6. Five Elements Of A Strategic Plan


Published on

Strategic planning templates & examples;
Business, Finance, planning, Vision, Mission, Plan, objectives, strategy, swot, pest, Business plan, Strategic planning, bcg matrix

Published in: Business

6. Five Elements Of A Strategic Plan

  1. 1. Five Elements of a Strategic Plan 1. Vision 2. Mission Statement 3. Critical Success Factors 4. Strategies & Actions for Objectives 5. Prioritized Implementation Schedule These elements become the foundation of a workable and achievable business plan. The strategic planning process explores essential questions about the purpose of being in business. Owners and employees must answer these essential questions and come up with a consensus on the answers. Answers to these questions will help in determining the seven important elements to the strategic plan. • What is our vision? • What do we do best? • What is our business? • What needs do we satisfy for customers, which competitors cannot provide? • What kind of image do we want? • What do we want to be known for? • What kinds of customers do we want to have? • How big do we want to be? • How many products do we want to have? • What personal needs do we want to satisfy? • What are our philosophy, ethical and social responsibilities, and values? • What value do we want to have to our customers, suppliers and distributors? • Where do we want to be in five years? Build the Five Elements 1.0 Vision A brief statement describing direction and growth plans. Based on the answers to the above questions, develop a vision, with full participation and quot;buy-inquot; from all employees and shareholders. Try to make the vision as concise as possible. Mission Statement(s): Statement(s) describing the important business capabilities, based on the customer's needs identified in the market research. From the vision statement, themes will emerge and form the mission statements for the business, and/or the problem or need to be resolved. The
  2. 2. mission statements will become the yardstick for measuring success and progress. In developing mission statements, consider what is really being sold, i.e. processors of crushed glass for sandblasting applications are really selling 'expertise' by creating a custom blend of blasting materials to replace conventional methods, saving money and improving worker safety and health. For instance, one of the missions that emerge as a theme might be 'fast response time'. The group might then develop a mission statement such as: quot;We shall react immediately to evaluate new product suggestions or problems customers identify and get the revised product to market in the shortest possible time frame.quot; This statement has several objectives that will require more strategies and action plans to achieve. The objectives in this mission statement imply: continuing customer feedback, a system for revising or upgrading products and services, and involvement of operations staff to minimize lead times for changes. 2.0 Critical Success Factors Key factors to be addressed if a business is to achieve the vision and mission statement. Critical success factors might include: • achieving credibility • maintaining product quality standards • finding needed resources • performing additional market research to stay in touch with customer needs • establishing definitions and standards of how a company serves and listens to all customers; • establishing internal and external communication standards; • profitability; • cost-effective manufacturing and operations; • establishing a continuous improvement policy for reviewing and evaluating progress ; • a system that documents processes so others can be trained; • buy-in from all levels of the company, which helps understanding and acceptance through participation; • commitment and willingness from the owner(s) to make changes. • a financial plan that ensures enough cash flow and sales revenue to grow the company effectively; • a plan to deal with downturns should they occur; • systems and administrative policies to enhance employees do their jobs effectively. After developing the list of critical success factors, review them for practicality and achievability.
  3. 3. Can all critical success factors be incorporated into the work scope in a cost- effective manner? Can each be defined in terms of controllable variables? A controllable variable is one where the business or individual can affect the outcome. Laws, regulations, interest rates and customer reactions are uncontrollable variables. Group brainstorming can help identify ways to make an apparently uncontrollable variable manageable. Ensure that the group quot;stands outside the problemquot; and views it in a different framework or opposing perspective. If an uncontrollable variable is controlling a company, call an open-minded, every-idea-counts brainstorm session and see what alternative solutions emerge from the group thinking process. Document the critical success factors and any contributing factors or sub- steps necessary to achieve the critical success factors, such as quot;being responsivequot; or quot;establishing a customer feedback systemquot;. Word the factors with an objective or goal in mind to achieve the desired outcome. Put together a representative team to prioritize each objective critical success factors objectives. Prioritize with respect to each other and with respect to existing workloads, and daily maintenance and operations. Re-evaluate the objectives before implementing. Do they still relate to the vision the company wants to follow or the problem it needs to solve? The order of importance for implementation of strategies defined as important by a growing business, are the ones that follow the path of least resistance towards achieving cash flow and product acceptance by the market place, if necessary A major contributor to strategic plan failure is assigning implementation to employee(s) who never participated in the planning. Assign lead responsibility to one person to manage the planning and implementations. Form teams if necessary. All team members must prioritize their time to concentrate on higher priority objectives. 3.0 Strategies & Actions Steps to Implementation: A strategy is the definition of how the work will get done and by whom. Strategy planning may be completed in the large group, or by a team assigned to the objective. Break down each critical success factor objective or goal into a series of strategies for implementation, by priority. For each strategy, define the specific action plans or tasks required to implement. An action would be defining what customers think would be desirable to have as part of the company's enhanced services. Another action would be calling customers to ask their opinions.
  4. 4. A strategy could be designing a new customer service system or other customer interaction to learn about what they think of the product and service. Or to collect ideas about how to make the product more functional, or provide better or more useful service. 4.0 Prioritized Implementation Schedule. Prioritize the critical success factor objectives and corresponding strategies/actions in order of importance. Document a schedule, including start dates, milestone dates and anticipated completion dates for each strategy. 5.0 Summary and Final Recommendations This collection of objectives, strategies, actions and responsibilities should become the foundation of a company's business plan. But a real business plan is not a static document. Together with an executive summary, history of the product or project, management team bios, marketing plans and a budget, it is now an action plan. These plans may also be important for potential investors. One major contributor to business failure is lack of focus on a single direction where all participants are working towards the same goals. Another contributor is losing focus on that direction and not exercising the discipline and management leadership to implement the plan as decided. A third contributor to failure is saying yes to every opportunity or changing the plan midway without determining how it will affect the current plan, priorities, resources and the ability to deliver on the promise.