Among the unstated problems with strategic business planning is a nagging guilt that, while a manager might have some idea about what it is and realize he should budget time for it, the reality of managing in the here and now usually commands his primary attention. It is easy to put off an amorphous planning process that doesn’t yield immediate results and competes with day-to-day priorities. When we dig into the planning process and try to connect the dots linking concepts to goals and objectives, to strategy, to action, to results, inertia seeps into the process and good intentions grind to a halt.
What Is Strategic Business Planning?
A strategic business plan is thinking, documenting and managing a process that sets up the guidelines for an organization’s future growth, change or intended improvements. It also spells out how managers intend to measure progress and results in accordance with the plan.
Unfortunately, many managers are guilty of the “ready, fire — aim” approach in which they figure out why they did something after they did it and call the results a plan. The primary task of strategic planning is to create a road map that links the present with the future. Planning results in a clear articulation of goals and objectives, and it should include action steps explaining how the goals and objectives are to be reached.
Peter Drucker, in his book, “Management” (Harper & Row, 1974), wrote: “Strategic planning does not deal with future decisions. It deals with the futurity of present decisions. Decisions exist only in the present. The question that faces the strategic decision maker is not what his organization should do tomorrow. It is, what do we have to do today to be ready for an uncertain tomorrow?”
The linchpin of strategic business planning is learning about the company’s business and then building assumptions about the future based on thoughtful and careful analysis. It should take the form of a written document that outlines the steps, the schedules and the checkpoints that are needed to get a company from where it is now to where it wants to be in five or more years.
No ski area or resort is a single monolithic, indivisible business. Most ski areas and mountain resorts are a collection of businesses that are (and should be) related and integrated. For example, ski area companies are in the hospitality business if they provide lodging or food and beverage service. They’re in the transportation business by virtue of chairlifts and shuttle services to and from distant points at a resort. They’re in the education business if a ski school is present. They’re in the retail business if they have a ski shop. Some are in the real estate business. Some are in other recreational businesses such as golf, tennis, health and fitness.
Not to ignore the obvious, all ski companies are in the ski business — which is the primary reason for existence — to serve the skiing customer in a mountain environment. To the extent that ski areas conduct some or all of these businesses, they usually strive for integration, coordination and synergism between their many businesses.
A strategic business plan for a ski area or a mountain resort should look at each of the component businesses and establish goals and objectives for each business, understand the market for each business, understand the competition for each business and understand the customers for each business. Therefore, a strategic business plan, as it applies to ski areas or mountain resorts, is an umbrella under which is included all of its key businesses.
In its broadest sense, according to Robert Donnelly in his book, “Guidebook to Planning” (Van Nostrand Reinhold, 1984), a strategic business plan addresses several fundamental questions:
- Where are we now?
- Where do we want to go?
- How are we going to get there?
- When will we arrive?
- Who will be responsible for what?
- How much will each step cost?
- What will we accept as a reasonable return for each investment along the way?
One of the great oxymorons in strategic business planning is the objective to produce a focused and flexible plan. How can one be both focused and flexible at the same time? What this means is to be focused (committed and dedicated) to the process of strategic business planning, but allow enough flexibility in the plan to accommodate unforeseen events, changes and uncertainty.
Who Needs It?
Most companies and organizations embark upon a strategic planning process because their position in the market place has been threatened. Typical scenarios that stimulate a need for strategic planning include a chronic loss in the customer base or a lower year-end profit than in the past. A less concrete reason is the feeling that “we’re constantly putting out fires, we need to get on top of things.”
Two fundamental observations can be made from the above about the need or motivation for a strategic business plan. First, business survival has been threatened. Second, these reasons are based on reaction. What about new start-up ventures or businesses that are healthy and thriving now? Don’t they need strategic business planning for the future? The answers to these rhetorical questions are an emphatic yes.
On the other hand, no business enterprise is immune to a changing world. Examples abound of large corporations that were once in near monopolistic positions and now face competitive threats. Consider the plight of U.S. car makers over the last decade and the substantial increase in foreign competition that they face. Could Ford and General Motors have been better prepared through strategic business planning to strengthen their positions for the future? Could IBM, which now faces many competitors, have been better prepared against firms like Apple Computer? Will the blue-chip or trophy ski resorts always remain at the top? Can smaller or medium-size ski areas that are struggling plan for their future?
Strategic business planning should be viewed in a positive or pro-active way for businesses. Some managers may have vague notions about opportunities for a ski area’s future, but not be quite sure how to go from the “idea” stage to the “action” stage. The strategic business plan may provide the road map.
Perspective or viewpoint may also influence a decision to seek a strategic business plan. Managers can be influenced by the “bright side” or the “dark side,” by problems or opportunities. Either way, real-world indicators would seem to indicate a need for individual ski areas and resorts to consider strategic business planning.
Looking at the dark-side perspective, there is bleak news about the ski industry’s struggle. Skier visits have dropped. The population is aging, which may mean fewer skiers. Many ski areas have gone out of business. Many ski areas are over-built with condos. Smaller ski areas may be losing market share to competitors.
From the bright-side perspective, members of the Urban Land Institute refer to the 1990’s and beyond as the “decade of recreation.” An aging population will reach its peak affluence soon and will be increasingly available for leisure activities and recreation.
Who Does the Job?
A strategic business plan is most successfully and aggressively pursued by those who stand to gain or lose the most as well as those responsible for the implementation and results of the plan. Usually, this translates to senior management, the board of directors and the owners.
Once the above questions are on the table, a strategic planning team composed of the key players should divide the tasks of strategic planning into small assignments according to either organizational or departmental responsibilities. A strategic planning team works best when each member has a clear understanding of the essential techniques of successful strategic planning. The basic techniques are:
Communication — It should be a participatory process with all team members talking, listening, reporting and writing.
Commitment — All team members must be fully committed to the creation of a plan to think, write and manage the process.
Responsibility — All team members must take individual and collective responsibility for all parts of the plan. Each team member must be held accountable for his or her share.
Objectivity — All team members must put aside company politics and personal bias to seek out what is best for the company.
In its most distilled state, strategic business planning allows all the team members to make decisions on the best course of action through a detailed plan prepared by the team. The plan, and its identified goals and objectives, should be realistic, achievable, measurable, actionable, economically viable and manageable. A good plan should not find a comfortable spot on a shelf and gather dust. It must be regularly reviewed, updated and refined.
Who Leads the Process?
The catalyst for strategic business planning is the company leadership (senior management, board of directors and owners). They must endorse, participate and actively support the process. Usually, the president, CEO or a chairman must start the ball rolling, but it can’t be a token effort, he or she must jump into the process with both feet.
Simply getting started can be a big hurdle. Robert Donnelly cites four basic approaches to the process along with advantages and disadvantages to each:
Use a Strategic Planning Organization
Advantages:
- 1) Thorough and detailed approach.
- 2) Professional critique of the business.
- 3) Management education for the staff.
Disadvantages:
- 1) Professionals tend to intimidate the staff.
- 2) Too much, too fast.
- 3) Professionally developed plan for implementation, but how?
Hire a Strategic Planner
Advantages:
- 1) Member of the team wants it to work.
- 2) Always around to explain and assist.
- 3) Manages implementation.
Disadvantages:
- 1) May become intimidated like the other employees.
- 2) May become frustrated by the lack of professionalism, dedication or the return to a “business as usual” attitude.
- 3) May intimidate, aggravate or turn off other members of the team — new kid on the block.
Use a Strategic Planning Consultant
Advantages:
- 1) Usually more flexible in time available for the process.
- 2) Willing to customize the process to the company’s culture.
- 3) Works well one-on-one with other members of the management team.
Disadvantages:
- 1) A lone consultant is usually working on other projects simultaneously, which can result in a time conflict.
- 2) Finding the right one is difficult.
- 3) Tends to become “their plan” for “your business,” so who implements?
Select a Primer As a Guide
Advantages:
- 1) Can study the process several times before beginning.
- 2) Become aware of potential obstacles and know pitfalls before beginning.
- 3) Can practice and create the process on paper as a basis for comparison before involving the staff.
Disadvantages:
- 1) CEO not only has to be involved and committed, but also must be the instrument. A difficult dual role.
- 2) There is no substitute for experience.
- 3) Hard to eliminate natural bias when trying to change the way individual staff thinks.
The two most important considerations in selecting one of the four approaches center on the available budget earmarked for strategic business planning and the knowledge and experience of the people involved. This does not mean, however, that the more money spent, the better the strategic business plan. Nor does it mean that the bigger the ski company the more money should be spent on strategic business planning or that only big ski resorts can afford strategic business planning. Very modest budgets can yield excellent strategic business plans among the four approaches.
When hiring outside the company, ask about fees and compensation. Ask candidates about their strategic business planning process and how they will get you to an actionable plan within your budget. Ask them about their previous experience and their knowledge and understanding of the ski business and other related recreational businesses.
Regardless of the approach, one individual should act as facilitator to bring out the best of the team, stimulate thinking, keep the process on track, nor let any one team member dominate the process and make sure all team members live up to individual responsibilities. The plan belongs to the team and the company; it should not be any one individual’s plan.
The facilitator also must put aside personal bias to become an umpire and have the tacit support and authority to act in that capacity. The facilitator must be capable of pushing and pulling the team to its objective of creating a plan.
Limitations of Strategic Business Planning
Strategic business planning is not a panacea nor is it a magic elixir. To some extent, managers get out of it what they put into it. No matter what approach is used, there must be a full commitment and complete participation by the senior managers, board of directors and the owners. The objective of strategic business planning is, as one CEO put it, “To get all guns pointed at the same target.”
“The major disappointments with planning,” wrote Robert Donnelly in his book, “Guidebook to Planning,” “have come from those who were looking for another quick fix, or for someone to come in and put the plan together for them. These managers have expected too much and, frequently, the wrong things. Planning is hard work that takes time and requires input from those who have the most to lose and gain. Planning is getting people to do what they are supposed to be doing anyway — thinking, writing and managing.
“Planning does not eliminate risk; it minimizes it. It cannot predict the future with accuracy or prevent mistakes, but it can reduce the number and magnitude of surprises and can provide contingency plans for the occurrence of both favorable and unfavorable situations. Planning is not deciding what to do in the future; it is deciding what to do now in order to have a future.
“Plans should be written down so they can be shared, critiqued and reviewed. Unwritten planning thoughts are like daydreams — they’re only good for a day or for as long as that mental imprint lasts.” Fi Canada: Japan:
