Where Are You Headed?

You’ve heard the old adage, “If you fail to plan, you are planning to fail!” So, how are you doing? The beginning of a new year is a great time to evaluate.

Two questions for you – has your company taken the plunge and developed a strategic plan? And if so, are you implementing it?

Maybe you don’t have a strategic plan yet … maybe it’s because the amount of advice and options has you overwhelmed. There are tons of articles and books about strategic planning – what a strategic plan is, that your company needs a strategic plan, and the benefits of strategic planning – and you’ve probably read a few. But, where do you start? What options will work best for you?

“There are many different descriptions about what Strategic Planning is. Some in the planning world offer five or six different types of plans based on what a business is trying to accomplish. In other parts of the business world, the phrase Strategic Planning brings with it a thought of a costly consultant who creates [a] fancy binder of material with no follow up or advice on implementation; leaving a business owner to ask, ‘What did I just pay for?’” wrote Wesley Shie in his blog, “Failure to plan is planning to fail”, for the Indiana Small Business Development Center.

Let’s simplify this whole Strategic Planning idea. It doesn’t have to be complicated. According to Shie, “If your planning process is complicated, then you run the risk that nobody in the organization will understand it (or people will interpret it a different way). To help with the simplicity, analyze the words for your own reaction: Strategic, which is developing a strategy for the organization; and Planning, which is the steps needed to execute the strategy.”

He suggests answering these few basic questions:

Where are we now?
Where do we want to go?
How are we going to get there?
Who will do what and by when?
How are we doing?

For Team 1 Plastics, a plastic injection molding company for the automotive industry, the strategic planning journey began in May 2010. Utilizing membership resources provided by the plastics manufacturers’ association MAPP (Manufacturers Association for Plastics Processors), Team 1 underwent a business assessment by Harbour Results for help in answering the question, “Where are we now?”

Craig Carrel, President of Team 1 Plastics, said that at the end of the assessment, there were three key recommendations by Harbour Results:

Develop a long-term strategic plan – answer the question, “Where do we want to go?”
Review the capabilities of the organization and develop a capability architecture that meets the long-term strategic plan – answer the questions, “How are we going to get there?” and “Who will do what and by when?”
Stop planning and start implementing the plan – begin to answer the question, “How are we doing?”

Team 1 Plastics had to decide what to do next. How would the company start its journey to strategic planning? The company’s owners, Carrel and Gary Grigowski, chose to hire a consultant to help them begin developing a strategic plan. They looked for one which does not “create [a] fancy binder of material with no follow up or advice on implementation.” After soliciting bids from several consulting firms, the company chose Harbour Results. Carrel said, “We have worked closely with Laurie Harbour (President and CEO of Harbour Results) ever since.”

Harbour helped Team 1 Plastics figure out “Where do we want to go?” The company answered this question with these two goals: “Be a financially secure company that provides opportunities for all our team members for generations in the future” and have “at least 15% operating profit by 2020.”

The next question, “How are we going to get there?” began to be answered by Team 1 Plastics. The company determined that to achieve the 15% operating profit goal, it needed to increase annual sales to $20 million by, as Carrel put it, “developing new markets and customers and pursuing new business growth.” Team 1 decided that one step to “get there” was to create a full-time sales position. In August 2010, Team 1 Plastics hired Dave Biondo as Sales Development Manager. Since his hiring, Biondo has played a key role in helping Team 1 add four new customers and profitably grow Team 1 sales.

To help the company get to being “… financially secure,“ Carrel said that Team 1 has improved its sales forecasting and capacity planning tools. “This has helped us forecast our sales demands for the next one to two years, ensuring that we can accurately plan for capacity requirements to meet these sales demands.” He added, “This has been an important improvement since we run 24/7 and need an accurate sales forecast that feeds our capacity planning.”

“Focus on training and development of all team members in current and future positions,” Carrel said, “is helping us achieve our profit and sales goals.” And leadership development is a key to planning for the future generation of leadership as the owners work on the transition from day-to-day operations to focusing on long-range planning, preparing the company for the eventual retirement of its owners.

Which leads to the final questions, “Who will do what and by when?” and “How are we doing?” These are questions that need to be continually asked by your company. According to the forbes.com article, Strategic Plan Template: What To Include In Yours by Dave Lavinsky, “You should develop your complete strategic plan each year, and then update it monthly as actual results come in and you gain more clarity and intelligence. While you will rarely achieve the precise goals established in your strategic plan, scores of research show that you’ll come much closer to them versus if you didn’t plan at all.”

Team 1 Plastics follows Lavinsky’s advice. Carrel said that even with all of the planning the company has done, it has encountered surprises, such as “systems and processes that were working fine at one level might begin to fall apart as you transition to a larger company,” and “needing to continually improve and upgrade our financial systems so that we can accurately project our capital needs, cash flow, and profit targets.” So Team 1 meets quarterly with Harbour to review and update its strategic planning objectives.

Following her recent meeting with Carrel and Grigowski, Harbour shared her perspective on Team 1 Plastics’ progress on its strategic planning journey. “Team 1 Plastics’ leadership has achieved a great deal of results through the strategic planning process. They have come together as a stronger team that can solve problems quickly and efficiently. They have learned how to work “ON” the business rather than just “IN” the business each day. This has allowed them to delegate more and more work and to develop their own successors. Additionally, with the detailed goals and objectives in front of them each year, they focus their efforts on achieving those — without distraction from other elements – allowing the organization to accomplish many of the goals. They are stronger and more prepared than ever to handle the growth.”

Harbour also addressed how Team 1 Plastics adjusted to those “surprises” that it has encountered in the past six years. “Team 1 Plastics has managed many challenges over the years that were unexpected, such as the recession, the Tsunami in Japan which affected its customer base, and the Toyota recall. Each of these things hit its customers hard and, subsequently, hit the Team 1 organization hard. They quickly reacted to these challenges and were able to stay strong and rebound from them with effectiveness. These lessons taught the management team; and they are stronger because of them. I believe they would react even better today to any surprise that came their way.

Carrel believes strongly that the strategic planning journey has allowed Team 1 Plastics to move closer to its two goals: “be a financially secure company that provides opportunities for all our team members for generations in the future” and have “at least 15% operating profit by 2020.” Carrel said that “the company has not yet achieved either goal but is confident it is moving in the right direction. And, if it continues to update plans and follow through with implementation, it will reach these goals. Then the task will be to develop new goals to challenge the company and a new strategic plan developed.”

Are Team 1 Plastics’ goals achievable? Harbour thinks so. “The 20/20 goals that Team 1 has set in place are absolutely achievable with the team in place. They have set some things in motion and are working very hard to drive efficiency, bring in new business, and achieve profitability. I’m confident that this team can reach the goals they have set out to achieve in 2020.”

Is Team 1 Plastics’ journey the only road to successful strategic planning? Probably not, but as “Shie concluded, “In any way it is accomplished, Strategic Planning is important and can play a role in moving your business forward … Failure to acknowledge the power of strategic planning can be the end to any growth within a business and if you don’t know where your business is going, it’s going nowhere.”