Certified Professional Management Consultant Jim McCarthy currently live and works in Oceanside, CA with his wife, Career Consultant Barbara McCarthy. Please visit Jim and Barbara’s main website at Strategic Planning
Posts Tagged ‘Planning’
Is Strategic Planning Recssion Proof?
October 25th, 2009 | Author: admin
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?
October 5th, 2009 | Author: admin
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.
Certified Professional Management Consultant Jim McCarthy currently works in Oceanside, CA with his wife, Career Consultant Barbara McCarthy.For information on a complete Strategic Planning System, please go toInternet Marketing
Strategic Planning and its importance to non-profit organizations
September 21st, 2009 | Author: admin
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.
RedTapeBusters is a service specializing in strategic planning for Australian non-profit organizations. We provide lobbying and funding efforts, to make sure your organization meets its goals.
How to Franchise – Strategic Planning, Documentation and Management of Franchise Systems
July 24th, 2009 | Author: admin
Imagine opening 20 new business locations without having to foot the bill for real estate, equipment and development costs or taking on any of the risk. Even more, imagine finding managers to run all those locations, who are just as committed to growing the company as you, and you don’t have to pay them a dime. Finally, imagine that these managers will hire, fire and manage all employees as well as foot the bill for all operating costs and expenses. Sound far-fetched?
Not if you’re planning to enter the franchise industry, one of the fastest ways to grow a small business without breaking the bank. For many companies, franchising a business (or licensing) is a sensible way to achieve rapid, profitable growth without giving up any control or ownership. Going from a single location to a dozen in a couple years, or a hundred in ten years is possible and well-documented because franchise owner-investors put up all investment capital, shoulder all risk and assume all day-to-day operating responsibilities.
It’s expansion, using OPM – Other People’s Money. Also, the franchise company gets paid handsomely for teaching others the secrets of how to operate its business. First, there’s the up-front “membership” or franchise fee of $20,000 to $50,000 paid for using the brand name and operating methods. In addition, there are continuing royalties of 5% to 10% of gross sales for ongoing advice and consultation. In essence, a franchise development program allows a company to get out of the trenches and become a highly-paid general overseeing its soldiers. Long-term options are also attractive. Build an empire and relax, or let the franchise company be acquired by an increasing number of large companies that look for small, but growing franchise companies. According to the International Franchise Association, 900 new companies have franchised in the last three years.
ENTERING A NEW BUSINESS
A company planning to franchise must realize it is entering a new business, offering an entirely different service (training & support) to entirely new customers (business owner-operators). This new business requires different skills, abilities and expertise. In the new business of franchising, it is critical to develop effective evaluation, documentation, mentoring, training and consulting skills. Since these new skills are rarely present within existing personnel, an outside franchise expert is needed to train existing personnel and plan the transition. The first step involves determining whether or not a business can franchise, and if so, what needs to be developed. Next, strategic franchise planning is necessary to create a “blueprint” for successful expansion efforts. Experience shows that, just like a building, the foundation developed at the beginning will create lasting consequences affecting the relative success (or failure) of the entire venture. Legal (franchise disclosure document, franchise agreements) and operational documents (franchise operations manual, franchise training program) are prepared and drafted and finally a franchise registration process is required in some 14 states, depending on which state(s) the company sells franchises. These phases are discussed below.
THE FRANCHISE FEASIBILITY PHASE
An indispensable step before any franchise development program gets underway is an analysis of the concept and business model. Has the concept been sufficiently proven in the marketplace? How profitable are existing prototypes or company-owned outlets? Franchising will not solve existing problems, it will only intensify them – and usually at a serious cost to franchise investors. Franchising should not be viewed as a method to raise capital, expand a business that has existing problems, or a way to get rich quickly. There must be sufficient profitability in the business model so that royalty and other payments can be made and leave the franchise investor with a sufficient profit. With a franchise feasibility analysis, a determination can be made about:
(a) whether franchising or licensing expansion ideas should be pursued, postponed or abandoned; and
(b) assuming a positive result in (a), what needs to be fine-tuned or developed from scratch for the franchise program.
Besides determining if and when the business can franchise, the analysis should also include providing guidance and direction so as much of the groundwork as possible can be done by existing personnel. This has proven to be a very effective approach and significantly reduces franchise development costs. If the feasibility analysis is positive, the other phases discussed below follow. My twenty-eight years of experience in the franchise industry lets me share a valuable insight about franchise feasibility studies. Too many companies leap into franchising without doing a feasibility study, or if one is done it is performed by a franchise consultant or group that tells everyone good news – they’re all “franchise-able.” The vast majority of franchise feasibility studies I’ve done either identify areas that need attention before franchising makes any sense or tell the client to forget about it and pursue other options.
THE FRANCHISE STRATEGIC PLANNING PHASE
A successful franchise development program begins with a solid plan – a foundation for franchising. The long-term goal is to establish balanced, integrated, successful business relationships with qualified individuals who support the company’s goals and image. Creating an enduring relationship requires a comprehensive strategy that addresses all aspects of the franchise endeavor.
The starting point is a detailed analysis that covers:
(1) identifying profile characteristics of who will be the best franchise owners for the particular business;
(2) competitive positioning to make the franchise stand out from the other 3,000+ franchise companies;
(3) geographic scope – where and when will franchises be sold;
(4) analysis of the company’s organizational strengths and weaknesses relative to franchising;
(5) identifying the appropriate franchise organizational structure as well as staffing requirements and responsibilities; and
(6) structuring the franchise relationship for a balanced, win-win scenario.
What should emerge from this detailed analysis is a specific strategic plan and framework for guiding virtually all franchise efforts. Despite the long-term importance of the franchise planning step, too many emerging franchise companies enter franchising with no plan or planning – other than “let’s try and sell a lot of franchises.” They rush through (or neglect entirely) the strategic planning process, thereby creating future franchise litigation land mines that are ticking franchise lawsuits waiting to happen.
Often, this is because they only utilize the services of a franchise consulting firm or franchise attorney, where little or no attention is paid to critical strategic planning, operational and organizational issues. Normally, these firms draft “boilerplate” franchise disclosure documents, franchise agreements and franchise operations manuals based on a questionnaire completed by their client, who is presumed to have made all strategic decisions. The franchise documents are presented, along with an invoice and a handshake – hardly the ingredients for success in the new business of franchising.
THE FRANCHISE DOCUMENTATION PHASE
If the company has made doing a good job at the planning stage the number one priority, franchise documentation goals will be apparent. Proprietary and intellectual property assets (like operating techniques, customer information, recipes, formulas and methods) need to be identified and protected. A trade secret protection program is developed and implemented. The name, logo and tag lines should have been previously registered as trademarks or service marks.
franchise operations manuals
Franchise operations manuals and training programs are developed, often from scratch, to impart business operating skills to the franchise owner as well as ensure uniformity of products and services. The franchise operations manual and training program curriculum must be drafted with a particular focus. Certain topics, chapters and policies found in manuals for a company-owned chain, for example, are entirely inappropriate in a franchise environment, creating significant liability (lawsuit) issues for the franchise division.
I routinely find franchise operations manuals drafted by franchise consultants or do-it-yourself manual kitscontaining inappropriate chapters or topics. Not knowing where the bullets come from in franchise litigation, they proceed blindly ahead using “boilerplate” manuals where most (but not all)
Seven Ways to Supercharge your Strategic Planning Process
July 5th, 2009 | Author: admin
Copyright (c) 2007 Gayla Hodges
At this time of year, many companies look to the future and put together a Strategic Plan and/or a Business Plan for the coming year(s). For many, this has become a matter of looking at the last plan and changing the numbers to match new goals. If this is your process, you’re missing a huge opportunity to build the strategic thinking and planning capability of your organization.
Whether you have a team of two, twenty, two hundred or two thousand plus, the strategic planning process provides multiple opportunities to develop employees and positively impact the bottom line. Here are a few suggestions of how to supercharge your strategic planning process and make it a vital part of your organization’s success.
Create Pre-Planning Teams
Charter a team of three or four people to do advance research on industry trends, internal and external factors that will likely affect the future of your company in both positive and negative ways. Build time early in your agenda for a presentation from the team. This not only saves time in your planning session but gives those on the advance team an opportunity to think and learn from the research.
Charter a Stakeholder Audit Team. The size of this team will depend on how many stakeholders you identify. A stakeholder is a person or entity that has a “stake” in your success as a company. Stakeholders might include customers, suppliers, community leaders, etc. The job of this team is to interview these key individuals to get their input about what they need from your organization and/or how you might work more effectively together. This team will need to summarize and analyze the data they collect and bring it back to the planning team for use in the actual planning session.
Be sure to include some of your high potential non-managers on these teams so they are exposed to the process and have the opportunity to think at a higher level than their job usually demands.
Include Bargaining Unit Leaders and HR
If you work with a bargaining unit, include them in the process. Many items become easier to negotiate when Union leaders understand the big picture and the challenges the organization is facing. Also, Union leaders bring the viewpoint of your employees to the table in a unique way that can be very helpful in designing the “people” initiatives you will need to be successful.
Make sure to invite your Human Resources Director/Manager to the table. Many companies put together a strategic plan with multiple “people” strategies without the input of the HR Department. Since most of these strategies will fall to the HR Department for implementation or at least major support, it’s in everyone’s best interest to incorporate their ideas as well as making sure the strategies are implemented “as intended.”
Use an Outside Facilitator
This can either be from another part of your organization or an outside consultant. Either way, your focus should be on the actual strategic thinking and planning. Executives who try to facilitate their own strategic plans are like doctors who try to treat themselves. It’s not the best use of your professional expertise. A trained facilitator will bring out the best in each of those participating in the process, including the leader!!
Include a Communications Professional in the Process
You will want the document you create to be a tool that is used throughout the year. A professional can help you simplify difficult concepts, communicate concisely and format for utility. Remember, the major purpose of the document you distribute to employees is to engage them in the goals of the organization.
Distribute a Copy of the Plan to Each Employee
Make sure your first line Supervisors understand the major components of your plan and, more importantly, how they will contribute to reaching the goals of the plan. Then, have them distribute copies of the plan. Research shows that employees trust the Supervisor that they know more than upper management. So, roll out the plan but give your Supervisors the info they need to explain it.
Keep the Plan Alive Throughout the Year
Include regular updates on progress toward strategic goals in your organization’s communication channels. Bring the planning team back together once a quarter to review the plan and track progress. Showcase teams or individuals who are directly impacting the success of the plan in company communication vehicles. Most importantly, celebrate milestones reached along the way.
Use the Plan
If your copy of your company’s strategic plan doesn’t have dog-eared pages and coffee stains by mid-year, you’re not getting the most out of the plan. As a leader, those you interact with should be so used to seeing you with a copy of your plan that they notice when you don’t mention it. And, since you are their leader, you will begin to notice that they are bringing up company goals, milestones and impacts on a more regular basis as well. This is the power of the plan. It has the potential to engage people at every level of your organization in striving to meet company goals.
You may be thinking, this is fine for larger companies but I’m an Entrepreneur and/or my company consists of only a few people. How will this work for me? It will actually work very well if you think about all those who have a “stake” in your business and engage them in the process. Ask associates, your Mastermind Group, or key individuals you respect from the networking organizations you belong to for their help in building your plan. That way you will not only build a plan, you will build relationships that energize your success.