Tweed-Weber’s Strategic Planning Q&A

1) What is strategic planning?

 

Strategic planning is the process by which an organization envisions its future and develops the necessary procedures and operations to achieve that future. The basic steps of the strategic planning process include preplanning research, SWOT analysis, strategic assumptions, identification of key issues facing the organization, and the development of mission and vision statements, long-range strategies, strategic actions and operational objectives. Overall:

• Defining how you will differentiate your organization in its service area.
• Determining the direction in which your organization should be headed.
• Building change activities into the organization’s daily work activities.

2) Why should an organization do strategic planning?

The primary motive for organizations to do strategic planning is to make decisions based on preplanning research and purposeful thinking. There are many specific reasons for an organization to initiate a strategic planning process, including the following:

• provide a structure for management
• give the organization better control over external forces 
• serve as a tool for decision making and resource allocation
• develop a strategy for innovation so the organization can compete effectively
• bring everyone together in the organization so that they are on the same wavelength
• raise management/employee awareness of current issues and operations 
• reawaken and motivate key people within the organization 
• position the organization for a merger or joint venture 
• create a document suitable for fundraising and/or public relations 
• increase morale within an organization and develop a sense of trust and cohesion 
• set the stage for the organization to make a "quantum leap" to a new level of product/service development or functioning

3) What is the difference between strategic planning and annual planning?

Annual planning has an operational focus and is concerned primarily with concrete goal setting and the scheduling of specific tasks to meet these goals. It does not usually concern itself with an analysis of the external environment or the fit between the organization and the environment. Strategic planning gives explicit recognition to the organization’s outside environment and places an emphasis on the organization’s strategic advantage in meeting the contingencies in this environment. Although strategic planning also involves goal setting, it is broader in scope and much more comprehensive than operational planning.

4) How long does it take an organization to complete a strategic plan?

The amount of time it takes an organization to complete a strategic plan varies greatly depending on a number of factors, including; the size and complexity of the organization, past experience with strategic planning, accessibility of planning data, and time and availability of planning participants. In general, it will take an organization about two to three months to complete a strategic planning process.

5) When should an organization do strategic planning?

While there is no “right” time to do strategic planning, it is usually inadvisable to initiate a strategic planning process if the management team is extremely weak, if there are serious internal conflicts, or if top leadership has recently left the organization. There are advantages to doing strategic planning when the organization is in a relatively strong position, as management may feel more confident about undertaking a serious, in-depth examination of products and services. If things are going well, however, people may feel no real need to change. On the other hand, if the organization is in a state of transition and introspection, there may be more openness to a process of renewal and to consideration of a new direction for the organization.

6) How often does an organization have to redo their strategic plan?

It is a good practice to review and update the strategic plan on an annual basis. For most organizations, adjustments are made at the level of strategies and perhaps goals. Most of the time, changes would not be made on an annual basis to the language of the mission and vision statements unless there have been dramatic changes and shifts in the organization's external environment during the past year.

7) Who should staff the strategic planning activity?

There is no one right answer to this question that would apply to a broad range of organizations. It is typically a mixture of management and staff members. However, it is important for one person to be responsible for guiding and monitoring the process. Even if the group uses an outside consultant, it is still important that there be a staff person on the inside who works closely with the consultant and the strategic planning committee. Typically, this staff person is the president.

8) How much do you mix management and staff in planning?

In general, the planning process will be more productive if it includes participation of management and key staff members. In preparing to plan, one of the important steps is the establishment of the strategic planning committee. All members of the planning committee need to receive an orientation to the planning process so that they understand what strategic planning is, the steps involved, as well as the time commitment required. Beyond the strategic planning committee, other stakeholders can be involved in various information gathering activities including completion of surveys, participation in focus groups, and attendance at periodic review sessions.

9) When implementing the strategic plan, what factors most significantly enhance or inhibit that part of the process?

What is always most critical is the level of involvement that people have while developing the strategic plan. In general, if people are involved in the process in meaningful ways, they will be ready to do their part in implementing the plan that results from the process. The opposite is also true - if people whose involvement is critical to the successful implementation of the plan have not been involved in meaningful ways, they will not be excited about the plan nor will they be very motivated to take some responsibility for implementation.

10) How does an organization stay focused on its vision when there is a major change in the organization's management? Does the organization have to start all over?

If the strategic planning process and the development of organizational vision involved a wide circle of management and staff, it is less likely that a change in leadership will cause the organization to lose focus. You don't have to start over in most cases. In fact, having a strategic plan in place should help in recruiting the new leadership.

If you would like to learn more about strategic planning, give us a call. We can help you Know More, so you can Do More. Call us toll-free at 1-800-999-6615, email us at mail@tweedweber.com and/or visit us on the web at www.tweedweber.com. Also, be sure to follow us on LinkedIn (Tweed-Weber, Inc.) and Twitter (@TweedWeber).

Why is Nonprofit Board Member Engagement Critical to Success?

If you are a director of a nonprofit organization, a board chair, and/or a board member, it is your duty to care for the organization in a way that helps to ensure its current and future success. Having engaged board members is crucial to how well your nonprofit organization performs and achieves its mission. Having a disconnected, disengaged board will result in a disconnected, underperforming organization.

At Tweed-Weber, we have a tried-and-true method for conducting a Nonprofit Board of Directors Assessment. It is essential to get answers from each board member relative to the following (just to name a few):

• Do they support the organization’s current mission/purpose?
• Do they believe the organization’s work activities are aligned with its mission/purpose?
• Does the board believe there is a strategic vision of how the organization should be evolving over the next three to five years?
• Does the board have a common understanding of the organization’s planning objectives?
• Does the board regularly discuss how the organization should meet new opportunities and challenges?
• Do board members understand what information they need to make informed, responsible decisions?
• Is the board provided with the information they need to make informed, responsible decisions?
• Do board members have a complete understanding of the organization’s current work activities?
• Do board members understand the key measures that are used for tracking progress toward the organization’s goals?
• Is the board involved with developing strategies for generating resources?
• Are appropriate financial controls in place to ensure the organization’s stable operations?
• Does the board ensure that the budget reflects the priorities established in the annual plan?
• Is there an effective process in place to nominate and select new board members?
• Does the board’s composition reflect the diversity of background, expertise, and other resources needed by the organization?
• Is the size of the board appropriate for effective governance?
• Do board members feel actively engaged in the work of the board?

Whew. That’s a lot. But there’s so much more to be learned in addition to the questions above. Conducting a board of directors assessment has become a best practice of highly successful, highly regarded nonprofit organizations. The collective voice of the board should be heard as a regular part of board management and the way the board functions.

If you would like to learn more about Tweed-Weber’s Nonprofit Board of Directors Assessment, feel free to contact us. We will help you Know More, so you can Do More. Call us toll-free at 1-800-999-6615, email us at mail@tweedweber.com and/or visit us on the web at www.tweedweber.com. Also, be sure to follow us on LinkedIn (Tweed-Weber, Inc.) and Twitter (@TweedWeber).

The Five Sources of Cost Advantage

There are five commonly recognized sources of cost advantage – people, material/supplies, processes/systems, facilities, and capital. It is not necessary to focus on all of them in order to experience the benefits of being the lowest cost producer in your industry; any one could be enough. However, by achieving a true cost advantage in more than one source, you further ensure your company’s success.

 

Now, let’s explore each of these five sources and determine the relationship it has on your business.

 

People

 

Many organizations boast that their people are their most important asset. While this may be true, people can also represent the most significant cost to a company when you shift from the balance sheet to the operating statement.

Companies do not become the lowest cost producers by paying their people the lowest wages and benefits possible. They become the lowest cost producers by leading and managing their employees to performance levels that exceed those of their competition. To do this, they continuously focus on enhancing the skills of their people. They create highly flexible employees who are capable of meeting the demands of an ever-changing marketplace.

 

Lowest cost companies create highly disciplined teams who understand their real competition is outside of their organization, not inside. They: 

• tell their people what to do
• support them in their efforts to do it
• measure how well they do it
• reward and/or discipline based on their measurements

Materials/Supplies

All companies use materials and supplies to produce their products or perform the services that their customers buy. Lowest cost companies do not simply focus on the lowest unit price of materials or supplies, they establish purchasing practices that result in the lowest total cost for these materials and supplies.

 

This distinction is essential because the lowest unit price for a particular purchased product may not be the lowest total cost for the same material. Lowest cost companies identify and separate their strategic purchases from their low-risk purchases. They then align their purchasing resources to ensure that strategic material purchases receive the level of attention they deserve. They understand and track their total purchasing costs and work hard to continuously reduce them.

 

Processes/Systems

 

Everything that a company does is a process. From the way it hires to the way it fires, from entering orders to collecting receivables, from manufacturing products or delivering services to the way you ensure their quality, everything that an organization does can be reduced to a series of definable steps. Processes that are linked together become a system. Lowest cost producers design their processes and resulting systems to be highly efficient.

 

Organizational processes and systems can be classified into four basic categories:

• Sales processes – positioning your company and products, generating leads, converting those leads into orders, and entering those orders into your operations
• Operational processes – engineering and manufacturing your products, and ensuring the quality of your products/services
• Distribution processes – getting your products or services to your customers
• Support processes – human resource activities, management information systems, financial management, administration activities (to name a few). Support processes are essential for your sales, operational, and distribution processes.

As a company grows, these processes and systems tend to evolve with it. Lowest cost companies recognize that evolution does not always yield efficiency, and they constantly evaluate and re-engineer their processes to ensure they are performed in the lowest cost way possible.

 

Facilities

 

After people and materials, the most significant cost center for companies is often their facilities. Facilities include physical plant (offices and factories), equipment and technology hardware.

 

Lowest cost organizations work hard to ensure their offices and/or manufacturing facilities are designed to produce the most cost-efficient performance. They invest in the most effective capital equipment to do the essential work of their business. Increasingly, lowest cost companies look for ways to use technology to increase their productivity and reduce their costs.

 

Capital

 

The last (but not least) source of cost advantage is capital. Capital falls into two fundamental categories, money that you have (cash on hand and equity) and money that you don’t have (receivables and credit availability). Lowest cost companies recognize and maximize the advantages that come from effective capital management.

 

What does this mean for your business? All of these sources are just the first piece of the puzzle. The rest is actually performing them. Once all of these pieces come together, the picture it paints will be one that customers can’t look away from. But how does one figure out if all of the pieces are working together? It’s easy; conduct an employee perception survey. This survey is designed to allow you to get into the minds of your employees. It helps you recognize areas that are and are not working. Most importantly, it instills the fact that you care about your employees and the success of both them and the business.

 

If you’re wondering if an employee perception survey is right for you, we can help. Call us toll-free at 1-800-999-6615, email us at mail@tweedweber.com, and/or visit us on the web at www.tweedweber.com. Also, be sure to follow us on LinkedIn (Tweed-Weber, Inc.) and Twitter (@TweedWeber).Today, sit back and allow us to do all the work, and help you figure out the perfect picture for your company. No one can guarantee certainty, but market research can guarantee clarity. You will Know More, so you can Do More. 

A Metric by Any Other Name...

By Al Weber, President, Tweed-Weber, Inc.

 

For some time now, I have become increasingly aware of the use, or perhaps I should say misuse, of the word “dashboard” among managers and executives. I suggest misuse might be the more appropriate description because, as I think back to the first time I heard the term, it had a very specific meaning. That meaning defined the metrics on an organization’s dashboard as leading indicators for the organization. Much like the gauges and warning lights on an automobile’s dashboard, they would communicate what was going on within an organization in (relatively) real time. And as important, they would be immediately actionable. You could do something about them, in short order, to change them. More and more, however, I hear virtually ALL metrics being described as dashboard metrics, and when I look at dashboards, often proudly presented, I find them to be outcome measures or lagging indicators.

 

While outcome measures have value and should represent an effective rear view mirror look at an organization’s performance, they are not always helpful in generating short-term, quick response reactions to the current circumstances going on within that enterprise. Imagine how helpful (or perhaps unhelpful) it would be if, instead of a fuel gauge on your car, you received an automatically generated report stating you had run out of gas four times over the past calendar month. Even if this report had a cumulative year-to-date column and multicolor graphs and charts, you wouldn’t be any better off. Or what if you received a regular report letting you know that you exceeded the posted speed limit 308 times over the past 30 days? While that may only be and average of 10.26 times per day, how many of those events might have resulted in a long conversation with a state police officer?

 

Both a fuel indicator and a speedometer are perfect examples of dashboard instruments. Their jobs are to tell you when you are having a problem, not that you had one. If you know you have a problem, you can apply corrective action. If you don’t know you have a problem, and worse yet, you won’t know if you are having one in the future, all you can do is count the number of speeding tickets you have received and pay your fines in a timely manner to avoid additional penalties.

 

As you look at the metrics you are currently using to run your organization, you need to ask two key questions. 

1. Is the information your metrics provide real time (or as close as possible to real time) data?
2. Is the data actionable?

If the answer to either of these questions is “no,” you really aren’t looking at true dashboard indicators. You are looking at some form of outcome measures. You can call them Key Result Areas, Critical Measures of Success, or Key Performance Measures, but don’t confuse them with the dashboard indicators that precede, and often predict, your outcomes.