Business Planning

How you can successfully implement strategy in your business…

Strategy Development – the basics

There are four basic steps in a good strategy development process:

1. Develop a plan and set of strategies for the business that define where you want to take the business in the future
2. Convert this plan into actions and targets that represent the first steps towards your end destination
3. Align organisational systems and processes to support and drive execution
4. Execute the plan by tracking the action plans and targets and modifying the plan as circumstances change

Strategy Development – not-so basics

1. Commitment – strategy needs to be developed using a process that builds organisational commitment to the direction being pursued. Seek input from people within the organisation to the development of the plan to reduce resistance to change and provide a sense of ownership.
2. Communication – strategy implementation requires people to understand the strategy and their involvement.
3. Culture and systems – organisations have many (official and unofficial) systems, processes and ways of completing tasks that collectively make up the organisation’s culture. Many strategic changes will require changes in culture to be successful.

Execution Builds Credibility

As its core, a plan is a forecast or prediction of where the organisation will be in the future and how it will get there.

Numbers are not enough to drive execution

When it comes to executing strategy, most organisations simply convert the desired outcomes of the plan into a financial budget and then use the normal monthly reporting cycle to monitor whether the plan is actually happening. We would argue that this is only part of the answer.

Two essential ingredients are needed (in equal amounts) to ensure your plans gain traction and start becoming reality.

1. A clear action plan – with responsibilities, milestones and deadlines that are follwed up on a regular basis.
2. Key Performance Indicators (KPIs) – that focus management action and discussion on a small number of critical measures.

How to Implement Effective Strategy

1. Break away from the day to day and make time to plan for the future of your business.
2. Complete an action plan containing a handful of short-term, achievable and resourced projects that your team can work on.
3. Identify two to five KPIs for yourself and each of your key managers. Report on these two to five items, plus your action plan projects every month. Look at which parts of your normal reporting process can be eliminated to give you time to focus on these issues.
4. Think about all of the official and unofficial systems and processes in your organisation. Identify those that are not supporting your strategy – change them or remove them.

The Bottom Line

Planning, taking action, achieving results, reviewing and then planning again can be a self reinforcing cycle that drives significant improvements in business performance. 

Disclaimer: This article is intended to provide general information only, and does not take into account readers’ specific circumstances. Readers should seek professional advice before acting on the matters discussed in this article.

Acknowledgements:

www.grantthornton.com.au