CONSULTANTS FORUM

Strategic Planning Concepts

By David Litterello

Strategic planning is a phrase that is used by many American corporations with regard to their day-to-day operations. This is a common, but incorrect, association. We read too often of companies that have lost market share, been rocked by reduced earnings and lost sales. This indicates that many of these companies lack any real long-term planning. Strategic planning asks the question "Where do I want the corporation to be in two to five years?" This requires visionary thinking to go beyond the boundaries of today's limitations, which include technology, labor, suppliers, information and competition to name just a few.

No crystal ball
It would be quite easy to plan for the future if we had absolute information about what lies ahead. But that's not the real world. The solution is not to abandon strategic planning but rather to develop more free thinking in conjunction with our long-term planning. This free-thinking approach refers to a creative and untraditional analysis of each business challenge. (I use the term "business challenge" rather than "business problem" to impart a positive connotation.) Free thinking must be centered and focused on a realistic assessment of the current environment and its trend toward the future.

Strategic planning involves a commitment from top management as well as middle management. It is, however, the line personnel that can help provide management with the foundation components necessary to develop a strategic plan. Critical issues and concerns can be discerned from these individuals. Input regarding supplier problems, material problems, customer requirements, labor issues and other critical components of the operation can be obtained from this valuable resource. These issues can then be incorporated into the overall strategic plan. This type of employee empowerment and involvement can greatly contribute to the success of the strategic plan. Feedback for internal and external customers will ensure that the plan will have meaning and a true impact on the overall operation.

What makes a good plan?
The following key points will assist you in developing a successful strategic plan.

  • Goal definition: This is very often the most difficult phase in the planning process. The goals must be established in a collaborative setting (task force) that will include the key people and departments involved in the process. The objective in this phase is to identify an ideal solution to an existing condition.
  • Data collection: This phase requires the task force or planning committee to correctly assess the current status of the organization or department with a forward trend toward the desired goal. Anticipate various scenario environments (competition, cost increases, labor reductions, sales and volume fluctuations, etc.).
  • Data classification: Determine multiple sets of solutions under different scenarios. Scenario analysis should provide alternative solutions under different constraints and assumptions.
  • Establish specific objectives: Identify a tangible mission/goal for each time period-short, intermediate and long term (for example, 5,000 production units per day by 1996, reduced re-tooling cycle time, global distribution network by 1996, implementation of EDI, MRP, DRP systems).
  • Develop a composite plan: The composite plan should contain short-, intermediate- and long-range plans. This plan should be a combination of developmental, operational and strategic plans. This composite plan will form a model for the strategic plan.
  • Evaluation/feedback: As the plan is implemented, it is critical that each objective/goal be re-evaluated and updated to reflect the current status of the model. Feedback from line employees should be submitted to the task force for review and evaluation.

    Planning goes on and on
    Strategic planning should not be a once-a-year management obligation. It is an ongoing process that will evolve and should continue on its own without any formal direction from top management. Strategic planning should focus on the identification and evaluation of opportunities rather than just problem-solving. A corporate culture that allows employees to develop a healthy discontent for things as they are will ensure that change will continue.

    All corporations face change.Those that can effectively manage and anticipate change will prosper in this current environment. Strategic planning is the tool that will help manage change.

    David Litterello is the director of planning and logistics for Actmedia, Inc., a leader of in-store marketing and promotions. He has 13 years of experience in operations/logistics with Pfizer and Bristol-Meyers Squibb. He has an MBA degree from the New York Institute of Technology.
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