Elaine Johns, President/CEO and Ronnie Donaldson, Lead Consultant have published “Making energy and vision last” in the ISE April 2017 issue.
Making energy and vision last
Strategic planning needs to be more than a checkoff of your to-do list
It’s that time again – time for another off-site strategic planning session to talk about “things.” You have staff pull together all your financials, historical trends and forecasts, benchmarks and current metrics, information about your industry and information about your competitors. And then you disappear for two, three, maybe four to five days to talk and strategize and plan.
How do you make that vision and energy last? A productive strategic planning session should generate determined focus. Let’s talk about how to get there.
Data gathering
Strategic planning session attendees should be those with accountability to performance. Aside from the usual data points listed above, technology advances and enhancing consumer growth may require a repositioning of the organization outlook.
Slice strategic planning into quarters
Having trouble making the timing work for strategic planning? Things creep up undone as the date for your off-site draws nigh?
Well, perhaps you should break the planning process up into quarters, Richard Randall wrote in an article for the Central Penn Business Journal. Randall, president of the management consulting firm New Level Advisors, advocates starting research during your organization’s second quarter. Assign people to research competitors, customers and suppliers. Gather economic and industry-specific forecasts. Make sure your assumptions match the outside world and spend a few weeks reviewing the research. Take the third quarter to establish your strategic goals for the next three years, along with checking the progress on your existing plan, if you have one. By quarter’s end, define the strategies and the resources needed to reach your goals.
In the fourth quarter, create your budget for the next year. Make sure you include the resources needed, select specific goals for departments and individuals, and identify operating goals necessary to make the budgeted sales and income work. Then you can spend the last month of the year assigning and distributing the goals and budgets, Randall wrote.
Have you ever thought about asking for some strategic ideas from the lower ranks? Staff members from the younger generations, including those working in front-line positions like field and sales personnel and call center operators, can provide perspectives that the C-level suite may not even realize.
Facilitation
Before the session begins it is important to understand the facilitator’s role in the strategic planning process. The main duties for any facilitator are to ensure that the session stays on schedule, that everyone’s voice is heard and that key information is brought to the floor.
Establishing an effective set of ground rules is an important step at the beginning of the session. Typical ground rules are as follows:
- Everyone has a chance to speak.
- Respect when someone else is speaking.
- Individuals’ titles are left outside the door. All opinions are equally important, and none of the participants should feel hesitant sharing their opinions with a senior executive.
- There is no such thing as a dumb idea.
- Avoid “sidebar discussions” that distract the group.
- Start and end the session on time.
Game-changers
An interesting way to start discussion is to consider the future and what the environment will be like in five years. A gamechanger is defined as a newly introduced element or factor that changes an existing situation or activity in a significant way. So what are the top five game-changers to your industry? And how will they change your “existing situation in a significant way?”
As an example, in the electric utility industry, the gamechangers could be defined as the following:
- Changing utility business model (onset of consumer centricity)
- Technological advancements creating distributed energy resources (DERs)
- Bringing communications to communities in rural America
- Benefits of big data analytics
- Generations in the workplace
- The desired outcome of this discussion is to reach a group consensus as to the applicability and practicality of the individual game-changer on the organization. The group should dive into these game-changers and examine some “what-if” scenarios that could have a major impact on their respective industries. The knowledge gained from this discussion can be applied in the next steps of the strategic planning process.
Where you are
Organizational self-assessment can be accomplished via two avenues. The first is a strengths, weaknesses, opportunities and threats (SWOT) analysis. The second is a discussion of the organization’s financials, trends and forecasts, benchmarks and metrics. Let’s start with the SWOT analysis.
As the name states, the SWOT analysis allows for discussion from several angles:
- Strengths: current assessment that accentuates the internal positives
- Weaknesses: current assessment that accentuates the internal negatives
- Opportunities: futuristic assessment of external positive influence
- Threats: futuristic assessment of external negative influence
Often SWOT analyses are performed in a group setting, allowing for feedback from the entire pool of participants. A consideration we have found effective is to receive individual feedback on SWOT-related questions prior to the actual strategic planning session so that domineering opinions do not intimidate reserved opinions. Remember that in strategic planning, all opinions matter.
Collect all opinions and summarize. Look for common issues. Present the summary at the strategic planning session and obtain consensus on the common issues.
The second avenue of organizational self-assessment depends on establishing a baseline understanding of your organization’s financial status, trends and forecasts, and competitor activities. This portion of the self-assessment, or discovering your current corporate status, allows an organization to begin the benchmarking process to develop performance measures and compare them to internal targets or industry standards for the purpose of measuring your organization’s performance and identifying areas that need improvement.
In order to be successful, you must first determine how success will be measured. This process can reveal potential areas where performance is lacking and identify underlying contributing causes or mitigating factors to the performance gap between the organization’s current state and where the organization wants to be in five years.
This discussion allows for your organization to see how it measures up against your peers, along with helping management take an outside look at how the organization is doing as a whole. It facilitates out-of-the-box thinking that can lead to identifying potential competitive advantages over your competitors as corporate strategy is being developed later in the session.
The organizational self-assessment part of the strategic planning session ultimately should describe the external and internal factors that are especially relevant to the strategic opportunities available to the organization.
Painting the year five picture
This part of the planning session combines the outcomes of the game-changer discussion, the common issues of the SWOT analysis and conclusions from the current corporate status to formulate the environment around the organization and under which the organization will be operating five years into the future. Organizations should match their internal resources and capabilities to the external environment identified to achieve a sustainable competitive advantage.
An outside facilitator may be helpful, especially during this part of the session, as out-of-the-box thinking will be required for effective discussion. An outside facilitator has no personal investment in the discussion, can ask for clarification and can test applicability of topics. Depending on your organizational culture, it might be easier for an outside facilitator to push the envelope.
The future picture should be categorized into a handful of topics, as these topics become the categories for the next step: defining the five-year corporate goals.
Defining the five-year corporate goals
The breakout groups come back together, and each presents its specific category corporate goals. These presentations will result in discussions and probable revisions. The objective is to obtain an understanding and consensus from all participants for the goals in each category. Finalization of the corporate goals may require additional research/calculations and discussions outside the strategic planning session. In this case, reconvene the group at a later date.
This final step is the most important to keep the strategic plan alive. Assign breakout groups, each with a different category obtained during the step that painted the five-year picture. Make sure a category subject matter expert is in each group. The groups’ assignment is to define the corporate goals for year five, year one and year two. Year five is the long-term goal and years one and two are the interim goals.
Key to effective strategic planning is the definition of specific benchmarks and performance metrics that can be measured and monitored by key staff and other stakeholders. You cannot improve something if it cannot be measured.
After the corporate goals are finalized, a communications plan is defined by:
- Identifying all stakeholders (such as stockholders, employees, investors)
- Defining specific messages for each stakeholder group
- Determining order of delivery of messages
- Assigning who will be the deliverer
- What materials will be distributed, if any
In addition, regular reporting of the corporate goals should be defined. This step establishes a sense of accountability throughout your organization and assists with implementation of the strategic plan. For example, the board of directors will hear an update of the corporate goals semiannually, and the employees will hear an update of the corporate goals annually.
A successful communications plan should assign specific responsibility for the implementation of the plan to specific resources. Everyone should understand how progress will be monitored and measured.
Enter the vision
A strategic plan can be a useful communications and operational tool for an organization. It’s not a one-time event to develop – it’s the visionary focus for all in the organization. To keep it alive and valuable, several efforts need to take place. Have a communications plan for all stakeholders, boards, staffs, consumers/customers and communities. Have a reporting plan for management. This makes all departments accountable for corporate goals. By keeping the strategic plan in front of stakeholders and a part of your organization’s reporting, its vision becomes a familiar and common focus for the entire enterprise.
http://www.iise.org/uploadedFiles/IIE/Author_permissions/ISEApril17Johns.pdf