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Key Essentials of Business Planning

9 Jul, 2007 By: Dennis LeStrange imageSource

Key Essentials of Business Planning

Business Planning is crucial to the success of any business today. It is the
process by which an organization objectively reviews its performance in the
context of its goals, expectations, opportunities, and overall purpose.  This
process also involves comparisons to competitors, market area, and industry.
Business Planning, as we know, is conducted by all types of entities—large and
small, public and private, traditional and Internet-based; some treat this
exercise with true reverence, while others avoid any combination and derivatives
of the words "Business Planning," which likely will be a huge mistake.

Many of us in document imaging are advocates of real Business Planning
because it affords an organization the occasion to address current and future
opportunities and issues, providing a documented roadmap to achieve goals while
monitoring workflow and productivity.  It also gives the senior leadership team
a chance to remove itself from the day-to-day grind in order to think freely
about the business entity, and determine how their business can be improved
overall.  It sets a course of action for the short-term, as well as more
distant, long-term initiatives.

Let’s review the fundamental steps of business planning (BP) to enhance your
company’s overall performance, and leave you with some best practices to make
your BP session more productive:

Business Planning 101

This process begins with the commitment of the dealer-principal, and it
involves a formal meeting with as many managers, supervisors, and high potential
employees as possible, but not with so many people that the session can be
unruly and unproductive.  The assembled group must be cross-functional to
include representatives from sales, service, administration, operations, HR and
finance.  These participants should be your top performers, committed to
improvement, and willing to challenge every process and program in the company.
Defensiveness cannot be tolerated in any fashion, particularly with the senior
leadership team, as it will stifle any free-flowing thought.  Try having  some
fun with this by using a prop (okay, a rubber chicken or some item with local
flair!) which is put in front of anyone who is caught being defensive.  The
person who ends the day with this item can either buy the first round of drinks
that night at dinner, or Starbuck’s coffee for everyone at the end of the day.

Consider using an individual from outside of your company to moderate this
planning session.  Objectivity is the key to good brainstorming, which an
outsider can bring without company/program bias. 

Conduct this planning session in an off-site location to eliminate
distractions that will occur if it is held in your company’s conference room. 
Insist that pagers, PDAs and cell phones are turned off or left at the door.
Yes, answering cell phones are a constant distraction during a meeting. And if
one person is allowed to use these devices, then everyone will want to do so,
and your strategic meeting will fall prey to multiple interruptions.

While these sessions usually occur in conjunction with the development of the
annual budget, they can be separate events specifically tied to strategy
development.  In any event, conduct these meetings at the same general time each
year in order to establish continuity and expectation levels of those involved.

The dealer-principal should kick-off the meeting in order to set the tone and
articulate the purpose.  Following the opening, an individual from
sales/marketing should present objective/external industry trends from some
recognized authority like CapVentures or IDC.  This provides a backdrop to
formulate thoughts, ideas, and suggestions, which are relevant to your business.

SWOT Analysis

After the industry perspective, conduct a SWOT analysis.  This is an acronym
for Strengths, Weaknesses, Opportunities and Threats.  Strengths and weaknesses
are internal factors, and opportunities and threats are external elements that
may influence your business.  The idea of this exercise is to brainstorm each of
these factors, then prioritize the top three or four in each category.  A
critical success factor to this portion of business planning is to be
open-mined, and defensive commentary should be avoided. 

If possible, try this as an exercise in advance of the meeting, conducted by
those employees not able to attend. That makes the process more inclusive and
instills a participative philosophy throughout the organization.  Employees love
to provide their input, particularly in their respective area of expertise. Some
of best ideas come from these all-inclusive pre-planning SWOT analysis
meetings.  Make sure you take advantage of this opportunity!

After the SWOT analysis has been concluded, then four different breakout
sessions should be conducted for each of the four elements.  The makeup of the
breakout groups should be prepared in advance with thought and foresight.  A
good mix of function and position are essential to making these sessions
productive.  Identify a leader of each group, usually someone with high
potential, but certainly someone who is truly respected.  The objective of these
breakout groups is to take the priorities from the general session and begin the
process of creating action plans to achieve goals, which will be aligned to
those priorities.

Action Plans

After you complete the SWOT analysis there will be a strong desire to fix
everything that is wrong with your business, but you must resist!  Limit the
number of strategic initiatives. This will result in the development of
formalized action plans for 3-5 key items, allowing you to concentrate your
efforts on the most important areas, which will provide the highest return. 

Usually action items will be a corrective strategy to some internal weakness,
which must be improved to take advantage of market opportunities. You want to
thoroughly eliminate these problems so that they don’t reappear at a later date,
and that takes detailed management involvement ensured only through a limited
number of initiatives.

With action plans there are a few rules to ensure effectiveness.  First of
all, include a situational analysis, which is a succinct statement of the
problem, and an objective, which must be both specific and measurable.  To "grow
sales" isn’t an acceptable objective, whereas "increasing segment IV sales by 10
percent from X to Y" is a detailed objective that can be readily measured.
Insist on this level of specificity which is easily quantified.

Regarding action steps, they too must be succinct and accurately describe the
detail measures necessary to eliminate the problem in the case of an identified
weakness, or to take advantage of an opportunity in order to grow revenue.
Assigning people for actions and  due dates must also be part of these plans.
The planning session isn’t the place to formalize these action plans; it is
simply the forum to create the priorities and a plan draft.  Group leaders in
conjunction with your CFO should take responsibility to complete formal plans
for inclusion in the Business Plan document, subsequent to the planning session.

The Advantages

There are advantages to business planning:

  • Creates a participative/problem-solving forum
  • Increases employee commitment
  • Allows performance to be objectively reviewed
  • Encourages teamwork and cross-functional cooperation
  • Provides the setting for "bigger picture"
  • Inclusion of high potential employees reduces turnover
  • Creates a positive environment with emphasis to long-range plans
  • Develops objectives based on SWOT analysis
  • Outlines the roadmap for short-term performance improvement


Hopefully, you find business planning far less imposing than you did before,
and accept that it is absolutely essential to growing any organization. At a
glance, the major points of the process are summarized here:

1. The dealer-principal must endorse this process to make it effective

2. Use an outside moderator—they are more objective

3. Involve as many key managers, supervisors, and employees as feasible

4. Make sure that each function, geographic area, and level is included

5. Don’t let anyone get defensive!

6. Encourage "out-of-the-box" thinking.

7. Conduct these meetings at least once a year

8. Assign breakout group leaders based on leadership skills/future potential

9. SWOT analysis should be all-inclusive, and the foundation of the meeting

10. Prioritize initiatives; don’t take on too much at any one time

11. Use action plans as the means to achieve objectives

Dennis P. LeStrange is a principal of Strategy Development, a
management/consulting/sales training firm specializing in developing growth
strategies, controlling costs and profitable investing of resources. Contact him

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