Speaker 1: Hello and welcome to my video on how to develop a strategic plan for your organization. My name is Edward Shihab and in this video I'm going to show you the steps that you have to follow in order for you to develop a good strategic plan. Stay tuned. All right so what is the strategic plan? A strategic plan is a plan that shows how your company is going to create value on an ongoing basis for its own shareholders and stakeholders. The strategic plan is threaded through the organization and is part of the ongoing operation of the business. Strategic plan is a two-pta chart show you the nan awesome side of the lives of the city while managing its organization. All right now let's dive in look at the strategic plan that we're going to discover. All right so what is a strategic plan a strategic plan is a plan that shows how your company is going to create value on an ongoing basis for its own shareholders and stakeholders. The strategic plan is threaded through the organization and is part of the ongoing operation of the business. operation on a company. generate protein with the end transaction statement and is part of the ongoing operations of the business. Strategic plan is threaded through the organization and is part of the ongoing operation of the business. strategic planning in itself helps the high level concepts and visions that the organization has become a reality through taking actions on specific projects. Sometimes you know we are confused on who the strategic plan is intended for and so one of the first things that we need to ask ourselves is who are we developing this for. First and foremost you need to be focused on who your shareholders are the people at the highest level who are asking for this value to be realized from your plan. So keep that in mind as you develop your strategic plan because they play a big role in how you balance out your strategic plan. In general it is recommended that your plan is balanced and based on four or five different perspectives such as the shareholders which is the financial side that they need the customers and the value that they get. The internal processes that need to be developed as well as the people that are involved in making this happen. This is called the balance scorecard and I'll talk about that in a little bit. So the first thing that you need to do when you develop a strategic plan is you need to understand what your values are as an organization. Every organization holds some values as part of their core foundation. So what are the things that the organization will never budge from or shift from. Examples of some of these values would be let's say honesty loyalty innovation creativity maybe ethics. Sometimes it is more like profits market share. So you really need to understand the values that your organization stands for. If you're not really sure what the values are put together a team and brainstorm some ideas. What you think the values are and you can start with as many as you like and then narrow these down to like the 10 most important values then narrow down to narrow them down to the five top most values and then bring them down to the three most important values that your organization stands by. Once you know what your values are the next step that you want to take is to prepare a value statement something that says that this is what's important to us. And therefore we do it like this. So you might say for example if innovation was really what is important to you then you could say something like we innovate in everything that we work on in order to create maximum value for our customers. So if that's what your values are then that's going to drive what your vision and mission is going to be. Most organizations. Are. Founded. And the values of that organization. So if our values relate to education and we believe that knowledge is king and everybody should have access to knowledge right then our mission statement would be most likely related to us sharing knowledge and educating people and our vision would be that in the next so many years that we would have accomplished this kind of education or knowledge sharing. So once you know what your values are the next step is to go into defining what your vision is. Your vision is where you see your organization over the next two to five or 10 years right. So depending on where you are in the ranking of the organization if you are a CEO or CEO or C level person you're probably looking at about five years of a vision or more. And if you are a department head you're probably looking at it two years. And maybe. It goes lower from there. So at different levels all the way to the team lead level you will see that the duration of that vision statement is going to be shorter and shorter. So the lowest that you may have is three to six months and that would be someone at the team level trying to execute on a short term vision. So what goes into a vision statement. Well a vision statement. There are two ways to look at or maybe there are two sides to a vision statement. There's the one that organizations put. On their website for everybody to see and that tends to be quite generic that says you know something like we aim to be the benchmark and let's say in customer service or we aim to be number one and providing the best hospitality experience. So these are pretty generic that companies will put on their website but internally the leadership needs to have their own vision statement that describes where they see themselves in the next few years. And these vision statements would be more effective if they have some numbers associated with them or some expectations some benchmarks that we want to use. So the way you should imagine vision statements is like this. If we're talking about a two year vision statement then just imagine that you went into that today is 2019 you went into a time travel pod you stepped inside and you said it for two years from now. 2021. So in two years steam comes out this pod makes some buzzing sounds the door opens and you come out. What you see out there pertaining to what you had stated two years back should have become a reality. So if you had stated that your organization let's say in 2019 right now your organization has three locations your retail organization and you have three locations and in your vision statement you stated that in the next two years. You would expand to 25 different locations. So now we have a clear understanding of what you expect to happen in the next two years. So basically if you go into a time travel pod at that point and you said it for two years from now and you come out. You should see when you evaluate how many locations you have you should be able to find that you have 25 different locations and that if you see the 25 different locations then your vision became a reality. So that's what it means to have a vision statement where you see yourself but it needs to be a realistic view of the future. It shouldn't be just a generic you know dreamable unrealistic vision that if you want you can put it out there for customers to see. But you know I wouldn't encourage that because if customers see your vision and you know they see that this was maybe written way back and they're you know they're evaluating you right now. And they see that none of that has actually happened then you become a laughing stock. You become a joke. All right. So what you want is a vision that is realistic of where you see yourself as an organization in the next two five or 10 years. And when we talk about where you see yourself we mean the state of your organization your people your processes the tools the location the space the procedures policies the cash position your network. And your market share. These are some of the things that you might consider when you're thinking about how you will be in the next two to five or 10 years. So let's say you're able to put together a vision statement stating where you expect yourself to be. So we have three different locations right now and we aim to have one location in every major city over the next two years. So that means if a place is a major city. What is it? We will need to have a branch in it. Right. So that's how we prepare the vision statements. The next thing that you need to do is look at preparing a mission statement and mission statements defines who you are and what you have been set up to do. Your mission statement states that this is this is what we do for business. So for example our mission is to educate everyone in this town. Our mission is to provide best class health care services in our city. Okay. Or it could be something that says our mission is to ensure that everyone in our community has access to health insurance. So whatever your mission statement is is what defines you as an organization and why you have been set up as an organization. Now if you have your values and you have your vision and you have your mission. The next thing that you need to do is analyze yourself to understand how well you are positioned. For that vision to be realized and so typically what we do here is we do a SWOT analysis and SWOT SWOT that stands for strengths weaknesses opportunities and threats. All right. Strengths and weaknesses are internal to us and they represent areas that we if we're looking at strengths. We're looking at areas that we feel good about ourselves in such as we have the right amount of cash or we have abundant cash. We have qualified resources. We have. We are well connected in our organization. We have a lot of maturity. We have a lot of history background in that specific industry. We are supported maybe by government. And so these are going to be considered strengths. The opposite of that would be considered a weakness on the other side of the SWOT is the opportunities and the threats. So where are the opportunities when it comes to our industry. Mind you when you do your SWOT analysis don't do a SWOT analysis for your whole company. Do a SWOT analysis for a specific strategic objective that you're working on. Right. So if your goal is expansion to 25 different locations then do a SWOT analysis for expansion. How suited are you for that expansion. What are the strengths that you have and where do you see you have some weaknesses internally. These are your current strengths and weaknesses. But then what about opportunities that lay out there. Where are the opportunities. Let's say we have some areas that are underserved in our market. Right. Maybe these are opportunities for us to open locations in. Right. And what about the threats. Where are the threats coming from. Maybe you have competition that could challenge you in some of these areas. Maybe regulation could limit you in certain ways. Or maybe some political instability or for example power struggles in the area don't make you feel very comfortable about expanding that fast. So you want to evaluate. Where the opportunities are and you want to look at where the threats may be coming from. So once you've done this you've done your strengths weaknesses opportunities and threats you need to evaluate them across each other so your strengths can help you capture opportunities your strengths can help you overcome some of the weaknesses or maybe some of the threats. But if you have a weakness in an area that is a threat for you that would be an indicator of an area that you need to walk away from rather than try to fight it. Okay. So try to capitalize on your strengths to capture the opportunities that are out there or overcome the weaknesses. And for and at the end of this SWOT analysis come up with some action plans of how your strengths that you've identified can be used to capitalize on opportunities out there or maybe overcome some weaknesses so that you can capitalize on opportunities. Once you have these action plans written there try to write some goals. Okay. What are the goals based on that. These goals need to be either smart using a smart acronym so specific measurable agreed upon realistic and time and cost bound. Make sure these are goals that are realistic right specific and can be measured at some point. You don't want goals that don't have numbers associated with them because who's going to know if you actually achieved those. So if you said one of your goals would be to have three major sponsors. Maybe you need to qualify what a major sponsor is right. And that way you know when you have the three major sponsors. If you stated that your first six locations should be in place within the first six months and you put a date against it then that's easy to measure. So put goals that are measurable. If you said your HR should start recruiting specialists in a specific field and you should have five of those resources ready by May of 2020. That is very specific. So you want something specific. So you want something that you can check later on and confirm that it actually is in place. So develop these goals and then now go to the next step. Once you have all of your goals start thinking about how to develop your strategic plan. Now other things can also happen at this point. Your goals will need to be assigned. You need to figure who will be responsible or accountable for specific steps. Who's going to who's going to support some of these actions. But technically it's probably you. It's probably too soon. What you need to do is evaluate these goals and determine how they fit into your overall strategic plan. Okay. So this is where we come to the balance scorecard. You don't necessarily have to use the balance scorecard. But it has been used by a lot of the fortune 500 companies and the majority claim that it brings about good benefits and value for them. What does it mean to use the balance scorecard? Well balance means that it looks at different perspectives. When you develop your goals for the next few years. And it makes sure that it's addressing all of these perspectives. And this scorecard is where we represent the goals and the metrics associated with them against which we're going to measure eventually. So let's talk about the balance side of things. The four areas you want to look at is the financial aspects, which is what matters to the shareholders. What value do your shareholders want? If you're an investor. Okay. If you're in a community service. If you're a government. Then what do the taxpayers want? You got to figure out who your customers are. Who are the people that are funding your operation? What exactly do they want from you? The other thing that you need to ask is if we're going to bring this kind of value to our shareholders. Then what is it that we need to provide as a service to customers that would help us generate this kind of revenue so that we can satisfy the needs of our shareholders. And so the customer side of things. Is going to require that you provide some value ads. All right. These are things that customers want from you. Now for you to be able to provide these customer service or value ads. There are internal processes that will need to be enhanced. So that's the third perspective that you need to look at. What is it that we need to do internally and change as far as processes and services so that we can provide the value ads for the customer so that we can generate revenues that will please customers. Revenues that will please our shareholders. Right. And then now finally what you need to ask yourself is if we're going to have these internal processes enhanced and so on. What sorts of learning and growth are we going to require? You might need to grow your team and you may need to educate yourself. Train yourself so that you can develop these processes that would help you provide good value to the customer to the customers. Which in turn will also generate. Additional revenue for your organization. So that's the brief about the balanced and then the scorecard is where you look at the actions that need to be taken and the metrics against these. So for example if one of the things that we want to provide to customers is faster service. Right. Then what is it that we measure to ensure that we have provided faster service to our customers. Let's say your Amazon. Right. Amazon.com and to you the faster you can get your products to the customer the better the more business you will do. So what is it that you need to measure to assure that you have provided good fast customer service or delivery. Let's focus on delivery. What is it that assures that you have delivered your products in a fast efficient manner to your customers. Well the delivery time from the time that they order to the time that the customer gets their order. That would be the cycle. Or the time that you need to measure. So we can say that the delivery cycle from order to product being delivered needs to be less than two days for example or less than 48 hours. So that is the metric that you want to measure. And the action would be to facilitate faster delivery. Let's say via drones. Okay. To your customers or maybe through partner networks that would allow for faster delivery to our customers. And the metric or the measure there is less than 48 hours. Okay. So that's what you're going to score yourself against. And over time once you've put this action into place. If your strategic plan is executed you'll be looking for these results that you are able to deliver in less than 48 hours. So that's what it means to have a balanced scorecard. Okay. And that's how we develop the KPIs against the balanced scorecard. Most of the time your strategic plan is developed in the form of what we call a strategy map. And that strategy map as you see here it's going to have at the highest level the financial expectations or objectives. And below that you're going to have the customer values that we're going to give out there so that we can achieve the financial goals for our shareholders. And for us to be able to deliver these customer value adds. We need to look at what internal processes need to be enhanced and improved. And below that you want to look at what learning and growth needs to happen. And you see that there are arrows that connect from the bottom all the way to the top. And so it's a cause and effect type relationship that if we do the following learning and growth. We should be able to improve our internal processes so that we can deliver the following values to the customer. Which will help us deliver financial gains for our shareholders. This is the four side perspective the balanced approach for us to develop our goals. And this balanced approach is going to be used for the same goals that we discussed previously tied to your SWOT analysis. So let's just recap at this point. You wanted to develop a strategic plan. So you need to know in the next two or five years what actions need to be done for you to be able to achieve. Your vision. So you identified your values. You identified your vision. You know what your mission is. You did a SWOT analysis to look at your strengths and weaknesses. And where the measurable goals were evaluated against the balanced scorecard approach. Or they were evaluated for how balanced they are. So as you execute on your plan to overcome the weaknesses or capture the opportunities on your SWOT. So that your vision can be realized. You are doing this in a balanced approach. You are addressing what your shareholders want. What values your customers are looking for. And what internal processes need to be enhanced. And what learning and growth needs to happen. Mind you once you develop this plan. This plan needs to be executed. Therefore projects will be initiated to execute on the small pieces of your strategic plan. The work has to be assigned. And you have to make sure people know that they are accountable for this work. It needs to be done as scheduled. Because every piece of this is going to be strategic to us. And it's going to have consequences if it is missed. And therefore it's very important that people know they are accountable. And in this case I would recommend that you use a RACI chart. R-A-C-I To clearly state who is accountable and who is responsible. Who can be consulted. Who is informed. But the main thing who is accountable for every piece of that strategic plan. As well as being sensitive to the fact. That every strategic plan and every enhancement that we do in an organization. Is going to mean changes. And people usually don't feel very comfortable with changes. So you also need to address the fact that your stakeholders and your community. May struggle with change. And so you have to work on easing the impact of this change on that community. Or on the stakeholders. Right? So if you are able to manage the change. And assign accountability. And you have your strategic plan as discussed. Then most likely you'll be able to execute your strategic plan pretty well. I hope this video has helped you in understanding the concept of strategic planning. If you have any questions. Or if you'd like to share your feedback on how you do strategic plans. Or if there's any advice you'd like to give. Please let me know. Put your comments down below. If you like this video. Or if you would like to see more of these videos. Please subscribe and hit the notification bell. If you think others might benefit. Please share this with them. And we look to see you on the next video. Take care. Bye bye.