This document summarizes the key elements of strategic business planning for high performance organizations. It discusses developing a mission statement, conducting a SWOT analysis to identify internal strengths and weaknesses and external opportunities and threats. This includes analyzing critical issues and compiling a critical issues report. The goal is to formulate strategies to guide the organization and address gaps between its current performance and what is needed to respond to internal and external factors. Strategic business planning requires commitment from leadership and involvement of employees to build understanding and commitment to the resulting plan.

1. Newhouse Partners Inc., Oakville Ontario, info@newhousepartners.com, www.newhousepartners.com

2. The Art and Science of Strategic Business PlanningThe Opportunity for Change and Transition to Create a High Performance Organization Dr. Shayne Tracy and Florian Meyer C.A. rebuild, reposition, revitalize

3. Strategic Business Planning-Key Success Factors of High Performance Organizations Common and consistent goals aligned with mission Demonstrated organizational commitment top to bottom Role clarity-I know what my job is. I know what is expected of me Leadership at all levels Individual and mutual accountability Complementary knowledge and skills The right people in the right positions with right talent

4. Strategic Business Planning-Key Success Factors of High Performance Organizations Reinforcement of required behavioral and technical performance Shared power (real and perceived) Shared rewards based on measured performance and productivity Focused learning culture Planned renewal and sustainability Being customer centric Having strategic financial acumen Profitability based on collective measurable achievement

5. Strategic Business Planning Strategic business planning is a thought process as well as a plan. Developing effective business strategies is learning to think strategically, learning how to ask questions and to think broadly and creativelyabout the organization. Strategic Business planning is successful when it is collaborative and involves management, employees, suppliers and customers. Strategic business planning is integral to organization change and transition. “If you keep on doing what you have always done you will get what you always got”

6. While Strategy Formation is Nonlinear and Iterative…. “ Random acts of strategic thinking are futile” What new results will we seek? What adjustments are needed? What Results Do We Seek? What Situation Do We Face? What will be done by whom and when? What strategies will we use?

7. The Need - Do Any of these Situations Describe Your Organization? The company was established to respond to a major need, but lately interest/sales in the organization’s products/services has diminished? Losing money but continues with activities similar to those of 10 years ago….profitability? The organization is now operating smoothly, but you wonder if it will be in five years? Concern over performance and productivity at the management and employee level? Significant new competitors? Succession of senior management? Merger of two organizations? “Financial issues are trailing indicators and a symptom of the underlying aliment”

8. Introductionto Strategic Business Planning Strategy has been defined as "that which has to do with determining the basic objectives of an organization and allocating resources to their accomplishment." A strategy determines the direction in which an organization needs to move to fulfill its mission. A strategic business plan acts as a road map for carrying out the strategy and achieving long-term results. “ People in organizations need a picture, purpose, plan and a part to play”

9. Radical Surgery? Strategic business planning is not long-range planning. Long-range planning builds on current goals and practices and proposes modifications for the future. Strategic business planning considers changes or anticipated changes in the environment (internal and external) that may suggest more radical moves away from current practices. When developing a strategic business plan, long-term market trends, alternative opportunities, new technology and other factors are analyzed. This analysis might determine the emphasis on other/new business units, decisions on future market expansion, labour allocation or capital, and other strategic decisions. “ High performance organizations continue to renew their business model to retain their most valuable external asset….the customer”

10. Organization Commitment to Strategic Business Planning Strategic business planning requires a significant investment of time resources and energy. Organizations have to overcome barriers raised by comments such as: "a lack of time", "things are changing too fast", "we're doing OK now", we’re making money aren’t we”? A visible commitment from top leadership is required for effective strategic business planning. The organization should emphasize team planning. Involving those affected by the plan builds an organization-wide understanding and commitment to the plan (participants acquire an "ownership“) “We should have been more proactive two years ago...I ignored my gut feeling....and look at what it cost us….we could have been ahead of the downside we are now experiencing” Client

11. Strategic Business Planning Model Key Elements Organization Mission Statement — What business are we in? Strategic SWOT Analysis — What are the strengths and weaknesses of our business? Finance, Operations, People, Sales and Marketing? Strategy Formulation — What do we need to do to strengthen the business? Goals, Long-term Objectives, Operational Business Plan Immediate Action Plans — When and how will we act to implement the plan and who will be accountable? “ We continued to muddle and meddle with the organization plan…it was the blind leading the blind ….and the bland leading the bland” Client

12. Stage 1: Mission Statement The mission statement establishes what the organization plans to do, for whom, and for what benefit it exist. The mission statement identifies organizational purposes and the reason for its existence. It addresses the "what" questions, i.e., what is our role? what business are we in?, etc. It is a short (one, two, three sentences) statement. The mission statement - the organization's "preferred future" - ensures consistency and clarity of purpose throughout the organization. It provides a point of reference for all major planning decisions. When it is communicated as a basis for key decisions, commitment is gained from within the organization and support from those outside. “ Effective mission statements use these words in a sequence: the____is___that____for____to_____ with the appropriate message in between”

13. Mission Statement-What Should It Tell You? What is our business? What is our principal service/product? Who are our principal clients/users? What is unique about our organization (geographic, products, services, mandate)? What are the benefits? Comment The mission statement may have to be rewritten after the process. New directions, strategy and processes will dictate a new or modified mission statement

14. Stage 2: Strategic Analysis The strategic analysis is an in-depth look at all factors likely to have the greatest impact on the future of the organization. During this analysis, critical issues facing the organization will be identified. The analysis forms the basis for decisions affecting the organization's future. It is essential that sufficient accurate information be available on which to base judgments. Assumptions will be identified and checked. Comment The strategic business planning process requires an interna “brand” For example; “Transitions-Good to Great” to focus energy and innovation “As insiders, we can’t see the forest for the trees…..for many of us, it tends to be the same trees, we don’t even see the changing forest!” Client

15. Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis-Internal Strengths and Weaknesses of the Organization (Internal) In this part of the analysis, factors which are internal to, or within the control of, the organization will be identified. Their impact on the ability of the group to fulfill its mission will be discussed. These may include: customer base, employee skills or resources, organization structure, shared values, finances, partnerships, joint ventures, staff and style of leadership within the organization or systems such as communications channels. Comment This analysis is done through targeted interviews, document reviews and a collaborative one –two day workshop(s) (retreat) with key decision makers. Online web polling is also an option for distance input. Assessment tools are used to evaluate talent ( skills, behaviour and skill attributes) and human capital potential

16. Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis- External Factors Opportunities and Threats Facing the Organization (External) All organizations are affected by outside influences over which they may have little control. These factors have varying degrees of impact, both positive and negative, on the organization. Factors to be addressed here will relate to the mission. They may include activities of competition, government policies, society/community influences or trends, markets, the economy, lifestyles, the environment, demographic trends, technological advances or alternatives. Comment Market and Best PracticesResearch will support intuitive inputs. Customer/supplier surveys and interviews might also be used.

17. Critical Issues Report The SWOT analysis, identifies the issues most critical to the future of the organization. Their significance can be measured by the size of the gap between the current status or performance of the organization and what is needed to aggressively respond to internal and external factors in the future. These issues affect growth and/ or financial stability or form barriers to the accomplishment of the organization's mission. A Critical Issues Report for each issue is compiled. It contains supporting information, underlying causes and conclusions and the impact on the organization. Comment The Critical Issues Report provides the basis of the Strategic Business Planning Strategy document

18. Stage 3: Strategy Formulation-Strategic Windows The focus at this stage is on where the organization should be going rather than how it should get there. A three to five year planning horizon is recommended. The critical issues facing the organization in accomplishing its mission should be the baseline for this stage. There are three steps in this stage: 1)Identification of Key Strategic Windows There should be no more than seven to ten key strategic windows formulated in this stage. Examples: Declining Sales Recruiting Need- Getting theright people Need new trucks-Fleet Management

19. Stage 3: Strategy Formulation Continued 2) Establishing Key Strategic Priorities The next step is to prioritize the strategic windows. Criteria for ranking is based on which area has the greatest effect on the organization's ability to fulfill its mission. The highest ranking key strategic window(s) will be the "driving force" of the overall strategy and are the ones requiring the most time and resources allocated to it. Comment Each key “strategic window” will require extra effort from the organization in the future. “It isn’t the changes that do you in; it’s the transition.” —William Bridges, Managing Transitions—Making the Most of Change

20. Strategy Formulation Continued 3) Develop a Strategy Statement for Top Ranked Opportunities The key prioritized strategic windows are the basis for future actions of the organization. They must be carefully documented for communication to key stakeholders. A newsletter is helpful. Strategy statements for each opportunity (two to three paragraphs) should answer the following questions: What will be our future key strategic windows? How do they differ from our current windows of concentration? Do they represent changes? Are they compatible with our mission and the conclusions from our strategic analysis? Comment Communication is critical at this stage in preparing the organization for change.

21. Stage 4: Setting Long Term Goals and Objectives Within the most important strategic priorities, identify what must happen to move the organization closer to accomplishing its mission and strategy (Goals). These goals are broad and visionary. Write the objectives for the goals using the following format: "To have (or become) ... (the results) ... by ... (year)". Test the objectives to determine if they are: S-pecific M-easurable A-ttainable R-ational, reasonable, responsibility T-ime focused “When you don’t know where you are going any harbour will do”

22. Stage 5: Implementation-The Rubber Hits the Road! A comparison with the current strategy is undertaken at this stage. An examination of the structure and operations of the organization must be carried out to ensure a fit with the newly stated strategy, goals and objectives. Areas to be scrutinized, and possibly changed, include: Finance-allocation of resources: will enough resources be available for the highest ranked strategic area? What do we cut back to free up resources? Organization structure: are jobs adequately defined? Are the right people in the right place? Information systems: what will be the organization's technology needs? “People don’t fear change …they fear the loss that change brings.” Dr. Donald Carmont

23. Stage 5: Implementation-The Rubber Hits the Road! Continued Other examples of key strategic areas in organizations may be: improving marketing, sales, training of leaders/staff, profitability, profile, etc. Management: is the appropriate management team in place? Leadership: is there sufficient leadership potential? People responsible: are there people identified as "in charge" of each goal and objectives? Reward systems: how will people be recognized or rewarded for achieving results? Comment The time frame for implementation will reflect the scope of the required change. Criteria and milestones for evaluation are established. Accountable people will be identified. “ The best laid plans are futile unless they are actioned with discipline, vigor, responsibility and with top of mind”

24. Stage 6: Operational Plans-Working Business Action Planning-Balanced Score Card Short-term operational action plans (e.g., one year) are set based on the longer-term objectives. These will include specific activities and programs. A well written, openly communicated plan for these objectives will be similar to that used when developing long-term objectives. The result will be a map of activities or programs, responsibilities of people, resource allocations, finances and a time frames. It is anticipated in subsequent years, the time required to update the strategy and long-term objectives would be less. Comment The strategy must be reviewed each year. A balanced score card approach is implemented.

25. The Balanced Scorecard Dimensions Financial Perspective Vision, Values, Mission, Strategy Customer Perspective Internal Processes Learning & Growth

26. Stage 6: Operational Plans-Business Action Planning-Balanced Score Card

27. The Strategic Business Planning Process – Success Factors Visible commitment of Executive Management in the implementation. A planning steering committee to undertake the strategic business planning tasks. Involving the whole organization in idea generation to increase awareness, ownership of the plan and the change process while setting organization standards. Allowing plenty of time! There will be gaps in time between certain stages (e.g., stages 3 and 4) for reaction, reflection, checking facts, analysis and data collection. Organization brainstorming, creative “out of the box” thinking especially in stages 1 and 2 allows new ideas to be considered.

28. The Strategic Business Planning Process – Success Factors Define your mission, values and corporate goals through process Engage as many people as possible in data/information collection. Communicate, Communicate, Communicate! Challenge organization beliefs, assumptions and status quo. Outside consultant(s) minimize biases, challenge assumptions, and allow the entire organization to contribute equally while keeping the process on track. Ensure the “right people are in the right seat” on the bus Map the organization structure and chart to align with Mission and Goals Ensure the reward structure is congruent with the achievements defined by the plan. Implement goal setting and a score card process to drive measurable results. “The merger was less than successful. We failed to involve the people in a process that provided for engagement in solving key merger challenges in sales, operations and product/service overlap. It may appear to take longer but in hindsight it would have been worth it….pay now or pay later” A Client

30. Social/community

31. Gov’t policies

32. Environment

33. Markets

34. Economy

35. Lifestyles

36. Demographics

37. Technology

39. Allocation of resources

40. Organization structure

41. Information systems

42. People responsible

43. Rewards

45. Prioritize strategic windows

47. Programs/ activities

49. Staff/directors

50. Group culture

51. Leadership style

52. Structure

53. Systems

54. Shared Values

55. FinancialINTERNAL STRENGTHS and WEAKNESSES

56. Key Activities and Deliverables-Alignment Meetings with Executive to plan process and timelines Co-management of Steering Committee and process Business document Reviews, questionnaires (online) Customer Survey, External Research One to One Interviews, meetings, talent assessments of staff One day offsite strategic input retreats (SWOT)(SSC) Critical Issues/ SWOT Report Meeting with Executive to review Critical Issues/SWOT Report Strategic Windows Summary Transitions and Change Seminars for Managers and Staff One day offsite action planning and implementation sessions Goal Setting and Score Card training Strategic Summary Report Coaching of Executive and Management Team

57. Customers/Clients More Strategic Your Unit More Operational Customers/Clients/Suppliers Regulators/Competitors Vision/Values Mission Goals Strategies,Tactics Objectives At the Unit Level Action Plan Responsibility

58. Final Thoughts on Strategic Business Planning Keep Your Thoughts PositiveThoughts Become Your Words Keep Your Words PositiveWords Become Your Behaviours Keep Your Behaviours PositiveBehaviors Become Your Habits Keep Your Habits Positive Habits Become Your Values Keep Your Values PositiveValues Become Your Destiny Gandhi —Gandhi