Online financial courses - The best source of advice comes from the Short Courses


Online Financial Courses - Strategic Planning

Provided by : Matt H. Evans
Adress: 6903 29th St N ; Arlington, VA 22213
Phone number : 1-877-689-4097
Email: matt@exinfm.com

Course 4: Strategic Planning

Chapter 5: Implementing the Strategic Plan

We have established our overall strategies for the future. We need to make it official by having the Strategic Plan approved. Approval may involve the Board of Directors, Executive Management, and others who need to lend their support to get the Plan implemented. By having key decision-makers approve the Strategic Plan, it signals that it's OK to implement the Plan. Implementation is managed through the development of an Operating Plan.

An Operating Plan is a step by step plan for implementing the Strategic Plan. Operating Plans depend upon good strategic plans. If there are fundamental problems with the Strategic Plan, then successful implementation will be extremely difficult. Additionally, since operating personnel must implement the Strategic Plan, some level of involvement prior to this point should have taken place.

Operating Plans are prepared for the short-term (usually one year). One major function of the Operating Plan is to allocate resources for getting the plan implemented. If resources are not available or there is an excess of resources, then the Strategic Plan should be re-evaluated.

Operating Plans need to cover the functional areas which are required for implementation - marketing, research & development, financing, operations, technology, etc. Each functional area will submit detail budgets and plans for inclusion within the Operating Plan. Detail functional plans address the following:

- Plans for establishing organizational size, structure, and staffing.
- Plans for asset deployment and investment.
- Plans for promotion, pricing and marketing of products and/or services.
- Plans for production changes and scheduling.
- Plans for management development and training.
- Plans for raising capital.

Generally, functional plans should be prepared by Managers over the functional area. They should not include areas outside the control of the Manager. The key task for the Manager is to remain focused on the Strategic Plan and not get lost in the detail. The best operating plans tend to minimize the detail and flow from the Strategic Plan.

Also consider the following points about Operating Plans:

- Operating Plans usually assign responsibilities and define the roles people will play in accomplishing the Strategic Plan.
- Operating Plans are routinely changed as you learn more and gain experience. An incremental, trial and error approach is often the best approach.
- Operating Plans need to be tight enough to meet strategic objectives, but loose enough to allow for creativity and flexibility.
- Operating Plans usually will include a timeline or deadline for completing tasks.
- Operating Plans should be communicated to everyone held responsible for doing the tasks. If outside groups will assist, then include them in the communication.
sitemap | top

Evaluation and Control

Successful implementation requires monitoring the progress of action steps within the Operating Plan. Evaluation should be done on a regular basis (monthly, quarterly, etc.) with an emphasis on the following:

- How much progress has been made in accomplishing the task?
- What is preventing us from moving forward?
- Is there a need to go back and revise the strategic objective?
- What adjustments should be made to the Operating Plan?

One way to evaluate and control an Operating Plan is to include budgets. Budgets are used to allocate resources and coordinate how assets are deployed. Budgets compare actual results with performance standards. Budgets usually cover short-term (one year or less) and they cover several functional areas - marketing budget, production budget, technology budget, etc.

Budgets should be prepared based on the following criteria:

- Budgets should be simple and easy to understand.
- Use budgets for those areas that need to be monitored.
- Budgets should not dominate decision-making. They should be used as a tool for managing, not a way to manage.

All of the budgets for an organization are combined into the Financial Plan. The Financial Plan is part of the Operating Plan.

Note: For more information on the Financial Plan, take Short Course 2 on Financial Planning and Forecasting. One of the problems with budgets is that they tend to be financial in nature. The Strategic Plan covers many functional areas not related to finance, such as marketing, customer service, production, and human resource management. Therefore, we need a measurement system for the non-financial areas. The performance measurement system used for measuring non-financial areas is called the Balanced Scorecard. The Balanced Scorecard is designed around the Strategic Plan. Additionally, the Balanced Scorecard will include critical financial measurements. Therefore, the Balanced Scorecard becomes the principal system for evaluation and control of the Strategic Plan. Like the Strategic Plan, the best Balanced Scorecards tend to be simple and manageable.



sitemap | top

Contingency Plans

Because change is so much a part of planning and decision making, it is often useful to include contingency planning within the Operating Plan. Contingency Plans provide direction to operating personnel if unplanned events occur. For example, lower-level managers can prepare several budgets - expected budget, budget if growth rates are 10% below expected, 20% below expected, etc. These alternative or contingency plans provide guidance based on "what if" type analysis.

Contingency Plans are prepared similar to the Operating Plan. They cover the short-term and outline specific action steps to be taken. However, the level of detail is kept to a minimum, providing enough information to set a new direction.

Larger companies will use simulation models to prepare contingency plans. For example, if market growth is 5% less than expected, the impact on cash flow and earnings will be _____. Since more quantitative data is available at the operating level rather than the upper levels of the organization, simulation is more appropriate for developing operating plans than strategic plans.
sitemap | top

Updating the Plan

The final step in this entire process is to repeat the process; i.e. update the Strategic Plan. The process needs to be dynamic since the operating environment is changing. As a minimum, strategic plans need to be updated yearly by going through the basic process of assessment, critical issues, objectives, etc. This will involve new staffing, new projections, and new implementation steps. Additionally, you may need to change your approach to strategic planning. If a stable environment has become extremely dynamic, then a shift from a goals approach to scenario playing may be appropriate.
sitemap | top

Summary

Strategic planning is a dynamic process of continuously looking at your current situation and plotting your next move. This requires a solid understanding of the organization as well as an understanding about the environment that the organization operates in. The best organizations are always engaged in some form of strategic planning. There is no right way to do a strategic plan. The best approach is to find a process that fits with the organization. This requires a fit with the mission statement, the strengths and weaknesses of the organization, and the opportunities and threats confronting the organization. If there is a fit, then start the process by getting organized. Organization involves putting together a team or committee, collecting information about current plans, and outlining how the Strategic Plan will be developed.

Situational Analysis is the next step in the process. Situational analysis is an assessment of strengths, weaknesses, opportunities, and threats related to the organization. Significant critical issues (no more than eight) are listed. Critical issues are addressed by developing overall strategies or objectives. The combination of mission, objectives, principles, and other components becomes the formal strategic plan. The final layer in the process is implementation of the plan. An Operating Plan is used to plot specific actions or tactics for getting the Strategic Plan implemented. Operating Plans consist of budgets, functional plans, financial plans, contingency plans, and other specific plans. Throughout this entire process, changes and updates can take place. Therefore, strategic plans and operating plans must be flexible and open to revision. At least once a year, the Strategic Plan is re-evaluated for changes.

Recommended Workbook: Strategic Planning Workbook by the Wilder Foundation, 919 Lafond Ave, St. Paul, MN 55104-2198, Ph: 1-800-274-6024 or 651-659-6024 or visit www.wilder.org.
sitemap | top

Chapter 1: Preliminary Considerations
Chapter 2: Organizing the Process
Chapter 3: Assessing the Situation
Chapter 4: Developing the Strategic Plan
Chapter 5: Implementing the Strategic Plan
Chapter 5 points
Evaluation and Control
Contingency Plans
Updating the Plan
Summary


10 Upcoming learning videos : in all categories



Selected learning videos for today


learn video about : Explaination about the theory of plate techtonics in geologyExplaination about the theory of plate techtonics in geology
learn video about : Differentes types of rocks in geologyDifferentes types of rocks in geology
learn video about : Geology lecture titled Macro evolution in the deep sea by SeilacherGeology lecture titled Macro evolution in the deep sea by Seilacher
learn video about : Geological evidence of Darwin theory of evolution that still mattersGeological evidence of Darwin theory of evolution that still matters
learn video about : The meaning of Limestone and shale cycles in the upper ordovicianThe meaning of Limestone and shale cycles in the upper ordovician
learn video about : Geologic carbon sequestration and mitigating climate change by inection of CO2Geologic carbon sequestration and mitigating climate change by inection of CO2
learn video about : Geology and mineral resources of oclahoma by Ken JohnsonGeology and mineral resources of oclahoma by Ken Johnson
learn video about : How to calculate the budget line and prices if you know incomeHow to calculate the budget line and prices if you know income
learn video about : Ecuador geology and volcanology given by Dr throfilosEcuador geology and volcanology given by Dr throfilos
learn video about : This video is about Mexico volcanos and Mexico Geological phenomenonThis video is about Mexico volcanos and Mexico Geological phenomenon
learn video about : Explanation about the 3 type of rocks and the relationship between themExplanation about the 3 type of rocks and the relationship between them
learn video about : Learning english vocab for ESL - project managementLearning english vocab for ESL - project management
learn video about : How to pronunciate words starting with BHow to pronunciate words starting with B
  1. What happens when we pull on a pulley and the pulley is pulling on other things?


  2. Tension in an accelerating system and pie in the face


  3. A more complicated friction/inclin ed plane problem


  4. Calculating the acceleration of on object sliding down an inclined plane


  5. Phisics cours - Introduction to friction


  6. Physics explanation about Mass on Inclined Plane


  7. Learning physics - A slightly more difficult tension problem


  8. Learning physics-An introduction to tension


  9. Physics topic explaining Force with Vectors


  10. Explanation about Newton's Laws and vectors