Strategic Planning for Business — Do You SWOT or SOAR?
Every business needs a strategic plan in order to thrive, and this has never been truer given the current economic environment. That plan starts with a vision statement — where leadership sees the company going in three to five years. This is different than the mission statement — the “why we do what we do.” A vision statement is “where we want to go from here.” They both align with the company’s business plan and goals, but one is foundational and the other aspirational.
With corporate vision in place as a guide, it’s time to get in the evaluation trenches.
Corporate Strategy and Structure
The following fundamental activities inform the business strategy:
- Survey stakeholders, from internal leadership to shareholders, to find out what they see for the future of the organization. Use this to develop or tweak the vision.
- Look at the evolving needs and market conditions of the company’s customers or clients. Does the organization need to pivot service or product offerings? Are there industry trends or technology changes that need to be adopted in order to stay competitive?
- Analyze the company’s competitors and industry to see what lies ahead, and draw up a plan for how and where to compete. As COVID-19 has shown, many companies are no longer limited to current physical geography.
Next up, assessing the business from the inside out.
This four-part assessment looks at the following:
- Strengths — What’s working well for the company? What gives the company a competitive advantage?
- Weaknesses — What are the areas for improvement or practices that are best to avoid?
- Opportunities — What trends can the company take advantage of? Are there changes in government policy or the market that will affect the business?
- Threats — What are the internal and external issues that threaten sustainability and profits (such as poor cash flow, debt, lack of funding, human resource problems or technology deficits)?
This alternative assessment model, which looks at strengths, opportunities, aspirations and results, focuses on positive attributes and is suggested for early-stage companies that are still developing. Since weaknesses and threats have not yet arisen, SOAR makes sense, especially as the company is growing and working its business plan.
Create SMART Goals
Based on the results of the SWOT/SOAR analyses, it’s time to create an operational plan with goals that are:
- Specific for effective planning. They may not look like financial goals on the surface, but they should all tie back to (improving) the company’s numbers.
- Measurable to determine progress and reevaluate actions as needed; remember, what gets measured gets done. Be sure to include key performance indicators (KPIs). Reviews should be done at least quarterly and incorporate the most recent financials. Over time, there will be more history and experience to rely on to make nimble adjustments.
- Attainable inasmuch as they can be accomplished within a reasonable time frame.
- Relevant in that they align with an organization’s values and long-term objectives, which further support the vision
- Time based with a realistic yet ambitious end date for each specific task (at least quarterly); include a “by when” for each action to keep the team focused, motivated and on target.
Follow the Plan
It’s hard work to develop a strategic plan so it’s vital that the company follows it. Conduct periodic evaluations against the stated KPIs to measure those goals and make any necessary adjustments upon review or in response to changes in the market or industry. Even if something changes, be sure to set deadlines for each specific task to stay the course and lead the organization towards fulfilling the SMART goals and achieving the vision.
As the pandemic has taught all of us, change happens — frequently; companies that work their strategic plans while also recognizing the need (and possessing the ability) to shift accordingly will fare better than others in the long run. Remember, although action plans are short-term measures, the strategic plan is a tool for long-term viability and financial health.
Christin Meizinger is a multi-site controller at CFO Your Way.
This article appeared in the January/February 2021 issue of New Jersey CPA magazine. Read the full issue.