STRATEGIC PLAN REVIEW AND CRAFTING TIPS

The final quarter of the year is synonymous with strategic plan reviews and crafting sessions. It is not merely traditional business practice but an issue of evaluating overall execution of the business strategy, measuring actual results against set targets, drawing key lessons upon which to adjust the strategy for the forthcoming year. It is important to note that having such exercises on the corporate calendar or placing importance to the process is not sufficient. It is commendable, but not sufficient!

The following are some of the reasons why such important processes at times do not yield the desired results.

1.??????Lack of inclusivity – it is vital to initiate the process by thorough organization wide consultations. This ensures a multidimensional view to the strategy as all stakeholders input into the process. Employees, customers, shareholders, and other critical stakeholders ought to be consulted to get their views on the products/ services, areas of strength/ weaknesses, possibilities in terms of product offering, trends in customer preferences and opportunities (Both low-hanging fruit and future demands/ prospects).

2.??????Participation of Senior Executives only at the planning workshops – In many instances, organizations go through wide consultations but leave out shopfloor representatives when it comes to the review or planning workshops. It is important to have the most critical units represented at all levels i.e. competitive drivers, so they bring their technical knowhow as people who are on the ground. Executives by nature of their plates will have “lost” touch with the nitty-gritties of implementation that require thorough critique at planning stage. It becomes important to avoid drawing archaic plans that will be impossible to implement. Remember a lot of resources and time are committed to the process thus placing importance in doing it right, with due care and precision.

3.??????Inadequate preparations – many a times consultations are not backed by thorough research prior to the planning workshop. Experience has shown that setting up committees that interrogate issues before the retreat sessions yield better results. Basically, every business’ agility is premised on understanding the customer, compliance, profitability, capital, and liquidity pillars. The organization’s strategy should clear on the health/ viability of each of the pillars so clear, practical, and realistic objectives and targets are drawn. Discussions at planning workshops do not yield much if the five (5) pillars are not tended to diligently. The following questions are vital to examine each of the pillars;

Customer Pillar

• Who is/ are our customers? (Markets and their sizes)
• What yield/ value are we realizing from each of the customers?
• How are we serving the customer? (Efficiency, currency, convenience, value-for-money, and relevance of distribution channels/ service platforms, business processes and product functionality)
• How do we sustain continuous communication with the customer? (Information, feedback mechanisms, queries resolution mechanisms)
• How can we court new customers? (Business development)
• How are customer tastes and preferences evolving?
• What will be the competitive drivers? (Quality, cost, convenience, skills, distribution channels, technology)
• What were the major reasons for some customers switching from our brand?
• What alternatives are emerging in the industry that stand to present substitutes for our product/ service offering? ?
• How is the level of employee engagement and workplace climate?
• How efficient has the organization been in retaining employees?
• How competitive is the reward structure?
• ?How are we going to give back to the society/ community? (Corporate Social Responsibility?

Compliance Pillar

• To what extent has the organization been compliant to regulatory requirements? (Good corporate citizenry)
• What have been the changes to regulatory requirements?
• What compliance issues make or break the business?
• What level of investment should be put in place to be fully compliant?
• How is the workplace health and safety configuration?
• How green-friendly are the production and waste production processes?

Capital Pillar

• How is the current technology, machinery, and infrastructure base vis-a-viz industry standards?
• What are the current developments and trends?
• How adequate are the internally generated Research and Development solutions?
• What investment is required to inject into both internally and externally driven Research and Development?
• What investment is required should new products/ services be adopted for launch?
• What new products/ services can be developed/ introduced utilizing the available machinery, infrastructure, technology, and business processes?
• What capital developments should be prioritized to defend and expand brand positioning?
• What opportunities are available for outsourcing or infrastructure sharing?
• What mechanisms can be put in place to avert tech-access/ supply constraints?

Liquidity Pillar

• How efficient has the organization been in funding operating expenses and meeting its financial obligations?
• What investments have been set that have a quick liquidity turnaround time to fund operating expenses and other obligations?
• How have the payment arrangements offered to key customers efficient to support liquidity?
• What are the revenue collection efficiency ratios?
• How have the payment windows agreed upon with creditors convenient to support cash flow management?
• What has been the yield from investment vehicles?
• Which sources of financing have been responsive to loan applications?
• What has been the cost of funds sourced from outside sources e.g. banks, venture capitalists etc?

Profitability Pillar

• What has been the yield per product/ service line?
• What is the current Asset Revenue Generation Efficiency? (Capacity utilization)
• How did the organization fare in terms of Profitability Ratios?
• What revenue streams have potential to be stimulated for better yield?

Conclusion

Having interrogated all these questions in representative committees prior to the planning workshop, the delegates will be equipped with well informed write ups that will serve as an accurate point of reference as further brainstorming is done at the workshop. It is even prudent to come up with tentative budgets for each of the new ideas that will be submitted to committees. From experience, it helps to rein - in fantasies that sometimes carry away delegates during the review and planning workshops. It is not wise to get excited about ideas that cannot be funded! In effect, most strategies fail because the finance team is requested to derive budgets way after the planning process whilst a general outlook of figures should have been interrogated at the planning stage. Going for the planning retreat with budgets in mind ensures adoption of practicable solutions thus all stakeholders will value the process.

About the Author

Mufaro Makarudze is a Freelance Human Resources Consultant based in Harare, Zimbabwe.