Business Strategy: Part 3 - From Strategic Planning to Success, The 10 Essential Ingredients
About the Author:
Paul Wilton (editor)
CA with degrees in commerce, accounting and information technology. Paul worked overseas in the “Big 4” accounting firms and served as a director at Audit New Zealand before setting up his own consultancy. Author of A-Z of New Zealand Business Law, Paul has over 20 years of experience as a business owner and consultant. He joined FBA in 2004 and is totally committed to providing excellence in quality and value to our subscribers.
“I love it when a plan comes together”
Colonel John "Hannibal" Smith from the A-Team
In “Revitalising Your Business before it’s too Late”, we examined the need for strategic planning and the best time for injecting new ideas and life into your business. “Forming your Own Destiny”, set out the structure and format of the plan itself and provided some tips for putting it all together We now move on to the most important part: Turning the plan into action so that you actually achieve the success that you have mapped out for yourself.
For the successful implementation of your strategic plan, you need 10 essential ingredients:
1. Leadership - Commitment and Support
Your strategic plan will drive your business direction. If it works, it can take your business to new heights. If not, think of the missed opportunity. As leader, you have to be 100% behind the exercise from start to finish. If you do not support the strategy and ensure that it is implemented, it will not happen. Where others are involved with the implementation, make it known to them how important this is to you. Symbolic actions can help to get the message across, such as a strategy launch, posters on the walls and so on.
2. Quality
You will not achieve success by implementing a bad strategy. A robust process when preparing the plan will help you get it right. Some strategies will clearly work. You know this based on your experience and your knowledge of the business and your customers. These are normally the easiest strategies to implement because they are tried and tested. Many expansion strategies fit into this category. With other strategies, there will be risks and unknowns. For these, your action plans must include steps to test and confirm your assumptions. You may need to bring in help for this. Review points must be built in to keep you on track. Don’t allow the project to run away with you. If it becomes obvious that the strategy will not work, then it’s back to the drawing board. Always ensure that the time, cost an effort that is going into the project will be justified by the outcome in the end.
3. Communication and Buy-in
In most cases, you will be relying on others to implement the strategy for you. Best practice dictates that the implementation team are involved in the preparation of the plan. You will need their total understanding and confidence in the strategy to get the best results. People who understand the strategy will make day-to-day decisions that are consistent with it. Every member of the team must take ownership.
‘‘It is hard to execute that which you don’t understand. There is a big difference between reading a plan and being directly involved in developing it’’(1)
Jim Ethier, President of Bush Brothers (Large US food manufacturer) www.bushbeans.com
4. Timing and Market Conditions
Strategy has a lot to do with outsmarting your competitors. There is always the risk that someone else gets in first or that new technologies affect demand. Market conditions may change before the strategy takes hold. How should you deal with this risk? Identify the market conditions that have the greatest affect on your strategy and have contingency plans in place to respond to changes. Similarly, conditions may change in reaction to your strategy. Try to anticipate how your competitors may react and how you will respond in turn.
5. Willingness to Change
Be prepared to amend your strategy or implementation plan whenever key assumptions change, new intelligence comes to light or where it is clear that something will not work or there is a better way to do it. We are not talking about a knee-jerk reaction to every little thing - only significant matters that make it clear that there is a better way to move forward.
“By understanding what factors have greatest impact on the success of your strategy, you can respond more quickly if they change.” (1)
John Sterling, Partner and co-founder of Smock Sterling
– Strategic Management Consultants: www.smocksterling.com.
6. Alignment
Any new strategy is likely to introduce new requirements within the business. These may include new equipment such as IT systems, new skills, new premises and so on. A basic assessment of your organisational capabilities and the gaps created by a change in strategy is a very direct means of improving alignment. Make sure that you picture what additional capabilities will be required to support the implementation of your strategy and to make a smooth transition when the time comes to implement new ways of doing things. This organisational alignment must be built into the implementation plans.
7. Make it Manageable and Manage it (one bite at a time)
Break the strategies down into manageable projects or action lists. Keep it short and make sure that the scope and tasks are clear in each case. Prioritise and assign tasks to the best people for the job.
Note dependencies. Those affected must understand their role and how it fits into the bigger picture.
Prepare budgets and timelines with checkpoints and ensure that the people involved have the support they require. This support will include regular meetings with decision-makers to review progress and to deal with any issues, questions, risks and uncertainties.
Keep all communication channels open. Email is very useful but face-to-face contact is also necessary to ensure that the support is adequate.
Bring groups together on a regular basis to confirm that they are all pulling in the same direction. Encourage them to work together as necessary. The more they help each other, the better it will be for all.
‘‘Describe the strategy on one page so it is easy to communicate.” (1).
Rich Meeusen, CEO, Badger Meter (a world leader in flow measurement & control)
8. Resources
Ensure that the resources allocated to the tasks are adequate. This includes people, money, equipment… You really have to be realistic and free up enough time for people to ensure that they complete the tasks within the allocated time-frame. This is the substance of the support that is expected from you as the leader.
9. Strategic Focus
It is up to you as leader to ensure that the strategic focus is maintained. If you give conflicting messages about the priorities, the strategy will be put on the back burner.
‘‘The real challenge in strategy implementation is that from time-to-time people can lose focus as the work-a-day pressures take over. You have to reinforce that the strategy isn’t something you do in addition to your work – it is your work’’.
Doug Ray, publisher of the Illinois-based Daily Herald
(one of the largest daily newspapers in the US)
10. Montioring and Accountability
For something as important as implementing the business strategy, there must be real expectations regarding delivery and performance. Everyone must understand that these will be monitored and that those responsible for completing tasks will be held accountable. The culture should be positive and supportive but everyone must be totally committed to the success of the exercise.
‘‘Everyone knows what the top projects are and are able to focus. No one misses a deadline on a top priority project because they were working on something else’’(1).
Rich Meeusen, CEO, Badger Meter
Conclusion
When done well, strategic planning becomes strategic management. The strategies with the highest priorities are implemented first and the strategies are continually assessed to confirm that they remain relevant and refreshed as need be. When it is clear that the business model is not working, there is a need to redesign and this gives rise to a full-blown assessment of where the business is and where it wants to be. At that point, one must be prepared to go back to Square 1 and go through the process that we have been covering in this series.
Acknowledgements and References:
1. Several years ago John Sterling, partner and co-founder of Smock Sterling – Strategic Management Consultants in Illinois, conducted an extensive study and published a paper in Strategy & Leadership, entitled: “Translating strategy into effective implementation: dispelling the myths and highlighting what works”. I have drawn heavily on this study which is as relevant today as it was when it was then.
www.smocksterling.com/comm/pdf/SS-C-013.pdf
2. www.planware.org/strategicplan.htm
Reignite the Passion