Bill Gaw's Back-to-Basics,
MRP-LEAN Manufacturing e-Bulletin
01: Strategic Planning
By Bill Gaw
Strategic planning is a business process that most companies employ to
identify critical success factors that set the course for future growth and
profits. Professional development and team training should be one of the
plan's critical objective and budgeted accordingly.
Lewis Carroll in "Alice in Wonderland" makes a good case for it: "Would
you tell me, please, which way I ought to go from here?" said Alice. "That
depends a good deal on where you want to get to," said the Cat. "I don't
much care where...," said Alice. "Then it doesn't matter which way you go,"
said the Cat.
Like most business processes, the key to success is the effective
implementation of the plan. Companies that do a good job of developing and
executing their strategies can create a competitive edge that
provides increased market share and higher gross profit margins. Organizations that turn their plan into a "dust collector" upon an
executive bookshelf, will never achieve their full growth and profit
Most criticism of strategic planning is aimed at the planning process.
They question the validity of a plan that has been based on market "guestimates",
the questionable valuation of the depth and breadth of competitors and an optimistic assessment of the company's internal
strength and weakness.
The fact that strategic plans can be overly optimistic is not the core
problem. Although the criticism may be appropriate, it puts the focus for
improvement on the wrong end of the process - it is the implement-ation task that is critical to producing
positive results and it is here where most companies fail at
Poorly implemented rational, strategic plans will produce limited positive
results. On the other hand, overly optimistic strategic plans, effectively
implemented, can produce results beyond every-one's expectations. This being
the case, what is the key to effective implementation? In one word -
Companies that are good at strategic planning build commitment to the
planning process and to each of the strategies within the plan. They build
commitment throughout the organization, working with people from all business functions to build commitment before, during and after
development of their strategic plan.
Winners begin early in building a commitment to the strategic plan.
Suggestions are encouraged from managers at all levels, from key executives
who will participate in the planning sessions, and others who will share responsibility for implementing the resultant strategies.
Together, they surface issues that will require changes in business process
and/or culture and identify those constraints that will need
to be overcome if implementation is to be successful.
During planning sessions, key executives from each functional area are all
encouraged to participate and contribute to the plan. These executives
develop strategies that build on organizational strengths and consider
resources required to accomplish those strategies.
They assure that a key
executive "owns" each strategy and commits to a time schedule for
its accomplishment. The key executives give thought to resource planning -
realizing that human resources are the key to making positive things happen in difficult, complex business environments - and they commit accordingly.
Following the development of their plan, those responsible for
implementations develop their own "tactical plans." These action plans,
when coupled with self-directed work teams, are major contributors to a successful Strategic Planning implementation.
Teams use their plan to
manage, to make decisions and to grow their business. Periodically, they
review their "tactical plans" to monitor and report on the progress of
implementation - keeping the plan "alive" by revising strategies and
tactics when necessary.
THE PLANNING PROCESS
Finally, to insure successful implementation of their strategic plan, they
work on the planning process itself. The planning group continuously "fine
tunes" the planning process to insure that inputs from all business
functions are given their due consideration and to insure that buy-in and
commitment to the final plan is agreed upon throughout all levels of
So, why are most operations management teams outside of the strategic
planning process? Why do many line managers view strategic planning as a
make work project that produces little or zero value to customers? Maybe,
it's because they did not participate in its development nor did they
buy-into its validity - let alone commit to the execution of its strategic
In short, they're not connected to the process! To achieve a
company's full growth and profit potential, CEOs and business owners need
to insure the active participation of operation management in the strategic
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