From the Ask Tom mailbag-
Our company is preparing for our annual strategic planning session. Sometimes, it just seems like an exercise to increase our net sales by ten percent and our net profit by two percent. If that is all we are doing, why do we spend two days off-site?
Some companies think that to increase our net sales by ten percent, we just need to increase our sales team and their efforts by ten percent. Some companies think that to increase our net profit by two percent, we just need to become more efficient and cut waste by two percent. These may be worthy objectives, but we hardly need two days off-site to think like that.
Strategic planning requires that we look at those external circumstances that are constraining the defined objectives in front of us. Adding ten percent more sales people to the team will not increase sales if our market is no longer interested in our product or service. What has changed about our market? What has changed about our competitors? What has changed about our vendors?
Cutting waste by two percent does not inform us about the changes in technology that create efficiencies on the order of 10 percent or 20 percent. What has changed about technology surrounding our business model? What has changed about our external labor system that may require us to look harder at technology as a solution?
What headwinds are created by new regulations, financial regulations, safety regulations, environmental regulations? What is the financial climate for infusions of external cash, lines of credit, institutional debt, private equity?
Most of these questions are not about internal factors, but external systems that have an impact on the way we internally organize.