How to improve business performance with strategic planning

How to improve business performance with strategic planning

A Leader’s Options to Improve Business Performance

The number one job for all executives is to improve their business performance. What methods to employ is the question. Here are a few concepts to consider.

Business Model Canvas

At the simplest level, it is about creating the Strategic Direction and then relentlessly Executing a Plan. Let’s unpack each of those elements

Strategic Direction

The first question to answer do we have an effective Strategic Direction. At Hewat Strategic Edge we substitute the term Strategic Direction for something more practical – Strategic Framework. A Strategic Framework is a critical touchstone to drive customer value. It succinctly outlines where we are going and how we are going to get there.
It should help management and staff to “sing from the same song sheet” and focus on results – the right results. The Strategic Framework communicates the value you intend to create for your customers, owners and employees.

Our Strategic Framework has six components:
Execution Plan

There are a variety of models that are like our Strategic Framework. Balanced Scorecard is probably the best known internationally. In our practice, we enable the creation of a Strategic Framework through a couple of days of facilitated sessions. To access the full description of our Strategic Framework Program go to https://www.hewatstrategic.com/strategic-framework-program-description/. Here is a link to download a self-assessment of your current strategic planning https://www.hewatstrategic.com/resources/guides-tutorials/seven-questions-assess-strategic-planning/.

Critical Input into the Strategic Direction

Building a Strategic Framework should be informed by a range of considerations, but two critical sources of information stand out –Value Propositions and Business Model.

Value Propositions

The engine of growth is our Value Propositions. We must have a clear understanding of the value that is currently provided or should be provided, to each customer segment, through each bundle of services and products.
This is often a work in progress. We may be at the stage where we have simply identified the need for improvements, in order to create the required customer value. We may have identified the need to find innovative solutions to meet unmet customer needs. Each of these commitments needs to be reflected in our Strategic Framework.

Business Model

Strategic Framework

Every organization needs to have the ability to create, deliver and capture value. We find the Business Model Canvas a tremendous visual tool to assess nine areas of a business.

The canvas includes five aspects of capturing value:

  • Products and Services
  • Customer Segments
  • Customer Relationships
  • Channels; and
  • Revenue Streams

The canvas also includes four aspects of creating value:

  • Key Partners
  • Key Activities
  • Key Resources; and
  • The resulting Cost Structures

In our Practice we have developed the Strategic Business Review, which is a process that enables a team to conduct a rigorous examination of the business in each of these nine areas. The result of the Strategic Business Review is a Priority-Based Action Plan to strengthen the most critical aspects of the business.

Execution of a Plan

There is some truth to the maxim that a poor plan executed well executed is better than a great plan executed poorly. However, neither of these situations should be an option.
Once we have an organization with a sense of what it wants to accomplish, we need to rely on two elements of success – our people and our processes.

People

Process

It is essential to have processes that are aligned to the organization’s strategic direction and capable of delivering the required customer value. To do that we need to view the organization as a system of processes that are delivering outputs, either to internal customers or to external customers. There are a variety of proprietary approaches to process improvement. They all include a focus on understanding the process customer’s needs, establishing improvement results, examining performance gaps, identifying alternative means of improvement, and deciding, creating and implementing action plans.

Process

Every business has many processes, but they are not all equal. Given that resources are always limited, our focus must be on those priority processes that will maximize the return, by driving continuous improvement in critical areas to increase revenue, decrease costs, achieve higher quality, or improve customer experiences.

People

It is essential that we align the skills, knowledge, and commitment of our people to the strategic direction it is more than a truism that people are an organization’s greatest resource.

improve business performance

 

Our company’s ability to succeed in creating sustainable and profitable customer value is dependent on our people’s understanding and acting on the Strategic Direction. Their skills and knowledge must be integrated with the processes of the business.

At the end of the day, employees need to have confidence in the Strategic Direction and believe that leadership is committed to it.

What comes first?

What actions should a leader take first? Here is a rough and ready answer.

  • If you don’t have a multi-year plan Strategic Plan, get the team away for a couple of days and create one. It will enable you to have:
    • Everybody singing from the same song sheet and acting on it.
    • Getting traction on process improvements to cost costs and or increase growth.
  • If you have a plan but it is stalled, you should consider:
    • Relaunching the plan so that people believe it is real this time. It will enable you to:
      • Fix the priority processes; and
      • Develop our people
  • If you have a plan and have been doing the process improvements and people development, but still not satisfied that you have all the elements of success in place:
    • Consider a Strategic Business Review
      • Create a Priority-Based Action Plan;
      • Recalibrate your Strategic Plan; and
      • Engage the people to implement relentlessly

 

“Failing to plan is planning to fail” –

Benjamin Franklin

“Plans are only good intentions unless they immediately degenerate into hard work.”

—Peter Drucker


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