EDITOR'S NOTE: This article first appeared in the October 2012 issue of Snow Magazine.
It’s rare that success in business happens by accident or luck. For most, business success comes from planning – strategic planning and not reactive-after-the-fact planning. To many people, strategic planning is comparable to visiting the dentist. They know it’s important and will produce positive affects, and yet they dread it and prolong it for as long as possible. Most companies completely avoid it stating they don’t have the time to do it. Fact-less than 9 percent of snow companies have a legitimate strategic business plan.
The main purpose of a strategic plan is to help a company consistently identify opportunities that provide a sustainable competitive advantage, and help achieve its vision and goals. It will help determine the overall direction for the company including what services to provide, organizational structure, team make-up, geographic footprint and market position. The end result creates value for key stakeholders and owners.
When done properly with the right people, building a strategic plan yields a high return on investment for all involved. Developing a good strategic plan requires the commitment, collaboration, and collective skill-sets of key employees and stakeholders, along with an experienced facilitator. Take time to select the best team possible. Assembling a group of “Yes” folks is a waste of time and money. Once you’ve selected your team, send out a memo with the goals and agenda of the strategic session clearly outlined, and solicit their input. Giving the team an opportunity to contribute to the overall strategic planning process will make them feel included, and will help with buy-in of the plan. You don’t want to give the impression that the strategic planning process is a one-way executive mandate, with a goal of creating a rigid rulebook that will be handed down for all to follow. Remember a strategic plan is not a static document, but a work-in-progress that is constantly changing and evolving as the market does.
With the team and facilitator selected, begin by taking a look at the company’s current status and see if it is aligned with the vision. If your current status is not aligned with the company vision, determine why not. Has the market changed or did you lose focus? Next, conduct a situational analysis and environmental scan. The purpose of the situational analysis and environmental scan is to help you evaluate past and present market dynamics, as well as identify internal and external forces that may affect your company’s performance and strategic direction. By understanding your current market dynamics and internal and external environment, you can begin identifying profitable growth opportunities and potential threats. A simple tool you can use is called a SWOT analysis, and it is an acronym for Strengths, Weaknesses, Opportunities and Threats. You want to build on your internal strengths, eliminate weaknesses, capitalize on opportunities and identify the threats that may prevent you from reaching your goals.
You’ll also want to conduct a competitive analysis and objectively judge your competition using the same tools. How do you compare with your competition? What does their brand represent in your market? How does their team and equipment stack up against yours? Do they have a unique position in the market? Do you have a compelling selling proposition and competitive advantage that would make their customers want to partner with you over them?
Once you’ve identified which markets hold the greatest potential for growth and profits, be objective about your ability to service these markets. Have you objectively identified the strengths you can leverage, and have you taken the corrective action needed to address your weaknesses?
Remember as you have limited resources (people, money and time) you’ll need to prioritize your tasks. Always focus on your greatest pain points and opportunities first. You’ll want to develop strategic objectives and goals in four key business areas- finance, operations, sales and marketing For each strategic objective create an initiative – for example, enter the institutional market for snow with a sales goal of $250,000 – and then assign a team, timeline and success metric – for example, gross margin of 45 percent – for the initiative. Somebody then needs to monitor, coach and reward. Some key metrics to consider:
- Increased wallet, referral, retention and market share
- Increased win ratio and revenues
- Increased process and production efficiencies
- Identification of new markets segments
- Utilization of equipment and technology
- Increase in route density
- Resource allocation
- Increase in number of qualified service providers
- Increase in safety record with a reduction in mod rate
- Increased stakeholder satisfaction and retention
- Debt reduction
- Increased gross margins
- Return on Investment
- Increased brand equity – name awareness and reputation
- Return On Relationships (ROR)
- Balance of revenue by market segments
Now assemble your team, collect their input and go back and write your plan. Make sure the plan has buy-in and when completed is communicated and shared with all of your key stakeholders.
Finally let’s discuss the methodologies that will help you successfully assess and refine the plan.
Assess your plan based on key strategic initiatives. Did you hit your revenue, referral, retention, wallet-share and profit numbers? Gain the market share you anticipated? Increase efficiencies in administrative, field and sales processes? Increase your stakeholder satisfaction levels?
It is important to send out a post strategic planning assessment audit to your team and solicit answers to the following critical questions:
- Did we have the correct team assembled and did we solicit feedback from every body
- How accurate were we of our competition
- What questions weren’t asked or answered that would have given us a better picture of the market
- Did we spread ourselves to thin? We have a limited number of resources (people, money and time) and did we focus those precious resources on our critical pain points and opportunities…. or did we not raise the bar high enough
- Did we give everybody enough time to properly prepare for the planning session
- Did we select the correct facilitator, ask the right questions and was it the best time of year and proper environment to conduct our planning session
- Did we accurately communicate the plan to everybody? Was everybody given the tools necessary to execute the plan
- During the course of the year did we assess the plan often enough to affect change
- Were we customer-centric or too internal focused
- Is our company properly organized and do we have the right team in place to carry out our strategy. If not, what changes need to be made for success
Answering these questions honestly will help you assess and refine your strategic team and plan. The process of developing the best possible strategic future for the company is an on-going process that requires you to identify and adapt to the market and change before your competition.
So assemble your team, get their creative juices flowing, design your strategic plan and build a profitable company. Try it, you’ll like it and so will your customers.
Judith M. Guido is an industry consultant and chairwoman and founder of Guido & Associates. She is a frequent Snow Magazine contributor.
For more: For a copy of the strategic planning model outline, email Judy at jmguido@sbcglobal.net.
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