Strategic Planning: The Basis to the Success of any Business

By Nathan Denny and Scott Axelrod

Strategic Planning: The Basis to the Success of any BusinessStrategic planning is the cornerstone to the success of any business. But it’s also a complicated issue, and can take a lot of time to get right. Is it worth delaying a product launch for? And should CEOs involve employees in the process? These and other questions were addressed in this Private Advisory Board session on Strategic Planning.

ISSUE #1

Our product launch has been delayed by a much-longer-than-anticipated period of development. Should the CEO launch the product now, or delay for another 45 to 60 days while an advisor helps create an effective rollout and strategic plan?

Why It’s Important

  • The company is “running into a serious cash flow problem.”
  • The CEO has been told the company has “one chance to capture and corner the market” and fears missing that opportunity by delaying launch.
  • At the same time, that opportunity may be missed by going to market “without a strong and succinct message.”

Alternate Options

The CEO can start selling the product at a “placeholder” price that will eventually change, and which doesn’t yet include backend tech support — essentially “playing it by ear,” avoiding delay while still working with the advisor, courting early adapters, and closing deals.

Clarifying Questions (Background/Understanding)

  • What does your ownership structure look like?
  • Are current investors willing to invest more?
  • Do you have a banking relationship?
  • Are there other players in this space doing what you do?

Suggestions

  • Get a business plan put together for investors.
  • Look for money from new opportunities (family members, suppliers).
  • Look for equity partners to raise short-term cash.
  • Work on short-term funding now while also identifying how to find long-term funding to survive.

Action Plan

The CEO has committed to creating a positioning statement and action plan to attract investors.

ISSUE #2

An executive is contemplating the purchase of a new business that doesn’t compete with his current company. Should he notify the president of these plans?

Why It’s Important

His ideal situation would be to continue working for his current company and be an equity partner for the new company until it grows enough to support him. The current company is publicly traded. However, he’s concerned that the current company will call it a conflict of interest or distraction.

Other important factors:

  • This executive has known the company president for more than 30 years.
  • Many family members, including his wife, work for the company.

Clarifying Questions (Background/Understanding)

  • How far into the buying process are you?
  • Is there really a conflict of interest? (As it turns out, the risk is more that it’d be a distraction.)
  • Do you have a non-compete agreement with your current company?
  • Are there any significant reasons other than cash flow for not leaving existing company now?
  • Is your family supportive of a move?
  • Does your departure affect your family members’ employment at the company?
  • What is the biggest risk with full disclosure?
  • Do you own a large share of your current company or are you just an employee?
  • If you make people aware of what you might do but decide to stay, will that effect how the company looks at you?

Suggestions (Solutions)

  • Full disclosure = sleeping better.
  • Work out a scenario for your current company that lays out a three-to-six month / 60-40 work time split.
  • Be up front with your boss (and also friend) when you’re ready to pull the trigger.

Action Plan

The CEO will spend time working on an exit strategy, and incorporate all these suggestions into a discussion with his friend/boss.

ISSUE #3

A CEO needs to develop a quick process to build a strategic plan, involving all employees within this process, if possible, for new ideas.

Re-stated Issue:

The CEO wants to empower employees to achieve higher goals and not just ride along.

Why It’s Important

  • In the past, he’s done his own planning. He wants to include staff members — and they want to be included — but he also fears losing focus.
  • Direction I’m headed: planning on having a strategic meeting with employees this month, and involving a facilitator for an open dialog.
  • As the company begins a new year, the CEO feels this process will help define individual goals.

Clarifying Questions (Background/Understanding)

  • Do you have an employee incentive program?
  • Have you thought about surveying your employees on their thoughts on how to engage them on strategy?
  • Do you risk losing some of these employees if the company goes in a direction they don’t agree with?
  • Are you an open book company? Do you share financials?

Suggestions (Solutions)

  • With regard to key employees: “They don’t need to have their way necessarily. They just need to have their way considered.”
  • Don’t lose sight of the fact that it’s your company. Ultimately, it has to move in the direction you want it to.
  • This is a communication issue — define the path the company is headed and communicate it.
  • Book recommendation: “Vision to Die For” by Bill Hybels

Action Plan

The CEO has decided to do a survey and get background info ahead of meeting, making communication a focus.
Session date: Feb 9, 2012
Originally published: Feb 9, 2012

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