Business Management 101: Strategic Planning for Businesses and Government Agencies

By Jay Arnold, Jeff Lower

There is a Chinese proverb that states, “When planning for a year, plant corn. When planning for a decade, plant trees. When planning for life, train and educate people.” In other words, strategic planning for your business or public agency must consider short-, mid- and long-term goals. Equally important, you must make decisions based on where you are presently, and where you want to go. Are you happy to stay standing in a cornfield, or do you want to hike through the forest and on up the hill to the university campus?

As geospatial professionals, this concept of realizing “where we are and where we are going” should be relatively easy to grasp, but many times it is taken for granted, and therefore it can become a liability if we don’t pay attention.

Most organizations have developed some form of a strategic plan, even if they have not formalized it. They generally know what products and services they offer, who they offer them to, and where they offer them. But formalizing your strategic plan, following it and updating it on an annual basis will result in increased productivity, better customer service and more return on your investment (ROI).

We recommend a strategic plan be as simple and specific as possible. It should address eight key topics:

  1. Blueprint: This is the overall plan that describes the value proposition (or foundation and purpose); the strategic goals and objectives that must be met (such as having happy customers, happy shareholders and happy employees); the core values (such as integrity, dedication and perseverance); the mission (what it is the company or agency performs or provides); and the vision (what we strive to become and would do under perfect conditions).
  2. SWOT: This is an analysis of your Strengths, Weaknesses, Opportunities and Threats. Some strengths can also be weaknesses. For example, having the strength of “more employees and more equipment than anyone else” could perhaps also be a weakness of a “cumbersome organizational structure and high overhead.” During a SWOT analysis, you very well may discover an opportunity that can make game-changing differences in how you run your operation.
  3. Corn, Trees and Campuses: This is a simple, but specific list of short-, mid- and long-term goals. For most businesses and agencies, we would define short-term as one year, mid-term as three years, and long-term as five to 10 years. Some companies and large agencies actually create 20-year and even 50-year strategic plans. The concept is that you can get started moving in the right direction toward those very long-term goals versus having different people moving against one another in multiple directions. The golf analogy is that you typically cannot see the pin on a par-five hole, but you know which direction to begin hitting the ball in order to eventually sink the putt.
  4. Competitive Intelligence: A structured analysis of the competition should be based on the SWOT results, and will provide guidance on where you really measure against the rest of the playing field. This homework seems practical enough when you think about it, but you might be surprised at how many companies simply work by the old adage that “if we make a good product and do what we say we will do, and do it when we say we will, we won’t have to worry about the competition.” That’s a dangerous attitude. Government agencies need to think about the competition, too. Many agencies rely on federal or state funding that can be divvied up in many ways, reducing or eliminating some pieces of the pie. Competition also can come from technology. Just consider what the Internet is doing to the U.S. Postal Service, as well as to many walk-in service bureaus. A “status quo” attitude of your customers also can be considered competition. If someone decides not to make a purchase, or not to come visit a national park, then that becomes “couch potato competition.”
  5. New Market Penetration: Typically a strategic plan will include analysis of potential markets you should consider entering. You need a plan that includes an honest assessment of how much money and effort it will require, and what the ROI will be, to enter a new area. For companies, the hardest thing to do is to sell new things to new customers. For government agencies, adding a service or expanding what you provide to your constituents – like a new website with document downloads – can also be daunting.
  6. Organic Growth and M&A Analysis: If you have a plan to grow your business by X percent per year, you need to consider whether it will all be from organic growth (where you hire new employees and/or do more with less), or by acquiring other businesses. It is easier to maintain your corporate culture under organic growth, but it can take much longer than buying another company and merging its culture with yours. Government agencies also can experience a growth requirement, or a need to consolidate functions and do more with less. Previously, 3K3 worked for a county in Florida that was adding more than 150 new residential subdivisions per year. Think about the government services needed to keep up with that growth.
  7. Corporate Due Diligence: Companies and agencies should measure their employees’ performance, and assess how well their equipment and other resources are working. But what do you measure against? Developing the yard stick can be the most difficult aspect of assessing yourself. But there are lots of tools out there, and consultants who know how to use them! At the end of the day, it boils down to looking at yourself in a well-lit mirror. Maybe one that has magnification capability. Again, this applies to businesses and agencies. Think about the A-76 process at the federal level, or the school board reshuffling and consolidations going on right now across the country.
  8. Talent Development and Retention: It is true that your employees are great assets. So how do you continue to develop them, and then retain them as they grow? Sometimes your staff grows beyond what you can offer them. If that happens, pat yourself on the back for providing excellent training and professional development services. Wish them well, and then go back and see how you can keep growing your business. You also should expect that some people will leave, no matter what you have to offer. As a manager, you should keep a list of employees and where they stack up in terms of replacing their managers. Anyone who is ready today would receive an “RN” status – meaning they are “Ready Now.” An “R1” status means they likely will be ready in one year. Having an RN, R1, R2 plan is helpful. You can go beyond two years if you like, but the point is to think about transitions.

Life is indeed a journey, and the ride is part of the fun. But having at least some idea of what you will see along the way can help you make sure to bring enough snacks and digital-camera storage cards with you. And also a wide-brimmed hat and dark glasses for your days in the bright, warm sunshine, looking outward from the campus on the hill.

Ed. note: This is the first in a five-article series. The next installment will appear in two to three weeks.

Published Wednesday, March 30th, 2011

Written by Jay Arnold, Jeff Lower

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