Plan to Succeed:
How to Create a Strategic Plan
By:
Jacqueline M. Jenkins
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A strategic plan is the roadmap that defines the business's course of action. The exercise of creating the strategic plan forces managers to assess business operations from a long-term perspective versus solely the immediate issues of the day. More importantly, a strategic plan equips the management team with a means to monitor the business's progression towards the stated organizational objectives.
The first step in creating your strategic plan is to draft a mission statement. The mission statement is a clear concise statement that describes the organization's purpose for existence. CVS/Caremark Corporation, the 6,200 pharmacy chain, defines the company's mission in the following manner, "We will be the easiest pharmacy retailer for customers to use". [1]
Next, conduct a SWOT analysis on your business that evaluates the business's Strengths, Weaknesses, Opportunities and Threats. The strengths are core competencies that enable the business to succeed. For example, strength for the world's leading maker of household products, Procter & Gamble, is the company's brand awareness. Weaknesses are the internal factors that deter a business from success. In a highly capital intensive business such as manufacturing, a lack of access to capital is a weakness.
Opportunities and Threats are external factors that impact the business. The introduction of product innovation represents opportunities. Blyth, Inc., a home-expressions company, reinvigorated the candle industry by creating fragrant candles. Blyth grew from a small candle maker to $1.5 billion in sales. Threats are challenges such as new market entrants, change in demographic trends and/or industry dynamics that result in a shift in the current business environment. The recent change in the U.S. weather patterns creates a shorter cold weather season that severely threatens retailers.
Benchmarks measure the success towards the goal of the strategic plan. To establish benchmarks, identify accessible, repeatable metrics such as sales figures, customer penetration, production time or profitability. Once the benchmark is established, I suggest that the management team schedule quarterly meetings to assess the business's progress. This meeting also provides an opportunity to review the strategy to ensure the continued relevance of the goal and to identify any changes that might need to occur due to changes in the business or the business climate in which the company exists.
An additional key to succeeding in developing a successful strategic plan is communication. From the senior management down to the line staff all individuals must understand and be aligned with the business's mission and strategy for success. Absent a plan, the business will perish.
Source:
1 www.missionstatements.com (Fortune 500)
Recommended Additional Reading:
Porter, Michael E., Competitive Strategy, New York, NY: Free Press, 1980.
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