UBC Phar400-pharmacy business planning-27jan2012


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Guest lecture to UBC Entry to Practice 4th year Pharmacy students about strategic business planning and their semester term project to present a business plan for a new clinical service.

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  • How many of you have ever been involved in planning?
  • Having clear, written goals sets the path. One which you can clearly articulate to others (like customers and especially staff); and keep you focused on why, how and what you are doing, especially when the going gets tough in the early stages of implementing a new process or system.The challenge is not so much what to do, but how to do it and why it matters.
  • I’ll give you the dots; you have to connect them.
  • By now you’ve probably given your clinical service idea some thought; this is your BIG idea.One of the most important questions you must answer is; Is this product or service something people care about?As we go through this afternoon consider these points... (refer to slide) And focus on creating a unique value proposition; and build it around your dominant strengthExplain need and market; electric car example. The key to business success has always been the same; find a need and fill it.Your business goal is to find out what people (buyers and consumers) really need and WANT (what they desire), and then give it to them better and faster than anyone else.A need alone does not = a market. Desire to meet an unfulfilled need does.In retail Pharmacy it used to be Location, location, location.And that’s still true but only up to the point that it’s a real estate solution. Today, for a retail Pharmacy biz to be successful in a sea of sameness. It’s differentiate, differentiate, differentiate. Think different, be different; don’t do better sameness.
  • Every time I ask this question; the immediate answer I get back is “To make a profit”. But this is wrong. The real purpose of a business is to create and keep a customer. If a biz successfully creates and keeps a customer in a cost effective way, it will make a profit.If for any reason, a biz fails to attract or sustain a certain number of customers, it will experience losses. Too many losses will lead to the demise of the enterprize.To create and keep customers for your clinical service idea you need to DIAL IN…Fulfill an intention...Future Shop story. I Want to buy a web cam.Value is in the applied benefits of the benefit; for example take Diabetes patients. Pharmacists help diabetic patients manage their disease (benefit). Patients want to manage their disease so they can lead “normal” lives; do the things they want to do, participate in the activities they want, have feet that don’t ache all the time, eat food that tastes good etc. (these are applied benefits). Or the example of a mom who brings their asthmatic child in. Pharmacist provides the proper use on the inhaler device. (benefit) The mother wants peace of mind so she can sleep at night; knowing her child isn’t struggling to breathe, knowing her child can participate in sports activities and lead an active kids life. (applied benefit).Find out what they want; ask them. Serve customers; don’t simply provide customer service.
  • Before we jump into the typical phases in the standard "generic" planning process, let's stand back and minute and briefly look at the role of planning in its overall context. This is more than an academic exercise -- understanding this overall context for planning can greatly help you to design and carry out the planning process in almost any planning application.
  • One of the most common sets of activities in management is planning...Very simply put, planning is setting the direction for something -- some system -- and then working to ensure the system follows that direction. Systems have inputs, processes, outputs and outcomes. To explain, inputs to the system include resources such as raw materials, money, technologies and people. These inputs go through a process where they're aligned, moved along and carefully coordinated, ultimately to achieve the goals set for the system.
  • Outputs are tangible results produced by processes in the system, such as products or services for consumers. Another kind of result is outcomes, or benefits for consumers, e.g., jobs for workers, enhanced quality of life for customers, etc. Systems can be the entire organization, or its departments, groups, processes, etc. (For an overview of various systems in organizations, see Basic Definition of Organization and Various Ways to Look at Organizations.)
  • Work backwards through any system...begin with the end in mind.Share The Everest expedition story.
  • NOTE: It's not critical to grasp completely accurate definitions of each of the following terms. It's more important for planners to have a basic sense for the difference between goals/objectives (results) and strategies/tasks (methods to achieve the results).
  • Whether the system is an organization, department, business, project, etc., the basic planning process typically includes a similar nature of activities carried out in similar sequence. The phases are carried out carefully or -- in some cases -- intuitively, for example, when planning a very small, straightforward effort. The complexity of the various phases (and their duplication throughout the system) depend on the scope of the system. For example, in a large corporation, the following phases would be carried out in the corporate offices, in each division, in each department, in each group, etc.NOTE: Different groups of planners might have different names for the following activities and groups them differently. However, the nature of the activities and their general sequence remains the same.NOTE: The following are typical phases in planning. They do not comprise the complete, ideal planning process.
  • 3. Other assessment or methods could include...using reports (i.e. State of the Industry, Trends & Insights) or ask customers; conduct a focus group. Attend conferences on the subject.What are the barriers to entry? For you? For your competition?
  • 9. For example: number of Med reviews done during a month, number of immunizations. Each time you get closer to the objective it is a “milestone” to reaching the goal.
  • At this stage, although you may already have an idea for a new product or service.; consider that... Ideas can come from many sources, for example:Sources of Ideas1. Complaints from current customers (see Customer Service and Customer Satisfaction)2. Requests for Proposals from large businesses, government agencies, etc.3. Modifications to current products (see Innovation)4. Suggestions from employees, customers, suppliers, etc. (see Creative Thinking)Also see How to Find a Product to Market (short, reflective piece on developing an idea)
  • Market research usually involves doing a periodic study of some sort.Market research generally probes a few topics; however by itself doesn’t yield a deep understanding of the customer. As opposed to periodic studies, customer learning is a continuous process of probing customers.It is a process that fundamentally incorporates the fact that every customer is truly unique and that customers’ needs, wants and expectations are never static. They change with the life forces affecting the individual or the business and the environment in which they exist.Make customer learning the cornerstone of your market research process. It is a continuous learning approach that involves everyone in the organization in “market research”.
  • Odds are that you have already conducted at least some basic forms of market research. For example, you have listened (a research technique) to others complain about not having enough of something -- that should suggest providing what they need in the form of a product or service.
  • 1. Some useful data collection methods might be, for example, conducting focus groups, interviewing customers and investors, reading the newspaper and other key library publications, and listening to what clients say and observing what they do. Later on, you might even develop a preliminary version of your product that you pilot, or test market, to verify if the product would sell or not.2. This where you put potential customers into segments and define large numbers of unique clusters in the segment.Useful data collection methods might be, for example, reading about demographic and societal trends in publications at the library. You might even observe each group for a while to notice what they do, where they go and what they discuss. Consider interviewing some members of each group. Finally, consider conducting a focus group or two among each group.
  • 3. Here’s where focus groups can really come in handy. Conduct some focus groups, including asking them about their preferences, unmet needs and how those needs might be met. Run your ideas past them. At the same time, ask them what they would need to use your services and what they would pay for them. 4.Go to their location, look around and look at some of their literature. Notice their ads in newsletters and the newspaper. Look at their web sites. 5. A particularly useful data collection method in this area is the use of focus groups. Get some groups of potential clients together and tell them about your ideas. Tell them how your ideas are unique. Tell them how you would want your program to be seen (its positioning). Ask them what they think.
  • 6. One of the best ways to make this conclusion is to conduct an evaluation. An evaluation often includes the use of various data collection methods, usually several of them, for example, observing clients, interviewing them, administrating questionnaires with them, developing some case studies, and, ideally, conducting a product field test, or pilot. 7. One of the best ways to make this conclusion is to evaluate the results of the advertising. This could include use of several data collection methods among your clients, such as observing clients, interviewing them, administrating questionnaires with them, developing some case studies. What is their awareness of the professional services you offer beyond dispensing?
  • Somewhere along the way you’ll need funding or a budget from an investor or Pharmacy Manager or owner.
  • 1. Whether you're starting a new product, service or organization, there needs to be a strong market for it Is it retail; (patient counselling on Rx’s)? Manufacturing (compounding)? Production (central fill)? Service (home visits, lab results, immunization)? Wholesaling (creating your own product,ie George’s Cream)?2. You'll have to do more than "sense that there is a need" or claim that "it's common sense that there is a need". You'll have to have enough evidence to convince an investor or funder -- and yourself. Your investor or funder could be your Pharmacy Manager or the owner of the business.3. Conduct a competitive analysis. What is a competitive analysis?Go visit them; ask to use the service. Take a script there and have it filled; what was the experience like?
  • Every business has competition and prospective business owners ignore competitors at their peril. Unless a business has an absolute monopoly on a life-essential product, there will be competitors offering alternative and substitute products and services. That level of competition is revealed in the competitor analysis section of your business plan.A competitor analysis is an important requirement in any business plan because it (a) reveals the firm's competitive position in the "marketspace" (on-line marketplace), (b) assists you to develop strategies to be competitive, and (c) investors and other readers of the business plan will expect it. If you ignore or minimize the impact competition will have on your business prospects, then you have an unrealistic business plan.After giving some background about the type of competitors your business will face -- you identify and analyze your major competitors -- those most likely to impact on the success of your business. The analysis uses a variation of SWOT, a popular strategic planning tool, to help you identify strengths and weaknesses of competitors, and then opportunities and threats for your business.
  • The answers to these questions usually comes from market research.
  • You need to think about some strategic decisions. While you may not have to know the detail to answers about the near future of your new organization, you should have some impression about the overall goals to accomplish. Knowledge of these goals will help you a great deal when thinking about what resources and skills you will need right away in your new organization. Think about your answers to the above questions so far when identifying your clinical service plans.
  • 1. What skills (and people) are needed by your organization?The links Employee Task and Job Analysis and Job Descriptions will be helpful.2. How will you attract and retain the best people?The topics Recruiting, Retaining Employees and Basic Guide to Management and Supervision will help you.3. How will you know how to organize your staff?The links Workforce planning, Specifying Jobs and Roles and Selecting Your Organizational Design (who will work for whom, etc.) will help you. For those starting nonprofits, the links Key Roles and Structures in Nonprofits and Three Aspects of Nonprofit Structure and will help you.
  • 4. How will you compensate employees? What benefits will you offer?The topic Benefits and Compensation will help you.5. How will you know what basic personnel policies you'll need?The topic Policies (Personnel) will help you.6. How will you know how to manage your organization?The topic Broad List of Knowledge Areas and Skills in Management (you don't have to master all these skills to start an organization) will help you. Also consider Boards of Directors, Chief Executive Role, Basic Overview of Supervision and Management Skills Unique to Nonprofits (for nonprofits).
  • 7. How will you ensure personnel are effectively working toward the organization's goals?The topic Employee Performance Management will help you.NOTE: A key resource to help you manage and supervise people is Basic Guide to Management and Supervision.8. Human Resources isn’t just the internal staff. Do you have a banker? Financial adviser? Tax advisor? Lawyer?The topics Getting and Using Banker, Getting and Using a Consultant, Getting and Using a Lawyer and Getting and Using an Accountant will help you.
  • What equipment needs will you have?(These needs depend very much on the resources needed to develop, distribute and support your product/service.) The link Facilities Management might be helpful to you.What computer equipment will you need?The link Computers, Internet & Web will help you.
  • Many Approaches to Strategic Planning ... It Depends There is no one perfect strategic planning model for each organization. The approach, or model, for strategic planning depends on:The purpose of strategic planning, for example, if planning is meant to add a new product or program, then the process will probably include market research to verify the need, markets, pricing, etc., for the new product or service. .Whether the organization has done planning before, for example, if the organization has not done planning before, then extensive attention to mission, vision and values statements is probably warranted.The culture of the organization, for example, some cultures might prefer a "linear" approach from mission, vision, values, quantified goals, strategies, action plans, financial analysis, etc. Other cultures might prefer a more organic and unfolding approach, such as telling stories.Whether the environment of the organization is changing rapidly, for example, if the environment is changing rapidly, then planning should probably be a shorter term than for an organization who's environment is fairly stable.Whether the organization has had success in planning in the past, for example, if an organization has done planning in the past, but planners do not believe it was successful, then the organization should perhaps undertake a simple, short-term planning process for now.Each organization ends up developing its own nature and model of strategic planning, often by selecting a model and modifying it as they go along in developing their own planning process.
  • Why do a biz plan?Sometimes when I ask business owners if they have a biz plan. They reply with it’s all right up here...These same people then spend more time to plan and document their vacation than they do their business; I just don’t get it.A business plan is your blue print and road map to implement your idea. Consider...As a memberof the team without a written biz plan how can I see the “movie” going on in the owners head.
  • Business plans appear in many different formats, depending on the audience for the plan and complexity of the business. However, most business plans address the following five topic areas in one form or another.
  • Advisors...Highlight that “people” isn’t just the internal staff.
  • It’s not so much about trying to identify and avoid the things that can take you off track or go wrong; it’s usually more about how you will recover.
  • Some people take this wide look around after they've identified or updated their mission statement, vision statement, values statement, etc.These statements are briefly described below. Other people conduct the analysis before reviewing the statements.Note that in the past, organizations usually referred to the phrase "long-range planning". More recently, planners use the phrase "strategic planning". This new phrase is meant to capture the strategic (comprehensive, thoughtful, well-placed) nature of this type of planning.
  • At some point in the strategic planning process (sometimes in the activity of setting the strategic direction), planners usually identify or update what might be called the strategic "philosophy". This includes identifying or updating the organization's mission, vision and/or values statements. Mission statements are brief written descriptions of the purpose of the organization. Mission statements vary in nature from very brief to quite comprehensive, and including having a specific purpose statement that is part of the overall mission statement. Many people consider the values statement and vision statement to be part of the mission statement. New businesses (for-profit or nonprofit) often work with a state agency to formally register their new business, for example, as a corporation, association, etc. This registration usually includes declaring a mission statement in their charter (or constitution, articles of incorporation, etc.).It seems that vision and values statements are increasingly used. Vision statements are usually a compelling description of how the organization will or should operate at some point in the future and of how customers or clients are benefiting from the organization's products and services. Values statements list the overall priorities in how the organization will operate. Some people focus the values statement on moral values. Moral values are values that suggest overall priorities in how people ought to act in the world, for example, integrity, honesty, respect, etc. Other people include operational values which suggest overall priorities for the organization, for example, to expand marketshare, increase efficiency, etc. (Some people would claim that these operational values are really strategic goals. Don't get hung up on wording for now.)
  • It's common to develop an annual plan (sometimes called the operational plan or management plan), which includes the strategic goals, strategies, objectives, responsibilities and timelines that should be done in the coming year. Often, organizations will develop plans for each major function, division department, etc., and call these work plans.Usually, budgets are included in the strategic and annual plan, and with work plans. Budgets specify the money needed for the resources that are necessary to implement the annual plan. Budgets also depict how the money will be spent, for example, for human resources, equipment, materials, etc.(Note there are several different kinds of budgets. Operating budgets are usually budgets associated with major activities over the coming year. Project budgets are associated with major projects, for example, constructing a building, developing a new program or product line, etc. Cash budgets depict where cash will be spent over some near term, for example, over the next three months (this is very useful in order to know if you can afford bills that must be paid soon. Capital budgets are associated with operating some major asset, for example, a building, automobiles, furniture, computers, etc.
  • With such an elaborate process it’s easy to lose sight of the end game.Indeed, I have participated in some of these strategy building sessions where the criteria for success seemed to be how complicated you could make the content and process. And I’ve always had difficulty with this approach; but thanks to my friend Ray Osing I have seen a BE Different approach work much more effectively.It’s based on the notion of “dumbing it down”; that simple is good, simpler is better.Let’s take a look at a possible case and apply the simple strategic approach.
  • Situation; you are busy working in the business with not much time to work on the business. You know that you need to do something to increase the revenue to overcome the challenges of the new Pharmacy business reality.Look at what matters to the customers that you intend to serve.Look at the competencies that your organization currently has.Look at the competencies that your customers want and your competitors lack.Look across your organization to discover the nuggets that either you have or can create to be memorable in your customers’ eyes and earn their business for a lifetime.
  • You need to move before the competition.
  • Overall there are three broad areas to every Business Plan;Finance, Marketing, and OperationsOr another way to put it is Money, Customer Awareness and Customer experience
  • HOW BIG is a question about your financial growth aspirations.The answer should drive strategy development but very often it is the last thing considered. Very often, the marketing or operations strategy is created first and then the financial results are determined.Then what happens is it doesn’t fit and the overall strategy is not good enough because the financial results are unacceptable.This becomes an exercise in circular logic and takes much longer to than it should.The character of your strategy depends on how bold your financial goals are. A strategy with aggressive annual targets will require higher risk and choices that will be completely different than a strategy built to achieve modest financial goals.Don’t try to squeeze better numbers out of a given strategy. Change the strategy to achieve a higher level of performance.
  • Not all customers are created equal. Some have a higher profit potential than others.So, it is extremely important that you carefully choose the customers you want to attract. This question is all about choice. Rarely does an organization have infinite resources to address and serve every group of customers. You can’t be all things to all people.The Lifetime value of a customer is the most meaningful way to look at the financial benefits a customer brings to the organization.Consider the Lifetime value of a customer. It separates the good customers from the great ones. LTV=present value + strategic value.Present value is based what they currently spend with you.Strategic value is based on their potential spend with you over some future period.Think about it another way: Strategic value = Current spending + Future spending.The choice you make about WHO to SERVE must be consistent with your financial goals. The financial targets must drive every aspect of strategy.Targeting a customer who has a sales growth potential of 5% makes little sense if the financial objective is to grow top line revenues by 15%.
  • This without a doubt is the most important part of the strategy.This where you create your service strategy.Select the customer needs and expectations you intend to satisfy from the segment you have chosen to serve.Examine the internal opportunities; look in every nook and cranny for what you do well and where you need to improve.Evaluate exactly where the competition is focusing their efforts; Which customer segments? Their value proposition? Market success? Vulnerabilities? SWOT them and yourself.Decide on what basis you intend to compete, win and create a unique value proposition. I.e. what unique value proposition do you promise your chosen customers?Create a How to compete and win position statement...
  • Your strategic game plan statement not only provides succinct strategic direction for your organization, it also provides an excellent communications vehicle for the rest of your organization.The game plan statement without a navigational chart to execute it is a pipe dream.To successfully execute your strategy you need detailed objectives and action plans, with people held accountable to complete them.Don’t create too many objectives as you develop your game plan. Don’t overwhelm; complexity freezes people.Refine objectives to a critical few that will have maximum impact on your strategy implementation.
  • Imagine the action with such a game plan statement.Is it clear? Do you think employees would get it? Does it direct the resources of the Pharmacy? Does it drive a stake in the competitive ground?This is how to capture the hearts and minds of the people you need to carry out your game plan and make you and your clinical service idea successful.
  • Do not let all this strategic stuff be overwhelming – it is a little like wading into the pool from the shallow end at first.Define a strategic business game planBe specific, HOW BIG, WHO SERVE, HOW WIN.Develop a tactical plan that assigns who will do what and by when.But keep it simple. It doesn’t need to be perfect; just do it. Launch it.Get everyone focused on the highest value activity and hold them accountable for their part of the plan.Make sure your organization has a serve-the-customer orientation rather than a customer service one.
  • Review progress towards goals frequently; especially at the early stage.Focus on the few things that make the most difference.Cut the crap. Clear the path; eliminate the make work stuff. Also important is; to avoid creating crap; crap robs you of bandwidth. Do a crap review and let go of things.
  • Be anal about execution; create a culture to deliver the promise everyday; and at every moment of truth of every customer contact. Culture takes years to develop and days to destroy. You can’t have a bad day when you’re building a new idea and a culture to support it.Get going.Then plan on the run; don’t fall into analysis paralysis. Market research is a continuous customer learningCelebrate small successes to keep everyone in the organization invested in what they are doing is making a difference.Don’t let the bozo’s get you down. Status quo is not an option...When planning and implementing a new clinical service; Don’t listen to the rhetoric that comes from some people. “I wish it was still the same as it used to be, it won’t work, can’t work BS”.Victims are afraid of change; leaders are inspired by it. Being in the comfort zone is the least safe place you can be.
  • To your business and professional success, thank you.
  • UBC Phar400-pharmacy business planning-27jan2012

    1. 1. January 27, 2012 Gerry Spitzner retailSOS.ca
    2. 2. www.slideshare.net/
    3. 3.  Rules of engagement; “play full on” Get my attention if you have a question or comment There are no “out of bounds” questions When I reference... Patients are customers - - customers are patients Product or service; they are the same Organization, firm, company; all these = Pharmacy “You”; almost always I am referring to your clinical service idea or your Pharmacy business plan. retailSOS.ca Gerry Spitzner 3
    4. 4.  Your clinical service Business Plan project ◦ Help you with a simple strategic framework to create your clinical service business plan. ◦ First we’ll look at a high level approach to planning with proven concepts. ◦ Then take these ideas to share a 3 step strategy for your Business Plan to communicate and implement a new clinical service strategy that produces strong financial results. retailSOS.ca Gerry Spitzner 4
    5. 5.  Thoughtstarters Planning in its larger context Critical role of Market Research Initial Considerations to Address About Your Idea for a New Product or Service Another way to look at Strategic Planning retailSOS.ca Gerry Spitzner 5
    6. 6.  Why does it matter? Why should the business come to you rather than someone else? What are you known for? What are you a solution for? Doesn’t make sense to dream up ideas without speaking with customers. A need does not necessarily mean there is a market. Differentiate, differentiate, differentiate retailSOS.ca Gerry Spitzner 6
    7. 7.  What is the real purpose of a business? Dial into everybody’s favorite radio station; WIIFM It’s never about what you can get; rather it’s about what you can give. Your job is not to sell something; rather it is to fulfill an intention. The customers intention to do business with you; to fulfill some unmet need they have. Value is in the applied benefits of the benefit. retailSOS.ca Gerry Spitzner 7
    8. 8. Understanding the overall contextfor planning can greatly help you todesign and carry out the planningprocess in almost any planningapplication. retailSOS.ca Gerry Spitzner 8
    9. 9.  Simply put, planning is setting the direction for something -- some system -- and then working to ensure the system follows that direction. Systems have inputs, processes, outputs and outcomes. Inputs to the system include resources such as raw materials, money, technologies and people. Inputs go through a process where theyre aligned, moved along and carefully coordinated, ultimately to achieve the goals set for the system. retailSOS.ca Gerry Spitzner 9
    10. 10.  Outputs are tangible results produced by processes in the system, such as products or services for consumers (patients/customers). Another kind of result is outcomes, or benefits for consumers, e.g., jobs for workers, enhanced quality of life for customers, etc. Systems can be the entire organization, or its departments, groups, processes, etc. retailSOS.ca Gerry Spitzner 10
    11. 11.  Work Backwards Through Any "System“ Whether the system is an organization, department, business, project, etc., the process of planning includes planners working backwards through the system. They start from the results (outcomes and outputs) they prefer and work backwards through the system to identify the processes needed to produce the results. Then they identify what inputs (or resources) are needed to carry out the processes. retailSOS.ca Gerry Spitzner 11
    12. 12.  Planning typically includes use of the following basic terms. Goals ◦ Goals are specific accomplishments that must be accomplished in total, or in some combination, in order to achieve some larger, overall result preferred from the system, for example, the mission of an organization. (Going back to the reference to systems, goals are outputs from the system.) Strategies or Activities ◦ These are the methods or processes required in total, or in some combination, to achieve the goals. (Going back to the reference to systems, strategies are processes in the system.) retailSOS.ca Gerry Spitzner 12
    13. 13.  Objectives ◦ Objectives are specific accomplishments that must be accomplished in total, or in some combination, to achieve the goals in the plan. ◦ Objectives are usually "milestones" along the way when implementing the strategies. Tasks ◦ Particularly in small organizations, people are assigned various tasks required to implement the plan. If the scope of the plan is very small, tasks and activities are often essentially the same. Resources (and Budgets) ◦ Resources include the people, materials, technologies, money, etc., required to implement the strategies or processes. The costs of these resources are often depicted in the form of a budget. (Going back to the reference to systems, resources are input to the system.) retailSOS.ca Gerry Spitzner 13
    14. 14.  1. Reference Some Overall Singular Purpose ("Mission") or Desired Result from System ◦ During planning, planners have in mind (consciously or unconsciously) some overall purpose or result that the plan is to achieve. For example, during strategic planning, its critical to reference the mission, or overall purpose, of the organization. 2. Take Stock Outside and Inside the System ◦ This "taking stock" is always done to some extent, whether consciously or unconsciously. For example, during strategic planning, its important to conduct an environmental scan. This scan usually involves considering various driving forces, or major influences, that might effect the organization. retailSOS.ca Gerry Spitzner 14
    15. 15.  3. Analyze the Situation ◦ For example, during strategic planning, planners often conduct a "SWOT analysis". (SWOT is an acronym for considering the organizations strengths and weaknesses, and the opportunities and threats faced by the organization.) ◦ During this analysis, planners also can use a variety of assessments, or methods to "measure" the “health” of systems. 4. Establish Goals ◦ Based on the analysis and alignment to the overall mission of the system, planners establish a set of goals that build on strengths to take advantage of opportunities, while building up weaknesses and warding off threats. retailSOS.ca Gerry Spitzner 15
    16. 16.  5. Establish Strategies to Reach Goals ◦ The particular strategies (or methods to reach the goals) chosen depend on matters of affordability, practicality and efficiency. 6. Establish Objectives Along the Way to Achieving Goals ◦ Objectives are selected to be timely and indicative of progress toward goals. 7. Associate Responsibilities and Time Lines With Each Objective ◦ Responsibilities are assigned, including for implementation of the plan, and for achieving various goals and objectives. Ideally, deadlines are set for meeting each responsibility. retailSOS.ca Gerry Spitzner 16
    17. 17.  8. Write and Communicate a Plan Document ◦ The above information is organized and written in a document which is distributed around the system or company. 9. Acknowledge Completion and Celebrate Success ◦ This critical step is often ignored -- which can eventually undermine the success of many of your future planning efforts. The purpose of a plan is to address a current problem or pursue a development goal. It seems simplistic to assert that you should acknowledge if the problem was solved or the goal met. However, this step in the planning process is often ignored in lieu of moving on the next problem to solve or goal to pursue. Skipping this step can cultivate apathy and skepticism -- even cynicism -- in your organization. Dont skip this step. retailSOS.ca Gerry Spitzner 17
    18. 18.  Sources of Ideas... Complaints from current customers Requests for Proposals (RFP’s) from large businesses, government agencies, etc. (i.e. LTC facilities, BC Bid) Modifications to current products (i.e. Innovation) Suggestions from employees, customers, suppliers, doctors, healthcare professionals, etc. retailSOS.ca Gerry Spitzner 18
    19. 19.  You Need More than a Good Idea ◦ Just because it seems like a great idea doesnt mean that it can become a product. ◦ A viable product needs to be profitable (or, in the case of a nonprofit, at least sustainable), including being producible and marketable. ◦ Also, the product should be related to the purpose, or mission, of your business. ◦ Businesses can go bankrupt by trying to be too many things to too many customers, rather than doing a few things very well. retailSOS.ca Gerry Spitzner 19
    20. 20.  At this point, you will benefit from understanding the basics of marketing, particularly how to conduct market research and a competitive analysis. If your idea still seems like a good one, then its important to know how you will position and identify your new product to the market. Youll certainly want to know how much you might charge for it (that is, its price to the customer). retailSOS.ca Gerry Spitzner 20
    21. 21. It is extremely difficult to developand provide a high-quality productor service without conducting atleast some basic market research. retailSOS.ca Gerry Spitzner 21
    22. 22.  Market research has a variety of purposes and a variety of data collection methods might be used for each purpose. The particular data collection method that you use during your market research depends very much on the particular information that you are seeking to understand. retailSOS.ca Gerry Spitzner 22
    23. 23.  Various methods of market research are used to find out information about markets, target markets and their needs, competitors, market trends, customer satisfaction with products and services, etc. Businesses can learn a great deal about customers, their needs, how to meet those needs and how the business is doing to meet those needs. Businesses or YOU need not to be experts at methods of research either. retailSOS.ca Gerry Spitzner 23
    24. 24.  1. Identify opportunities to serve various groups of customers. ◦ Verify and understand the unmet needs of a certain group (or market) of customers. What do they say that they want? What do they say that they need? 2. Examine the size of the market – how many people have the unmet need. ◦ Identify various subgroups, or market segments, in that overall market along with each of their unique features and preferences. retailSOS.ca Gerry Spitzner 24
    25. 25.  3. Determine the best methods to meet the unmet needs of the target markets. ◦ How can you develop a product with the features and benefits to meet that unmet need? How can you ensure that you have the capacity to continue to meet the demand? 4. Investigate the competition. ◦ Examine their products, services, marketing techniques, pricing, location, etc. One of the best ways to understand your competitors is to use their services. 5. Clarify your unique value proposition. ◦ Your proposition describes why customers should use your organization and not the competition’s. retailSOS.ca Gerry Spitzner 25
    26. 26.  6. Conclude if the product is effectively meeting the needs of the customers. ◦ One of the best ways to make this conclusion is to conduct an evaluation. An evaluation often includes the use of various data collection methods, usually several of them. 7. Conclude if your advertising and promotions strategies are effective or not. ◦ One of the best ways to make this conclusion is to evaluate the results of the advertising. Are current and/or potential customers aware. retailSOS.ca Gerry Spitzner 26
    27. 27. If youll need funding to start your new for-profit or non-profit clinicalservice, investors or funders are muchmore likely to provide money to you if theysee that youve done some planning. retailSOS.ca Gerry Spitzner 27
    28. 28.  Is There Really a Need for the Product or Service in Your Organization? What Type of New Product or Service Will You Be Starting? What Planning and Financial Skills Do You Need? What Are Your Initial Plans? retailSOS.ca Gerry Spitzner 28
    29. 29.  What Human Resources Will Your New Product or Service Need? What Facilities and Equipment Will You Need? How Much Money Will You Need? Write a Strategic Plan or Business Plan Document? retailSOS.ca Gerry Spitzner 29
    30. 30.  What is the nature of your new product or service? ◦ Whether youre starting a new product, service or organization, there needs to be a strong market for it How do you know there is a need for your new product or service? ◦ Youll have to have enough evidence to convince an investor or funder -- and yourself. Who are your competitors? What makes your new product/service any different or more needed by customers? ◦ Conduct a competitive analysis. What is a competitive analysis? retailSOS.ca Gerry Spitzner 30
    31. 31.  Who are your competitors? ◦ What customer needs and preferences are you competing to meet? ◦ What are the similarities and differences between their products/services and yours? ◦ What are the strengths and weaknesses of each of their products and services? ◦ How do their prices compare to yours? ◦ How are they doing overall? retailSOS.ca Gerry Spitzner 31
    32. 32.  How do you plan to compete? ◦ Offer better quality services? (value) ◦ Lower prices? ◦ More support? ◦ Easier access to services? ◦ How are you uniquely suited to compete with them? retailSOS.ca Gerry Spitzner 32
    33. 33.  What is the basic purpose of your organization? (This is your mission statement.) ◦ Basically, the mission statement describes the overall purpose of the organization. ◦ When wording the mission statement, consider the organizations products, services, markets, values, and concern for public image, and maybe priorities of activities for survival. For example McDonald’s mission statement... ◦ McDonalds vision is to be the worlds best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile. retailSOS.ca Gerry Spitzner 33
    34. 34.  How will you manage your finances? How will you monitor and record your income and expenses? Do you know how to prepare and manage a budget? Cash flow statement? Balance sheet? ◦ What system will you use for bookkeeping and accounting? ◦ What system will you use to document patient counselling? ◦ How will you adjudicate with Pharmacare? ◦ How will you bill the patient? retailSOS.ca Gerry Spitzner 34
    35. 35.  What are the major goals for your organization over the next three years? What do you need to do to reach those goals? What objectives do you need to reach along the way to each goal? How will you know that the organization is efficiently pursuing its goals? retailSOS.ca Gerry Spitzner 35
    36. 36.  1. What skills (and people) are needed by your organization? ◦ Employee Task and Job Analysis and Job Descriptions will be helpful. 2. How will you attract and retain the best people? ◦ Research Recruiting, Retaining Employees and any Basic Guide to Management and Supervision will help you. 3. How will you know how to organize your staff? ◦ Workforce planning, Specifying Jobs and Roles and Selecting Your Organizational Design (who will work for whom, etc.) will help you. For those in nonprofits, research Key Roles and Structures in Nonprofits and The Aspects of Nonprofit Structure will help you. retailSOS.ca Gerry Spitzner 36
    37. 37.  4. How will you compensate employees? What benefits will you offer? ◦ Researching Benefits and Compensation will help you. 5. How will you know what basic personnel policies youll need? ◦ The topic Policies (Personnel) will help you. 6. How will you know how to manage your organization? ◦ The topic Broad List of Knowledge Areas and Skills in Management (you dont have to master all these skills to start an organization) will help you. Also consider Boards of Directors, Chief Executive Role, Basic Overview of Supervision and Management Skills Unique to Nonprofits (for nonprofits). retailSOS.ca Gerry Spitzner 37
    38. 38.  7. How will you ensure personnel are effectively working toward the organizations goals? ◦ The topic Employee Performance Management will help you. 8. Do you have a banker? Financial adviser? Tax advisor? Lawyer? ◦ Research the topics Getting and Using Banker, Getting and Using a Consultant, Getting and Using a Lawyer and Getting and Using an Accountant will help you. retailSOS.ca Gerry Spitzner 38
    39. 39.  What equipment needs will you have? ◦ These needs depend very much on the resources needed to develop, distribute and support your product/service. Researching Facilities Management might be helpful to you. ◦ Facilities Management includes, cleaning, floor washing, ventilation (HVAC), lighting, receiving What computer equipment will you need? ◦ Researching Computers, Internet & Web will help you. ◦ Laptops, iPad’s, printers, Wi-Fi etc. retailSOS.ca Gerry Spitzner 39
    40. 40.  What is the Cost of Needed Resources? ◦ Consider the costs to obtain the necessary skills, facilities and equipment identified from addressing the questions from all the previous. What are your start up costs? ◦ How much money will you need to get started before generating any revenue? ◦ Consider wages, licenses & fees, advertising, marketing & promotion, leasehold improvements etc. retailSOS.ca Gerry Spitzner 40
    41. 41.  Should I write write a Basic Strategic Plan, full on Business Plan or both? ◦ Usually a Business Plan is a three year outlook and used to attract investor funding. Consider the Pharmacist/owner as an investor. What is Strategic Planning? ◦ Simply put, strategic planning determines where an organization is going over the next 12 months or more and how its going to get there. ◦ Typically, the process is organization-wide, or focused on a major function such as a division, department or other major function. retailSOS.ca Gerry Spitzner 41
    42. 42.  A business plan is often prepared when: ◦ Starting a new organization, business venture, or product (service) or ◦ Expanding, acquiring or improving any of the above. There are numerous benefits of doing a business plan, including: ◦ To identify any problems in your plans before you implement those plans. ◦ To get the commitment and participation of those who will implement the plans, which leads to better results. retailSOS.ca Gerry Spitzner 42
    43. 43.  To establish a roadmap to compare results as the venture proceeds from paper to reality. To achieve greater profitability in your organization, products and services -- all with less work. To obtain financing from investors and funders. To minimize your risk of failure. retailSOS.ca Gerry Spitzner 43
    44. 44.  To update your plans and operations in a changing world. To clarify and synchronize your goals and strategies. For these reasons, the planning process often is as useful as the business plan document itself. retailSOS.ca Gerry Spitzner 44
    45. 45.  1. Business summary ◦ Describes the organization, business venture or product (service), summarizing its purpose, management, operations, marketing and finances. 2. Market opportunity ◦ Concisely describes what unmet need it will (or does) fill, presents evidence that this need is genuine, and that the beneficiaries (or a third party) will pay for the costs to meet this need. ◦ Describes credible market research on target customers (including perceived benefits and willingness to pay), competitors and pricing. retailSOS.ca Gerry Spitzner 45
    46. 46.  3. People ◦ Arguably the most important part of the plan, it describes who will be responsible for developing, marketing and operating this venture, and why their backgrounds and skills make them the right people to make this successful. ◦ Ideally, each person in the management team (and key program and technical folks) are indicated by NAME. ◦ This section is also where you should include your advisors (board of advisors) and other healthcare professionals such as doctors, NP’s, nurses, LTC administrators etc. ◦ Also consider others you may need to make the plan a success; suppliers, corporate sponsor, associations etc. retailSOS.ca Gerry Spitzner 46
    47. 47.  4. Implementation ◦ This is the how-to section of the plan, where the action steps are clearly described, usually in four areas: start- up, marketing, operations and financial. ◦ Marketing builds on market research presented, e.g., in a Market Opportunity section of the plan, including your competitive niche (how you will be better than your competitors in ways that matter to your target customers). ◦ Financial plan includes, e.g., costs to launch, operate, market and finance the business, along with conservative estimates of revenue, typically for three years; a break-even analysis is often included in this section. retailSOS.ca Gerry Spitzner 47
    48. 48.  5. Contingencies ◦ This section outlines the most likely things that could go wrong with implementing this plan, and how management is prepared to respond to those problems if they emerge. retailSOS.ca Gerry Spitzner 48
    49. 49.  1. Strategic Analysis ◦ This activity can include conducting some sort of scan, or review, of the organizations environment (for example, of the political, social, economic and technical environment). ◦ Planners carefully consider various driving forces in the environment, for example, increasing competition, changing demographics, etc. ◦ Planners also look at the various strengths, weaknesses, opportunities and threats (an acronym for this activity is SWOT ) regarding the organization. retailSOS.ca Gerry Spitzner 49
    50. 50.  2. Setting Strategic Direction ◦ Planners carefully come to conclusions about what the organization must do as a result of the major issues and opportunities facing the organization. ◦ These conclusions include what overall accomplishments (or strategic goals) the organization should achieve, and the overall methods (or strategies ) to achieve the accomplishments. ◦ Goals should be designed and worded as much as possible to be specific, measurable, acceptable to those working to achieve the goals, realistic, timely, extending the capabilities of those working to achieve the goals, and rewarding to them, as well. (An acronym for these criteria is "SMARTER".) retailSOS.ca Gerry Spitzner 50
    51. 51.  3. Action Planning (tactical plan) ◦ Action planning is carefully laying out how the strategic goals will be accomplished. ◦ Action planning often includes specifying objectives, or specific results, with each strategic goal. ◦ Therefore, reaching a strategic goal typically involves accomplishing a set of objectives along the way -- in that sense, an objective is still a goal, but on a smaller scale. retailSOS.ca Gerry Spitzner 51
    52. 52.  3. Action Planning (tactical plan) ◦ Often, each objective is associated with a tactic, which is one of the methods needed to reach an objective. ◦ Therefore, implementing a strategy typically involves implementing a set of tactics along the way -- in that sense, a tactic is still a strategy, but on a smaller scale. ◦ 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, which includes knowing how the organization will know who has done what and by when. retailSOS.ca Gerry Spitzner 52
    53. 53. Your strategy must result inaction, so keep it simple, get to thecore issues quickly and act. retailSOS.ca Gerry Spitzner 53
    54. 54.  Build a new Pharmacy clinical practice with a strategic approach and a simple tactical business plan that communicates value and benefits. and answers the question... “Why should I (the customer) do business with you?” Or... what are we offering to our customers that sets us apart from the competition? retailSOS.ca Gerry Spitzner 54
    55. 55.  After conducting a high level environmental scan you’ve determined a need and market for a new clinical service. For example... You’ve heard from the Band Chief that no one in the area is serving diabetic patients in the neighbouring 1st Nations community to help band members lead a “normal” active life. He is concerned for the children. Your Pharmacy has 2 CDE Pharmacists on staff and recently the owner was approached by a nutritionist for a possible collaboration. You notice there are more and more Band members visiting the Pharmacy. You know you need to move quickly to seize the opportunity retailSOS.ca Gerry Spitzner 55
    56. 56.  Answer just three questions and you have your strategy... HOW BIG do we want to be? WHO do we want to SERVE? HOW will we COMPETE and WIN? retailSOS.ca Gerry Spitzner 56
    57. 57.  HOW BIG do we want to be? ◦ Means the Financial plan for your Business Plan (idea). What are the financial goals in order to satisfy the owners of the business? Financial goals determine the character of your strategy. Morph from a strategy-drives-financials paradigm to a financials-drive-strategy one. Don’t try to squeeze better numbers out of a given strategy. retailSOS.ca Gerry Spitzner 57
    58. 58.  WHO do we want to SERVE? ◦ Means create the Marketing Plan for your Business Plan. Who are the customers to whom you intend allocating scarce resources because you believe they represent the best economic opportunity for the firm? There is no such thing as a bad customer; it’s just that some are better than others. If a customer segment can’t deliver your financial goals why would you bother with it? Consider the Lifetime Value (LTV) of a customer as a way of making a choice of who to serve. retailSOS.ca Gerry Spitzner 58
    59. 59.  HOW will we COMPETE and WIN? ◦ Means your daily Operations Plan and how you will “deliver the promise” of your idea in all the other parts of the Business Plan. How do you intend to compete with other companies available to your targeted customers and win? How win is the most critical aspect of your strategy building as it puts words to why someone should do business with you instead of with your competition. Too many objectives paralyzes progress; define the critical few and do them. Find the three things that will achieve 80% of the strategy and do them. retailSOS.ca Gerry Spitzner 59
    60. 60.  Step by step approach to create HOW to WIN... Select the customer needs and expectations you intend to satisfy from the segment you have chosen to serve. Examine the internal opportunities; look broadly at the competencies your organization currently has. Evaluate exactly where the competition is focusing their efforts: Which segments? Their selling proposition? Market success? Vulnerabilities? (SWOT) Decide on what basis you intend to compete, win and create a unique value proposition. I.e. what unique value benefits do you promise your chosen customers? retailSOS.ca Gerry Spitzner 60
    61. 61.  Here’s an example... “Our basic competitive approach will be to develop intimate one-to-one relationships with our diabetic patients (customers) and be the only Pharmacy in our community that delivers disease management, healthy living and nutrition offers to match each one’s unique needs and preferences.” retailSOS.ca Gerry Spitzner 61
    62. 62.  HOW BIG? WHO SERVE? HOW WIN? Once the answer to each of these questions is clear the Strategic Game Plan Statement needs to be created. It’s developed from the answers to the 3 questions above and looks something like this... “We intend to (HOW BIG) by [desired time frame] by focusing our scarce resources on (WHO to SERVE). We will compete by (HOW to WIN).” retailSOS.ca Gerry Spitzner 62
    63. 63.  Here’s an example... We intend to grow Pharmacy revenue from the rapidly increasing diabetic market segment from 500K to 750K by the end of 2012. We will focus our resources on working with our local 1st Nations Bands with a view to expand into other Lower Mainland bands in the 1st Quarter of 2013. We will compete and WIN by ◦ Leveraging the intimate understanding we have of the customer (patient) and their current situation with disease management ◦ Providing personalized holistic health & wellness based solutions combined with nutritional solutions ◦ Matching our CDE Pharmacists specifically with each customer, and ◦ Delivering knock your socks off customer service retailSOS.ca Gerry Spitzner 63
    64. 64.  Create a strategic game plan for your clinical service idea by addressing three critical questions; HOW BIG do you want to be? WHO do you want to SERVE? HOW are you going to compete and WIN? Develop detailed objectives and action plans that address how to implement the strategy. Prioritize the list of objectives to determine the critical few that will have the highest impact on strategy execution. Hold people accountable for their strategy deliverables. retailSOS.ca Gerry Spitzner 64
    65. 65.  Review the progress you are making on your strategy at least once a quarter. Even daily during the first month then monthly for the first quarter. Focus. Focus. Focus. Determine the fewest number of things that will produce 80% of the strategy results and do them. Multi-tasking can be deadly. Cut the crap. Eliminate all activity that does not work toward implementing your new strategy. And reassign the people associated with non-strategic work. retailSOS.ca Gerry Spitzner 65
    66. 66.  Be anal about execution. 90% of winning is what you do in the trenches, not how pretty your plan is. Plan on the run. The success of your strategy will be determined by how well your organization listens to its successes and failures (customers) on a day to day basis. Use this experience to tweak your strategy on the go. Celebrate your success every time you hit a milestone (no matter how small it is) to keep everyone engaged and moving forward. Don’t let the “status quo” bozo’s get you down... retailSOS.ca Gerry Spitzner 66
    67. 67.  Find me... Follow Twitter: @passion4retail Connect LinkedIn: Gerry Spitzner Web/Blog: retailsos.ca Email: gerry@retailsos.ca Digital Biz card: gerryspitzner.tel Digital Biz card: retailsos.tel retailSOS.ca Gerry Spitzner 67