As the third quarter ends many of us begin to plan for 2006. In some organizations this is a regimented formal process with very defined inputs and outputs. In others it is a free-form brainstorm that reviews the environment and creates projections for the future. But unfortunately in most it is simply non-existent. In our increasingly competitive environment this reactive approach to leadership is very dangerous. As one of my first managers liked to say, "onward through the fog!"
Strategic planning takes many forms. From the Toyota Production System we get the concept of Hoshin Kanri, which is comparable to a ship's compass. This gave rise to the Toyota principle of "true north"... the direction in which all improvement activities must flow. Commonly translated as "policy deployment", this is a systems approach to the management of change in critical business processes using a step-by-step planning, implementation, and review process.
Although there are many methods, the fundamental requirements of a strategic planning activity are:
- Analyze the external environment: competitors, suppliers, technologies, industries, political, social, environmental, etc.
- Analyze the internal environment: the organization's strengths, weaknesses, threats, and opportunities
- Define the organization's vision: the core values and core purpose
- Create strategies to leverage strengths, improve on weaknesses, support the vision, and capitalize on new opportunities
The first time an organization goes through this type of exercise can take quite a bit of time, perhaps even a year. The results can be eye-opening, scary, but hopefully also exciting due to newly discovered opportunities.
The fifth step is to create measureable goals and objectives for each part of the organization so that all groups are aligned to support the strategic plan. The Common Sense Guy has an excellent post on how to create meaningful objectives. To be effective, objectives must:
- Specific: targeting, explicit, and well-understood
- Measureable: be able to easily tell if the objective has been met
- Achievable: challenging, motivating, but still achievable
- Results Oriented: focus on the results you expect to achieve
- Time Specified: specific time frames and deadlines
The last step is a regular and meaningful review of progress toward the objectives, which becomes part of a regular review of the strategic plan. This type of process will align all segments of the organization to work toward a well-defined future objective, without the waste associated with unplanned activities.
Do you know what your organization will be focused on and aligned toward in 2006? If not, now's the time to start planning.