Before making your first Discussion Post, please take a moment to read over the General Discussion Topic Instructions.
Consider your readings from this week. Please discuss the importance of strategic management and planning.
Make sure to also:
analyze the implementation strategy
the potential problems that may limit its effectiveness
the role of communication
Research methods are the building blocks of the scientific enterprise. They are the “how” for building systematic knowledge. Let’s take a moment to think about knowledge. How do you “know” things? One way you know things is through your own personal experiences. Even as personal experiences are rich in depth and detail, and create a lot of meaning in life, they are also quite limited in scope. If you try to generalize what is true for you, it is easy to overgeneralize and arrive at misleading conclusions for everyone.
Another fundamental way to gain knowledge is through the authority of others—your parents, teachers, books you have read, shows you have watched, news and articles from social media. This “second-hand” knowledge includes many diverse sources, and often this knowledge is more than one step removed from where it originated. Life is made simpler by inheriting knowledge from humanity’s vast collection, instead of relying only on what you can discover for yourself. In fact, most people spend years attending school to acquire a basic set of knowledge that seems relevant for living and working in today’s world. Even though it can still take a long time to learn even a small proportion of the knowledge that is available, the efficiency of being able to gain a lot of knowledge in this way benefits us and allows us to continue to build and further what is collectively known. However, not all information that is passed along is of equal value. While some of the things that we learn on the authority of others is based on scientific research, certainly there is much more information that is based simply on opinion, common sense, misinterpretation, or skewed information. It takes critical thinking skills to sort this out.
By learning about research, reading samples of research, and practicing research it is possible to expand your ability to think through knowledge and its acquisition in new ways. When you learn the rules on which research is based, you are learning to generate knowledge in the tradition and practice of science. Regardless of the method selected, social science research methods are designed to be systematic and to minimize biases. The goal is to produce findings that represent reality as closely as possible, overcoming some of the hidden biases that influence our conclusions when we are not systematic. As you will soon learn, research involves making many careful decisions and documenting both the decisions and their results. Decisions are important throughout the practice of research and are designed to help researchers collect evidence that includes the full spectrum of the phenomenon under study, to maintain logical rules, and to mitigate or account for possible sources of bias. In many ways, learning research methods is learning how to see and make these decisions.
These days, research is everywhere. Whether you pursue an academic career or enter an applied field, research skills are likely to have a valuable application. In academic research, the application is obvious. Academic writing nearly always describes research methods because academic work is judged first on the merits of its methods. Findings must be supported by how the information was collected, and whether it was thorough and unbiased, and addressed the research question appropriately. Outside of academia, more and more careers call on people to understand data, to design ways to solicit feedback or information, to actually collect the information, and to figure out through analysis what the responses mean. For instance, people in many fields and sectors of the job market want to understand who is using their products or services, how well they are carrying out internal or market objectives, how well their employees are performing, and who is interacting with their website or following them on social media. It is possible to specialize in research and become an expert in answering questions of this type, but even knowing some basic principles of research can help you to make intelligent and meaningful contributions. Knowing about research methods can also empower you in your personal life because it can make you a wiser, more critical consumer of all information. It can help you ask better questions about the information you encounter and ultimately act as a better informed citizen.
The accumulation of knowledge through research is by its nature a collective endeavor. Each well-designed study provides evidence that may support, amend, refute, or deepen the understanding of existing knowledge. However, individual studies, no matter how compelling, are rarely enough evidence to establish findings as “fact.” It is through the ability to find similar findings across studies, and the variability that studies may find when they ask questions in different ways and of different groups, that theories (covered in Topic 3) grow to be established as our working knowledge. Much like language, scientific knowledge is a living conversation in which new studies and new inquiries allow what we know to grow and change over time.
The Business Plan versus the Strategic Plan – Part 1
By Charles A. “Chip” Brethen | Stonehurst Capital Advisors, Inc
Contact Charles A. “Chip” Brethen | Visit Website | About The Author
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This is the first of a three part article on plans and planning. The first article is to be a basic comparison of the Strategic Plan versus the Business Plan. This will give you an idea of what constitutes each type and their purpose. The second article will elaborate on the Strategic Plan more in depth and the third article will delve into the process of developing a Business Plan. I will also give you some tips on engaging an outside facilitator and what to expect from them.
Quite often the two terms, Business Plan and Strategic Plan, are used interchangeably, but they are not interchangeable to the professional. Occasionally, I find myself trying to keep from misusing the terms. An example might be the interchangeability of terms like goals and objectives and the confusion derived from their use or misuse. It is important to define terms and make sure that everyone involved is speaking the same language.
I always like to start with the strategic planning process because elements of the Strategic Plan are critical to the development of the business plan. I also like to keep it simple. It seems as though many Strategic Plan and Business Plan facilitators and consultants try to develop and draft an ultra complex document that goes beyond the understanding of all but a few. These verbose documents are expensive, complicated and generally of little use to all but the largest, most sophisticated companies with a staff of MBA’s. Therefore, if the plan cannot be understood by those responsible for it execution and implementation why spend tens of thousands of dollars premium for a document that sits on your shelf in an exquisite binder? You could say that the chance for the success of a plan is directly proportional to its simplicity. A two page outline of the corporate Vision, Mission Statement, Goals and Objectives is much more effective than a three inch thick book with reams of complex, inconsequential and/or useless data.
Please notice that I used the term process when referring to planning. Planning is not an event. It takes weeks or months to develop a framework and gather the data necessary to make a viable plan. Part of the reason for the lengthy planning “process” is to check for viability and consistency through the input of key individuals within an organization. Ideas need time to ferment.
The pre-process of acquiring the necessary information is critical as well. For example, quite often projected sales data starts on the back of a cocktail napkin, jotted down by some salesperson that has neglected to get their report in on time and, furthermore, doesn’t recognize the significance of his or her input. That is why I recommend that most supporting data should be generated during the Action Plan phase of the strategic plan and not before. The most logical conclusion is worthless if based on erroneous data.
The Strategic Plan is a document containing the company’s Vision, Mission Statement, Goals, and Objectives over a period of time and how specific individuals within the company will achieve those Objectives within that specified time frame. The use for a “Strategic Plan” is to determine your limited resources (time, money, people, equipment, materials, technology, and facilities), evaluate those resources, then for management to get everyone on the same course such that their actions are coordinated to achieve each Objective within the resource limitations. It is an internal document to be used routinely as a roadmap for your employees, on a timely basis, to achieve success. The format is generally as follows:
Risk analysis & contingency plans
The above format is pretty basic, but will vary depending on the interpretation of the elements of the plan. For example, the Mission Statement can vary depending on interpretation. I generally like to include the values of the company in regards to its stakeholders (customers, employees, vendors, shareholders, board) and some explicit definition of what business the company would like to be in.
The definition of terms is also critical. For example, Goals are enduring statements of what the company is striving for concerning the medium to longer term view. “Increased market share” would be a goal. Objectives are statements or desires that include a time frame and an amount; they should be consistent with the Goal. “We want to increase our market share by 10% in the year 2005” is an Objective consistent with that Goal.
I have developed hundreds of Strategic Plans for companies I was responsible for as well as for clients. The main fallacies that I see are:
Mistaking Action Plans for Goals.
The incorporation of issues (future problem solving, decision making and present problem solving) as Goals and Objectives.
Risk Analysis without appropriate Contingency Planning
Lack of preplanning that is necessary to make the process go smoothly
Lack of commitment by the CEO or other key manager
No objective third party facilitator to make the planning process balanced and reasonable
Finally, the Strategic Plan is a living, dynamic document that is flexible, takes into account changes and acts as an almost daily guide to running a business.
The Business Plan is a statement about your business that follows a distinct format that will be used to evaluate the business you are in and what you choose to do with your business in the future. The use for a “Business Plan” is to demonstrate to outsiders what your business is all about. The basic format is as follows:
Table of contents
Production, engineering and/or technology
Sales and marketing
The above format is basic and can be modified depending on:
The purpose for the plan
Find a strategic partner
Give confidence to lenders
Check the viability of your company or new programs
Investors or lenders
Acquisition or divestiture candidates
Strategic alliance candidates
Potential key employees
The maturity of the company
Declining or in trouble
The bottom line is that the first thing that your audience will want to see, especially if they are asked to take a vested interest in your company, is your business plan. NO ONE WILL RISK THEIR CAPITAL WITHOUT EVALUATING SOME TYPE OF VIABLE BUSINESS PLAN. (Unless you have enough credit and assets to basically underwrite the amount of money on your own)You will be judged by the reader by your logic, clarity, completeness, simplicity, consistency, grammar, punctuation, spelling, and your ability to demonstrate your uniqueness. Your audience will be looking for a specific format with a compelling executive summary. They will want to know that you know what you are doing, where you are going, how you will get there and, most importantly, how and when they will get paid back.
I read and review dozens of business plans every month and find that most are very poorly written. The most common flaws in the written proposal are:
The inability to clearly and simply state what business you are in and how you do it in the first few paragraphs of your executive summary
The use of industry jargon that is familiar to only those who are in that industry and thereby confuse the audience.
The concentration on the features of the product, service or company and not the emphasis on the solutions that are provided to their target market.
The inability to articulate exactly what their target market is looking for.
The lack of a compelling argument in the executive summary to entice the reader to delve into the details later on.
Financial inconsistency between the prose of the plan and the financial statements.
All in all, I highly recommend that a seasoned professional be involved in both processes. When I was President and CEO of AKZO Nobel Coating in North America with eight divisions, I was the facilitator for the each of the divisional plans, but I always enlisted the help of an outside professional to facilitate our North American corporate plan to ensure objectivity, keep us focused, and to keep my views from over riding those of the management team.
Remember: The effectiveness of any plan is in its simplicity. The key is to reduce the complexities of your business into a written form that anyone can read and understand.
In the next two articles we will focus on the Strategic Plan itself in much more detail and then on the Business Plan. We will also discuss what you should look for from an outside advisor in regard to developing your plan.
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