5 Tips to Get the Most Value From Your Annual Strategic Planning Process

By James Dorn, President

Your manufacturing company’s leadership team is invested in getting the most value out of your annual strategic planning process. After all, it’s your most focused opportunity to take stock of your company’s current performance, introduce new ideas, set goals and formalize your direction for the coming year and beyond.

The thing is, every company approaches strategic planning differently, with varying degrees of formality and consistency from year to year. Some organizations approach strategic planning without enough structure in place to guide the process toward truly strategic outcomes. Others are so bogged down in formal planning requirements that the whole process feels burdensome and tends to stifle creativity. The way you structure your planning process makes a difference in the quality of the strategic plan that results from it. A well-conceived approach helps your team get the most value out of your strategic plan.

The following tips will help your team zero in on the most important aspects of planning so you can focus on developing a rock-solid strategic plan that aligns your organization to meet its objectives and deliver profitable revenue growth.

  1. Use a dedicated facilitator. Without a dedicated facilitator to captain your strategic planning process, even the best laid plans are likely to go off-course. A dedicated facilitator is necessary to structure your process and keep it on track over the course of weeks or months of preparation. Too often, the CEO or CFO of manufacturing companies conducts the strategic planning process. It’s not that C-Suite executives aren’t capable of facilitating the planning process. It’s just that it’s not the best use of their energies. The reality is that you want your best people to participate in the process rather than facilitate it. One way to free your executive team up for planning is to hire a professional facilitator. A good third-party facilitator can provide objectivity, inject new expertise and perspectives, tamper group-think and prevent the bias of influential executives from dominating. Allowing your leadership team to participate in developing the strategic plan without facilitating the process will bring out the best in your team.
  2. Limit the amount of corporate strategic objectives to no more than four. Some manufacturing companies identify a laundry list of strategic pillars in their annual planning. It’s not that you should limit your ambitions. It’s that having too many objectives hampers your ability to fully realize any one of them. Your company has fixed resources. Think of them like a pie. the more objectives you have as a firm, the more that pie is segmented, and the more your resources are stretched in different directions. It’s better to narrow your focus and ensure that you have sufficient resources allocated for each objective. You also want to be sure that everyone in your organization can recall the strategic objectives from memory in order to deliver on them on a daily basis. Limiting the number of overarching objects to just three or four allows you to achieve both goals and deliver great results for each objective, too. To narrow your number of objectives, evaluate all you want to accomplish and consolidate those goals into key themes. Smaller aspirations can be rolled up into larger strategic pillars. Finally, ensure that each of your objectives is aligned with what you want to accomplish and grounded in a longer-range shared vision for growth. This ensures that your annual efforts are progressing your organization toward achieving goals on your long-range roadmap.
  3. Formalize the planning process. Strategic planning is a team sport. Approaching it without a formalized structure in place would be like putting your offensive team on the field without designating a play beforehand. Remember that developing the strategic plan doesn’t just involve your executive leadership team. It also indirectly requires the coordination of their respective teams. Everyone needs guidance on what exactly the planning process entails so they can prepare appropriately and provide the materials necessary at each stage — all while continuing to run the day-to-day business. We generally recommend allowing 10 weeks for the entire planning process. This process should progress from taking stock of where the organization is, where it is going, and how the organization will execute on the new strategic plan. Make sure that it concludes with concrete operating plans for cross-functional groups and shared KPIs. The full process generally includes the following activities:
    • Collecting a fact base (data and analytics pertaining to historic performance, market share, customers, etc.)
    • Conducting leadership interviews (initial visioning, historic strategies, and preliminary performance targets)
    • Preparing leadership for group planning (learnings from the previous year, key actions, SWOTs, etc.)
    • Facilitation of group planning sessions (growth visioning, performance targets, key strategies, corporate objectives, etc.)
    • Formulation of a comprehensive go-to-market strategy (align and prioritize revenue-generating strategies)
    • Formalizing budgets and allocation (corporate, division and functional groups)
    • Development of operating plans, shared KPIs, and operating rhythm
  4. Make your plan more agile. On the face of it, this may seem to contradict what we just said about formalizing your strategic planning structure. It’s a bit of a paradox, but your planning process must have a formal structure and allow for a bit of breathing room to adjust in response to shifting factors. Instead of writing or waterfalling an exhaustive 12-36-month plan, formalize your firm’s go-to-market strategy around the big initiatives that deliver on your strategic objectives. Complement this higher-level plan with operating plans and a strong operating rhythm. And then plan to reassess the plan at a regular cadence to determine whether shifts in buying habits, market conditions or competitive encroachment demand a strategic shift. A growth committee is an excellent way to ensure that your cross-functional teams are consistently adjusting the plan to deliver on profitable revenue growth.
  5. Be consistent. Once you’ve landed on an effective structure for developing your strategic plan, you should strive to keep both the process and your reporting formats consistent from year to year. Doing this enables your team to continually be more effective, efficient, and makes it much easier to look back and evaluate changes and impact. Of course, this doesn’t mean that you shouldn’t evolve your strategic planning structure as needed to get the most ROI on your planning efforts. Just be sure to weigh the utility of major changes against the disruption in your ability to easily track the success of your strategic planning year over year.

Annual strategic planning sets the course for your manufacturing company each year. Find the right structure for your planning process, and you’ll start your year headed in the right direction.

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2019-09-20T11:19:19+00:00