Have you begun thinking about what next year will bring for you, your team, and your organization?
Perhaps you’re part way through a 3-5 year strategic plan and are not ready to take on a new direction quite yet.
But if you are thinking about your strategy for the coming year or years, how will you plan to maximize your resources for maximum effectiveness?
At Athena, we help companies engage their teams in strategic planning by facilitating the use of a balanced scorecard process. It’s the best way we know of to make a solid plan that takes a healthy look at both financial and non-financial targets. It’s a highly effective way to balance the tangible and intangible, the short-term and long-term. Not only does it give us a picture of what and why we’re doing what we’re doing, but it also shows us how we’re going to do it.
The balanced scorecard asks you to approach your business, whether for profit or not-for-profit, from four different perspectives. These perspectives incorporate both lag and lead measures, making it a solid foundation for execution.
Financial: the ultimate definition of financial success; how you will measure shareholder value
Customer: how you will measure customer satisfaction, happiness and loyalty
Process: how you will deliver value to your customer; internal processes designed to achieve the financial and customer goals
Enablers: how you will support the strategy using the right competencies, right culture and right structures
But wait... we're getting a bit ahead of ourselves.
If using a balanced scorecard approach to your strategic planning is your desired path, where should you start?
The best place to start is to ask yourself what your key focus will be for the business for the next year. This is a high-level question that asks you to hone in on two key criteria:
1) What is your overriding objective (revenue growth or cost containment)?
2) What is your value proposition (best deal, best product/service, or best friend)?
It is important to start with these two questions because they will point you in the direction you must go. If you are doing this planning with a team, then you know how important it is that everyone around the table is contributing with the same objectives in mind. It can be quite problematic when someone at the table is working from a different agenda and thus throws a monkey wrench into the whole process.
Start with the overriding objective question. There are really only two financial strategies to choose from, and they are to either sell more or spend less. Which will be your primary focus? Certainly over time you will want to accomplish both of these, but for the near-team strategic plan, which one will drive your efforts?
The second question to answer is about your value proposition. Here you essentially have three choices.
1) Do you want to compete on price? Then you are seeking to be the “best deal” to your customer. Southwest Airlines, McDonalds and Ikea are examples of companies competing to give the customer value for the dollar.
2) Perhaps you are more focused on being the “best product or service” provider in your industry. Here you focus on innovation and being a leader in your preferred lane. Apple, Cirque de Soleil and Tesla come to mind.
3) If these are not your focus, then perhaps the unique value you bring to your customer is through the deep and intimate relationship you have with your customer. Starbucks and the Ritz Carlton are companies that illustrate the “best friend” perspective.
Once you have identified these two foundational pieces, you are ready to begin working on your strategy. Creating a strategy map is a highly visual way to define your path and communicate your story. The people inside your organization need to be able to execute on the strategy, so this means that your job is to create it and communicate it so that people understand it.
While your strategy can be illustrated and communicated in one page, it takes a lot of work to get to that point. If you are thinking about embarking on a strategic planning session, consider engaging someone from outside the organization to help you get there. If you already have these resources in-house, then perhaps having a template to follow would be helpful. Either way, Athena is happy to partner with you.
