Strategic Planning That Works

Mark Komen, President

Kodyne, Inc.

Plymouth, MN

When I ask small business owners if they have a strategic plan, their eyes usually glaze over and, after a moment, they may respond, “Why do I need a plan?  Who knows what will happen in the future?  What’s the point?”  Often, small business owners do plan – they just plan in their heads, rarely writing anything down and tend to look at strategic planning as overly complicated, tedious and time away from other things more pressing.

“Besides, I have a business plan.  My bank reviews it regularly,” they may say.  However, projections for the bank are not a strategic plan.  Nor are marketing plans, operations plans or sales plans.

Typically, a strategic plan includes a long-term vision for your business, spells out your competitive advantages, your company’s vulnerabilities and what it takes to be successful given the current and future market environment as you see them.  The plan then includes goals and strategies for you to address short-comings as well as opportunities.

My strategic planning process is based on the Strategic Business Leadership® methodology (SBL), developed by The Alternative Board®.  The process begins by creating a personal vision for the business owner (see my companion article, “Personal Vision -There’s Something in it For Me After All”).  Then we define what the owner brings to the company in terms of their strengths and passions, as well as the competencies and values the organization needs to achieve the company’s and owner’s visions (they are different).   The output is an actionable plan to grow the business in the desired direction.  We plan the first year in detail – right down to “who does what, when” and set placeholder goals for the next 2 or 3 following years.  Sounds like a lot but it’s something we build over time, taking advantage of the latest market conditions.  Plus, I’ve found that the owners usually have things pretty well thought out – just not documented or in one place.  They just need someone to explore the possibilities with them and to help them clarify and document.  The advantages of putting the plan in writing are:

  • Being clear to staff, suppliers and customers about the direction of the business
  • Having a plan to track and follow
  • Having a plan you can tweak or change if the situation warrants it

I introduced the SBL® strategic planning process to ISC Companies in Plymouth, MN in 2002.  I interviewed owner Mark Koch about his experiences with the process and how strategic planning has impacted his company.

What does ISC do?

We provide turn-key solutions in combining distribution machine components with machine and fabrication operations.  In addition to our offices in Plymouth, we also have facilities in Sioux Falls and Rapid City, SD.

How did you plan in the past?

We did things informally, basically reacting to how I saw the opportunities for us in the market.  I didn’t have a formal process that engaged my staff or a method for tracking our progress.

How did the Strategic Business Leadership® process help you personally?

The process provided me with a vehicle and template to develop a strategic plan.  I was able to organize my thoughts, create a vision for the business, and track progress.  I felt good that, as a business leader, I could engage my team in the process.

What were the outputs of the planning process?

We developed a plan with specific goals, strategies and action steps that would allow us to achieve our overall objectives with ownership by the team and everyone’s responsibilities spelled out.  We also got a system for tracking progress and holding people accountable.

How was the process received by your management team and staff?

We had 100% buy-in from the beginning.  We continued to grow as a team and improve the plan each year – making it more meaningful over time.

What business results have you seen as a result of using the SBL®  process?

Our revenues have virtually doubled since 2002 and we’ve consistently exceeded the standards for growth in our industry.  Keeping the plan in front of us during the year forced us to look at and improve our internal processes – something we might not have done otherwise.  We were able to improve our bottom-line, especially in our machining and fabrication operation.  We’ve become more sophisticated in measuring our internal costs and efficiencies which has helped to drive profitability.

What do you do to keep the company on track?

We review the plan and action items that are coming due at our monthly manager’s meeting.  Each action item is assigned to a responsible individual who reports status to the team.  We use this to discuss how the business has been impacted by the activity and we actively assess each item’s completion.  If an item isn’t completed by its due date we assess its merits going forward.

What organizational changes have you made as a result of using the SBL® process?

We’ve re-organized to more closely align our management team’s individual talents and strengths to the needs of the business.

What recommendations would you make to someone considering using the SBL® process?

Get on the bus!  This process is good for any kind of business and we’ve seen significant results from using it.  We definitely couldn’t have done this so successfully just by following the exercises in some book; using a trained facilitator who pushed us and forced us to consider options made all the difference.

Do you have to be a for-profit, privately held company for this to work?  Not at all as I’ve successfully adapted the SBL® process for non-profit organizations as well.  In closing, strategic plans are, in essence, your assumptions about your company, the markets you do business in and your bets about the future.  If you keep the plan in front of you, you’ll be able to react to changing situations and modify the plan to react to them.  In any case, you’ll be building your business with a clear sense of direction in mind and making decisions that support making that happen.

Copyright 2009.  Kodyne, Inc.  All rights reserved worldwide.