Small Companies Can Benefit from Strategic Planning

The online dictionary Wikipedia defines strategic planning as “an organization's process of defining its direction and making decisions on allocating its resources, including its capital and people. It is often times viewed as a process for determining where an organization is going over the next 3 to 5 years or more”. Strategic planning enables an organization to answer the following questions:

• Who are we?
• What can we do?
• What are our strengths and weaknesses?
• Which critical issues must we respond to?
• What should our priorities be?
• Where should we allocate our resources?
• How do we want to grow?
• Where do we want to be in the future?

Most large organizations have a significant process of strategic planning where overall directions are given to the organization. They need to do this since there are large amounts of resources at stake and many people and departments involved to manage these resources. However, few small organizations do strategic planning even though relative to their size, they too have large amounts of resources at stake and people involved to manage these resources. The reason for this absence of a strategic plan is usually due to the fact that top management of the organization is very tactically oriented and involved with the day-to-day operations. Just getting through the near term is the only thing on their collective mind. The problem with this is that within the organization, there is no overall plan that gives people direction as they make decisions which means that different parts of the organization can be going in different directions at the same time. In small volumes, this is not such a problem, but as the company grows, it can become very chaotic, frustrating and problematic and can lead to failure due to the conflicting priorities that will exist.

A strategic planning process does not have to be long, time consuming and drawn out, but it should involve the key personnel of the organization. With guidance from a facilitator familiar with the process, implementing a planning process can be fairly quick and simple and can be done without being a major intrusion to the operation. Benefits that can be realized include:

• Clearly defined business strategies and supporting objectives for growth
• Identification of business strengths and weaknesses
• Quantified resource requirements and financial projections
• Integrated operational plans for each area of the business
• Clearly defined business performance measures
• A focus on achieving and building advantages

Strategic plans are very different from operational plans. Operational plans are tactical and are concerned with “today”. Strategic plans are concerned with “tomorrow” and are effective in coordinating the tactical activities so that the future growth of the organization is effective and under control. Without some aspect of a strategic plan that is known to all, activities of the organization will be disjointed and counterproductive, even though everyone is doing what they think is best. Frustration will exist within the ranks and growth will be difficult which can lead to the overall failure of the organization. With a well conceived and communicated strategic plan, an owner or management team will likely get what they want in terms of organizational performance, but without one, they will most likely not and everyone in the organization will suffer to some extent.

What do you find as pros and cons of Strategic Planning? Do you have examples where it helped or hurt?

Planning is the Key to Success to Implementing Lean

Lean is a philosophy that is based on continuous improvement, the simplification and standardization of business processes, and the elimination of all forms of waste throughout the organization. Implementing Lean techniques can help companies to improve their operational performance and customer responsiveness and drive positive results to the bottom line.

Companies that are new to implementing Lean often times start with taking small steps, sometimes as a trial to test the process. Once they realize the early benefits of using Lean techniques they get more aggressive with their strategy and expand the program throughout the organization. The basic steps to developing the Lean plan are:

• Review and assess Lean readiness within the organization
• Identify the readiness issues that must be addressed to make Lean successful
• Develop aLean strategy and metrics that will be used to guide the Lean implementation
• Analyze and prioritize improvement opportunities
• Provide overall Lean education and training, including change management
• Develop a plan of action for implementing the improvement opportunities

Engaging top management is vitally important to facilitate the adoption of Lean philosophies and technologies. In order to get and sustain buy in from top management, it is important to make them realize that adopting Lean tools and concepts will help assure the long term viability of the company.

Benefits of implementing a well planned Lean effort are:

• Alignment of operations and corporate strategy
• Clear enterprise-wide communication
• Increased throughput on the shop floor and front office
• Reduced costs by the elimination of wastes
• Increased flexibility in satisfying changing customer demands

As the famous adage goes “it is easier said than done”, companies face challenges in implementing Lean concepts. Having a systemic approach to the implementation, incorporating education at all levels along the way and focusing on change management will help assure success in the adoption of Lean tools and concepts.

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