Six Steps to Successfully Executing a Strategic Plan

1 58 BONEZONE March 2013 BUSINESS CRITICALSix Steps to Successfully Executing a Strategic PlanA Strategic planning process (SPP) provides a systematic way of mapping the handful of key decisions that an organization must get right in order to survive and thrive during the next several de!nition: Strategic = gaining a competitive advantage, long termPlanning = preparation for certaintyProcess = systematic approach to a conclusionThe proposed annual six-step Strategic planning process, shown in Exhibit 1 on the following page, may prove essential for those working in most corporations. It provides an oppor-tunity for senior leaders to assist in formulating a company s Strategic plan, implementing the Strategic plan and connecting strategy and implementation to a rewards , before starting the process, secure the commitment of the leadership team up front or quickly abort.

2 Bring the right people together. Those who carry out strategy should develop it. And remember, if you want to accomplish a strategy, agree to focus on it, and then plan ahead to make it an ongoing Six Steps of the Strategic Planning ProcessSteps 1-3, Strategy Formulation: Looking Within, Looking Around, Looking AheadStep #1 in the process consists of conducting an internal strate-gic audit or critically looking within your own organization to answer where are we now? Determine your competitive strengths measurableattributes that make you better than your competition Determine your competitive weaknesses whatprevents you from achieving better results; identifyrecurring weaknesses Determine people opportunities, challenges andconcerns Determine if you can !nance the futureTakeaway: Never state a critical weakness unless you make a commit-ment to !

3 X #2 requires you to conduct an external Strategic audit to identify trends or critically look around outside of your orga-nization. Identify favorable and unfavorable trends and your largest single threat regarding: Customers and customer demand Products and technologies Competitors Economics Government policy (healthcare reform, regulatory,reimbursement, compliance, quality systems, etc.)Takeaways: Never select a future trend that is not supported by anexisting one. When identifying the most favorable trend, determine howyou can capitalize on it and track it over the next threeyears. For key favorable and unfavorable trends, ensure that youmonitor and con!rm a trigger, a pre-determined levelthat causes you to take action or make a change in #3 proposes that you identify critical planning assump-tions, including opportunities and threats by looking ahead:Determine opportunities and threats related to: Market assumptions Key customers or repeat business Costs Key competitor analysis Line items (cash "ow, P&L, balance sheet) Key technological improvements and forecastsDon UrbanowiczUrbanowicz Consulting, LLCIf you want to accomplish a strategy, agree to focus on it, and then plan ahead to make it an ongoing D KPFF 2/BONEZONE March 2013 59 Government policy assumptions and interactions People planning assumptionsTakeaway.

4 Critically identify and openly discuss which opportunities and threats will have the greatest impact on future business perfor-mance. The initial three Steps looking within, around and ahead are the building blocks to develop the Strategic plan. The next three Steps will allow you to implement the Strategic 4-6, Strategy Implementation: Answering The How, The What and Keeping Score Step #4 of the SPP consists of putting together measurable performance objectives (See the sidebar, 2013 Measurable Per-formance Objectives, on the following page), and answers how you can tell if your personnel are doing what will help the company be successful in achieving the agreed-to game : If you have a plan, then have a system in place to measureand monitor performance. Ensure that objectives are SMART: speci!

5 C, measurable,achievable, reviewable and trackable. Consider assigning accountability for objectives and mak-ing their progress #5 and #6 in the process consist of compiling action pro-grams that answer what programs are needed to achieve the game plan, and then con!rm the !nancial resources required to fund the action programs how you will allocate resources to capitalize on opportunities and eliminate CRITICAL^dZ d '/ W> EE/E'WZK ^^ ^WW d/KE^ Z ^h>d^ ^dZ d 'z &KZDh> d/KE ^d W^ ^dZ d 'z /DW> D Ed d/KE ^d W^ ^dZ d '/ /E/d/ d/s ^ E K : d/s ^ Dh^d /Ed ZE > ^dZ d '/ h /d >KK</E' t/d,/E Z ^dZ E'd,^ LJ t <E ^^ ^ LJ LJ ^dZ d '/ /E/d/ d/s ^ D ^hZ > W Z&KZD E K.

6 D/s ^ K E E d d K Z t Z ^ z ^ d D ^ D Z d d , Z Yh/Z ^ WWZKWZ/ d yd ZE > ^dZ d '/ h /d >KK</E' ZKhE LJnj d W LJ ' LJ LJ LJ d/KE WZK'Z D^ KZ' E/ d/KE >^dZh dhZ ,hD E Z ^KhZ ^ d t KEdZK> ^z^d D^ Z/d/ > W> EE/E' ^^hDWd/KE^ >KK</E' , KWWKZdhE/d/ ^ d,Z d^ D < LJ < LJ LJ > W > < LJ ' LJ W / LJ LJ LJ &/E E / > Z ^KhZ ^ >>K d/KE ^ > Zz /E Ed/s ^^ ^LJ ^dZ d '/ W> EE/E'WZK ^^ ^WW d/KE^ Z ^h>d^^dZ d 'z &KZDh> d/KE^d W^^dZ d 'z /DW> D Ed d/KE^d W^^dZ d '/ /E/d/ d/s ^ E K.

7 D/s ^ Dh^d /Ed ZE >^dZ d '/ h /d >KK</E't/d,/E Z ^dZ E'd,^ LJ t <E ^^ ^ LJ LJ ^dZ d '/ /E/d/ d/s ^ D ^hZ > W Z&KZD E K : d/s ^ KEE ddKZ t Z ^z^d D^ D Z d d , Z Yh/Z ^ WWZKWZ/ d yd ZE > ^dZ d '/ h /d >KK</E' ZKhE LJnj d W LJ ' LJ LJ LJ d/KEWZK'Z D^KZ' E/ d/KE > ^dZh dhZ ,hD E Z ^KhZ ^ d t KEdZK> ^z^d D^ Z/d/ >W> EE/E' ^^hDWd/KE^ >KK</E' , KWWKZdhE/d/ ^ d.

8 Z d^ D < LJ < LJ LJ > W > < LJ ' LJ W / LJ LJ LJ &/E E / >Z ^KhZ ^ >>K d/KE^ > Zz /E Ed/s ^ ^ ^LJ Exhibit 1: Strategic Planning Process Actions and Results2 CTV D KPFF 2/60 BONEZONE March 20132013 MEASURABLE PERFORMANCE OBJECTIVES: A SampleJohn Smith, Marketing & International Sales1. Objective: Sales of key products: Achieve or supportthe achievement of 2013 budgeted sales of $ (ABCD) and $ million (XYZ) Criteria: Launch ABCD globally by end of 2Q13. Expand the ABCD marketing support packageto monitor existing new competitors and meetemerging customer needs.

9 Achieve international sales budgets of $ (ABCD), $ (XYZ), $500K (EFG) and $300K(MNO).2. Objective: New product launches: Launch XYZ-LIGHT by 2Q13; EFG-LIGHT by 3Q13 and anoutsourced generic by Criteria: Achieve new product launches, with full clinicallaunch packages, on schedule. Achieve new product to sales ratio (2010-2013)of 20% in Objective: Product phase outs: Review the currentP&L by product line; identify phase-out candidatesand achieve a reduction in inventory of $150K atstandard factory Criteria: Complete product line review by April 2013. Secure buy-in for phase-out products by May2013. Achieve inventory reduction targets for phase-out products by December CRITICALT akeaway: Appreciate the difference between planning and execut-ing strategy. Strategy typically requires only a small group of top managers; it is carried out over a shorter period of time, and suc-cess is measured by a completed plan.

10 Execution requires everyone in the organization; it is carried out over longer periods of time, and success is measured by results achieved. Connect Strategy and Implementation to a Reward SystemUpon completion of all six process Steps , connect ob-jectives, action programs and budgets to a reward system. Tying a manager s evaluation and compensation to progress and successful implementation of objectives and action pro-grams has been a proven : Consider complementing shorter- with longer-termperformance targets. Having the appropriate organizational structure andcontrol systems in place will help connect strategy andimplementation to the Plan Simple for EmployeesThe strategy and resultant objectives, action programs and budgets must also be translated in extraordinarily sim-ple terms into something the organization can understand.