Strategic planning is essential to companies large and small. Large corporations have strategic planning organizations; smaller companies rely on the senior management team or the owner to do the strategic planning. The development of a strategic plan requires both analytical ability and therefore should not be staffed entirely by financial experts, which happens in many companies.
Understanding where the company has been is an important part of strategic planning. How did it get to where it is now? What have been its successes, its failures, its projects or products that fell in between success and outright failure? What are the competitors doing that impacts your business? What is your market doing? That's where all the analytical skill is needed: You must thoroughly understand how you got to where you are right now.
But more than that, you also have to understand where the industry and market are going and how you might fit into that. Much of this is taken care of by doing the external portion of a SWOT analysis, the opportunities and threats. I covered this in a previous post. You can also undertake a Porter Analysis, named for Michael Porter, a professor at Harvard and well-known competitiveness guru. In a Porter Analysis, you determine the forces at work inside the industry: the level of competitive rivalry; the bargaining power of both your suppliers and your buyers; the threat of new entrants into the industry; and the threat of substitutes, those products and services that solve the same problem as yours, but in a different way. Again, analytical skills are required.
Part of understanding how to move forward is also through understanding the skills and capabilities you have within your company. That happens by performing the internal portion of the SWOT analysis, the strengths and weaknesses. It can be difficult to be honest about where you have truly outstanding employees, technologies, processes, competencies, etc., but it is even more difficult to understand where you are not so great. Admitting to weaknesses is not something most business people are willing to do, but if you don't, you may well develop a strategic plan that is not able to be implemented.
But those analytical skills, in isolation, are not enough. You need to pair them with the ability to find the story. What does all of this actually mean for your business? Are there indicators that show that the industry is becoming so competitive that you could lose significant market share? If so, what can you do about it? Should you enhance your product so it provides extra value to your customers, or should you exit the market, perhaps focusing your resources on a new product line? Is there something happening in the external environment, that, when paired with your weaknesses, could indicate a coming downward spiral?
Those are just some of the issues you need to deal with when developing a strategic plan. So, how do you staff the group that will actually develop that plan for you? One way is to simply have the senior leadership team work on this together. Another is to have a permanent organization staffed with those who can both analyze and interpret.
But there is a third way. You will need someone who is ultimately in charge of developing and implementing the strategic plan; that can be a vice president or the CEO. But for the staff, consider bringing in employees on a rotational assignment. Two years is probably a good length of time to spend in a strategy organization. Don't just rotate senior people in and out; bring in people from all levels of the company, including from the front lines. You will benefit from the insights and information they bring, because once you get past about 100 employees, you simply cannot get to know everyone well, and therefore work is being done, information gathered, insights developed that you may never hear about. Doing this will also allow you to get to know the skills and abilities of those you may never have even met; in this way, you can start developing succession plans throughout the middle and upper levels of management.
Of course, you can't just randomly pick people off a list. You'll need to ask for recommendations from your management team. You'll need those who know how to gather research, those who know how to analyze data, and those who can find that story in the numbers. You'll want some who have dealt directly with customers and some who understand how projects get funded. Which means you will have to pick carefully; this will be no different than hiring from the outside.
Once you find good employees, why send them back to their original organizations? Because then you will begin to spread the word about your strategy, how it was developed, what it means to all levels of the organization. Remember, implementation of strategy doesn't happen in the executive suite; that's reserved for the front lines. Each and every organization needs to understand how their work fits into the strategy, and working alongside someone who has helped develop it is an outstanding way to diffuse a deep understanding of and commitment to your plans, goals and objectives.