Strategic Planning – Part 4

Key Definitions of Strategic Planning

Strategic

In the dictionary, the word strategy has to do with war and deception of an enemy. In management, strategy has to do with responding to a dynamic and sometimes hostile environment in pursuit of a service mission. Thinking strategically thus means being informed and consciously responsive to this dynamic environment.

Planning

Strategic planning is planning because it involves intentionally setting goals (choosing a desired future) and developing an approach to achieving those goals.

Fundamental

Because it is impossible to do everything, strategic planning implies that some decisions and actions are more important than others. The most important decisions have to do with what an organization is and why it exists; the most important actions have to do with what it does. On the other hand, strategic thinking is deciding on and carrying out the fundamental or most important actions.

Disciplined

Discipline highlights the relationship between the different steps in strategic planning. Mission depends on environment; which actions are most important are determined by assessing strengths and weaknesses, opportunities, threats, competition and barriers. Strategic planning is also disciplined in that there is a sequence of questions typically raised to examine experience and test assumptions, gather and make use of information about the present, and try to anticipate the future environment the organization will be working in.

Decision Making

Strategic planning is based on decision making because in order to answer the questions raised in the structured planning process, choices must be made. The plan ultimately is no more, and no less, than a set of decisions about what to do, how to do it and why to do it.

Long Range Plan

Long range is the longest time period for which it makes sense to make plans. The time period varies from organization to organization: the Social Security Administration is planning for the retirement of today’s babies sixty five years from now; high tech computer companies are putting out new products every six months.

Operating Plan

Operating plans are the detailed action plans to accomplish the strategic goals laid out in the strategic plan. An organization should have operating plans for each major organizational unit and correspond to its fiscal year. In addition, an organization may need operating plans which correspond to business cycles or longer, or cycles that differ from the fiscal year. Each is important.

Strategic Management

The concept of strategic planning implies managing, day-to-day and month-to-month, in a way that focuses on the most important decisions and actions. This requires the kind of longer-term perspective and priorities that result from a strategic plan.

This concept also incorporates the assumption that the environment is always changing: thus, strategic management requires ongoing reassessment of current plans in light of long-term priorities.

Inclusive Process

An inclusive process means that people who have a stake in the work of your organization participate in the planning process in an appropriate way. This does not mean that every client, funding source, volunteer and staff member must come to a joint consensus about what to do. It does mean that these interested individuals have a chance to be heard by the decision makers.

 

Strategic Thinking vs. Strategic Management

Strategic thinking means asking, “Are we doing the right thing, and at the right time?” It also requires three things:

• Purpose or end–a strategic thinker is trying to accomplish something
• Understanding the environment, particularly of the opponent, or opposing forces, affecting and/or blocking achievement of these ends
• Creativity in developing effective responses to the opponent or opposing forces.

As you might guess, strategic management is the application of strategic thinking to the job of leading an organization.

Finding the right mix of management and staff to carry out the task of strategic planning is the first step to the realization of planning success. Once you have the team in place constant communication will be the foundation the team will use to build the foundation. A breakdown in communication will crumble the process.

www.brianhazelgren.com

Source: The Business Game Plan, by Brian Hazelgren

Strategic Planning – Part 3

Sports and Business Have Many Similarities

Coaches wouldn’t dream of starting a season without one. Athletes would be lost without one. Fans would not enjoy the season as much if their team doesn’t follow one.  The media would have a heyday with teams that would not discuss a form of one. Quarterbacks would look like scared rabbits without reading one.

What is it? Well to put it as simply… “it” is a game plan. A game plan that is built upon a foundation of “we can win, and become the champs if we follow what we have planned for.” I refer to not just having one game plan, but employing several game plans throughout the season. A game plan is a great tool to have, and an even greater asset if followed and updated regularly.

During my younger years as an All-American athlete, I listened to my coaches talk about being the best, the champs, whether in our conference, the state, or even the country. They would even go as far as setting individual goals for certain team categories. I would listen with great interest to the goals they had established for the team, and how we would work together to achieve those goals. The coaches, our management team, would spend countless hours reviewing the skills and talents of the players, and lining up the right mix of skills with the positions. They would review films over and over and over, then come up with what they felt as a long-term strategic plan for the season. Then each week they would review the scouting reports and come up with a tactical plan for each opponent.

I learned several influential lessons from these “sculptors of boys and men”. These lessons have stayed with me for decades. They were built upon the foundation my parents established for me at an even younger age. One of the more powerful lessons is the concept of coming up with a solid, workable plan; following it; and then being flexible enough to revise it as you go.

Each new season of competition brought with it the notion of being classified as the very best. My old college friend and teammate Steve Young was a master of the game. He was always an inspiration to the team. He was a natural leader and was the perfect example of always striving to be the very best he could. I will be forever grateful to Steve for his competitive nature, as well as his example. He would study the game plan relentlessly at the beginning of the season. He would follow it because he trusted in those that had done their homework and put together a plan of action. And then he would update the plan every week as he faced a new opponent. If he thought changes needed to occur he would speak his mind—keeping the team as his number one focus and not himself.

Steve followed the team game plan and inspired those around him to stretch themselves and to reach for new plateaus. If someone was struggling he would lift them up to his level of performance. He was a fierce competitor on the field, and still is a fierce competitor off the field, both in sports and in business.

As a youth it didn’t matter if it was football, basketball, baseball or track, I couldn’t wait to get the season started. I would work my tail off trying to make my skills and talents pay off while in the heat of battle.

When I advanced to the collegiate ranks, even more challenging circumstances would present themselves and I had to figure out how to make my skills and talents work for the betterment of the team, as well as for myself.

I enjoyed a very successful career as an athlete. I was named All-American in three sports. I won three state championships. I broke five records in track and field—some that stood for 20 years. I have played on a national championship team. I had a chance to play professional ball in two sports. And through it all, I can say that it was the planning that made much of these things come to pass. Not just planning, but following the plan and making changes along the way.

Think about it for a minute…a pro football team does not stay with the same game plan week in, week out. The game plan must be modified and improved upon as a new opponent is faced, or as a back up athlete comes into the game to take over for an injured teammate. However the original plan is not tossed out, it is simply revised and improved upon.

So it is with developing a game plan for business. The original plan is what gets things moving. Markets change. Technology changes. Setbacks, even serious ones happen. New contracts are awarded. New industries are created. Natural disasters occur. Partners go off the deep end and spend wildly. Many things happen in business that you did not plan on, yet seem to crop up anyway. That is life. Yet each of these instances requires a flexible approach, a game plan that can be modified when needed.

Therefore, formulating a strategy is as important in business as it is in sports…

As a young man, I grew up participating in athletics and I really wanted to be the very best at everything I did. This meant focusing on an end result, but having a plan of action to get me there. I had a passion for pushing my mind and body to new levels, and doing my absolute very best to come out the victor. This required a certain game plan that always needed to be updated, tweaked, and often revamped into something entirely different than what was originally planned out. This “game plan” actually made me stay focused when things became a little fuzzy, or even not clear at all.

As an athlete, I participated in four sports: football, baseball, track and basketball. I was very blessed with the physical makeup to excel in these sports and was at the top of my game for many years. The fascinating aspect of putting together a game plan was that although I thought I had it figured out in the beginning, I soon realized that my plan needed to change each week. As I faced new opponents, the coaching staff would prepare a plan of action that was tailored to beating that particular opponent. Which meant that the original game plan at the beginning of the season had to be updated to meet a new set of circumstances head on.

Just as in sports, business is run by a set of plans that needs to be updated and kept alive in order to achieve maximum results. So then, this becomes what I will refer to as the Business Game Plan. This plan of course has to involve the Head Coach, Assistant Coaches, Players, Equipment Managers, Offensive and Defensive Teams, a Special Team, Cheerleaders, the band, the crowd and the media.

If you are not a sports fan–not to worry. All of this will make sense very soon, and hopefully you will understand my madness in developing this section with a sports twist, and learn to have fun with it.

www.brianhazelgren.com

Source: The Business Game Plan, by Brian Hazelgren

9 Principles of a Highly Successful Business Plan – Part 1

I once overheard a conversation between two entrepreneurs that helped me draw a correlation and make an observation. One of them stated… “Writing a business plan is about as fun as getting a root canal!” The other entrepreneur said, “I’ve got one even better, it is about as fun as sitting down for a long conversation with my mother-in-law.”

Sometimes I have to agree that it can create a little discomfort, but the process of writing a business plan can be highly rewarding if you follow a simple system and the proper outline.

You may have heard an investor or a banker make the statement: “I’m sorry, but before I make a decision, I will need to see your business plan.” If you are looking for funding a business or an idea, a business plan today is as essential as a business card and an e-mail address.

Writing a business plan is time consuming and requires discipline. I have written over 130 business plans. I teach a course at the University of Utah on Business Plan Development, and I have written four books on this subject. In addition, I have read through hundreds of plans over the years. With all of this familiarity in business plan development, I am still thrilled to begin the process all over again and create a magnum opus, or work of art.

There are definitive pitfalls to look out for and some simple things to include in your plan to help you achieve your goals. I want to walk you through nine key principles that are basic steps in getting funding. When these principles are observed, I have seen millions of dollars raised for business ventures. Follow them carefully as you plan your venture and you will be far ahead of your competition.

Principle 1 – Convince yourself that proper business planning is an absolute necessity.

Your business plan is the heart and soul of your operation and is one of the most powerful tools you can provide to potential funding sources. It explains the four most important things they will look for in sizing up the opportunity…namely your Management Team, your Financials, your Marketing Plan and your Product or Service.

Your plan should outline the market potential and how your product or service will fit in to take a piece of the market. It communicates how well you have researched the opportunity, and lays out a road map from beginning to end…or at least for the next five years. It should also tell the potential sources of capital how you plan to capitalize on your strategy and create sales.

Next, your plan should clearly explain why your team is qualified to drive the business to success. In other words, surround yourself with a team that investors will be comfortable with. Finally, a good convincing of the potential of the business will exist with your Financial Projections. This is a key area of focus and will require forecasts for you to show to financiers.

Principle 2 – Understand why you need a business plan.

“Those who fail to plan, plan to fail.” This old adage is not only profound and true; it is a simple process to follow. When you leave for a trip, you wouldn’t just hop in the car, drive to the airport, book the first flight out that you see when you get to the counter, show up at a destination with no lodging plans, no car, no money and no sense of what you would like to do while you are there…wherever there may be; without a sense of how long you would like to stay, people you would like to meet, places you would like to visit, etc., and then still be able to enjoy your trip.

The same is true with planning your business. Have a plan. Commit your plan to writing. Put some serious thought behind it. Do your research. Come up with a compelling strategy that will make others want to participate with you…whether they are potential investors or key employees. Explain how you will compete in the market, and what your critical path to customer acquisition is.

If you don’t have a plan, don’t plan on getting any funding. It’s that simple. Besides, you will be much better off by going through the process of developing a business plan. Two important things will occur in the process: 1.) You will better understand your business and will probably appreciate it more, and 2.) You will know if there really is an opportunity out there for you to snatch up your own piece of the American Dream.

Principle 3 – Take charge of your entrepreneurial life.

Think of it as a way for you to take control of your own destiny. A written business plan is evidence of your initiative. It shows that you have the discipline to focus your energies on an important project. Your plan will illustrate how you will achieve progress and growth, solve problems along the way, and accomplish your goals. Your business plan is the foundation of your vision and will allow you to structure your ideas into reality.

Principle 4 – Lay out a master blueprint.

A set of detailed architectural drawings is highly important to a builder…the same way a business plan is to an entrepreneur. Your plan will list the set of detailed procedures in building your business. It will also determine the details that will be used in reaching your objectives. Creating and reading from a set of blueprints in building a structure takes time and effort. Architects cannot neglect a single point of interest in developing the blueprints. If they do, the potential for disaster is certain.

Likewise, without a business plan the potential for disaster is very high. Your business plan is literally a master blueprint when you are developing a business. Blueprints for a building and a master blueprint for your business are very much alike. Isn’t it interesting that a local municipality will not even allow the footings to be dug if a set of blueprints is not first approved? Funding sources view loaning money or investing capital the same way and take the position of, “Come and talk with me after you have your plan in writing.”

Finally, each section of the blueprint is like a section of your business plan. Although they may be completely separate, they eventually must all tie together in the end to demonstrate a beautiful masterwork.

 

 

Principle 5 – Communicate your master plan to members of your team.

The business plan is a concrete statement of purpose that allows you to communicate to your associates and potential investment sources a step-by-step agenda for reaching your goals. Some portions of the business plan can also be used in training and coordinating meetings. You can even incorporate elements of your plan in explaining to your employees what their role is and how they will be accountable as you make the business function successfully.

The primary idea here is to have as many team members as possible involved in the process of crafting your business plan. After all, there may be several things they come up with that you probably never would have thought of. When your team is involved, they will be silently committing their energies to the success of the business. Involvement = Commitment, and Commitment = Success. This is a powerful way for you to find a greater degree of success, and keep your team enthused about the prospects of succeeding at all costs.

This concludes Part 1 of a two-part series on developing an investor-ready business plan. Part 2, further explains the principles that are critical in crafting a business plan that gets results.

www.brianhazelgren.com