Strategic Planning: Making It a Truly Useful Process

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Courtesy of TechKNOWLEDGEy Strategic Group

Strategic planning is a one of the most critical functions of executive management - an on-going process and task which must be regularly revisited, refined and updated in order to be successful over the long term. Unfortunately, formalized and truly useful strategic planning programs are still not commonplace in the environmental and engineering services business. Many firms believe that they cannot afford to invest the time and money necessary to build and institutionalize a formal planning function; many others which have tried to start formal planning have dumped the process after a few years because it didn't seem very useful. In addition, many of the senior managers in this industry are engineers and scientists who were never formally trained in business management techniques, or who may either be generally unaware or skeptical of the value of long-term strategic planning. Some industry CEOs claim that they personally conduct the firm's strategic planning in their own heads - when they need to; yet, as we will discuss below, strategic planning is a critical communication and objective-setting exercise which must involve many different layers of people throughout the firm in order to be successful. In short, too many firms end up fighting today's fires rather than planning for the future - yet the evidence shows that few tasks are more critical for long-term success and growth.

Most of us are only too well aware of the common complaints about strategic planning - that it is somehow an 'academic' or 'paperwork' exercise, divorced or detached from the day-to-day urgencies and realities of running a business, or that it is impossible to conduct a useful planning process because of the difficulties of predicting the future. Unfortunately, too many of us have been involved in strategic planning processes that were poorly managed, never implemented, or simply irrelevant. Too often, after a hopeful golf weekend or retreat in the mountains, the strategic planning process has resulted only in a thick bound volume that gathers dust forever more on the bookshelf.

Many firms seem to believe there is no need for strategic planning, especially when things are going well right now - that they know what they're doing, and that whatever happens in the future is just going to happen. However, when things are going well, it may not be simply because your management team is so much smarter or your execution so much better than the next guy - it may just be that you're being lifted up by the same tide that is lifting all the other boats in your industry. The trick is figuring out how to continue to perform well even when the tide starts to go out - how to succeed and continue strong performance even as others in your industry begin to suffer. Good strategic planning can help to confer those competitive strengths and advantages.

Especially in a rapidly changing and highly competitive industry like the environmental business, it is critical to regularly assess the marketplace and the competition - to continually figure out how to best mesh your strengths and weaknesses as an organization with the challenges and opportunities presented by the 'outside world.' A key function of the successful executive leader today is to force his or her management team through this kind of thinking exercise, to be explicit in the statement of the firm's objectives and to detail the means by which those objectives will be achieved - indeed, to be able to articulate them on a piece of paper.

Key Components of the Strategic Planning Process:

Strategic planning certainly can be an irrelevant and academic process - but it doesn't have to be. In fact, many well-intentioned corporate efforts at formalizing and instituting planning processes could be much more successful and accepted if they simply followed a few key rules and guidelines. And there is really nothing magical or ephemeral about the strategic planning process - much of it can almost be treated as a cook-book procedure, like other business management functions.

Following are some key guidelines for beginning to implement a reasonable strategic planning process.

1. Plan the planning process - decide what you want to accomplish, who is going to be involved over what time period, and what the end product should look like. This may sound obvious, but it often isn't. If you are just starting a new process, it may be wise to keep your expectations fairly modest to begin with. How detailed will the plan be? What period into the future will it span? Will it cover general objectives and directions for the firm, it will be a more specific, department-by-department breakout of detailed tactics for achieving those broader objectives?

2. The timing of the effort, vis-à-vis other corporate processes, is critical - the strategic planning is most effective if it is conducted in advance of, and tied directly to, the budgeting process. It is important that the finance people be directly involved in the process. The strategic planning process should be seen as setting the broad and general guidelines within which the more detailed financial budgeting process can be conducted. Indeed, it is difficult to understand how firms can even try to effectively budget without various strategic assumptions behind the process.

3. Make sure that the right people are involved - the strategic planning process should include most of the key executive management. If the strategic plan is drawn up in a vacuum by the CEO or the marketing department, it is neither a very valuable process, nor is it likely to be adhered to by others. It is especially important to involve some of the sales and business development leadership of the Company, as they are often the people in closest touch with the outside marketplace.

4. Top management must lead and champion the process - many executives in the environmental business pay lip service to being strategically-oriented and 'market driven,' but in practice, too many fail to practice what they preach. If top management doesn't take the marketing and planning function seriously, it is unlikely that anyone else will.

5. Make sure the data upon which you are basing your key is as accurate and timely as possible - indeed, one of the biggest risks inherent to the planning process is that you are evaluating your situation and planning your future based on faulty data. As a wise sage once said - 'it is difficult to make predictions, especially about the future.' Obviously, none of know the future with much certainty, but try to make sure that your assumptions about competitors, clients, services, the economy, and so on are as complete as possible - and recognize that it may be better to draw no conclusions, than to draw conclusions based upon clearly faulty data. This is an area where many firms could do much better - better and more sophisticated market research.

This aspect of the strategic planning function can be more challenging here than in other more mature industries, due to the accelerating pace of change in the environmental business - in terms of economic forces, driving regulations, technology, and competitive landscape. Many sectors of this industry are still young enough that they are plagued by a dearth of good market and competitive information, making it more challenging to position and prepare for the future.

6. Be as specific as possible in the delineation of your goals - plans that consist solely of 'motherhood and apple pie' objectives may look and sound nice, but don't really accomplish much. Many strategic plans tend to be far too general - 'we want to be the leading firm in our industry,' 'we want to exceed the expectations of our clients,' and so on - without any mention of the metrics or means of even measuring such lofty goals. As mentioned below, the good strategic plan should function as a detailed (if evolving) road map of where the business is headed. What are the main objectives of the firm, what are the specific sub-tasks required to accomplish those objectives, what routine and more day-to-day efforts will have to happen, who is responsible for which task, when should it be started and when should it be finished, etc.?

7. The strategic objectives and financial goals of the company should be ambitious, but they should also be realistically achievable. Many strategic plans tend towards superlatives - oftentimes involving growth assumptions or profitability rates that are clearly unachievable. If the plan proposes objectives that are clearly unattainable, and if there is no follow-up after such lofty goals are set, then no one is going to take the whole process very seriously. In short, the strategic plan should be objective and specific goals should be achievable given a strong effort.

8. As you develop specific plans and objectives, make sure you specify who is responsible for doing what, and by when. Many firms put together good planning documents with reasonable goals and objectives that everyone agrees upon, but which don't really allocate the responsibilities very clearly. This is one of the most important points to understand in getting a strategic planning process successfully up and going - specifying not just where you want to be, but in detail how you are going to get there.

9. Recognize that you are probably not going to accomplish everything - especially if you are just starting up a formal planning program, focus your efforts on a few key areas, and try to accomplish those first. Walk before you run, and show progress on a broad level before addressing the more specific areas.

10. Consider getting some outside assistance to help you implement and facilitate the process going forward - there are plenty of strategic planning and management consultants around the industry that would be happy to help you evaluate your needs and get a more formal program started. Sometimes outside facilitators can help force a more critical self-analysis and review, and can also help to keep the process on schedule when key participants have many other responsibilities and fires to fight on a daily basis.

11. Quantity does not equal quality in the strategic plan document - while some firms have produced multi-volume tomes, the most useful strategic plan documents can usually be adequately expressed in ten to twenty pages of text, or less. The document must be readable and understandable, and although we have stressed detail as a critical component, it appear to simply be one huge spreadsheet. A key value of a strategic plan is to promote internal communication and discussion of the company's current position and future objectives; hence it should be the type of document that can be readily absorbed by many different kinds of people within the company.

12. After the planning cycle is completed, make sure the key results of the plan are effectively communicated properly to the 'troops' - the rest of the relevant people in the company, and particularly those that did not have a specific role in the process. Some firms have had good success and 'buy-in' by giving the broad employee base a chance to participate in the process via a mail or intranet survey, etc

13. Never forget that a strategic plan must necessarily be an evolving and changing document - internal capabilities or directions may change over relatively short time periods, and circumstances in the outside world can certainly change dramatically. For example, many firms had a very distinct change in their strategic plans and directions last year following the unpredictable events of September 11. We are planning in an environment where things are constantly changing, and hence we must constantly change and adapt to keep up with the outside environment.

Once established, the plan should be re-evaluated and updated on at least an annual and preferably a quarterly basis - a well-written plan will allow the user to check progress on previously established goals, and determine if and where changes or corrections need to be made.


As a more regular and formal strategic planning process is developed and implemented, and as it begins to be more broadly accepted and utilized in an organization, several benefits will begin to emerge. First, strategic planning gets a little easier as it becomes more institutionalized - once a framework plan is in place, it becomes easier to adjust and modify that plan, as opposed to starting from scratch. As the process becomes better understood by more people, a better common understanding of the firm's overall direction and vision should start to become clearer across the organization, informational needs and/or organizational changes will begin to be more apparent, and creative new ideas and improved strategies will begin to emerge.

Often, the real benefit is not just the strategic thinking, the clearer objectives or the formal plan document that results, but the interaction and communication that occurs when the various leaders of the company get together to talk about strategy and direction. The planning meetings may be the only time that many of these people have to get together and talk through the broader future directions and strategic alternatives faced by the company, and significant and productive new personal relationship may be formed. Often, this communication is just as valuable as the plan process itself.

To be successful in the future, engineering and environmental services firms need a clearly articulated and regularly updated set of strategic objectives, which identify the strengths and weaknesses of the company and match them to changing external customer and competitive trends, and a continually changing marketplace. Those firms that have a specific and well-understood strategic plan, and a clearly stated set of objectives, are more likely to actually reach those objectives. Strategic planning is critical not only for large companies; in many ways, small companies have even less room for strategic or marketing mistakes. The winners of the future will be those whose leaders have had the commitment and vision to consistently monitor the external market environment, and the courage to adjust their paths as they move into the future, even when current cashflow or business conditions may make it difficult to take the long view.

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