With New Zealand in another round of lockdowns strategic planning for the future might seem like an impossible task. You might think your chances of picking the winning Lotto Powerball numbers on a Saturday night are greater than being able to predict the future. But a good strategic plan is less about predicting the future and more about providing you with a playbook and roadmap for your business. All good playbooks should have a game plan. They should also contain plans to manage what the competition throws at you and in this case Covid 19 is just a rather nasty competitor.
This blog is aimed to give small and medium size businesses some ideas about how to go about strategic planning.
In the early part of the year many consultants were talking about three phases of planning:-
Respond -the period when we deal with the present situation and manage continuity.
Recover – the period of learning and emerging stronger.
Thrive – the period of preparing for and shaping the future.
This is an excellent way to look at crisis management responses. However, until (and only if) we find a vaccine and deploy it widely enough to get herd immunity will we be able to move beyond a period of lockdowns and different approaches to managing Covid 19. Therefore, it is worthwhile to develop a plan which includes awareness of the Covid environment and makes some assumptions around how your business will need to adapt. It is time to be planning assuming a continuing Covid impacted world.
The best place to start with a strategic plan is a good situation analysis. Situation analysis is the process of critically evaluating the internal and external conditions that affect your business. It provides the knowledge to identify the current opportunities and challenges to your organization, service, or products.
The most used situation analysis is a SWOT analysis. In the SWOT approach you scan the internal and external environment of your business. You identify strengths you can take advantage of and weaknesses you can act on, as well as opportunities and threats for success. For each of the four boxes below you should put in the data that you have for both internal and external factors.
You may start to find that a weakness can also be a potential opportunity if you address it in the right way. Do not get too hung up on this, focus on listing the situation(s) you are facing. It will be a valuable exercise to document these and have them in one place. Now that you have summarised your current environment the next thing is to think about your strategy going forward.
Strategic Planning Framework
We have created a simple framework to help businesses think about developing a strategic plan. The picture below is a visual representation of this framework. For each of these boxes you should write down your strategic approach which includes your service and product offerings, what markets you are operating in, how many staff you will need to employ, thoughts on financial returns and how you might market the products or services.
The place to start as a business is to think about your Minimum Viable Offering. For many businesses this might be the level you are operating at today. For others it might be your fallback position.
Minimum Viable Offering: This is the minimum viable offering / services that your business can be sustained at. We would suggest you start your strategic planning here. What is the basic level of activity that will keep my business alive during the next three-five years? Many of us know the answer to this question already as we have done the thinking in terms of our businesses at some stage during the lockdown.
Then you need to look at where your business would move to from its minimum viable offering. While you can move in three directions – up to the left, across to the right or diagonally to the top right – it is most likely you will make several moves over the next couple of years starting with a move up or to the right. Let us look at the three options of where a business can move to.
High Innovation & Expansion: This is expanding to where you sell new and existing products or services to both new and existing markets or clients. Unless your business is pivoting to make face masks it is unlikely that in these times you will move from where you are today to a ‘high innovation / high expansion’ stage overnight. And even then, there will be a limit to how many face masks people will need and buy. And these areas might be highly volatile as people adapt to more regular lockdowns, or working from home, etc. For example, a business that goes from face to face to completely online might miss out if customers return to a face to face preference. So, the best way to look at the future is to think about the manageable steps you can take to get there. For this we should look at how we focus on innovation or new customers.
Focus on Customer Expansion: This is expanding your current service offering to new markets or new clients. The best place to start is to think about the services or products you offer today and are there new customers or clients in existing markets that you could sell these to. What would you need to do to do this? Then think more broadly about new markets that you could sell your products or services in. A good example of this today is what we see happening with tourist operators thinking about how they can sell their services to New Zealanders rather than international travellers. I work with a training provider who has expanded her customer base from companies providing services for children to include parents looking for help with child safety, behaviour and first aid training.
Focus on Innovation: This is expanding your offering with innovative or new approaches for existing markets or clients. What is innovation? It does not need to be the next big idea; it could be as simple as an online ordering portal for customers. Some innovation and new approaches might be internal to ensure a more consistent service to clients. I work with a company looking to automate a lot of processes to improve customer experience. They want to offer greater consistency around on-line delivery services. Your SWOT analysis will help you identify the areas of innovation you want to explore.
Remember for each of these areas you should write down your strategic approach which includes your service and product offerings, what markets you want to be operating in, thoughts on go to market plans, how many staff you might need to employ, an estimation of profitability. Develop a plan for each of the four areas. This will give you a very good idea of the roadmap for the future. You might have lots of options and ideas but try to refine it down to the key areas you want to focus on in terms of ‘innovation’ and ‘customer growth’. Focus on what you can do rather than what you cannot.
The Most Important Part
Strategy is not just about the big idea; it is about the pathway from the big idea to operational delivery. Most strategy fails because of how it is implemented rather than their being an underlying problem with the idea.
The SWOT analysis and Strategic Framework are both good tools to get your ideas down on paper and to think about your strategic plan. The final step is to document the actual plan. Document your plan as: –
Brief Summary Of Where You Are Now
Vision: Where You Want To Be In 3-5 Years’ Time
Goals: The Things You Need To Achieve To Reach Your Vision
Action Plans: Steps To Reach Your Goals
Your summary of where you are now will come from the work you did on the two frameworks.
Your vision should be a short statement about your future plans. You might choose to focus on one area in particular – e.g. innovation or customer growth. Alternatively, it might be appropriate to do a bit of both. Document what success looks like for you if this strategy is implemented. The goals will develop from this, they are a more specific set of outcomes to get to your vision.
With your Action Plans you need to be very specific about what needs to be achieved, who is going to action the items and when they will be actioned. These are the items that if successfully implemented will result in your goals being achieved.
At the end of this process you should have a documented roadmap from today to your vision in 3-5 years’ time, with clear goals to be achieved along the way and the actions needed to achieve those goals.
The important thing to remember about plans is that they need to be implemented. I am a fan of the saying ‘what gets managed gets done’ and this is true of plans. Put in place a process within your organisation to regularly measure progress against the plan. Engage employees in understanding the plan and supporting its implementation. When you meet to discuss the plan focus on both celebrating what is working and brainstorming how to fix those areas that are not going as anticipated. Make sure corrective actions are documented and implemented.
Given the uncertainty of the current environment think about flexible ways you can implement the plan. Do you need a more flexible workforce that you can flex up and down as demand might change? If you are outsourcing work around aspects of the plan can you have this done at an agreed fixed price. Now is the time to negotiate some good pricing with suppliers to help you deliver against your plan. If needed, think about how you might flex down to your minimum viable offering if there is another lockdown.
This is where having some pre-prepared game plan tactics is useful, so spend some time brainstorming these and documenting them.
Get in touch with us at MacGregor Jamee Limited if you would like help with implementing a strategic plan within your business – see our package below.
Strategic Planning in a Covid Environment
One-on-one sessions for the business owner and/or core management team on developing the strategic plan for your organisation. The outcome is a strategic planning document for your business, clear action plans and action owners, key performance indicators and a roadmap for implementation.
This is supported by six months of advisory support to ensure the implementation roadmap is incorporated into daily business activities and that data is reviewed for insights and action is taken on these insights.