strategic planning for today

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StrategicPlanningFor TodayByLeeWerrellFInstSMMCharteredMCSICertPFS

Strategic Planning For Today December 2010 Page 1

Typically, IFAs and business managers are often so preoccupied with regulatory

issues, business demands and time pressure issues that they lose sight of their

ultimate business objectives. With major landscape shifts on the horizon with the

RDR, move of the FSA to the CPMA as well as the backdraft of the banks financial

crisis and governments austerity combating measures, is precisely where a facilitated

business review for the preparation of a strategic plan is a virtual necessity. This may

not be a recipe book for success, but without clear direction, planning, awareness of

external impacts as well as internal crises, a business is much more likely to fail.

The support you receive from CEI Compliance Consultancy is targeted at corporate

development, corporate strategy planning, strategic management and strategy

consulting and will involve the following.

Planning: strategic thinking and strategic business planning identify where

the new opportunities lie.

Positioning: Strategy consulting gives your company the insight to be perfectly

placed to exploit each opportunity

to the full.

Process: putting in place a strategic

management process ensures that

your company is constantly primed

to use events to its best

advantage.

As the cat in Alice in Wonderland states;

If you dont know where you are going,

it doesnt matter which road you take.

A sound plan should: Serve as a framework for decisions

or for securing support approval Provide a basis for more detailed

planning. Explaining the business to others in order to inform, motivate & involve Assist benchmarking & performance monitoring

Stimulate change and become building block for the next stage

Your strategic plan should not be confused with a business plan. The former is likely

to be a short document whereas a business plan is usually a much more substantial

and detailed document. A strategic plan can provide the foundation and frame work

for a business plan, providing vision and identify the gaps and obstacles that the

business plan needs to address.

A strategic plan is different from an operational plan. The strategic plan should be

visionary, conceptual and directional in contrast to an operational plan which is likely

to be shorter term, tactical, perimeter focused, implementable and easily

measurable. As an example, compare the strategic process of planning a holiday


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Strategic Planning For TodayByLeeWerrellFInstSMMCharteredMCSICertPFS


(where, when, duration, budget, who goes, how travel are all strategic issues) with the

final operational preparations (tasks, deadlines, funding, weather, packing, transport

and so on).

Some Consultancys will use systems and processes that are common sense but have

a catchy acronym such as a M.O.S.T. analysis (Mission, Objectives, Strategies &

Tactics) and try to impress you with the structure of the logic.

The key to success is not to have a catchy name or fancy logic dressed up as some

sort of panacea, but for a practical, robust and meaningful plan to be formulated

based on the unique and precise needs of YOUR business. There is no one size fits

all answer to strategy planning and there are no quick wins. For this whole process

to hang together you need a systematic, objective overview and you need to ensure

that every part of the process locks into place, so that your whole business movesforward in an integrated and effective way.

A clear, carefully stepped corporate strategy invigorates your business, energizes

your team and puts your long-term goals within you and your teams reach

Basic Approach to Strategic Planning

Strategic management is a crucial element in keeping your business firing on all

cylinders and driving forward. But where can you find the time, the perspective or the

expertise? Working with you, your business plan and

your vision, a facilitator can help provide that

essential strategic management understanding and

experience to help you stand back; evaluate; then

moveforward.

A critical review of past performance by the owners

and management of a business and the preparation

of a plan beyond normal budgetary horizons require

a certain attitude of mind and predisposition.

Some essential points which should to be observed during the review and planningprocess include the following: Relate to the medium term i.e. 2/4 years Be undertaken by owners/directors Focus on matters of strategic importance Be separated from day-to-day work Be realistic, detached and critical Distinguish between cause and effect Be reviewed periodically Be written down, recorded and reviewable


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As the precursor to developing a strategic plan, it is always desirable to clearly

identify the current status, objectives and strategies of an existing business or the latest

thinking in respect o f a new venture. Correctly defined, these can be used as the basis

for any critical examination to probe existing or perceived Strengths, Weaknesses,

Threats and Opportunities. This then leads to strategy development covering the

following issues discussed in more detail below:

> Vision> Mission> Values

> Objectives Strategies Goals

> Programs

Key Steps towards a Strategic Plan

The preparation of a strategic plan is a multi-step process covering vision, mission,

objectives, values, strategies, goals and programs. These are discussed below.

The Vision

The first step is to develop a realistic Vision for the business. This should be presented

as a pen picture of the business in three or more years time in terms of its likely

physical appearance, size, activities etc. Answer the question: "if someone from Mars

visited the business, what would they see (or sense)?" Consider its future products,

markets, customers, processes, location, staffing etc. Here is a great example of a

vision:

I will come to America, which is the

country for me. Once there, I will

become the greatest bodybuilder in

hi st o ry . I wi l l go i nt o mo v i es as

an actor, producer and eventually

director. By the time I am 30 I will have

starred in first movie and I will be a

millionaire. I will collect houses, artand automobiles. I wil l marry a

glamorous and intelligent wife. By 32, I

will have been invited to the White

House.

Attributed toArnold Schwarzenegger;

electedGovernorof the State of California in 2003.


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The Mission

The nature of a business is often expressed in terms of its Mission which indicatesthe purpose and activities of the business, for example, "to design, develop,

manufacture and market specific product lines for sale on the basis of certain

features to meet the identified needs of specified customer groups via certain

distribution channels in particular geographic areas".

A statement along these lines indicates what the business is about and is in finitely

clearer than saying, for instance, "we're in electronics" or worse still, "we are in

business to make money" (assuming that the business is not a mint!). Also, some

people confuse mission statements with value statements (see below) - the former

should be very hard-nosed while the latter can deal with 'softer' issues surrounding

the business. The following table contrasts hard and soft mission statements.

Hard Soft

What business is/does Reason for existence

Primary Competitive

products/services Unique/distinctive

Key processes & features

technologies Important

Main customer groups philosophical/social

Primary issues

markets/segments Image, quality, style,Principal standards

channels/outlets Stakeholder concerns

Hard Statement Soft Statement

X Ltd designs, develops, assembles and

markets systems for data base

management. These systems integrate its

proprietary operating system software with

hardware supplied by major manufacturers,

and are sold to small, medium and large-

sized companies for a range o f business

applications. Its systems are distinguished by

a sophisticated operating system, which

permits use without trained data-

processing personnel.

Our mission is to enhance our

customers' business by providing

the very by providing the very

highest quality products and

services possible. Our customer

support strategy is based upon

total, no-compromise customer

satisfaction and we continually

strive to offer a complete package

of up-to-date value added solutions

to meet our customers' needs. We

value above all our long term

customer relations.


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Intel's original plan, written on the back of a menu is an excellent example of a

hard statement:

The company will engage in research, development, and manufacture and sales of

integrated electronic structures to fulfill the needs of electronic systems

manufacturers. This will include thin films, thick films, semi-conductor devices,

and........ A variety of processes will be established, both at a laboratory and

production level ...... as well as the development and manufacture of special

processing and test equipment required to carry out these processes. Products may

include diode transistors........ Principal customers for these products are expected to

be the manufacturers of advanced electronic systems .... It is anticipated that many of

these customers will be located outside California.

When drafting a mission statement, critically examine every noun, adjective and verb

to ensure that they are focused, realistic and justified. Too much huff and puff and no

one will take it seriously: too weak and it will be forgotten instantly.

The Values

Values are the area that

is needed to address

the beliefs and

principles of the

governance and the

operation of the business

and its conduct or

relationships with society

at large, customers,

suppliers, employees,

local (or wider)

community and other

stakeholders.

The Objectives

The next key element is to explicitly state the business's objectives in terms of the

results it needs/wants to achieve in the medium/long term.

The following terms have been used in strategic planning objectives: desired end

states, plans, policies, goals, strategies, tactics and actions. Because of this confusion,

definitions vary, overlap and fail to achieve clarity, thus people lose interest at this

stage for fear of doing the wrong thing. The most common concept is to think of

these outcomes as specific, time bounded statements of intended future results and

general and continuing statements of intended future results, which most models


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refer to as either goals or objectives (often interchangeably).

Some advocates would then have you arrange your objectives in a priority order, withthe Top Rank Objective (TRO), Second Rank Objective (2RO) etc. however we find that

typically the objectives or goals are all interlinked either in parallel or complementary

to each other, often using similar resource or effort, and there is no point in re-

inventing the wheel each time. The main advantage is that people typically have

several goals at the same time. "Goal congruency" refers to how well the goals

combine with each other. Does goal A appear compatible with goal B? Do they fit

together to form a unified strategy? "Goal hierarchy" consists of the nesting of one or

more goals within other goals where you could have different sub goals for different

departments or business areas, which combined would provide the supporting legs of

an over-arching goal or objective from a senior management perspective.

Goal setting often requires having short -term, medium-term, and long-term goals. In

this model, one can expect to attain short-term goals fairly easily: they stand just

slightly above one's reach. At the other extreme, long-term goals a pp ea r ve ry

difficult, almost impossible to attain. In Jim Collins Book From Good To Great

he mentions that within the objectives and in the strategic management jargon many of

the companies that achieved great sometimes referred to "Big Hairy Audacious Goals"

(BHAGs) in this context.

Aside from presumably indicating a

necessity to achieve profits,objectives should relate to the

expectations and requirements of all

the major stakeholders, including

employees, and should reflect the

underlying reasons for running the

business. These objectives could

cover growth, profitability,

technology, offerings and markets

and will be impacted by Porters

forces and a correct analysis of thoseelements providing robust, feasible

and attainable outcomes over time.

The Strategies

Strategies are the rules and guidelines by which the mission, objectives etc. and how

they may be achieved. A common mistake of many companies, small and huge, is that

they invent for themselves a short term strategy and a long term strategy and often

never the twain shall meet. You devise a strategy, and that strategy stretches from

the short term over to the long term with various activities and checkpoints in-built.

The key is to be flexible. No goals or objectives are cast in stone, and they can be


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revised as external and internal forces demand change. The shorter term strategy is

really the path currently undertaken whilst the overall strategy is a line on a map

saying we want to go from here to here and we expect to pass through these otherplaces along the way.

Strategies can cover the business as a whole including such matters as recruitment,

diversification, organic growth, or acquisition plans, or they can relate to primary

matters in key functional areas, for example:

The company's internal cash flow will fund all future growth.

New products currently being developed

and tested will progressively replace existing

ones overthe next 3 years.

All assembly work will be contracted out tolower the company's break-even point.

As Kimberly Clark said Shut the Paper

Mills, we want to make consumable paper

goods

Use SWOTs to help identify possible strategies by

building on strengths, resolving weaknesses,

exploiting opportunities and avoiding threats.

The Programs or TacticsThe final elements are the Programs which set out the implementation plans for the

key strategies. These should cover resources, objectives, time-scales, deadlines,

budgets and performance targets or in other works the Tactical Plans.

The tactical plan is developed by the management team (note: Not the Senior

Managers per se), which consists of the very people responsible for getting the actual

work done. They have to make sure that the strategy developed to achieve the

mission of the organisation is successful, within the limits of available means and

resources. Therefore, it is necessary to understand strategic goals and systematically

decipher those goals in order to formulate an effective tactical plan that charts

segregated courses of action to result in the attainment of strategic objectives.

Tactical moves are specific activities that are time bound (usually stated in weeks or

months) and are geared to result in a predefined outcome.

Tactical plans are most often used in larger businesses not because they arent

needed in small business, but because small business owners very often dont take

the time to formulate them. Ironically, tactical plans are even more important to

small businesses, whose survival often depends on plan execution due to a lack of

deep pockets or other resources.


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If you have a small business but have not taken the time to implement your business

strategy or tactical plan, use the information above to do so. It certainly wont be easy

but the end result will be well worth the time and effort.

Use Hindsight when Strategic Planning

Statements on vision, mission, objectives, values, strategies and goals are not just

elements of future planning. They also provide benchmarks for a historic review.

Most managers will find it exceedingly difficult to develop a future strategy for a

business without knowing its current strategies and measuring their success to

date.

Effect not Equal to Cause when Planning Strategy

When reviewing a business it is essential to cut through the symptoms of problems

and reach the underlying causes. Questions which can assist in revealing the real causes

include the following:

"What stopped the business from?" "What caused the cause of?" "Why didnt

the business achieve a 25% return?"

Do not turn it into a witch-hunt. No purpose is

gained from victimising an individual, ifmistakes were made, then a training need is

apparent, if collective decisions proved

flawed, then lessons are to be learned. Never

ask who was the cause of the failing other

than in a supportive context.

By way of an example consider why this

company may be unable to increase its

market share:

Because;

It cannot penetrate major customers

Its product range is too narrow

The company doesn't have the capability to produce additional

products

Of shortcomings in R & D

Of a lack of expertise and resource

R & D is not an immediate priority

Of a lack of profits

Of a high interest burden


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The company is over-reliant on borrowings The shareholders won't/can't raise additional permanent capital.

The moral in this case is that there are no major customers due to under-

capitalisation!

What is apparent is that we must understand our companies position within the

marketplace as a whole and locally regarding industry peers and their advantages,

bargaining powers of suppliers and clients, new entrants into the distribution arena

and substitute products or other means people may employ to obtain their desired

outcomes, and if we can exploit any of these areas, getting the jump on our

competitors. Rolling all that into the equation we can then work out where we are

today and where our strengths, weaknesses, opportunities and threats may lay.


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Strategic Planning For today Page 10

Strategic PlanningFor TodayByLeeWerrellFInstSMMCharteredMCSICertPFS

Understanding SWOT

Strengths

During your SWOT analysis you will consider a variety of strengths from within your

business. It is important to note that these strengths will all be internal to your

business.

Strength Defined: Strength is a core capability of your business where your business

has an advantage over your competitor(s), which your customers value i.e. you

passed the better than your competitors test.

Some Possible Strengths

When completing your analysis you will find that your strengths will generally fit into

two categories

1. Tangible Strengths, these tend to be strengths that can be precisely identified,

measured or realized

2. Intangible Strengths, these tend to be strengths that cannot be physically touched

or physically measured

Some examples of strengths that maybe found in your business include

Some possible tangible strengths that you may find in your business

Consider your assets including plant and equipment

Are your products unique or market leading?

Is your service offering (customer experience) unique or market

leading?

Have you got sufficient financial resources to fund any changes you would

like to make?

Do you use superior technology in your business?

Some possible intangible strengths that you may find in your business

Do you have or stock strong recognizable brands

Your reputation - are you considered a market leader? or an expert in your

filed?

Do you have good relationship with your customers? (Goodwill)

Do you have strong relationships with your suppliers

Is your business Innovative?


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Weaknesses

During your SWOT analysis you will consider a variety of weaknesses from within your

business. It is important to note that these weaknesses will all be internal to your

business.

Weakness Defined: A weakness

is a core capability of your

b u s i n e s s w h e r e y o u r

competitor(s) have an advantage

over your business, which your

customers value i.e. you failed

the better than your competitors

test.

Some Possible Weaknesses

When completing your analysis

y o u w i l l f i n d t h a t y o u r

weaknesses will generally fit into

two categories

1. Tangible Weaknesses, these tend to be weaknesses that can be precisely

identified, measured or realized

2. Intangible Weaknesses, these tend to be weaknesses that cannot be

physically touched or physically measured

Some examples of weaknesses that maybe found in your business include

Some possible tangible weaknesses that you may find in your business

Insufficient financial resources to fund changes

High costs (Not high price, high costs specifically refers to your operating

costs)

Inferior technology

Low volume and restricted in your ability to scale up

Some possible intangible weaknesses that you may find in your business

Weak or unrecognizable brand

Weak or unrecognizable image

Poor relationships with your customers


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Opportunity

UnderstandingSWOTOpportunities

During your SWOT analysis you will consider a variety of opportunities to your

business these Opportunities will all be external to your business.

An opportunity is an environmental condition in your macro or industry environments

that can improve your organizations competitive position relative to that of your

competitors.

You will find your opportunities when completing your industry environment analysis

and your macro environment analysis.

PossibleOpportunities

When completing your analysis you will find that

your O pport unit ie s wil l gene ra lly f it into t wo

categories

1. Industry Opportunities

Industry opportunities are opportunities in your

industry environment and generally reduce the

level of price competition in your industry. Todiscover more about your industry environment

we use Porters five forces.

2. Macro Opportunities

Macro opportunities are in the broader environments that generally affect all

businesses in your region, click here to read more about macro environment

analysis.

Some possible Industry Opportunities are

Expand your product range Diversify your business interests

Expand into your customer's field (Forward Integration)

Products or service in growth


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Some possible Macro Opportunities are

Favourable changes to legislation

Favourable changes to any import/export constraints

Favourable economic outlook Favourable cultural shifts

Technology that your business can utilise such as Ecommerce or Internet sales

Threats

During your SWOT analysis you will consider a

variety of threats to your business these

threats will all be external to your business.

A threat is a forecast environmental conditionthat is out of your control and has the

potential to harm your businesses profitability.

A common example: If you import goods for

resale, then a negative shift in exchange rates

will force up your costs, if you are unable to

pass these costs on to your customers, your

margins will reduce. So, exchange rate volatility could be a threat.

Some Possible ThreatsYou will find that your threats will fit into two categories;

Industry threats

Industry threats are related to an increase in the competition in your industry or a

reduction in market size. Generally industry threats threaten to reduce your

businesses profitability.

MacroThreats

Macro threats are the kinds of things that affect all industries in your region. Thesealso generally result in a risk of reduced profitability.

Some possible IndustryThreats include

Low cost imports, the threat of low cost imports affects almost any

manufacturer in the developed world, with the possible exception of food

manufacturing.

Consumer ability to shift to a substitute product and changing demand for

substitute products, consider the manufacture of nails used in the assembly of


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house frames, if housing developers shifted from timber frames to steel framed houses,

demand for nails would drop significantly.

Slow market growth or decline in market size, western countries the demand for alcoholic

drinks remains pretty flat

SomepossibleMacroThreats include

Demographic changes, the aging workforce making it difficult to get skilled workers in many

developed countries.

Industry Regulation, a good example is aged care facilities who are impacted by increasing

regulation and increased costs to administer these new regulations.

Tips to Avoid the

Common SWOT

Analysis Mistakes

Here are three of the most

common mistakes people

make when completing

their SWOT diagram.

Do your homework

Link your actions with

your SWOT

Stay away from

solutions

You will find that the content of the vast majority of completed SWOT diagrams contain unverified

strengths and weaknesses that are not aligned to the organizations core capabilities. Worse still, the

people completing the SWOT have not used our better than your competitor test.

Most completed analysis also show that those completing the SWOT have only a limited

understanding of the organisations strategic environments.

Link your actions with your SWOT

During the formation of strategy and development of business plan activities the

majority of people do not focus on the content of their SWOT analysis. Instead they start to go off on a

tangent and formulate plans and objectives and almost completely ignore their SWOT and develop a

business plan that has no regard for this analysis.


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Stay Away from solutions

A SWOT Analysis is an analysis tool only that should contain independently verifiable statements

of fact. You should stay away from solutions or developing solutions until you have a completedSWOT diagram. Once you have a competed SWOT Diagram you will shift to solution mode.

You will find that many people will want to list solutions in the opportunities section of their

SWOT. It is therefore vitally important, though challenging, to stay away from solution mode. This

is why we always recommend a facilitation exercise rather than doing it yourself. A facilitator

can offer guidance and direction and stop that tangential discussion before they start.

Our Consultancy, with its expert team of business management consultants will act as your out-

of-house in-house management team, whether on a project by project or on a long-term

basis. We will help you manage your business to optimise your opportunities.

Having been involved in Strategic Planning and Risk Assessment with the Boards of Directors of

well-known companies, we have also been involved in developing the Operational and Tactical

plans that implement the vision. We can provide on-the-spot support and guidance for the

length of the project, from when it is a twinkle in the eye, through to the launch and up to its

successful embedding.

With our select team of experienced strategic planning consultants, our consultants

will help you generate the business strategy and will guide you through putting in

place the necessary effective and precise strategic process that is targeted to ensure

your product or service has the right backing, the right positioning and the rightpromotion to provide sustainable success.


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Whatever the size of your business, from start-up to international company, specific

objective strategic planning support can provide the crucial difference which will

mean that resources are concentrated constructively, energies are focused creativelyand the outcome is fully profitable over the long term.

Companieswehavebeen involvedwith in the last10 years;

CEI Compliance can help provide a full compliance support service, reducing

required management time, ensuring all areas are up to date and working for your

firms long term benefit. Call 07092 289901 today or go online atwww.ceicompliance.co.uk

This whitepaper was written

by Lee Werrell FInstSMM Chartered MCSI

Cert PFS, founder of CEI Compliance Limited.

Lee is

contactable at any time and welcomes enquiries from all

businesses.

Call 0800 689 9 689

Avoid S166 Skilled Persons Reports download our free uide here
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