Our Strategic Planning Model
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While you will likely engage us to facilitate one of the top three tiers (project descriptions are linked below), our model for strategic planning assures execution by including everyone in the organization. Yes, everybody but not at the same time and not doing the same things.
You can describe this model as “integrated.” It starts with broad ideas at the top leading down to personal to-do lists as illustrated by the inverted pyramid. The four tiers involve different groups of people working at different times but maintaining alignment. In smaller organizations, all employees and volunteers may be involved in all four processes at the same or at different times.
Another way to describe it is this: A strategic Plan is about ends, and enterprise-wide strategies that set you apart. The Business Plan is about means, the journey to those ends employing those strategies and more. These ideas are explored further under the headings “Strategic Plan” and “Business Plan” below.
A complete plan is a balanced combination of who you are already and who you want to be, where you are and where you want to be, how you are and how you want to be, plus ideas and tasks for getting there.
In a conference call, a client asks about sequence:
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For far too many companies, what little thinking goes on about the future is done
primarily in money terms. There is nothing wrong with financial planning.
Most companies should do more of it. But there is a basic fallacy in confusing
a financial plan with thinking about the kind of company you want yours
to become. It is like saying, “When I’m 40, I’m going to be rich.” It leaves
too many basic questions unanswered. Rich in what way? Rich doing what?
~ Cynthia Williams, HBR
Strategy
Strategy is represented by Tiers I and II. The process involves:
- Clarifying a fuzzy picture of the world generations ahead,
- Making sense of it as best leadership can,
- Committing to creating an ideal vision of how things should be,
- Determining how to position the organization to benefit from the most likely scenarios, and
- Deciding what the organization stands for in a compelling way to drive growth.
Strategy development attempts to preempt the future, to position the organization against potential challenges, and find opportunities before others do.
There’s a good deal of public and governmental concern over board involvement in their organizations. In our view, Strategy Development is where a volunteer board contributes best, where the whole board employs its collective wisdom to paint a desirable picture of the future, one that provides direction for management’s tactical plans.
Imagine a planning retreat that refreshes your soul and reconnects you with what motivated you to volunteer or work for the organization in the first place. That’s what Tier I and II planning will do for you, and your leadership team. Your properly crafted Tier I and II plans can have the same effect on everyone else in the organization.
People use the term “strategic” all the time and they use it in different ways. This leads to confusion and
baseless disagreements. Harvey suggests these parameters for “strategic”:
The issue or strategy has the potential for significantly altering the company’s
direction or its financial situation;
It entails high risk, either in the sense that failure is ominous or that execution is
complicated in the requirement to involve all or most functional areas and thus
depends on difficult-to-obtain close cooperation and tight coordination;
It has high futurity, which is to say that the strategy and the actions in support
of it are not easily reversed or undone. There is no going back.
~ Harvey Bergholz, president of Jeslen Corporation, a successful
consulting firm he has headed for more than 35 years.
Tier I-Mission and Vision set direction: creates meaning, purpose and ends, and comprises strategic ideas little affected by events of any magnitude.
The Mission is your core purpose–why the organization, this particular organization, exists.
As Dr. Roger Kaufman puts it in “Strategic Planning for Success,” (2003) ”The ideal Vision expresses in measurable terms what we wish to accomplish and commit to design and create. It describes ends and not means, processes, procedures, resources, or methods.” We add, a vision is not about your company but its ambition to make life better for all those communities you serve.
“If you want to build a ship, don’t drum up people together to collect wood and
don’t assign them tasks and work, but rather teach them to long for the endless
immensity of the sea.” ~ Antoine de Saint-Exupery, in The Little Prince.
A measurable vision means you’ll know it when you see it. At this level, measurable is rarely a numerical end or condition to create; it’s more about, for example, improved social conditions you want to see for the people you serve, and who volunteer and work for your organization. Satisfaction grows as an organization contributes noticeably to those ends.
Core Values represent the corporate culture: what people think, what they feel, and what they do with their time. If your organization has identified its Core Values, your planning process need not address them overtly, but will be built upon them intrinsically. If you have not formally identified your Core Values, we may use a Tier I or II retreat to begin that process.
Community-building is at the heart of the credit union mission.
~ Debbie Matz, NCUA Chair, in a speech at the
2010 Wisconsin CU League convention.
Tier II-Strategy is all about differentiation; it embraces the unique benefits the organization can deliver and the general ways it will succeed. Examples includes what we refer to as your ‘enterprise strategy’ or ‘core strategy,’ or what author James Collins calls the “Hedgehog Concept,” as described in his book, “Good to Great.” Here an organization may also address a “Blue Ocean Strategy” to make the competition irrelevant. Tier II can and should also address core competencies and value propositions … major statements that flex over time to meet changing market conditions … the means, processes, resources and methods by which you will make your vision real as you pursue your mission.
This strategy development exercise is where your organization can develop what is commonly called a “unique value proposition.” Your UVP identifies what compels people to support your organization or do business with you.
Some organizations allow management to develop a vision and enterprise strategies and present them to the board for acceptance. In our process we engage the wisdom and perspectives directors possess to blend harmoniously with management’s expertise in defining the big picture–the farther horizon–and together design a multi-decade vision both partners agree upon as the ultimate destinations and broadly defined ways to proceed.
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Business Plan: the business-end of strategy by designing tactics.
A strategic plan is incomplete without execution. A Business Plan is tactical planning represented by Tiers III and IV. These tiers take the strategic plan’s big ideas and translate it into actionable tactics, sometimes called “strategic initiatives,” sometimes “objectives,” ”goals,” or “Key Result Areas.”
Many organizations call the process of developing these two tiers, strategic planning. That may be reasonable when the first two tiers exist and these tactical plans are aimed in that direction. Our concern is that, calling this process strategic planning may inadvertently lead an organization to begin here and never address the bigger issues in the above Tiers I and II. All planning is hard work, but tactical plans are in many ways easier than strategy and for that reason more apt to be done.
The tactical journey to the vision can start with bold ideas that may take many years (up to 10 or so years) to implement, i.e dreams. The near-term (2 and 3-year) activities are prioritized. Management outlines major action steps while not yet monetized in a budget and actively pursued. In addition to creating a journey to the Vision, the Business Plan also responds to identifiable trends and available data to project what to achieve in measurable ways. Planners may list strategies to describe how milestones or action steps may be approached (perhaps this is part of the tendency to mislabel this level of planning ”strategic”). For example, to achieve the long-range goal of reducing the operating expense ratio, one strategy is achieving greater employee productivity through optimized use of technology. Thisd is a legitimate strategy even though the organization has not adopted an enterprise-wide strategy on technology.
Specifics for making progress on the Long-Range Plan result in a one-year goal, reset each year to achieve more, and become budget line-items.
Logic will get you from A to B. Imagination will take you everywhere.
~ Albert Einstein: Was a theoretical physicist
Tier III – Long-Range defines the journey based on the direction found in Tier I and Tier II. This is where management sets strategic priorities or initiatives. Otherwise, this long-range part of the Business Plan sets targets, ends to achieve in 2 to 10 years. (For a one-year plan, see Tier IV, Operational.)
To develop this long-range plan effectively, Management can conduct an analysis of the organization’s strengths, weaknesses, opportunities and threats (SWOT). This level of planning is often mislabeled ”strategic planning” perhaps because certain behaviors, processes and structures–i.e. strategies–are defined to achieve Tier III objectives. The objectives or key result areas ground the organization in four operational areas and take shape according to directions set forth in Tiers I & II. Our long-range planning process uses the areas of markets, human resources, physical resources and technology, and finance to stimulate development of a balanced long-range plan.
Plans are only good intentions unless they immediately degenerate
into hard work. ~ Peter Drucker
This firm believes there is a place for and a valuable purpose to continue developing good intentions. The above Drucker quotation requires further clarification. Imagine the long range plan as concentric circles around a core which represent the next fiscal year (Tier IV).
The first ring contains things to achieve in two years, the next 3 years, and so on. Each ring out from the center is one year longer. The rings closest to the center, 2 and 3 or so years, are subject to financial projections and hard work. The words and ideas in the outer rings, years 4 – 10 (or so) are legitimate intentions that will, as their time draws nearer the center, become hard work. These as-yet unspecified achievements clarify how the organization intends to bridge the gap between where the organization is now to making the vision real. Because those ideas and dreams are in the plan, near-term decisions made with them in mind are more cost-effective and efficient.
The accomplishments of the inner rings are aimed at making it possible to accomplish what resides in the outer rings. No longer accept the excuse that we can’t plan beyond one or two years because we can’t project or predict more than that. The intentions of the outer rings give purpose to the work of the inner rings.
Tier IV – Operational is the detailed action-plan for the ends desired in the long-Range Plan. It covers the budget-period with nitty-gritty, “on someone’s calendar” details. This Tier involves all staff members because it becomes a part of their day-to-day work, essential to achieving a year’s goals, on the way to achieving the long-range intentions all on the way to achieving the mission and vision. Only at this point in Strategic Planning does it make sense to develop a budget for next year.
Since we recognize the value of volunteers’ and employees’ experience and input, the above planning model involves everybody at appropriate levels for maximum commitment and buy-in. Call on us to participate with you in taking your planning to the next level of horizon and depth.
Some will see our Tiers III and IV as being very similar to the hoshin methodology of planning in use in HP’s Japanese Plants.
A client asked about their existing plans …
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Call now 850-559-7094 to discuss what you want to accomplish.
The benefits of the planning process itself are among the things that can never be measured. It improves
teamwork, gets everyone on the same page, and increases each individual’s knowledge of the business.
~ Greg Stocker: Consultant, author
How we approach facilitation:
- Our preconceived notions we leave at home; it’s your unique future you’re defining.
- All participants have the right to be heard; the organization needs to hear each participant in a safe setting.
- The client’s leaders possess information about market trends and competitive pressures before the retreat.
- An atmosphere of candid communication and cooperation brings out the best in participants and results in an effective plan.
- We create a process to meet the requirements of your retreat; other than describing the end result/product, we do not publish the process to participants because we often need to adjust it as the retreat unfolds.
- Participants engage in the discussion because we make the process challenging and productive.
- The process is designed to help your participants move from setting only measurable goals to becoming more visionary.
- You will leave the session knowing that the clarity and direction you established in the Strategic Plan will drive the organization forward via the Business Plan.
For a free copy of something I designed for planning clients, the
“Strategic Plan Users Guide,” fill out this form. You will receive an
email with the link immediately. It clarifies each element of a
comprehensive planning document. You will also begin receiving our
eZine “Challenge the Status Quo,” also at no cost to you. The monthly
newsletter covers planning and governance issues with challenging
questions and practical solutions.
