I am going to to make this a little more lively for people to want to listen to this topic in the evening and so rather than basic Strategic planning – this is actually the more modern, more advanced topic of “ Real Time Strategic planning in a Rapid Response World” I have about 35 – 40 minutes so it is a high level overview and not too detailed. So why – “Real Time” and “Rapid Response World” Because that is the reality of the environment we live in. You and I – accountants and engineers – know that many things – certainly anything “strategic” requires thoughtful consideration to be done right but yet we must adapt to be successful and be heard. So tonight I am talking about Real Time Strategic Planning in a Rapid Response World We can still be thorough and thoughtful while adapting to this reality.
So what is the purpose of strategic planning anyway It’s simple: Focus on priorities and achieve results . We do that by developing the strategies that will lead to those results.
The purpose of strategic planning is not to do any of these things but they are common mistakes that lead to frustration that your strategic planning didn’t work or just became a binder on the shelf that no one looked at but wasted a lot of time Your Strategy is HOW you will attain your goals. If all you do is develop goals you have left out a critical piece. When there is a 3 year plan, first year is the only one ever looked at Consensus – we all agree that social security is a big problem, but everyone is afraid to put real workable ideas on the table – there is no consensus on that How many of you have ever been involved in a strategic planning process? How many have experienced at least one of this issues?
Business Model: Who are our customers? What geographic area do we serve? What products and services do we provide? What is our revenue stream? Develop a current and future business model Asset advantages Location Partnerships Name recognition and reputation
Financial analysis is much more than just a budget it includes many aspects of the financial picture – past, present and future. Trends – not just up or down – how about seasonal fluctuations or even fluctuations by time of day. The pairing of Dunkin Donuts and Baskin Robbins in the same building is a good example of the value of trend analysis. People drink coffee and eat ice cream at different times of day. They want Hot Chocolate in winter and ice cream in summer. The same employees and the same parking lot can cover customers of different product lines. Product lines at risk and those running a risk – this is an important analysis that is often overlooked by nonprofits.
Competition – Used to be wholesale and retail makrets. The Internet has blurred this and can allow a wholesaler to also be an online retailer but it must be handled in such a way that retailers are not undercut.
The foundation part can be done now – anytime – not when there seems like there is a big need and you have to do the planning right away. This the EASY part and the time consuming part
Example: use a nonprofit one because this happened right here in NJ and I’m familiar with the response and it happened in other states too including california: In a prior budget reduction frenzy it was initially decided to reduce to zero funding for the arts. That’s a 100% reduction – a disaster for the arts and in some communityies a big ripple in the local economy. It was finally partially restored after the Arts community banded together and did an incredible job of lobbying and pulled out all the stops activating big guns, etc. But then they stepped back and many realized they had been on the bring of disaster and almost didn’t make it. What question should they ask? How can we replace the funding we’ll lose? How can we balance the budget? How will this affect the whole arts community so how can we band together to restore funding What does this mean for the future of the arts community and how does our business model need to change? Many changed their business model to charge users of their service more and became less dependent on government funding.
Example: State legislature decides to eliminate funding for arts from state budget How can we replace the funding that will be lost? How can we balance the budget? How will the loss of funding affect the whol arts community and how can we respond as a community? What does this mean about the future of the arts in our communities? Will there be more cuts? Will this cut be restored in the next session?
Reality – What will it cost? Is it feasible? Can we afford it? Laugh Test – Do people think its realistic? Or do they look at you like you are crazy? Validity test - Will the proposed strategy work for what is needed or is it likely to fall short. If you need a 20% increase in revenues, does your strategy have that potential?
Work Plan List of activities to implement the strategy Who it is assigned to? Due Dates Use Project management tools to track Don’t forget to analyze results After you test if your strategy isn’t working, return to strategy formation or to the big question if you think you may have asked the wrong question.
Real time strategic planning 2 9 11 slideshare notes
Real Time Strategic Planning in a Rapid Response World Institute of Management Accountants February 16, 2011
Purpose of Strategic Planning Focus on Priorities…… … ..and Achieve Results
Real Time Strategic Planning Model (RTSP) <ul><li>Phase 1 </li></ul><ul><li>Basic planning elements that can be applied to various scenarios as they occur </li></ul><ul><li>Phase 2 </li></ul><ul><li>Strategy formation and implementation that occurs continuously </li></ul>
Traditional vs. RTSP Outputs <ul><li>Traditional Strategic Planning </li></ul><ul><li>Goals and 3 Year Plan </li></ul><ul><li>Real Time Strategic Planning </li></ul><ul><li>Action steps to be taken in real time </li></ul>
Strategy and Competitive Advantage <ul><li>Strategy </li></ul><ul><li>Coordinated set of actions aimed at creating and sustaining a competitive advantage </li></ul><ul><li>Competitive Advantage </li></ul><ul><li>The presence of visible, obvious and measureable ways in which your organization differs from and is better than its peers. </li></ul>
Financial Analysis <ul><li>Overall Budget </li></ul><ul><li>Diversity of revenue </li></ul><ul><li>Trends in revenues – Past and future </li></ul><ul><li>Stability analysis </li></ul><ul><li>Which product lines are at risk </li></ul><ul><li>Which products are running a deficit </li></ul>
Phase 1-Organizational Identity <ul><li>Detailed and time consuming </li></ul><ul><li>Can be used repetitively to address strategic issues as they arise </li></ul>
Phase 1 – Strategy Screen <ul><li>A set of criteria that your organization uses to choose whether or not a particular strategy is consistent with its identity </li></ul>
Crafting a Strategy Screen <ul><li>5 – 8 elements recommended </li></ul><ul><li>Consistent with mission/business model </li></ul><ul><li>Ethical </li></ul><ul><li>Break even or create a surplus within 12 months </li></ul><ul><li>The result will be sustainable </li></ul><ul><li>Will not put us in competition with valued partners or customers </li></ul>
The Big Question Framing the Right Question Will Drive the Right Strategies
Crafting the Big Question <ul><li>List a variety of ways to frame the question and choose the one that asks it so that all of the complexity that you want addressed is in the question </li></ul>
Strategy Formation Develop a list of potential strategies to address your big question Check each strategy against your strategy screen <ul><li>Test your strategy approach before implementation </li></ul><ul><li>Reality Check </li></ul><ul><li>Laugh Test </li></ul><ul><li>Validity Test </li></ul>
Connect with Marion <ul><li>Email: [email_address] </li></ul><ul><li>Blog: marionconwaynonprofitconsultant.blogspot.com </li></ul><ul><li>Website: marionconwayconsulting.com </li></ul><ul><li>Twitter: MarionConway </li></ul><ul><li>LinkedIn: Marion Conway </li></ul><ul><li>Facebook: facebook.com/MarionConwayConsulting </li></ul><ul><li> Become a fan - and see my blog feed </li></ul><ul><li>Resource: The Nonprofit Strategy Revolution </li></ul><ul><li> by David LaPiana </li></ul>