Creating and following through on an effective strategy plan isn’t for the faint of heart. It takes a lot of careful thought, questioning and courage to challenge the status quo. Those are not easy things to do, especially if the board has a past habit of letting management run the show and rubber-stamping their recommendations.
First of all, the strategic plan should continually be reviewed to ensure that it’s in keeping with the vision and mission of the company. The strategic plan should be seen as a living document that has a plan to take the company from where it is now to where it wants to be over the short and long term. Board directors should continually oversee the plan and monitor its progress. Managers should have hands-on experience in moving the plan forward.
In pursuing a strategic plan, boards need to identify their goals and objectives and develop strategies that will help them reach them. In addition, it’s important to identify all the obstacles that might get in the way. It’s also important to figure out what resources you may need and gather them up so that you’re ready to go.
Foundations of Strategic Planning
Perhaps one of the greatest challenges in the strategic planning process is getting everyone to slow down and take the proper amount of time to do a thorough job. Strategic planning is a process. It wasn’t designed to be completed in the course of a meeting. Most boards find that they need several board or committee meetings to complete the process so that they have confidence in it.
Boards should consider doing a situation analysis and a SWOT analysis as part of their strategic planning process. They need to identify the goals and objectives that they want to achieve over the short and long term and then outline the strategies the company needs to take to achieve them.
A situation analysis considers the economic, competitive, technical, regulatory and societal environment that will exist during the time that the company is scheduled to achieve its goals and objectives. It’s important to recognize the impact of these areas because boards and managers have little or no control over them. By considering the impact of these areas before identifying strategic action steps, the board and managers will be able to adapt their plans so that they will still be successful despite any fluctuations in external departments or systems.
It’s common for boards to perform a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis as part of their strategic planning. It’s not enough to merely identify the company’s strengths, weaknesses, opportunities and threats. Boards should consider and record ways that they can build on their current strengths. In looking at weaknesses, they need to analyze how they can minimize the impact. They should consider how to take the best advantage of every opportunity, and perhaps most importantly, come prepared to discuss ideas about how to defend against threats.
After thinking through the strengths, weaknesses, opportunities and threats, and considering the impact of all the areas included in the situation analysis, it’s time for boards to develop new strategies to meet their objectives.
Last, don’t make the mistake of completing the strategic plan and then just throwing it in a drawer. Strategic planning requires ongoing review. Boards and managers have the most experience, so they should keep the strategic plan handy and share their views of it with each other on an ongoing basis. As they review it, they should be asking themselves whether conditions have changed and, if so, whether the right strategies are still in place.
Challenging Management’s Ideas to Form the Best Strategic Plan
The inquisitive part of the strategic plan is perhaps the most difficult part of it. First, it requires thinking outside the box. Board directors and managers will need to think through the original question and then look as far beyond that as possible. Collaborate and consider the impact of the situation analysis as it could apply to the strategic planning process now and in the future.
Board directors also have to remember that it’s their job to challenge the ideas of the CEO and the senior managers. This isn’t so easy to do, especially when the CEO is a strong leader with a stronger reputation and long tenure. The CEO’s reputation counts, but it’s not everything. Consider every idea based on its own merits. Don’t be afraid to reject ideas that have a low chance of success – even if senior managers are in favor of them.
Think about the risks that may accompany certain plans. Initiate discussions on whether those risks are worth taking and whether there are any ways to mitigate them. Also, engage in lively discussions about whether the strategies and risks fit with the strategic direction of the company.
Helpful Tips for Effective Strategy Planning for the Board of Directors
Don’t be afraid to acknowledge the elephant in the room. If you don’t believe that something’s going to work, don’t just go along with the crowd. Others in the room may be glad that somebody finally called it out. Remember that you were chosen to be a board director so that you could offer up independent opinions and not just go along with everyone else.
Make sure that there are strategies in place for every objective and that they’re the right strategies to meet the desired end. Don’t be afraid to speak out about using the same strategies the board has used in the past that have never worked. If they’ve never worked before, why would anyone thing they’d work the next time around? Figure out if there’s a better approach and whether the goal is even reasonable.
Along the same lines, don’t be afraid to ditch a losing strategy altogether. Refocus your planning on things that will work. Factor in the potential response of your competitors. They’re sure to have one, and it may impact your strategic plans. Stand ready to revise your plan if the competitor moves in a way that hurts your company’s progress.
Consider whether your current managers and leaders have the skills, experience and mindsets to carry out the strategic plan regardless of their past performance. Don’t be afraid to get rid of people now who won’t be a good fit for fulfilling the strategic plan in the future. Get a board management software system. It’s the perfect tool for collaborating using a highly secure electronic platform.
In conclusion, remember that the board’s role is an advisory one. All board directors should be asking questions that stimulate thought and provide guidance. Assess the associated risks that may accompany your strategic plan. Ask openly, “What issues aren’t on management’s radar?” It takes courage to raise some issues, and it’s the board’s job to demonstrate their valor.