In a time of fierce competition and an uncertain economy, business owners and top management are searching for methods to truly out-think and out-maneuver the competition.  Books are being written by the dozens, but most seem to repeat what was written in past decades.  However, one book is different.  Good to Great by Jim Collins has a few ideas from his extensive research that make his book a must read.

Our experience indicates people who are accustomed to planning in the past, will continue to plan for the future of their companies, and do it extremely well, consistently, in a timely fashion and follow-up with implementation and accountability.  We have discovered the key to success is working to create a plan with meaning for the planners, their support people and employees.  Clearly, the secret is simple (not necessarily easy).  It is planning for the future of the business on a consistent basis and creating a workable plan.  We know owners and management teams that will allocate up to 2 percent of their working hours for planning purposes.  Indeed, this is called “creating a culture of CHANGE.”

What Goes Into a Workable Plan?

Both strategic planning and strategic thinking go into a workable and usable plan.  Let me explain.  Once the owner/president selects the 6 to 8 people to make up the planning/thinking team, a place for the two-day meeting is chosen, and we ask members of the team to answer sixteen questions in preparation for our sessions.  These questions prepare the team members to think strategically, discuss the future of the company and evaluate the environment in which it might operate. 

Team members are prepared to discuss the answers to these sixteen questions of which the lion’s share deal with the future direction of the company, how it will look 3, 5, or 7 years from now, what it will be doing and how it will do it.  The combined answers to many of these questions (see a sample of questions at end of article) deal with strategies for the company in the future from an operational and environmental viewpoint. Once complete, the answers to these questions will lead the group directly to its vision or mission for the company. 

Strategic Thinking

Strategic thinking is the process that seems to go on inside the mind of most company owner/presidents as well as other key people that help them determine the “appearance” of the organization at some point in the future.  The composition of the company may clearly be different than it is today.  This process reminded me of a painter I watched do his paintings on stage in front of a large audience as part of their entertainment that evening.  This artist would begin by painting 80 percent of a celebrity, then continue to complete the person so all could identify it.  He wasn’t finished at this point because he could go forward and make a few small/large changes, and what was once Jerry Lewis became Steve Martin or Liza Minelli.  It is this picture or profile that will determine the direction, nature, and composition of the business.  Decisions that “fit” within the parameters of this profile are implemented, and decisions that do not “fit” the profile are rejected.  

It is this operational planning and the strategic planning that will lead the team members to actually perform strategic thinking about the company’s future. 

Creating a Culture of Planning/Implementing

Planning leads to change-which leads to communication-which leads to employee participation, implementation and growth. For example, one company I worked with several years ago initiated a planning and thinking process about their company, and how it might look 5 years down the road.  At that time this mattress manufacturer had a plant in the Southwestern part of the country, produced, marketed and profitably sold thousands of units. Today, some 6 years later, the company is essentially out of the manufacturing business in the U.S. and has several plants in other countries where the mattresses are built and imported to the U.S. market.  The original plant in the states now serves as an assembly plant for certain bedding products and a distribution center for accessories in bedding and bath products.  The picture of the business has changed dramatically in just five short years.  Growth has been terrific followed by higher margins.  

The things that serve as physical indicators for a company’s direction, strategy, and eventual look might include:  its product catalog, the right people in the right positions for the company, the markets it serves, its competitors, customers, suppliers, its market segments, research and development budget, and facilities. 

Most importantly, which products do the company continue to offer and discontinue?  To which customers do we offer these products/services and which ones do we not offer them to?  Which market segments do we seek and not seek?  Which areas of the world/country/region do we pursue or not pursue?  How many steps of distribution can our market and industry afford? 

The End Result

The end result of strategic planning must produce a very clear profile of the products, customers, market segments, and geographic areas that the strategy of the business lends itself to and will receive emphasis, and those that will not receive emphasis in the future.

 Sample Questions

•  What would be the ideal customer mix for your company?

•  What should your product/service mix be in three years?

•  Define your company’s “core competency” as specifically as possible.

•  If I invested $1 million in your company, what could I expect to be done with it?

•  What major action needs to be taken to increase revenues?

This article appeared in Mike Henning’s Family Firm Advisor newsletter, for more information about receiving one free copy of our newsletter, visit us at our web site:  www.mikehenning.com,  e-mail: hfbc@mikehenning.com. or  call -- 217-342-3728.  Mike Henning is a nationally and internationally respected consultant and speaker on family business issues.