It does sound kind of contradictory – to prepare or plan – to plan. However, based on experience and also canvassing literally fifty to sixty lists of the most common strategic planning mistakes listed on various websites, your preparation for any strategic planning process is likely one of the most significant contributors to success of failure in developing a valuable and effective strategic plan for your business.

In this post, I will examine several key components of strategic planning preparation and then introduce perhaps the most important aspect of preparation, saving that fuller discussion for my next blog post.

So, you want to lead your business in developing a strategic plan (for your business group or perhaps the entire organization), what are the key steps in preparation that you must complete before actually scheduling the “strategic planning meeting or retreat”?

First, you are going to need to examine and make available “relevant data”. What data is relevant? To start with, these are the obvious data sources:

  • Current financial statements
  • Key financial history trends and comparisons (revenue as a whole and by product line, gross margin analysis  over time, cost of sale comparisons, G&A breakdowns, EBITDA history      and trends)
  • Market share analysis/comparisons
  • Any available research on current market trends
  • Customer/buying analysis   customer segmentation based on revenue, cross-product purchases, frequency  of purchase, method of purchase, or any other relevant customer behavior data
  • Any current customer satisfaction rating, survey results, or other feedback that you normally acquire in the process of doing business with your customers.

A second important step in preparation for planning is to truly understand where all the current stakeholders stand and how they view your business and interact with your business. What are their concerns? What do they want from your business? Are you still relevant to them? What do they have to contribute to your strategic plan? These stakeholders could be (depending on the level of strategic planning – re: group level or company level):

  • Investors
  • Board Members
  • Customers
  • Partners
  • Suppliers
  • Employees

How should you go about this? Talk to them. For example, one definite step in preparing for strategic planning at any level is to know how your customers view your organization and your relationship to them (Voice of the Customer). Consider conducting a “customer relationship audit” with key customers or potential key prospects. A relationship audit is an interview with a customer conducted with only the goal of determining how healthy and effective your relationship is with that customer from their perspective. Are you meeting their needs? Are you providing value in the relationship? What are you not doing for your customer that is important to them?

Third, you will need to ensure you have a true picture in terms of competitive analysis. Having the competitor “data” mentioned above is helpful in terms of things like market share or perhaps their financial performance, but more importantly is to have a clear view of your competitor in terms of what you do better, what they do better, where they are truly beating you, how customers view you and your competitor, etc. This requires engaging your organization at a deeper level (more on that later) to listen to what they hear and know in the market (as well as using information from the customer relationship audit).

Fourth, any time you enter into a strategic planning process (whether for your own division or entire company), you better have a clear understanding of your current employee engagement data/trends. Having this type of information may seem non-essential to many of you as you consider strategic planning; however, it makes total sense when you consider who you are relying on to carry out your strategic plan. Regardless of what objectives you create for the organization or how you do this, understanding the current state of employee engagement and any actions you must directly take now to drive better engagement should be an important priority to include in your strategic plan itself.

Fifth, you have a few basic, but important decisions to make that are “housekeeping” related.

Where will you hold the actual strategic planning meetings? Do NOT hold these in any of your business offices. It is paramount that your team gets away from the day to day business environment and limits their exposure to outside distraction.

Who will facilitate the process? It is possible for a CEO, other business executive, group manager, etc. to lead a strategic planning process; however it is highly probable that doing so will stifle some true communication, introduce bias, and has great potential to limit the overall innovative thinking in the group. Engage with a facilitator from the outside that can facilitate the process and thinking without introducing these limitations.

How much time will we need? This is hard to determine but my suggestion is to structure this so that you allow for enough time – and perhaps flexibility to extend time as needed or schedule additional time immediately. You can schedule a single two-day or three-day session or you can schedule a series of several meetings over time (but close together) to accomplish this, but whatever you do, do not “short-change” the process.

Who do you include? Who is invited to the planning process? How many is enough and how many is too many? Should you engage your whole organization in some way in preparation? These are great questions and are questions that I want to answer in my next post. One of the mistakes that I saw listed over and over again on websites relating to strategic planning was the mistake of “not engaging the whole organization in preparation”, or “limiting planning to only a few senior people”. In my next post I will explore ways to engage your organization, answer the above questions on who to include and also look at an important aspect of engaging your organization which is – continually monitoring your external environment. What does that mean? Well, read my next post and find out.