It is generally accepted that a well thought out strategy will take a business to the next level and beyond. And that failure to plan in business is like planning to fail.
But many business owners don’t do strategic planning because they find planning concepts confusing. This article gets around that problem by comparing Strategic Planning to something you can all relate to : building a house.
Building a House
Imagine that, for your new home, you will have a house built and that you have already bought a section. Your challenge is to ensure that you move into a house that satisfies the family’s requirements and does not have any building defects. The process for ensuring that this happens can be divided into 4 steps:
- Review Requirements
- Conceptual Design
- Detailed Plan
- Build House
Step 1 involves visualising how the house would be used. You need to look at the house from the perspective of different stakeholders – partners, children, the bank (who will be providing the finance) etc. The result is a good understanding of required specifications – number of bedrooms and bathrooms, configuration of living area, and so on.
Only after doing this are you able to give your architect the information needed to do a Conceptual Design (step 2). During this step, options are explored and your initial thinking is clarified. But the thinking is still focused on what the house will look like and how it will fit together –the number of rooms, layout and style.
Step 3 is the Detailed Plan, which specifies exactly how the house will be built. It provides detailed instructions for the builder to follow and, provided that it is followed correctly, will result in the desired outcome.
This simple process should deliver the house of your dreams. But it is very important that each step is successfully completed before moving on to the next step. For it to work, no steps can be left out and the sequence of these steps must not be changed. If the process is corrupted in this way, the project will most probably not deliver the desired outcomes – a comfortable home and a happy family.
Built into our house building process are the basic rules of project management, and they are just as applicable to Strategic Planning.
When doing Strategic Planning for your business, you need to go through a similar thought process as you would for building a house. The steps are :
- Explore Business Vision
- Set Strategic Objectives
- Tactical Action Planning
- Take Required Action
Each step is similar to the corresponding step in building a house. Compare these steps as we move through the process.
Exploring the vision you have for your business (step 1) is a lot like reviewing your requirements before building a house. It involves considering all the outcomes you want from your business, from the perspective of different stakeholders – the owners, customers, staff etc.
An effective way to do this to ask the question “If this business was a stunning success, what would it look like?”. For example, the business owners might want profitability, having more time for themselves and maximising the saleability of the business. Staff might be mainly concerned about career development, sharing in profits and flexible hours.
Your business vision is the foundation on which Strategic Objectives are built (step2). The Strategic Objectives, when they have been achieved, will turn your business vision into reality. Setting Strategic Objectives clarifies your thinking on what you need to do to achieve your business goals. It is like telling the architect what the key success criteria for your new house are.
Step 3, Tactical Action Planning, involves planning in detail what has to be done to achieve your Strategic Objectives, based on the use of appropriate tactics. It is like the detailed plan an architect does before building starts.
The final step is taking required action (step4). If all these steps take place successfully and in sequence, your strategy will be turned into action. Success in your business will inevitably follow…