|Keep It Simple
The watchword for any organization considering developing a strategic plan is simplicity.
Many organizations quickly become bogged down in details of questionable value.
Managers become preoccupied with the planning document and allow form to take precedence over substance.
Tremendous effort is focused on documenting what is already being accomplished rather than identifying what needs to change.
Some managers fall into this trap because they do not understand that the value of planning comes from the process, not from the document.
The process should be designed to encourage broad participation within the organization.
Communication and consensus building is more important than complex market analysis.
The process should result in greater focus on what is most important to the organizationís ultimate success.
By keeping the plan simple, you are more likely to achieve focus in the organization.
Any organization with limited resources will benefit from a clear set of priorities for how those resources are to be spent.
With unlimited resources, you could pursue every possible opportunity.
However, if you need a clear set of priorities that everyone understands and is committed to, then strategic planning might be helpful.
|Strategic Planning Myths
In the last issue of the newsletter, I addressed three common myths about strategic planning.
Although many organizations have embraced planning as a useful management tool, many misconceptions remain. Here
are a few more of my favorites:
1) We are too busy to plan. - The busier you are, the more you will benefit from planning. Every day you have
to decide what gets done and what gets put off. Planning is about setting priorities and making tough tradeoffs. Without clear
priorities, people may be putting off the wrong things.
2) Strategic Planning is just for big companies. - Many of the concepts used in strategic planning were developed by large corporations.
In fact, some of the concepts date back to ancient military practices. Although the complexity of the planning process is greater with larger organizations,
the process can be simplified such that even a small organization can benefit. We even help individuals develop personal strategic plans.
You can't get much smaller than one.
3) A budget is all we need. - Many organizations are managed with the aid of a budget. The primary purpose of the budget is to limit how
money is spent within the organization. These organizations are budget driven. Budgets are use to predict the future,
but they don't provide much help in creating the future.
|The poll question last quarter asked people - What is your outlook for the economy in 2007 compared to 2006?
The results were split almost right down the middle.
Here are the actual results:
|15%||Toss Up (Don't Know)|
|Our poll question this quarter is: How likely is it that the price of a barrel of oil will reach $75 in 2007?
Toss Up (Don't Know)
|Click here to participate in our poll.
You may return to the Poll Page to monitor the results as often as you like.
However, you should respond to the poll question only once. We will report the results in the next issue.
Planning Evolves Within an Organization
|Most organizations go through three phases on the way to a mature planning process. They are:
Predicting the Future - The planning process usually begins with budgeting.
The organization forecasts revenue and expenses a year or two into the future. Budgets are often generated bottom up which means
each department submits their numbers and someone compiles the results.
Managing the Future - As an organization matures, managers are required to set goals and objectives along with their budgets.
These are often collected and reviewed by the leadership. Some guidance or feedback may be provided.
Creating the Future - With experience, the management team begins to define the results it wants to achieve.
It becomes more aware of external forces in the form of opportunities and threats.
It begins with the end in mind and works backward from there to define the strategies.
|More Planning Myths
Measuring Results Instead of Effort