Leveraging Strategic Planning for Continuous Improvement
Different entrepreneurs engage in strategic planning for different reasons. Many want to clarify their long-term vision, identify what markets to enter, or develop new product categories. Many business owners who think of planning in this way do it every few years, when they feel their business reaches a particular milestone or tipping point.
Yet many other entrepreneurs utilize strategic planning through a completely different lens; as a continuous improvement exercise. For these business owners, strategic planning is never completed; it is a cyclical process. They leverage a planning cycle that creates a special energy, where strategy is woven into the DNA of the management team.
Strategy as an evolution reinforces the thinking that the business model, core offering and value proposition cannot be static. These foundational elements of strategy must be dynamic; changing constantly to take advantage of shifting market conditions. Customer expectations are a moving target, as they continuously expect more value be delivered through enhanced service, faster cycle times, and greater cost effectiveness. In order to meet the changing needs of the market, it is incumbent on a management team to continuously innovate.
I am often asked, when should strategic planning be conducted and I generally provide the answer that is appropriate for almost any business question; it all depends. If a company has never engaged in strategic planning, the answer could be, as soon as possible. The market and your customers will not wait you to find the most convenient time for your company to deliver the ultimate value.
For most other companies, planning should be done at some time during the year that is non-peak (in terms of seasonality) and precludes the budgetary cycle (months before the fiscal year begins). If a company utilizes a fiscal calendar, it should try to complete a strategic plan by September at the latest.
Companies that utilize an annual strategic planning process find a more productive rhythm for the management team. Each year the long term vision is recast, and a new set of strategic objectives are reprioritized. Such strategic objectives become the foundation for tactics to be executed upon in the following 12-18 months. Management teams that execute well are constantly aware of their progress versus strategic priorities and where they are in executing against a tactical action plan. As they complete the work in their action plan, a new year comes about and they rinse and repeat.
Companies who utilize such a planning process regularly report a significant return on their investment (when measured against the time they invest). Whatever the frequency of your strategic planning process may be, it is important that your management team find a routine for continuous improvement.