Strategic Planning Is More Than A Business PlanPublished by Dennis Duitch, CPA, MBA, Advisor, Mediator
Our Firm has offered strategic planning services to our clientele since the early 1980’s, with consistently effective results. As the pace of technology quickens and as competitive forces increasingly threaten business margins, the importance of such planning has become more critical than ever — both to the simple maintenance and protection of existing business entities, as well as to growth expectations.
It is important to understand that Strategic planning is a process. The focus of the process, in simplest terms, is about only three things: (1) deciding WHERE to go, (2) deciding WHAT you intend to do when you get there, and (3) deciding HOW to get there. Moreover, in today’s volatile business environment, strategic planning is an ongoing process applied for the purpose of regularly assessing both perceived opportunities and potential threats, in order to optimize the rewards and minimize the risks of any business endeavor.
“WHERE to go” and “WHAT to do” are typically visualized in terms of GOALS which need to be clearly definable and time-targetable. For some of our clients, goalsetting is the outgrowth of pure imagination; for others, it evolves from common sense extrapolations of present circumstance. However, once defined, such goals need to portray a clear image of just what is to be achieved. “Strategic vision” is the phrase often used to describe this picture —which then serves as the starting point and control mechanism to ensure that subsequent actions remain in sync with intentions.
“HOW to get there” involves delineating a specific path for the application of tactical steps, with reference to OBJECTIVES (“get there” by what means? in what time frame? by what measurement process?) as opposed to the underlying activities which will effectuate the Plan.
We utilize strategic planning to deal with a longer-term picture of WHERE, WHAT and HOW, with a commonly utilized time horizon for this process of five years. But, in order to determine whether “getting there” ever in fact occurs, it is necessary to also develop a realistic time frame with measurable parameters to monitor progress and accountability. After the strategic vision is in place — and deemed to be realistically achievable — the typically most important component of a strategic plan then becomes a business plan.
A formal business plan deals with operational issues, like WHO, WHEN and WHICH, and is typically developed as a written document presenting analytical description along with financial projections to clarify expectations and map the business or project’s direction –in other words, the people and procedures to make the Plan happen. The time frame for a business plan may be as short as three months, but one year is the norm.
While business plans are most often prepared in connection with seeking financing (often when a business has already become stagnant or is in trouble), our firm promotes regular business projections and formal plans to serve as a management tool for better steering the business toward long-term goals — as well as optimizing the potential for short term profitability and risk avoidance.
A well-designed strategic plan can be conceptualized as analogous to a well- developed movie, where the vision of goals and objectives are the author’s concept and time frame manifested in a basic script outline — all about WHERE, WHAT and HOW a story is intended to unfold. The business plan in this analogy becomes the distinct acts and scenes where characters and their actions are developed — the WHO, WHEN, and WHICH details. Of course, it is ultimately the performers and technicians (viz. personnel and procedures) who execute this “plan” to present a better or worse picture of the original concept, but without a map of where they are supposed to get to, any potential for an optimal result (e.g., academy award) is minimal.