Of all the functions of executive management, strategic planning might be among the most important — and the most time-consuming. It’s an important process that companies of all sizes and types employ to determine organizational priorities, focus resources, strengthen operations, and ensure that all company stakeholders — board members, executives, managers, employees, and others — are working toward common goals. It helps define direction, build consensus around intended outcomes and assess and position organizational direction amid an ever-changing environment.
Strategic planning has many written definitions, says author William Pirraglia, “but there is a consensus on its purpose. Strategic plans describe where your business is going, how it hopes to get there and how you will measure your progress toward your objectives. This is why strategic plans are often compared to road maps.”
Strategic planning combines a number of key decisions and actions that shape and guide what an organization is, who its customers are, what it does, and why it does it, to define how a company will move into the future. It also incorporates ongoing measurements that determine whether the effort is successful.
Two years ago the Toy Association, Inc., the trade association founded in 1916 to represent companies in the toy and youth entertainment industries, developed a new strategic plan and part of a top-to-bottom organizational overhaul. Founded in 1916, The Toy Association, not-for-profit organization, is among many entities across a variety of industries that are modifying their focus in response to changes in the marketplace. It’s easy to think of strategic planning as a corporate function, but it’s happening in all types of organizations, said Toy Association President and CEO Steve Pasierb.
“If you think nothing is going to change in your industry for the next five to 10 years, then you don’t have to do anything,” he said. “But I doubt many people say that, so I think you’ve got to constantly look at this” He added that many organizations equate a traditional slow-and-steady course with stability, but that outlook “doesn’t match the fact that the world is full of disruptive change right now.”
Pasierb says that successfully designing and implementing a new strategic plan can incorporate a number of factors. “Listen to a diversity of viewpoints,” he said. “Before the association began to make edits to its strategic plan, it hired consultants who interviewed stakeholders to get member feedback. According to Pasierb, having consultants involved helped elicit honest responses from association members.
“When you get a stranger to do it, people will talk about what they really don’t like, especially if you’ve got a good consultant, who can form that confidential and good relationship over the phone,” Pasierb says. He noted that receiving input from association members, along with customer data, was instrumental in the association’s successful rebranding effort.
Executives agree that stakeholder input is crucial to creating an effective strategic plan. In the corporate world, said Toronto’s Robert Morton, it’s not unusual for interviews and information sessions to take place over several months, so that all voices are heard. Morton, the founder and principal of RLM Consulting, a Toronto-based strategy and operations consulting firm with expertise in new product development, organizational effectiveness, change management, and strategic planning, advised listening to employees, whose input can be extremely helpful.
“A talented and skilled workforce is the lifeline of any organization,” said Morton. “In order to build an empowered team, companies should work towards a management cycle where ongoing support and improvement is at the forefront of importance. Organizational effectiveness is key.
One key element of strategic planning is to not only consider what your organization should be doing more of to position it for growth in a changing marketing, but also explore processes and activities that should be discontinued. Joel Trammell, founder and CEO of Khorus Software, suggested asking some specific questions.
Among them: “What items are hurting organizational focus and consuming resources without creating actual value? These could be anything from an unpromising customer segment you’re pursuing to an internal process that decreases agility,” he wrote, adding that you should think deeply and challenge your assumptions.
According to Trammell, developing an effective strategy will provide a common foundation for high performance.