Style Business

Is Strategic Planning Recession Proof?

Strategic Planning is a road map to lead an organization or a single entrepreneur from where they are now, to where they would like to be in the future.

Fair enough – but is it recession proof? The answer is emphatically yes! Strategic Planning is the one business tool, which if done right, can make your business essentially immune to business cycles. The key part of that sentence is “if done right”.

Strategic Planning is, at its core, a method for predicting the future. Strategy is the game plan to create your future – to win – even in the face of resource constraints, or intense competition. Strategy:

Maximizes reward, and minimizes risk
Leverages resources
Provides context, meaning, value, direction, and alignment for tactical actions
Leads to long-term success

Think about it: In almost every industry today, there are two kinds of organizations. First, there are those like Microsoft, Google, and Dell that change the game; they shape the ‘rules’ to their advantage. Second, are all the other organizations in those industries that are left to follow in their footsteps. When the competitive rules change, and they will change, the followers must do all they can to adapt, just to stay in business. They are, in a sense, on the defensive, and that is not a particularly advantageous place to be.

The ‘game-changers’ have a significant advantage because, since they left the starting gate before their competition, they get first crack at market share, and mind share. Simply put, when you make the rules, it is easy to win the game.

A major benefit of strategic planning is to help your business see the big picture, especially from a marketing point of view. By creating good strategic plans, you will be better able to understand the need for timely changes in your marketing approach and product mix. Strategic planning requires setting clear goals and objectives, and meeting those goals and objectives during specified time frames.

Why? – as I said earlier, strategy is about predicting the future, making assumptions about what is going to be, and making commitments based on those assumptions. If the future you predict is wrong, all of your right actions will still doom you to failure.

There are ways to ensure you don’t guess so wrong that you jeopardize your business:

1) Thoroughly understand your market and your business environment, and determine whether any potential “Market Disrupters” are on the horizon.
2) Create a strategy that has the effect of changing the market in your favor.
3) Create Strategic Flexibility in your business and marketing plans.

Strategic Flexibility is the key. You want to be in a position where, even if some of your assumptions are wrong (and they will be); your business is still viable.

One way to create flexibility is to think like a chess champion. You need to master the concept of “Down Board Thinking”. World class chess players do not simply think about their own moves, they look ‘down board’ and consider their opponents (competitions) possible responses to their moves, and plan a number of alternative moves ahead. This kind if thinking is particularly relevant both in creating your strategy, and in managing and monitoring the implementation of your strategy.

Another way is to have enough actions (tactics) going on at roughly the same time (in parallel) so that even if some of them don’t turn out as well as you expected, you will still prosper because you have enough right actions happening.

The real aim of Strategy then, is to have a set of actions in place consistent with your view(s) of your desired future. Once you have those actions in place, with systems, processes, metrics, and exit plans (because all strategies end), you can begin to manage strategic uncertainty, overcome business cycles, and prepare your business to be the one that prospers, even in times of recession.

What Is A Strategic Planning “System”?

A Strategic Planning System takes into account a great number of variables such as:
A market analysis
The strengths and weaknesses of your business
The products and services you offer
The resources that are available
The goals, objectives and measures that you have established for your business, etc.

The “system” then shows you how to develop a set of strategies and action plans – and to arrange them in such a way that vastly increases your chances of having a sustainable, profitable long term business.

At its most basic level, strategy has four simple components:
I. Knowing where you want to end up
II. Knowing what to put your energy against
III. Knowing the methodology of applying your energy
IV. Knowing parameters for the inevitable end games

Any strategic system that does not deal with all four of these elements is deficient, and not likely to lead to sustained success.

The major activities in any good strategic planning system include:

Strategic Analysis – Typically includes conducting some sort of scan, or review, of your business environment – and doing that on an ongoing basis.
Setting Strategic Direction – Coming to conclusions about what you must do as a result of the major issues and opportunities facing your business. These conclusions include what overall accomplishments you want to achieve, how you will measure progress, and the high-level methods you will use to achieve the accomplishments.

Action Planning – Carefully laying out how your strategic goals will be accomplished. Each goal should be associated with a tactic(s), which is / are the methods needed to reach the goal. Action planning also includes specifying responsibilities and timelines with each objective, or who needs to do what, and by when. It should also include methods to monitor and evaluate the plan.

Creating Reserves – Reserves are a way to help you deal with the unexpected. Reserves can be time allotted to deal with new opportunities, outsourcing partners available as needed, joint venture or affiliate partners, extra money, flexible work processes, etc. The point is, you need to be able to respond to events as well as plan for them. Strategy should be a roadmap but allow for the possibility of detours.

Most of us entrepreneurs and business owners are “doers,” not “planners.” In one sense, being a doer is perhaps the ultimate mark of a successful person. It’s what makes us a rare breed. Rather than thinking or wishing, we get out there and make it happen.

In and of itself, that is fine, but any strength carried to excess can rapidly become a weakness. I have encountered many small business owners who get into trouble “doing” the wrong marketing activities the right way or “doing” the right marketing activities the wrong way. If you want to “do” the right marketing activities the right way you must start with a strategic plan.

If you are in business, you hopefully already have a strategy. These range from some vague sense of the desires of the business owner, to massive, overly sophisticated master plans. So the question is not whether every company needs a strategy, but rather whether your company’s strategy needs to be well-thought-out, sound, appropriate and do-able. The answer is self-evident.

A good strategic planning system helps keep your business venture on track from the get-go without allowing for distractions that are inherent in poor planning.

Focus, accountability, and realistic requirements are what good business planning systems offer anyone who is considering starting or working in an online business. For success in on-line or off-line marketing, every aspect of your business venture must be itemized and planned, consistent with your strategic plans.

Strategic planning is vital to not only the operations of non profit organisations, but also to their continued viability as most don’t successfully access grants. A Strategic Plan provides vision to an organisation. If developed properly – the business plan will clearly show the goals and objectives over the next three to five years and how the organisation plans to deliver on these goals and objectives. The operational plan will demonstrate clearly that their services are well thought out – meet a need in the community and will demonstrate that this is a well run professional organisation giving fund managers and Australian Government agencies confidence in supporting projects with funding.

From our work with non profit organisations across Australia – the vast majority of small to medium non profits don’t have any Project Plans to support their projects let alone business plans. The larger non profits will probably have a Strategic Plan of some description in place – but really, in all honesty – how many of these operational plans actually reflect the organisation’s current goals and vision? Organisations over a matter of a month or two can have seismic shifts in focus and their operations yet forget all about the strategic direction in which they were headed and completely forget about their business plan. It never gets updated – it is a book shelf document unfortunately and little else. Organisations need to regularly review their Strategic Plan and use them as a management tool reporting on progress of initiatives at each Committee meeting and challenging any proposed changes in direction.

Organisations that have Strategic Plans in place which hopefully are supported by detailed Project Plans generally are way more successful in winning grants. Strategic planning can take many forms but it is increasingly becoming the real key to receiving funding. So much so that both Government and Philanthropic agencies will financially support an organisation/project – where a well detailed plan supports the initiative and the grant application over an organisation that has not clearly thought through their project and does not have a documented plan in place.

An organisation with well crafted Strategic and Project Plans in place also makes the grant writing process so much easier. Grant writing really is a specialised field although many organisations try desperately to hire young, inexperienced staff or try to convert one of their existing staff to become a grant writer. IF organisations had a robust business plan in place which was supported by comprehensive Project Plans the vast majority if not all of the information required to complete a grant application, respond to questions or address selection criteria would be included in these Plans. Inexperienced or converted staff would then have some reasonable hope of preparing a successful grant application. The sad reality is that most organisations do not have a planning framework in place then compound the problem by trying to prepare their own submissions to funding programs.

Companies such as Red Tape Busters assist clients in developing creative strategic and project plans which are used to complete grant applications. Given that they prepare such comprehensive documents, the time required to complete an application is cut down significantly given the plans have all the information needed. Companies like this also use the strategic and/or project plan as an attachment to grant applications – providing the fund manager with more comprehensive information about the organisation/project than what is allowed in the grant application. Most applications are word or page limited so attaching the Plans is the easy way of providing more information while still complying with the limiting requirements.