If, as the Managing Director of a company you do not know where your company is going, how will you achieve your aspirations to grow, move in a new direction or even, many would argue, survive in today’s fast paced business environment?  The answer is probably you will not be able to, unless that is you set a strategy for the future.  Put in its most simplistic form, Strategic Planning is that act that enables a company to set down a plan of where it is going over the next few years, how it will get there and just as importantly, how it will know if it has arrived (or not, maybe).

 

This article continues the series of pieces showing how military thinking and planning - which itself has been evolving since in 4 BC Sun Tzu wrote the Art of War - can be applied in a business setting to help clarify the thinking of the management team and ensure that plans for the future are coherent, logical and achievable. 

 

The essential key to ‘strategic design’ (to use military parlance) is to define a top level view of how the company intends to make progress into the future.  This responsibility lies clearly with the CEO/MD, who must have a deep understanding of what constitutes the art of the possible for his/her organisation.  He/she needs to agree a desired end state with his Board/senior management team (e.g. turnover of £20 million within the next 5 years); he must also have the ability to identify the critical factors that are likely to impact on the chosen course of action (political, financial, legal etc).  The leader must also be able to work out how to optimise his/her company’s core strengths and avoid the pitfalls of its weaknesses (which may be people or processes); whilst simultaneously watching the opposition very carefully (to see what they are doing), so that his/her company can counter or even better - get ahead of - their track.  And finally he/she needs to develop an ‘operational concept’ that all staff members can and will buy into and therefore do their bit to achieve success for the company. 

 

Although perhaps tortuous in composition, does it not actually sound quite simple?

 

Then why do so many companies face problems such as boardroom disagreements, contradictory approaches to risk, inefficient administrative processes, unmotivated workers, inability to work as a unified team…and oh yes, a shortage of cash!

 

The answer for the military is relatively straightforward: the focus of any strategic plan is on the entire organization.  In business, too often the focus of the business plan is on a particular product, service or program.  Therefore the vital components that will actually make the plan a success or cause it to fail by not being addressed have been neglected – it is the organisation as a whole that must deliver the desired objectives. 

 

In this context, do also remember Napoleons’ pragmatic dictum: “a plan in itself is often useless, but the act of planning is invaluable”.  From my own experience, I have written many plans but the one that is most often put into practice may well be Plan 13!  What this in effect means is that in any strategic planning sequence – flexibility is the key. 

 

Having gone through the process of formulating a strategy, the CEO/MD will inevitably have carried out some “what if” scenario thinking (brainstorming).  If the essence of such an exercise is captured and written down as ‘branches & sequels’ or ‘possible alternatives’, the company has the immediate built-in flexibility to adapt rapidly to changing situations without being blown off the original course as laid down in the Vision statement (see previous article).  How often have I heard from MD’s: “yes, well it is in my head & I know what I want to do etc”, but it is not written down!  The question I then ask is: “OK that is great - but how is everyone else in the company supposed to know what you are thinking?”  This is often met with a slight colouring of the cheeks and a realisation that communication is essential!

 

Let’s return to Strategic Planning and the need to determine where an organization is going over the next year or, more typically, 3 to 5 years.  There are several approaches to creating a strategy but they all require:

 

 

The CEO/MD must have in mind the ideal image of what he/she wishes to achieve, what specific actions must be taken to close the gap between today's situation and the ideal state, and what resources are required to execute the activities.  Clearly every business leader should have at close hand an updated SWOT analysis. Such a view of strengths and weaknesses may best done by different divisions of the company - working entirely separately - as different offices often have different perspectives and different opinions!! There also has to be a system in place for monitoring progress and getting feedback from those implementing the new processes.  This so-called “benchmarking” is absolutely necessary, because without it there can be no real ‘measure’ of attainment.

 

In getting up-to-date situational awareness, the strategy must cover:

In defining the strategic objectives, clarity of thought is an essential requirement; there must be a clear understanding of the processes involved and exactly what the company priorities are to be.  It is important to note that a target or goal is not necessarily synonymous with an objective. I would suggest that a differentiation is made between the target/goals that you need to achieve in order to ensure successful accomplishment of the objective.   In my military service, we used to describe such activity as a “line of operation”.  Along this line are a number of targets that must be achieved before ‘victory’ can be declared on the objective. 

 

Finally there must be an Implementation Plan – the road map to success.  The vital elements of this include the Mission statement, the Tasks set to the various departments, an apportionment or balancing of available Resources, the necessary ‘logistic’ (administrative)  back up, and above all the Communication Plan – which tells people what is being done by whom and when.

 

In my opinion, the ‘how’ is less important because if subordinates are empowered to take responsibility for their decisions and they have financial accountability suitably aligned, they can be entrusted to deliver the set targets and achieve the overall objective.  A recognised incentive system or public rewards usually ensures that this is so.