your business in the near term, such as competitive pricing pressures, unmet sales projections, unanticipated costs or difficulties in finding qualified staff. Balance this assessment with a series of strategies for addressing the identified challenges.
• Major strategic initiatives. A major outcome of the strategic plan is a well-defined understanding of major strategic initiatives in which your business will invest. These could include major product development, targeted research and development, or people-development initiatives. This step allows you to compare how well your company’s significant projects mesh with overall business strategy.

Though these steps give the strategic businessplan a strong start, remember that an effective planning tool must stayflexible to meet a changing business landscape. For example, an initialindustry analysis may be good for several years in a stable field, but the riseand fall of competitors requires constant attention. Ideally, experts say, it’simportant to revisit the business plan quarterly — or at least every six to 12months — to validate original assumptions, chart progress made against goalsand ensure that budget projections for key initiatives are on track. Sincethese indicators are vital to the health of your business, a regular businessplan checkup can help your company identify and guard against unforeseen marketor competitive afflictions.

Who should be involved in the planning session?
Since this business tool is most effectiveif it focuses on strategic, big-picture issues rather than routine tactics theplanning team should involve senior management from important line and stafffunctions in your business. The team should designate a lead sponsor, or "champion,"who is responsible for plan development, maintenance and updates. Since the CEOis ultimately responsible for plan execution, experts say the sponsor roleshould go to another senior leader who is willing to facilitate the planningand review process. To ensure success, the chosen leader needs both theinternal credibility and the clout to make it happen.

To make the process more objective, you may wantto consider working with an external facilitator who can help steer thediscussion and enable the CEO to participate rather than lead. A third partycan also help suggest solutions to issues — such as sourcing or technology —that come up in review sessions, and keep key leaders updated on progress andobstacles.

Making plan modifications
When the planning group gathers to conducta review of an existing strategic business plan, the management team shouldfocus on the organization’s overall direction. There are a number of steps toconsider during this review process, including:

• Understanding, as a team, plan accomplishments and successes. This gives the group a chance to recognize what went right during the initial plan period.
• Reviewing assumptions on external factors. In this discussion, the plan’s original assumptions about the external operating environment should be challenged and validated for accuracy. Depending on your organization, these could involve regulatory, industry, economy, technology or market issues. For example, a transportation-based business might need to reassess its business strategy in light of rising fuel prices that may not have been anticipated in the original strategic plan.
• Examining critical internal issues. This discussion should focus on important internal changes that have occurred since the business plan was developed. For instance, if a highly valued employee who was integral to the success of a scheduled product rollout has left the company, the plan should be modified to reflect how the business will successfully address the issue.

Post-meeting follow-up
Whether your organization has good habitswhen it comes to strategic planning or you’ve experienced a "painpoint" that inspired another look at your strategic plan, follow-up is keyto continued success.

• Schedule the next planning session before you leave this one, regardless if it’s three, six or 12 months away. Make sure everyone on the planning team knows they are expected to participate in the next review and ask that they put it on their calendars now.
• Assign individual responsibility for tracking and recording key performance measures, and set expectations on the method and frequency of reporting.
• Market the planning process to your employees by sharing major goals and finding creative ways to help them get involved with bringing the strategies to life.

Strategy is even more important when competitionfor business heats up. It’s important to take the time to ensure you’re headedin the right direction.