Strategic Business Planning for Online Startups
A business plan is one of the best investments that a startup needs to have and is one of the building blocks for a success online venture. Strategic business planning when it comes to online businesses is however slightly different from a typical plan. A strategic plan acts as a roadmap that will determine where you are going. The catch here is not only the fact that there is a plan, but the fact that the business plan is not rigid.
It has been shown that strategic business planning for online ventures need to be fluid, as opposed to typical business plans. The internet is an ever-changing place and those who survive on it are those who embrace these changes. With the many different ways and platforms for online marketing at your disposal, a fluid plan will help you focus your energies on what works and at the same time allow you to make changes when it is necessary. Starting an online business has become very easy and with a few hundred dollars you can have a business set up, everything from designing a website, hosting it and the initial marketing stages. However, in order to have an ongoing business, strategic business planning for continued marketing needs to be in place.
One of these areas is having a social media strategy. These days, internet marketing is inseparable with social media and any business that neglects this area of marketing is losing out in a major way. If you intend to build your brand and have a following, a strategic plan that places emphasis on social networks like Facebook and Twitter is going to receive better results than going any other way. Since building trust and relationships is an important aspect of any plan, social media is a vital part of it for any internet startup today.
Since social media is an integral part of strategic business planning, then enough time and resources need to be allocated to it if it to have any viable Return On Investment (ROI). In order to keep up with the publishing demands in providing useful content to social spaces, a strong consistent and persistent execution is required. While measuring success is a barrier when starting out, you can be sure that over time, the fruits of such an investment in the future will be sweet and well worth all effort you put now.
Strategic Planning – Pitfalls in Implementation
In our strategic planning work, we often work with companies who have tried strategic planning before. Almost inevitably, the companies we meet were disappointed in the results they got before using Simplified Strategic Planning. While some of these disappointments can be attributed to poor strategy or process issues, many – perhaps a third – were disappointed because the plan failed to lead to good implementation of the strategy.
This is a shame, because your management team puts some of its best thinking into your strategic plans. Often, the team is quite excited about the vision portrayed by your strategies. So, how is it that strategic plans are so often poorly implemented?
In our experience, there are five main root causes of poor implementation. Some of these are very closely linked to each other – that is, it’s common to see pairs of this issue operating in tandem. But, ultimately, each of these items, by itself, can torpedo your strategy implementation:
1. The plan is not linked to implementation
2. The implementation lacks follow-through
3. The implementation is given insufficient resources
4. Managers change their objectives too quickly
5. The plan attempts too much too quickly
Let’s examine each of these issues, and how to mitigate its negative effects on strategy implementation at your company.
1. The plan is not linked to implementation
This one is unfortunately, very common. In many cases, the plan’s issues can be traced back to a consultant who wanted to sell each step of the implementation as a separate service, but sometimes, it arises from sheer ignorance of the pitfalls of strategic planning. Many people who attempt strategic planning for the first time assume that once the strategies are written down, the organization has a plan. In a sense, this is true – written strategies are, technically, a plan. Writing your vision down, however, doesn’t guarantee that it will come to pass. If it did, we’d all be living in the utopia of the mission statements most of us labored over in the 1980s and 1990s.
The clearest symptom that a plan isn’t linked to implementation is an absence of clear, measurable objectives and related action plans that define, at a fairly low level, who is going to do what, when, how much it will cost and when it will happen. Sometimes this happens when the process stops after identifying strategies and goals, and sometimes the objectives are set, but no action plans are created (often because there are just too many objectives).
The simplest remedy for this problem, of course, is to follow a process that drives implementation by progressing beyond strategies and goals to measurable objectives and appropriate strategic-level action plans. Yes, this takes more time than the cheap and cheerful one- or two-day retreat that a lot of companies seem to like, but it has such a profound impact on the results generated by the plan that it is time well spent.
2. The implementation lacks follow-through
Sometimes, we see companies that do a decent job of linking their strategies to objectives and action plans, but still lose steam in the implementation part of the planning cycle. A lack of follow-through is one of the most common causes of this ”petering out”.
The best indication of poor follow-through is action plans that haven’t been updated since the plan was completed, or perhaps a month or two afterwards. The team set up their implementation plans with good intentions, but then dropped the ball as more urgent activities drove strategy implementation out of their minds. This is common because the very best strategies are never urgent – they are undertaken well ahead of time, because time and money can usually be traded off in strategy implementation. Companies that choose to spend time when they have it – even when the strategic initiative is not urgent – are almost always more efficient.
To remedy the lack of follow-through requires commitment from the highest level of the management team. If the owner, president, or CEO insists upon a serious, routine periodic review of progress on strategy implementation, it is highly unlikely that your company will drop the ball. Practically speaking, this means you must keep to the monthly monitoring process that we outline in the Simplified Strategic Planning seminar and manual.
3. The implementation is given insufficient resources
Another way of stating this is ”implementation is given insufficient priority”. It’s not uncommon to see, in a company that is relatively strapped for management resources, that action plan step postponement is a heavily used tool in the management team’s time management. It is always easier to postpone a strategic action than, say, to hire a new executive.
A common symptom of this issue is action plans where many steps are postponed two or three times before completion. Implementation is still progressing, but at a much slower pace than originally intended.
Fixing this issue isn’t always easy. Naturally, if you have the money, adding horsepower to your management team can help. Giving executives clear priorities, especially about the relationship between their routine operational responsibilities and strategic responsibilities, can also help. Finally, be aware that this issue may actually be issue number 5 (the plan attempts too much too quickly) in disguise. It’s difficult, if not impossible, to distinguish between trying to do too much and having too little to do it with, because they are essentially two ends of the same stick.
4. Managers change their objectives too quickly
In some companies, the main strategy implementation amounts to a kind of corporate ”short attention span”. Many of these companies don’t make much headway in their strategy implementation because they are never heading in one direction long enough for the strategy to pick up steam.
A common symptom of this implementation issue is a company that seems to be perpetually in the middle of dramatic changes. In a company with a sound, consistent strategy, change is occurring, but change tends to flow around the strategy, because the strategy represents a stable, unchanging reality, such as ”Starbucks customers like good coffee in a good environment”.
Another symptom is the classic ”flavor of the month” syndrome, where the company shifts direction every month or two based upon the viewpoint of the management guru that is currently in favor with the top executives. This is a dangerous problem, as many of today’s management gurus espouse strategic outlooks that are diametrically opposed. For example, ”The Experience Economy” espouses a strong, service-centered specialty strategy, while ”Nuts!” centers on a focused commodity strategy. You might succeed in shoehorning both of these outlooks into one company, but you are just as likely to end up with a train wreck.
The annual planning process, and strict discipline around that process, is the best antidote we know to ”short attention span”. The key here is to make sure you have sound strategic reasons for every change you make in your objectives (and no, ”there’s a lot of money to be made” is NOT a sound strategic reason). Likewise, test every change against the wisdom that is inherent in your own strategy. If it fits, great – but when it doesn’t, be very wary of making changes because of small, temporary changes in your marketplace or (worse) your reading list.
5. The plan attempts too much too quickly
This is probably the second most common issue, and, as we said, sometimes difficult to distinguish from issue 3 (The implementation is given insufficient resources). As managers, and as teams, we all seem to have eyes that are much bigger than our stomachs. If five objectives are good, ten must be better, right?
Well, wrong… ten objectives are almost always worse, from an implementation perspective, than five. There are two key reasons for this. First, we psychologically tend to focus more on items when they are limited in quantity. Everyone in your company is likely to know your company’s objectives if you only have four or five. If you have forty-two (we call this a ”laundry list”), chances are no one will know most of them, and few will even care. This is not because your employees are bad – rather, it’s because it’s not humanly possible for a group of people to remember and properly prioritize forty-two objectives.
The solution for this issue is simple, but often difficult. Don’t let yourself tackle more objectives than you can handle. If you had trouble with nine last year, try seven this year. In our experience, implementation is optimized somewhere between five and ten objectives, depending on the organization, its culture and resources.
These are just a few of the most common implementation issues we run into in our work as strategy consultants, assisting companies like your own in strategic planning. It’s not exhaustive, but hopefully, as you get out your plans for this year, you will think about taking some of the steps outlined here to improve your implementation.
Copyright 2007 by Center for Simplified Strategic Planning, Inc., Ann Arbor, Michigan – Reprint permission granted with full attribution.
What is Strategic Planning?
If you own small business or lead a FORTUNE 500, multi-national
company, most business leaders ultimately want to leverage
previous successes and eliminate causes of prior failures. This
is a difficult and complex process that begins with strategic
planning.
Sometimes it is not enough to focus on day to day operations,
leaders must have the discipline to take the time and effort to
clearly define where the organization is now and best determine
where the organization must be within a specific timeline.
Today’s business environment is very dynamic. Changes in the
marketplace are faster and more diverse than ever. Intensifying
competition and rapid technology advances make for constant
worry of your organization’s eventual obsolescence. Ultimately
your customers are never satisfied and will go elsewhere if you
do not give them what they want!
What is Strategic Planning?
Strategic planning focuses on obtaining accurate and unique
information relevant to your business objectives, presenting
same in an articulate written or oral form, to ultimately
position the company or organization to most effectively
leverage existing resources for the purpose of gaining market
share within reasonable profit metrics and within a specific
timeline.
Strategic planning requires creativity, innovation and non-
inear thinking. It is focused on defining causality within a
leadership perspective. It is much more than a descriptive “what
happened” reporting function; it is more about what “will or
should happen” to or within an organization to reach their
defined successes.
Strategic planning is about the future, not the past. It is
about long term thinking, not near term. It requires making
assumptions about your organization’s future.
Does Strategic Planning Work?
Strategic planning more often than not does not work. All the
time and money that has been spent by so many companies on
strategic planning has been ineffective for four fundamental
reasons:
1) No clearly defined business objectives to begin with
2) The belief among organization leaders that the strategic
planning process is finite, a once a year task, a
necessary management evil … versus a dynamic, ever-
hanging need to look into the organization’s future.
A desire to “Plan the work and work the plan!”
3) Too much debate among the planners about the forecasts and
not of the ASSUMPTIONS made in the strategic plan
forecasts themselves
4) Lastly, and most importantly, failure to execute the
defined tactics necessary to drive the planned
strategies.
It is difficult to effectively plan for the future of an
organization and to motivate leaders to do the same when the
strategic planning function has long been fraught with a valid
representative history of failure. However, if business planners
strive to understand WHY and HOW strategy planning most often
fails, they will significantly improve their odds of achieving
future planning success. It has also been proven that the
rewards of effective planning success are worth the effort!
Define a Strategic Planning “Champion”
There are so many demands today on business leaders. If there is
no planning discipline within the organization, there will only
be reactive responses to future business challenges not
proactive tactics to form the organization’s purpose and related
successes. There must be a “champion” within the organization
who makes strategic planning an ongoing priority within the
organization. This requires an ongoing commitment from senior
management and a constant priority given to strategic planning
processes. A shared commitment to strategic planning is
theoretically important but practically best maintained with
anointment of one person to constantly drive the priority among
the organization’s leadership.
A strategic plan should be considered a “live” document,
constantly being updated and upgraded, addressing valid changes
within the assumptions made in its development. Business or
organization strategies and their associated tactics are
integrative, should cut across; a broad number of issues,
organizational functions and entities. An effective strategic
plan will pragmatically force change within the organization to
ultimately drive improvement OF the organization and its
products or services offered.
Strategic Planning in Business
Strategic planning is critical for any sort of business. Initial stages of business are considered the most critical as this requires the involvement of every aspect of the business.
What Exactly is Strategic Planning
Planning cannot guarantee any success but a business done without planning is sure flop. Strategic planning is a way of stream lining your thoughts into very essential details and to decide upon what has to be done and precisely when. A good strategic planning success in most cases and this involves planning with respect to the ratio of risk involved and resources to be accumulated. It brings a great amount of clarity to your business. Strategies of how to sell your product, how to do the marketing, how to add value to the product and most of all how to establish the brand equity in the market.
Benefits of Strategic Planning
Strategic planning enables to view your business in a macro aspect by still considering the essence of micro aspects. Strategic Planning is something which we foresee of the future about a certain business venture. Most often business are made to last. Strategic planning to an extend ensures a long term success by taking up the investment opportunities at a regular basis and mobilize the funds to grow it further.
Though strategic planning offer most of the ill effects in the business. One must make sure you should not chalk out over ambitious plans for your business. The planning should be precise but should contain detail so the business. Strategic planning has to be a routinely updated to ensure success. Board meetings at regular intervals for this cause shall do more good to the business.
Strategic Planning – Strategic and Tactical Planning
Strategic planning is a business process that many companies employ to identify their critical success factors that set the course for future growth and profits. Lewis Carroll in “Alice in Wonderland” makes a good case for it: “Would you tell me, please, which way I ought to go from here?” said Alice. “That depends a good deal on where you want to get to,” said the Cat. “I don’t much care where…,” said Alice. “Then it doesn’t matter which way you go,” said the Cat.
Like most business processes, the key to success is in the effective implementation of the plan. Companies that do a good job of developing and executing their strategies can create a competitive edge that provides increased market share and higher gross profit margins. Organizations that turn their plan into a “dust collector” upon an executive bookshelf will never achieve their full growth and profit potential.
Most criticism of strategic planning is aimed at the planning process. They question the validity of a plan that has been based on market “guestimates”, the questionable valuation of the depth and breadth of competitors and an optimistic assessment of the company’s internal strength and weakness. The fact that strategic plans can be overly optimistic is not the core problem. Although the criticism may be appropriate, it puts the focus for improvement on the wrong end of the process – it’s the implementation task that is critical to producing positive results and it’s here where most companies fail at strategic planning.
Rational strategic plans poorly implemented will produce limited positive results. On the other hand, overly optimistic strategic plans, effectively implemented can produce results beyond everyone’s expectations. This being the case, what is the key to effective implementation? In one word – commitment!
Companies that are good at strategic planning build commitment to the planning process and to each of the strategies within the plan. They build commitment throughout the organization, working with people from all business functions to build commitment before, during, and after development of their strategic plan.
Winners begin early in building commitment to the strategic plan. Suggestions are encouraged from managers at all levels, from key executives who will participate in the planning sessions, and others who will share responsibility for implementing the resultant strategies. Together, they surface issues that will require changes in business process and/or culture and identify those constraints that will need to be overcome if implementation is to be successful..
During planning sessions, key executives from each functional area are all encouraged to participate and contribute to the plan. These executives develop strategies that build on organizational strengths and consider resources required to accomplish those strategies. They assure that a key executive “owns” each strategy and commits to a time schedule for its accomplishment. The key executives give thought to resource planning – realizing that human resources are the key to making positive things happen in difficult, complex business environments – and they commit accordingly.
Following the development of their plan, those responsible for implementations develop their own “tactical plans.” These action plans, when coupled with self-directed work teams, are major contributors to a successful Strategic Planning implementation. Teams use their plan to manage, to make decisions and to grow their business. Periodically, they review their “tactical plans” to monitor and report on the progress of implementation – keeping the plan “alive” by revising strategies and tactics when necessary.
Finally, to assure successful implementation of their strategic plan, they work on the planning process itself. The planning group continuously “fine tunes” the planning process to assure that inputs from all business functions are given their due consideration and to assure that buy-in and commitment to the final plan is at all levels of the organization.
So, why are most operations management teams outside of the strategic planning process? Why do many line managers view strategic planning as a make work project that produces little or zero value to customers? Maybe, it’s because they did not participate in its development nor did they buy-into its validity – let alone commit to the execution of its strategic objectives. In short, they’re not connected to the process! To achieve a company’s full growth and profit potential, CEOs and business owners need to assure the active participation of operation management in their strategic planning process. Professional assistance is available from Business Basics, LLC, why not give us a call.