“I’ve been in this group a little more than a year now,” started Sarah. “Last year about this time you all started talking about your strategic planning / annual planning activities.  I didn’t want to speak up last year, because we really didn’t have an organized annual planning routine at my company.  This year I’d like to start one … what’s enough and what’s too much?”

“When I first took over as CEO at my company, they really weren’t doing much of a formalized planning process either,” Rich replied.  “But the company I came from had a regular planning routine that I found very helpful, so I brought that process to the company I’m at now.   I think how rigorous your process should be depends on the size of your organization, the volatility and risks in the industry you compete in, and how satisfied you are with your current growth rate.  I was brought in to affect a turnaround, so accelerating growth was a key goal for me.  Plus, in our high-tech industry, there’s always technology advances that could have a significant impact on our future product plans.” 

Cindy commented, “I’ve worked at different sized organizations.  At one company, they had a fairly formal annual planning process, but it was primarily focused on fixing some company problems and generating a budget … revenue projections, product plans, organizational needs, etc.  I didn’t and still don’t consider that very strategic.  A strategic plan will spend more time looking at the overall market, perhaps the economy, technology trends / breakthroughs, the competitive environment, etc.  Based on all of that, we set certain goals – market share goals in specific segments, geographic sales goals, new product or technology goals, manufacturing efficiency goals – high-level types of goals.  Then we’d do the budget setting.  In that environment, the budget was designed to achieve the high-level goals we set; not just put together a budget so we had a budget to follow.  There were times when the revenue and gross profit projections would not support all of our goals; that’s when the conversation got real and hard trade-offs had to be made.

“I read this article once,” chimed in Peter, “that said that a CEO should spend 80% or more of their time planning.  I thought that was totally unrealistic.  I don’t know, maybe for a Fortune 1000 company that makes sense, but not for my $30M company.  I’m too active in the day-to-day operations.  Maybe it depends on how you define planning, because I do spend time every week monitoring our industry, watching our competitors, listening to our customers, going to trade shows … a lot of that is to make sure we stay on the right path.”

“I’ll tell you this, Sarah, I’ve watched more than one of my friends’ companies go out of business because of a lack of strategic planning,” James pointed out.  “From the outside I could see market trends that had the potential to seriously derail them.  After they closed, I’d asked my friend if they hadn’t seen that coming and the answer was always the same … they were so focused on monthly / quarterly revenues and profits and so busy fighting every fire that came up, that they never had time to plan a strategy to deal with the trends.  They all knew the trend was there, but they all felt like they had a lot more time to deal with it.  Then ‘all of a sudden’, it was too late!”

“Pretty scary,” thought Sarah.

“The key, though, is not the planning,” interjected Rich; “the key is in the execution.”

“That’s so true,” Don jumped in. “I’ve read quite a bit about the topic: some studies claimed there was no correlation between revenue growth and planning;  others found a definite correlation between growth and companies that operated from a strategic plan versus those that did not.  I agree with Rich, the key is operating from the plan.”

Peter added, “There are a lot of business planning software templates available and you can get other templates online.  The real value comes from the internal discussions you and your team have about the market, the technology, the competition and your own goals, as well as your own company strengths and weaknesses.  We also found it particularly helpful to involve more than just senior management in the process.  Salespeople, customer service people and others on the front line have a lot of insight into what’s going on out there.  Make sure you tap into their perspectives.  One thing I noticed is that once you involve them in the discussion their antennas are up.  They’ll start to notice things that provide additional insight.  They’ll even incorporate specific questions about the future in their customer visits.  It really lifts the market intelligence of your whole organization.”

“Market intelligence … that’s a thing?” queried James. “At least you didn’t say marketing intelligence!”  “Don’t go there,” warned Cindy, “or I’ll get my intelligent marketing people to submit one star Google reviews for you … then you’ll see!”

“Sorry for that rude interruption, Sarah,” apologized Cindy.  “Do you think you got enough?”  “I did,” replied Sarah. “Could I ask if you could each send me the table of contents from your plan? I think that would give me the start I need.”  “We will do that”, everyone chimed in … even James!

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If you’ve ever wondered what you could learn from your peers, found yourself feeling a bit lonely at the top and/or wanting to get feedback / confirmation from trusted colleagues, yet had no inner circle of trusted confidantes to turn to, this is your chance to give Inner Circle CEO Peer Groups a try.

MONTHLY QUIZ

According to a study published by the Journal of Small Business Management, small and medium enterprises that “operate” from a strategic plan grew ___% faster than those that did not operate from such a plan.

• 12%
• 27%
• 41%
• 63%
• 79%

The correct answer will be revealed after you submit your vote/answer.

Hear what one member says about why trying Inner Circle is worth a shot!