My husband is an occasional cigar smoker. As with any small vice, over time his desire for the smooth, mellow taste of a really good cigar has increased. Based on my observation as a non-appreciator, the difference between a not-so-good-cigar and a good cigar is about $20. So, John has concluded that if he can’t have a good cigar he would rather not have one at all. The same can be said about strategic planning and business planning. A business plan is the action plan implemented to accomplish goals during a defined period.
However, a business plan doesn’t ensure a smoothly running company unless it has a strategic plan as its basis. A strategic plan is the overriding, big picture description of a company and its mission. Ownership often defines the mission of a company as making money, but there are many underlying layers to that seemingly straight-forward mission. Ownership may want the company to be its legacy, its retirement, its job, a preferred place of employment, a way of giving back to society, etc. So the strategic planning process must first determine what ownership wants the company’s mission to be. Then it must establish the necessary architectural structures, processes, procedures and products/services to enable the company to accomplish its mission.
Through in-depth discussion with employees, management should determine what is working, what should be eliminated, and what should be added to systems and processes in order to ensure the company’s long-term success in accomplishing its mission.
Questions the Strategic Planning Process Should Answer
A. What is the core value or mission of the company? What does the company stand for? This definition helps determine the product categories and/or companies that should be targeted for development or acquisition.
- Explore existing products and/or services — Do these products and/or services fulfill the company mission? Should more be added? Should some be removed?
- Explore positioning with customers.
- Explore current marketing and selling processes.
B. Examine the current organizational, financial, distribution processes and inventory channels with potential to maximize sales and control the sales process.
- Do the current systems fulfill the mission?
- Would different systems better fulfill the mission?
- What systems need to be replaced? What should the new systems include?
- What can the company afford at this time?
C. Reality check on current industry standards for testing and diagnostics.
- Are we up-to-date on industry certifications?
- Are there new techniques that can generate revenue?
- Is the training plan current?
D. What does a stress test of the company show (busiest time versus slowest time), about the business infrastructure?
- Is technology working to the company’s advantage?
- Are real-time results consistently available for better management decisions?
- How will mobile platforms improve performance? Can the company afford them at this time? If not, when?
E. What are other high performance companies doing both inside and outside the industry?
- What is available within the industry? Should the company join an industry association or alliance?
- What industry events should management attend? What publications should management subscribe to?
- Are there local networking groups available for companies from different industries?
- What information is available on-line?
F. Has the company exploited its strengths?
- If yes, what is a new strength that needs to be built?
- If not, what is the company going to change in order to maximize strengths?
Creating a business plan can be daunting without a strategic plan defining the company's mission and model. Without knowing why the company exists or the business model ownership has in mind, determining goals is next to impossible.
"Close, but no cigar" would be an understatement.
Vicki LaPlant has been working with HVAC contractors for the past 30 years as a trainer and consultant. She is expert in helping people work better together for greater success. She is a Contracting Business.com editorial advisory board member and can be reached by email at [email protected],or by phone at 903/786-6262.