How to Refocus Your Business
Even the most successful companies review their strategic direction.
There are three stages in planning a strategic realignment, outlined by answering the following questions: Where are we now? Where do we want to go? How will we make it happen?
Strategic planning – where are we now?
We advise our clients to start this process with a situational analysis of external trading environment and internal operating performance.
To establish where you want to take the business, first you must be confident that you understand these factors: environmental, client, strategy development, competitor, market, self, image and defining market segment.
Your next step is to summarise the information into a SWOT analysis. In a concise format, you can identify strengths, weaknesses, opportunities and threats to your organisation’s business.
What strengths can you capitalise on as compared to your competitors? When considering this, look at issues such as human and financial resources, technology, operational efficiencies and market leadership.
You also must understand your weaknesses: what could your competitors capitalise on?
Opportunities should highlight untapped issues that you could leverage to develop stronger market position.
Threats are factors that might impact on your ability to meet your strategic intent and could include areas such as government, economic, legislative or competitive.
The results of an effective SWOT analysis will form the foundation for developing your firm’s strategic intent, which will result in a set of strategic planning strategies to be converted into action plans.
Where do we want to go?
Strategic intent is a simple, precise vision statement from your organisation’s leaders, used to chart progress and answers the question “where do we want to go?”
Strategic intent captures the essence of winning, is stable over time and provides consistency for short-term action while making sure there is room for team flexibility and innovation.
These statements are most effective when they are grounded in the past and project into the future. They become more essential and inspiring when they focus less on what you do and more on what you will do for your key clients or customers.
The important question is not “how will next year be different from this year?” but “what must we do differently next year to get closer to our strategic intent?”. This provides consistency to short-term action, while leaving room for acting on new opportunities.
Using the information you have developed from your Situational Analysis, SWOT Analysis and Strategic Intent, you can now identify and prioritise the critical issues in your business, the problems to be overcome and other influences which need to be managed.
How do we make it happen?
This is the stage where you decide how to put your strategic plan into effect, culminating in a set of action plans.
Key Performance Indicators should be used as measures of success. These enable you to monitoring progress towards achieving your objectives.
It is critical these KPIs are established in consultation with those responsible for their achievement. Ensure there is understanding and commitment to these initiatives at all levels.
- What specific actions need to occur for each strategy to ensure each is implemented? How will you review progress? What process of evaluation will you employ to measure and adjust the overall strategic plan?
- Who is responsible for implementing each action?
- Have they the authority and resources to achieve results?
- What is the current status/timeframe for implementing each required action?
Keep your plans sufficiently flexible to accommodate changes in the business and economic environments – but not so flexible that the plan no longer has meaning.
The three stages of strategic planning are vital to understanding the health of your business.
At the end of your strategic planning process the underlying questions affecting your business will be answered.
You will now be able to effectively manage and grow your organization with confidence.
Michael Fingland, Executive Director of national business transformation and turnaround firm Vantage Performance, was awarded Australasian Turnaround Professional of the Year 2011 by the Turnaround Management Association, for his work with fast growth and troubled companies.
This blog first appeared as a column by Michael Fingland in The CEO Magazine August 2012 edition.