Strategie planning: á guide for supervisorsErich N. Brockmann & Clifford M. Koen, Jr.

You've worked conscientiouslyand diligently for several years

as a supervisor. Your goal is tocontinue progressing as asupervisor with a hopeful eyetowards moving into management.Your efforts are beginning to payoff. Your immediate superior hasrequested your assistance withyour company's strategic planningprocess, but you know virtuallynothing about strategic planningand have never participated in anyactivity of this sort. Here is anopportunity for your star to riseand shine in full view of othersupervisors and managers. ,As youcontinue to think about ^he taskthat lies ahead, you begin towonder if your lack of knowledgewill cause your star to fade quickly.

The purpose of this article is toremove some of th^ mysteryassociated with strategy planningand provide guidance tosupervisors who may hé given someresponsibility in assisting with theprocess. A summary of thestrategic planning process and a listof suggestions for oonducting theprocess are provided. The more

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familiar you are with the processand the desired results, the moreyou will be able to contribute tothat process. We think you willfind that the process is prettymuch common sense.

Strategic planning is a concerntypically associated with topmanagement in an organization—the decisions often flow top-down.However, managers andsupervisors at all levels have criticalroles to play in the process. It is abasic rule of business that anorganization must continuallyreinvent itself if it is going to staycompetitive. Strategic planning i&ia methodology of continuousplanning and analyses that helpsfocus the organization onreinventing itself for futuresuccess. Every employee has avested interest in ensuring that itis successfully accomplished.

The importance of strategicplanning to a business can besummed up with the old saying—"If you don't know where you aregoing, any road will take you"^there". Prudent use of theinformation contained in this

article will help ensure that youand your company will find theroad to success and will continueto follow it.

To prepare a strategic plan, yourcompany must engage in a multi-step process addressing vision,mission, objectives, internalevaluation, external evaluation,and programs. The followingmaterial addresses these steps.

The Strategic' _. Management ProcessYour first step in learning the

strategic management processshould be to put yourself at ease.

"Although, the name itself invokesa grandiose scheme that may seembigger than life, strategicmanagement is, in fact, little morethan an exercise in timemanagement. It's all about howto achieve what's important whenfaced with conflicting demandsand limited resources. Second,don't get caught up in the hype ofstrategic management. Too manyorganizations go through themotions but lose sight of theintent. These companies are

-' fy-

/s

ridiculed in mainstream culture

such as in the Dilbert comic strip.

Remember the intent of strategic

management is to set your

company up for future success.

The following are descriptive steps

in the strategic management

process which concentrate on how

things should progress. As

appropriate, we will also give

examples of both the good and the

bad.

Mission

This is your starting point.Equally important as knowingwhere you are going, you need toknow where you are starting from—where you are today. A goodmission statement would includeyour company's name, its n\ajorproduct/service offering, its majorcustomer(s), and its source ofcompetitive advantage. It needs toanswer the question of "Why arewe in business?" Use the elevatorscenario which is popular in thesales and human resources arenas.That is, imagine 'selling' yourselfto another while you both areriding in an elevator. The timeallowed is limited and you have toget your message across,understood, and appreciatedbefore the ride ends. It's all abouteffective communications—quickand simple. For understanding,think of how you would describeyour company to your Mother.

Organizational missionstatements are normallydetermined by the company'sleadership. After all, that's thefunction of leadership—to set thegeneral direction, the big picture.

However, everyone elsethroughout the organizationneeds to know where and howthey fit into this big picture. Amid-level manager would thereforebe expected to develop guidancefor his/her department consistentwith the bigger picture. Fotinstance, if the company is knownfor its customer service, the HRdepartment would be responsiblefor hiring and motivatingemployees who would convey theappropriate company image and/or superior customer service.Everything needs to fit together;this is something that we're goingto stress throughout this article.

Assuming a fictitious restaurant.Mama's, providing lunch servicein a downtown setting, a goodmission statement would be:

"Mama's restaurant providesworkers in the central businessdistrict a home-cooked lunch.Our success rests on our unique,relaxed, home-styte atmospherewhere you can "get away" from thework environment, if just for amoment".

You should be able to developimmediately a understanding ofthe business. On the other hand,the popular press is rife withexamples of poor missionstatements. Too often,organizations create flowerystatements that, at best, saynothing and at worst, confuse.Otherwise, they cop out withsomething equally as useless like:"Our mission is to make money".

Making money is the basis for acapitalistic economy. The issueat hand is to structure and

position your company so that it

has the best opportunity to make

MORE money than the

competitors.

Vision

A company's vision providesdirection. It is where theleadership sees the organization inthe distant future. It is whereyou're going. It is often lessdefined than the mission andmore goal-oriented. Like themission, the company's vision isnormally developed by theleadership, ln fact, the ability toshare one's vision is often the markof a great leader. Visions providea unifying motivation. We can allremember John F. Kennedy'svision of "A man on the moon bythe end of the decade" and MartinLuther King's vision of "I have aDream". Both are simple yetpowerful.

A good vision need not be aspowerful as those above; but, itshould be useful. Your company'svision should paint a clear pictureof your company in the distant-one that can easily be seen in themind. While flexible, three to fiveyears is a reasonable time frame.A good vision should inspire andmotivate the entire company.Building on Mama's example, adecent vision could be, "When theharried workers think of lunch.Mama's is the first choice thatcomes to mind". This visionprovides sufficient direction formanagers at Mama's to use whensetting priorities.

Also, like the mission, eachdepartment in your company

needs to develop its ownpersonalized vision. Stressing fitagain, the department's visionmust be tailored to the company'sbigger picture. Building onMama's example, if Mama's isgoing to be the diners' first choice,then sbe needs to make sure tbattbe perception of quality andservice is developed in tbecustomers' minds. Therefore, theHR department's vision could be:"Our employees considertbemselves as partners."

Now tbat we know wbere we areand wbere we want to go, it's timefor a reality check. We need toevaluate our company relative toour competitors to see what weneed to do in order to make suretbat we can reach our desiredfuture. Tbis next part of theprocess bas two steps. We startby looking inside witb an internalevaluation of what we have andtben look outside at tbe externalenvironment to see bow wecompare to our competitors.Internal Evaluation

Wbile the direction settingintent of a Mission and a Visionis normally accomplisbed by tbecompany's leadership, internalevaluation requires representativesfrom all parts of the company.Tbis part of tbe strategicmanagement process is wbere yourinsigbt into tbe daily activities ofyour company can proveinvaluable.

Internal evaluation involves someserious soul-searching. You needto look around and take inventoryof everything tbat you have at yourdisposal. Tbis inventory sbould

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contain everytbing: people.^,buildings, desks, chairs, chickeS"roasters, refrigerators, freezers,etc.—tbese are your resources.Now look at wbat you're doingwith those resources: preparingmeals, serving meals, cleaning upafter meals—tbese are youractivities.

Tbe easiest way to identify andinventory the resources andactivities • is tbrougb abrainstorm ing session. Aneffective tool to accomplisb thisinventory is througb guidedvisualization. Gather tbedepartment members. Witb thehelp of a moderator and someoneto record everytbing, pictureyourself walking tbrougb thebusiness and seeing everything tbatis there (i.e., the resources) and-what's being done (i.e., tbeactivities). Everyone describeswbat they 'see' as tbey are beingled by tbe moderator witb tbeobservations being noted for thenext step.

The internal evaluation processshould provide a very detaileddescription of tbe business, wbarit has and wbat it does. The moredetail tbe better. In fact, tbebrainstorming session will be moreeffective if you can remainobjective and refrain fromassigning adjectives during theidentification phase. To illustrateby building on Mama's example,one resource could be tberestaurant's address/location.Wbile tbe location may be areason for success, avoid anyclaims of 'prime' location for themoment. Simply list everytbing;

; the list will be pared down and-prioritized later.

Another benefit of remainingobjective is avoidance of tunnelvision. You'll be tempted to leapahead in the process and fit youractivities into your company'svision and future success.However, if you take short-cuts,you may miss out on indentifyingotber activities that may be equallyimportant at setting yocompany up for future success.

Mama's resources would include:a cbef with credentials from aparticular culinary institute; twohostesses; five wait staff; 1,000square feet seating area with thirtytables; a lease on tbe property; akitcben capable of producing fiftymeals per bour; etc.

•̂> Mama's activities would include:receiving the ingredients to tbemeals; preparing the meals; servingtbe meals; cleaning up after tbemeals; greeting incoming diners;seating tbe diners; taking orders;delivering tbe meals; disposing oftbe waste; paying tbe employees;developing menus; etc.Tbe more detail is better becausewe bave to evaluate eacb of theseactivities to see wbere we rankrelative to our competitors. Wewant to find out what Mama'sdoes better than wbat bercompetitors. Furtbermore, whyshould potential diners chooseMama's over her competitors:Papa's, Uncle Joe's or Aunt Jane's?This is the question we want toanswer next, and the moreactivities we bave in ourdescription, the more options webave in our next step—externalevaluation.

External Evaluation

If you're going to find out whichof your activities are better thanthese activities of yourcompetitors, you first have todefine the boundaries. You needto identify your competitors orwhat's referred to as the externalenvironment. Your competitorsare defined in terms of customers.After all, the competitors are allfighting to attract the samecustomers. Your company's intentis to attract those customersinstead of allowing them to freelyseek out your competitors. Thisis key to your company's success.You need your company to providesomething the customers want andthen conduct those activitiesbetter than the competitors.

Of course, this is much easiersaid than done. Not only do youhave to understand who thesecustomers are, you also need tounderstand what they want. You'llhave to rely on marketing researchto identify what your targetcustomers want and how theydecide among the various choices.In Mama's case, the target market,the potential diners, come fromoccupants of the office buildingsin the central business district; thisis consistent with her missionstatement. Mama hired aconsultant to survey the potentialcustomers to see what criteria theyuse when deciding where to eatlunch. The consultant identifiedthree factors: within three blockswalking distance; a relaxedatmosphere; and, good tastingfood. Mama, being familiar withthe area around her restaurant.

identified three other restaurantsthat may be able to satisfy the abovecriteria: Papa's, Uncle Joe's andAunt Jane's.

The task at hand is to make surethat Mama's is better able toprovide the above three factorsbetter than the other threerestaurants can. In other words,Mama wants to make sure she hasa competitive advantage. Now isthe time to add the evaluationdimension to the activities weidentified earlier. We stressactivities, since a competitiveadvantage is rarely hased on asimple resource. For instance, it'snot really the chef that diners cometo see; it's his/her capability toproduce a tasty meal which attractscustomers. One's reputationdoesn't happen automatically; ithas to be built over time based onone's actual performance—youactually have to DO something.

Therefore, we need to evaluateeach of Mama's activities relative tothe corresponding activities of theother three competitors. Theinitial intent is to see whereMama's performs better (i.e., herstrengths) AND where Mama'sdoesn't perform as well (i.e., herweaknesses) at each activity relativeto her competitors' performances.The ultimate goal here is to builda competitive advantage on herstrengths and improve herweaknesses, as necessary. Morespecifically. Mama wants herstrengths to match the customer'sdecision criteria and thus becomea competitive advantage.

The biggest .ptpblem withexternal evaluation is gathering

information on competitors.Oftentimes, specific data areunavailable. Other times, it justtakes a little more effort to findusable data. There's nothingwrong or unethical about visitingyour competitors and evaluatingyour experience. If you're amanufacturing organization,there's nothing wrong withbuying your competitors 'products and comparing themwith yours. The sources ofcompetitive intelligence are vast,often contextual and beyond ourscope. Therefore, this topic is notaddressed in this article.

We can now look at Mama'sactivities and see if she has acompetitive advantage. The firstdecision criterion wasconvenience. After evaluating herlocation relative to those of thethree competitors, we can see ifmore potential customers arewithin a three block radius or not.The second criterion wasatmosphere. After hiring anobjective evaluator to visit all fourrestaurants. Mama found that hersrated as the most relaxed. Thisevaluation demands furthermeasure since it is so critical. Shereally needs to come up withobjective measures for defining a'relaxed atmosphere'. The thirdcriterion was quality food. Again,an objective evaluator could behired to taste the offerings. Asimple measure for food qualitycould be the credentials ofMama's chef relative to those ofthe chefs of the competitors.

Due to space constraints, we'lllimit our coverage here. To be

maim

really useful, you should evaluateALL of your activities agaiVistVERY specific measuremeWtcriteria in order to see where yoirank relative to your competitorsor industry standards. You mayfind other sources of competitiveadvantage as well as areas, notnecessarily linked to thecompetitive advantage but whereyou need to improve your businesssuch as reducing costs.

Let's return for a moment toyour position as a mid-levelmanager. Because you may nothave direct contact with yourcompany's customers, you maythink that you don't have to worryabout these considerations. Atfirst glance, this may seem to makesense. However, when lookingdeeper, you may find youractivities with many indirectinfluences on the customer thatyou hadn't considered before.These activities may becomesources for new, heretoforeundeveloped, sources ofcompetitive advantage. Therefore,be very careful not to discountyour effect on the overall company.We'll now shift our focus to thelonger term considerations. Whatelse is going on around yourcompany that you haven'tconsidered yet? How will thoseevents change the way you'reconducting the business in thelong term?

The Bigger External EnvironmentIti addition to considering how

well you are doing relative to yourcompetitors, you also have toconsider what other factors can

affect your business. These factorsare quite diverse and oftentimesdepend on the type of business.For instance, the price of jet fuelhas been rising. This price increase

\ has raised the cost of doingmsiness for ALL the airlines.

When faced with such a cost, a company has only two

choices.\First, one could raiseprices. Depebding on competitoractions and custbiner reactions,raising prices may noHie a viableoption. Second, onesimply absorb the cost increase>However, your costs must be lowerthan your price in the long run ifyou're to stay in business.Therefore, simple absorption isonly viable for companies whoseinitial costs are sufficiently low.

Although Mama's is not in theairline business, she is notimmune to rising gas prices; priceincreases affect the cost of heringredients. Mama is faced withthe same choices provided above;she can raise her menu prices orsimply absorb the cost and notmake as much profit. In Mama'smarketing research report weshould have noted that price wasnot one of the major decisioncriteria on the part of potentialdiners. Therefore, Mama couldraise prices to compensate forincreased costs without losingcustomers. Of course, there issome price level where the othercriteria will start to play less of arole; this needs to be consideredduring the marketing researchprocess.

In general, we refer to externalfactors that can have a positive

impact on businesses asopportunities and the negativeones as threats. Since theseopportunities and threats affect allbusinesses, your company'sspecific competitive advantage willallow you to benefit more thanyour competitors when all arefaced with an opportunity.

For instance, the increase incorporate downsizings hasincreased stress and lowered thenumber of employees. On thepositive side (from Mama'sperspective), increased personal

also increases the need forone to Seeliwhatever relaxationone can find dufhig.the day. Arestaurant that provides arToïof relaxation will enjoy acorrespondingly higher demandthan those without such anatmosphere. On the negative side,the corporate downsizings havereduced the total population ofpotential diners. However, sinceMama enjoys a higher demandthan the competitors, she willmost likely lose fewer customersthan the other three.

The evaluation of the generalenvironment is the least welldefined in strategic management.One must be very creative andinsightful in order to noticechanges. In fact, it would reallyhelp if you could predict thefuture. However, since that'simpossible, your next best bet isto stay alert to what's going onaround you by scanning theenvironment. By paying closeattention to as much media as youcan afford, you become moresensitive to changes. Although

you won't be able to actuallypredict a change, you may be ableto notice subtle changes beforeyour competitors. You can tbentake action before anyone else andgive yourself a competitive edge.Putting it all togetber in a Plan

You sbould now have

information wbicb is sufficient to

best position your company for

future success. Tbe following

summarizes the steps previously

discussed: r

^ You know wbat your company

is doing currently, wby, and what

You know who your competitorsafe and tbeir activities—yourindustry.

^ You know wbo your customers

are and wbat they want.

v̂ You know wbere your companyis headed in tbe long term—yourvision.

•/ You know what you bave at yourdisposal—your resources.You know specifically what it istbat your company is doing—youractivities.

•/ You know what you do better

than your competitors—your

Strengtbs. „">t

^ You know what you don't do aswell as your competitors—yourweaknesses.

•/ You know wbat strengtbs matterto your customers—yourcompetitive advantage. ^ .

•/ You know wbat environmentalcbanges may affect your businessas well as the competitors—theopportunities and threats.

It's now time to put tbese pieces

togetber into a coberent and

comprebensive strategic plan. Tbe

tbeme in any strategic plan is to

FIT all the pieces togetber. Ask

yourself tbe following ¿[uestions

and then develop a to-do list of

objectives t^at will set your

company u^ for future success:

.V Do I have sufficient resources toaccomplish my current missionand achieve my future vision?

^ Do I have sufficient strengtbs toensure tbat I remain competitive?

./ Do I bave too many weaknessessuch that they will overwhelm anyadvantages I may bave?

•" Are tbere enough opportunitiesand not too many tbreats sucbthat I can achieve my future vision?

If you can answer all questions,yes, then your priority is to simplymonitor tbe situation and note ifanything cbanges. If you answerno to any of tbe questions, thenyou need to establish a detailedaction list to correct thesituation. Based on yourunderstanding of wbere eacb ofthe pieces fit into the biggerpicture, you can develop an actionplan to correct tbe situation.

/ Summary

Stra'tegic management is allabout positioning your companyrela'tive to your competitors sotkat your performance will bebetter tban theirs. Tbis processis accomplisbed tbrougb discretebut interconnected steps whereyou identify resources andactivities. You then compare youractivities against your competitors'activities to see wbose are better;tbese become strengtbs for theowner. Your strengtbs tbatcorrespond to wbat tbe customerswant become your competitiveadvantage. You tben use yourcompetitive advantage, in tbe faceof changing environmentalconditions, to out-perform yourcompetitors.

Tbe strategic managementprocess is a pbilosopby—it's a wayof life for an organization and allof its employees. However, itsbenefits are often lost tbrougbincomplete development orapplication ofthe process steps ortbrough contamination wbereoutcomes are more importantthan tbe intent. For instance,when you want a missionstatement bad enougb, a badmission statement is wbat youoften get.

All too often we bear about:putting out tbe fires; crisesmanagement; and, reactive vs.proactive. We 'know' tbat wesbould plan; it's just too easyNOT to plan. When companyleaders do recognize the benefitsof strategic management and it'stime for you to get involved, weintend for our guide to provide

you with enough enUghtenment tomake it apparent that you areknowledgeable of the strategicmanagement process. Even moreimportantly, our guide shouldallow you to actually contributeto the process.

To find and remain on the roadto success, an organization shouldbe actively involved with strategicplanning; supervisors can play a /key role in the success of that /planning. This multi-step process/of continuous planning and'analysis addresses vision, mission,objectives, internal evaluation,external evaluation and prograrnp.While this may not necessarily ^ea recipe for success, without ii abusiness is more likely to fail.Understanding this process Willenable you to be an engagedparticipant in the strategicplanning process and help yop addvalue to your organization, i ,

rI

Erich N. Brockmann is anAssociate Professor ofManagement at the University ofNew Orleans. He teaches StrategicManagement in the undergraduateand graduate programs.Clifford M. Koen, Jr. is a Professorof Management at the Universityof New Orleans. He teachescourses in Human ResourceManagement and conductsseminars for employers onmanagement and employmentmatters. r