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Strategic Planning For Dummies®

Book Description

If you’re starting a new business or planning your business’s future, there are plenty of things you should take into account.

Strategic Planning For Dummies

covers everything you need to know to develop a plan for building and maintaining a competitive advantage — no matter what business you’re in.

Written by Erica Olsen, founder and President of a business development firm that helps entrepreneurial-minded businesses plan for a successful future, this handy guide covers all the basics, including:

  • How a strategic plan is different than a business plan

  • Establishing a step-based planning process

  • Planning for and encouraging growth

  • Taking a long-view of your organization

  • Evaluating past performance

  • Defining and refining your mission, values, and vision

  • Sizing up your current situation

  • Examining your industry landscape

  • Setting your strategic priorities

  • Planning for unknown contingencies

If you’re in business, you have to plan for everything — especially if you intend your business to grow. Whether you’re planning for a small business, large conglomerate, nonprofit, or even a government agency, this book has the planning specifics you need for your organization. Step-by-step, you’ll learn how to lay the foundations for a plan, understand how your plan will affect your business, form planning teams, discover what your strengths are, see where you are, and, finally, plan where you’re going. And there’s much more:

  • Learn to analyze business trends that will determine your business’s future

  • Set measurable, realistic goals that you can plan for and achieve

  • Make strategic planning a habitual part of the organization

  • Prioritize multiple strategies that you can implement simultaneously

  • Set a defining vision for the organization that guides all your planning and strategy

This friendly, simple guide puts the power of strategic planning in the palm of your hand. For small businesses that can’t afford to hire strategic planning consultants, it’s even more imperative. Careful, constant planning is the only way to handle an uncertain business future. With this book, you’ll have all the step-by-step guidance you need to ensure you’re ready for anything that comes.

Table of Contents

  1. Copyright
  2. About the Author
  3. Dedication
  4. Author's Acknowledgments
  5. Introduction
    1. About This Book
    2. Conventions Used in This Book
    3. Foolish Assumptions
    4. How This Book Is Organized
      1. Part I: Laying the Foundation for Your Strategic Plan
      2. Part II: Looking Backward to Move Forward
      3. Part III: Sizing Up Your Current Situation
      4. Part IV: Moving Your Organization into the Future
      5. Part V: Creating and Making the Most of Your Plan
      6. Part VI: The Part of Tens
    5. Icons Used in This Book
    6. Where to Go from Here
  6. I. Laying the Foundation for Your Strategic Plan
    1. In this part . . .
    2. 1. What Is Strategic Planning Anyhow?
      1. Clearing Up the Confusion about Strategic Planning
        1. What is strategy?
        2. What is a strategic plan?
        3. What is the strategic planning process?
        4. What are the big planning pitfalls?
        5. What are the components of a strategic plan?
        6. What are the most frequently asked strategic planning questions?
          1. Who uses strategic plans?
          2. Does every strategic plan include the same elements?
          3. Just exactly what is strategic planning?
          4. What is the difference between strategic planning and long‐range planning?
          5. Does every company need a strategic plan?
          6. We are highly successful already, so why should we plan?
          7. Can a smaller company afford the time for strategic planning?
          8. Why plan in a world that's highly uncertain?
          9. How can we be confident that our planning will be successful?
          10. What is strategic thinking?
      2. The Strategic Plan's Key Elements
        1. Vision: Bringing things into focus
        2. Mission, goals, and objectives: Empowering employees
        3. Strategy: Explaining the how
        4. Execution and evaluation: Ensuring success
      3. Tips for Better Strategic Planning
      4. Warning Signs That You Need This Book
    3. 2. Why Strategic Planning Impacts Your Growth
      1. Reason #1: Strategic Planning Is the Leading Management Tool
      2. Reason #2: Failing to Plan Is Planning to Fail
      3. Reason #3: The Best of the Best Do It
        1. What makes great companies great
        2. What are successful CEOs spending their time on?
      4. Reason #4: You Get Better Results (I Promise)
        1. The day‐to‐day impact
          1. Spend more time on high impact, high‐growth activities
          2. Identify true opportunities versus false starts
          3. Adapt quickly
          4. Be proactive instead of reactive
          5. Achieve your vision for success
          6. Increase employee commitment
        2. The bottom line impact
        3. Your new bottom line
      5. Putting Planning into Action Today
        1. Drive the organization with big vision
        2. Establish big goals
        3. Celebrate wins
        4. Seek out new ideas
        5. Ignore distractions
        6. Empower through ownership
        7. Neutralize negativity
        8. Be passionate
    4. 3. Getting Set Up for Successful Planning
      1. The Elements of a Strategic Plan
        1. Where are we now?
        2. Where are we going?
        3. How will we get there?
      2. Before You Start, Are You Ready?
        1. Assessing your readiness
        2. Knowing the right climate for planning
      3. The Step‐by‐Step Strategic Planning Process and Timeframe
        1. Establishing your strategic planning process
        2. Making strategy a habit, not an event
          1. Annual strategic planning retreat
          2. Quarterly planning update
          3. Monthly strategy meetings
        3. Making your process go smoothly
      4. Selecting Your Planning Team
        1. Getting everyone involved
          1. The role of the CEO
          2. The planning team members
          3. Everyone else, regardless of position
          4. Nonemployees
          5. The Strategic Plan Manager
        2. Determining who's involved when
      5. Going It Alone or Hiring a Facilitator
        1. Running the planning sessions yourself
        2. Using a facilitator
          1. Finding a good one
          2. Deciding whether a facilitator is a good idea
      6. Futurecasting: Visualizing the Future
        1. Getting into the right frame of mind for futurecasting
        2. Leaving your assumptions at the door
        3. Working a strategic thinking exercise
  7. II. Looking Backward to Move Forward
    1. In this part . . .
    2. 4. Taking Lessons from the Past
      1. Reviewing What Happened Last Year
        1. Recognizing what you achieved
        2. Understanding why you failed
        3. Eliminating pesky problems
      2. Evaluating Your Products and Services
        1. Picking the winners
        2. Dumping the losers
      3. Putting Your Portfolio Together (In the Matrix)
        1. Evaluating market attractiveness and business strength
          1. Factors that affect market attractiveness
          2. Factors that affect business strength
        2. Creating your own matrix
      4. Looking at Your Financial Performance
        1. Understanding the financial dynamics of your business
          1. Checking your liquidity
          2. Gauging your risk levels
          3. Monitoring your profitability
          4. Measuring your productivity
        2. Sorting out three‐year trends
        3. Trailing your numbers over 12 months
        4. Evaluating your numbers
    3. 5. Focusing on What You Do Best
      1. Knowing Your Competitive Advantage
        1. The 30‐second competitive advantage challenge
        2. What competitive advantage isn't
        3. What competitive advantage is
        4. Why having a competitive advantage is so important
      2. Uncovering Your Advantages
        1. What's your distinct purpose?
        2. How do you make money?
        3. Why do customers buy from you?
      3. Pinpointing Your Competitive Advantage
        1. Perusing a few examples
        2. Stating your competitive advantage succinctly
        3. Putting your advantage to the test
        4. Breaking away from the pack
      4. Using Your Advantages Now
        1. Implementing your advantages
        2. Measuring your advantages
        3. Putting your advantages in your plan
    4. 6. Refining Your Mission, Vision, and Values
      1. Assessing Your Mission
        1. Elements of an effective mission statement
        2. Evaluating your current mission statement
        3. Writing a new mission statement
      2. Evaluating Your Organizational Values
        1. Elements of effective organizational values
        2. Developing or updating your organizational values
        3. Acting on your organizational values
      3. Visioning: Focusing in on Your North Star
        1. Elements of an effective vision statement
        2. Imagining your future — vividly
        3. Updating your vision statement and vivid description
        4. Envisioning your personal future
      4. Finalizing Your Strategic Foundation
  8. III. Sizing Up Your Current Situation
    1. In this part . . .
    2. 7. Assessing Your Business and Its Capabilities
      1. Identifying Your Strengths and Weaknesses
      2. Assessing Your Capabilities
        1. Human capital: Having the right people in the right seats
        2. Organizational capital: Getting a feeling for your corporate culture
        3. Knowledge capital: Knowing what you already know
      3. Examining Your Resources
      4. Process: Connecting Your Capabilities and Resources
        1. Operational processes
        2. Customer management processes
        3. Relationship management processes
        4. Innovation processes
        5. Other process areas
          1. Technology
          2. Communication
          3. Productivity
      5. Checking Your Profit Margins
        1. Identifying cash creators
        2. Detecting cash drains
    3. 8. Seeing Your Business Through Your Customers' Eyes
      1. Getting to Know Your Most Valuable Customers
        1. The 80/20 customer
        2. Determining the lifetime value of your customer
      2. Digging into Why Your Customers Are Your Customers
        1. Satisfaction by the numbers
        2. Obtaining feedback without using a survey
        3. Spend time talking to your customers
      3. Uncovering How You Deliver Value to Your Customers
        1. Unlocking the value chain
        2. Developing your value chain
      4. Kicking Your Value Up a Notch
        1. Creating value through excellent operations
        2. Creating value through innovation
        3. Creating value through knowing your customers
    4. 9. Assessing Your Strategic Position in a Dynamic Environment
      1. Identifying Opportunities and Threats
      2. Seeing the Future
      3. Finding Opportunities in Your Operating Environment
        1. Identifying your economic indicators
        2. Watching important social shifts
        3. Staying on top of technology trends
        4. Monitoring political winds
        5. Flexing with demographic movements
        6. Going global
        7. Growing natural
      4. Monitoring Your Industry
        1. Looming new competitors
        2. Threatening substitute products
        3. Bargaining power of suppliers
        4. Bargaining power of buyers
        5. Duking it out with your competitors
      5. Analyzing Your Competition
        1. Identifying your competitors
          1. Direct competitors
          2. Indirect competitors
          3. Substitutes or new entrants
        2. Gathering competitive intelligence
        3. Isolating what you really need to know
        4. Competing to win
      6. Analyzing Your Market
      7. Summarizing Your Opportunities and Threats
      8. Finishing Your SWOT Analysis
  9. IV. Moving Your Organization into the Future
    1. In this part . . .
    2. 10. Growth: It's Not Just for Kids Anymore
      1. Strategizing How to Grow
        1. Market penetration
        2. Product development
        3. Market development
          1. Expanding geographically
          2. Reaching into new market segments
        4. Something totally new
          1. Related diversification
          2. Unrelated diversification
      2. Executing Your Growth Strategy
        1. Going it alone
        2. Playing well with others: Developing partners
          1. Identifying the types of strategic partnerships
          2. Knowing when to buddy up
          3. Defining how to buddy up: The Partnership Criteria Sheet
          4. Determining who to buddy up with
        3. Combining forces: Mergers and acquisitions
          1. Keeping your motivations clear
          2. Weighing the pros and cons
          3. Using M&As to grow
      3. Evaluating What Path to Take
    3. 11. Finding New Customers
      1. Researching New Markets
        1. Identifying your information needs
        2. Locating information sources
          1. Internal company information
          2. Secondary data
          3. Primary data
      2. Defining Your Target Markets
        1. Dividing up your market into groups
          1. Benefits
          2. Descriptors
        2. Visualizing your target customer
      3. Targeting the Most Attractive Markets
        1. Defining an attractive segment
        2. Evaluating your target customer groups
      4. Standing Out from the Crowd: Your Positioning Statement
        1. Writing your positioning statements
        2. Perusing examples of positioning statements
      5. Reaching Your New Target Markets
        1. The Four Ps: Neither a soul band nor a legume
          1. Product
          2. Price
          3. Promotion
          4. Place
        2. The cycle of (product) life
      6. Staying Market‐Focused
        1. Gathering relevant information
        2. Sharing what you know
        3. Responding to what you've discovered
      7. Putting It All Together: Organizing Customer Information
    4. 12. Establishing Your Strategic Priorities
      1. Evaluating All Your Opportunities
        1. Identifying opportunities from your SWOT analysis
        2. Sorting through your other opportunities
      2. Choosing the Best Opportunities
        1. Developing your own rules
        2. Sorting out internal and external priorities
        3. Creating a short list of priorities
      3. Balancing Out Your Strategic Priorities
        1. Financial priorities: If we succeed, how will we look to our shareholders?
        2. Customer priorities: How do we provide value to our customers?
        3. Internal priorities: To satisfy our customers, in what processes must we excel?
        4. Employee priorities: How must our organization grow and improve?
      4. Turning Priorities into Strategies, Objectives, and Goals
        1. Strategizing how to reach your vision
        2. Writing your long‐term strategic objectives
        3. Making your short‐term goals SMART
      5. Pegging Your Measures
  10. V. Creating and Making the Most of Your Plan
    1. In this part . . .
    2. 13. Putting Your Plan Together
      1. Assembling Your Strategic Plan
      2. Getting Down to Business and Taking Action
      3. Ensuring Your Plan Makes Cents
        1. Estimating revenue and expenses
          1. Revenue
          2. Expenses
        2. Contributing to the bottom line
        3. Projecting out your financial future
      4. Securing Funds for Your Strategic Plan
        1. Find the correct financing product
        2. Minimize your risk
        3. Adjust your lending agreement
        4. Think big
      5. Evaluating Your Strategic Plan
        1. Visualizing your plan with a strategy map
        2. Mapping your strategy
      6. Making Your Plan a Living Document
    3. 14. Putting Your Plan to Work
      1. Getting Ready for Implementation
        1. Avoiding the pitfalls
        2. Covering all your bases
        3. Making sure you have the support
          1. All hands on deck: People
          2. Show me the money: Resources
          3. If you build it, they will come: Structure
          4. Plug it in, turn it on: Systems
          5. Make yourself at home: Culture
        4. Determining your plan of attack
      2. Communicate, Communicate, Communicate
        1. Making sure everyone buys in
        2. Rolling out the plan
        3. Continuing communication
      3. Holding People Accountable (Including Yourself)
        1. Appointing a strategic plan manager
        2. Paying for performance
        3. Coaching for achievement
      4. Keeping Score of Your Progress
        1. Building your scorecard
        2. Using a scorecard to measure progress
        3. Holding effective strategy meetings
      5. Keeping Your Plan Working for You
        1. Change: The only constant
        2. Adapting your plan as necessary
    4. 15. Contingency Planning: Your Plan B
      1. Facing Up to Real Business Risks
        1. Identifying common risks and threats you might face
          1. Potential threats to your business
          2. Disaster planning
        2. Assessing the impact of your risks
        3. Taking action to manage the real risks
      2. Keeping Your Business Humming Along No Matter What: Continuity Planning
        1. Just the basics, ensuring you're covered
          1. Back up your data
          2. Keep a hard copy of current contact information
          3. Know your alternative suppliers and buyers
          4. Secure your premises
          5. Maintain your equipment or machinery
          6. Cross train employees on important tasks
          7. Stay current with your insurance
          8. Communicate the plan to key employees
          9. Have a way for employees to work from home
        2. Getting more specific
      3. Scenario Planning: What If . . . ?
        1. Considering the smaller what ifs . . .
        2. Thinking about the big what ifs . . .
        3. Stepping into your future
    5. 16. Planning Considerations for Entrepreneurs and Department Managers
      1. Planning Issues for Entrepreneurs
        1. Ensuring your business continues after you
          1. Planning for transition
          2. Considerations for exiting your business
          3. Preparing for a smooth exit
          4. Gathering additional resources
        2. Valuing your business
          1. Establishing a value
          2. Determining your value
      2. Planning Concerns for Department Heads
        1. Cascading corporate goals to department goals
        2. Avoiding landmines in departmental planning
          1. Limited budget and resources
          2. Alliances and coalitions
          3. Conflicting missions
          4. People handling
          5. Departmental identity
          6. Metrics, metrics, metrics
    6. 17. Planning for the Social Sectors
      1. Moving from Profit to Sustainability
      2. Getting Your Board on Board the Planning Effort
        1. The role of the policy board
        2. Being tight on the ends and loose on the means
      3. Planning for Governmental Entities
        1. Recognizing how governmental planning works
          1. Leadership
          2. Governing board
          3. Power and politics
          4. Values and culture
          5. Administrative systems
          6. Community involvement
          7. Central control of implementation
        2. Getting advice for governmental planning
      4. Planning for Nonprofit Organizations
        1. Redefining competition with the Matrix (but without Keanu Reeves)
          1. #1: Alignment with mission
          2. #2: Program attractiveness
          3. #3: Alternative coverage
          4. #4: Competitive position
        2. Specific strategies for nonprofits
  11. VI. The Part of Tens
    1. In this part . . .
    2. 18. Ten Ways to Keep Your Strategic Plan from Hitting the Shelf
      1. Getting Everyone Involved from the Start
      2. Deleting the Fluff
      3. Appointing a Strategy Engineer
      4. Creating a Strategic Plan Poster
      5. Hooking Achievement into Incentives
      6. Using a KISS
      7. Holding a Monthly Strategy Meeting
      8. Using a Scorecard
      9. Leading by Example
      10. Celebrating Your Success — Whenever You Feel Like It
    3. 19. Ten Ways to Ruin Your Strategic Planning Meeting
      1. Refusing to Use a Facilitator
      2. Neglecting to Conduct Any Research Before the Meeting
      3. Inviting Everyone
      4. Holding an Annual Retreat
      5. Getting through the Agenda No Matter What
      6. Forgetting to Explain the Process
      7. Assuming Everyone Thinks Like You
      8. Ignoring the Elephant in the Room
      9. Ending on a Low Note
      10. Overlooking Life After the Meeting
    4. 20. Ten Shortcuts to Getting Your Plan Done
      1. Focus on Your Top Five
      2. Remember That Something Is Better than Nothing
      3. Start Implementing Soon Because No Plan Is Ever Complete
      4. Eat the Elephant One Bite at a Time
      5. Knock Your Plan Out in One Day
      6. Get Out of Town
      7. Outsource It
      8. Leave Perfection to the Accountants
      9. Get Everyone to Pitch In
      10. Just Do It