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Adjusting Your Strategy to Meet the Economy

By Michael Wilkinson, Managing Director, Leadership Strategies, Inc.

Imagine that you are in the midst of implementing a three-year strategic plan.  During the first year, your team accomplished 85% of the priority strategies and achieved most of the first year objectives.  However, at the beginning of the 2nd year, the economic downturn has begun hitting your organization especially hard.  Revenues are down, customers are delaying purchases.  You have to cut budgets and, in some cases reduce head count, to get costs in line with the reduced revenues.

What about the strategic plan?  Do you suspend activity on all strategies?  Do you stop monitoring progress until revenue gets back on track?  Does the strategic plan go on an indefinite hiatus?

At Leadership Strategies, we say no.  Just as a strategic plan should guide your choices in times of prosperity, we believe it is especially important to use the strategic plan for this same purpose in times of crisis.  The strategic plan should be able to point out the most critical strategies for continued emphasis and those strategies that can be de-emphasized.

Recall that through using our Drivers Model, organizations identify broad goals, measurable objectives, and specific strategies and priorities.  While an organization typically has between three and eight broad goals, below is an example of one goal area and the relevant objectives and strategies from a corporate strategic plan.

Profitability
3-Year objectives
Strategies
Deliver sperior financial performance
  • Increase profit per sq. ft. by 10% by 3rd year
  • Increase stor revenue to $146 million (15%) annual growth
  • Increase catalog and e-commerce revenue by 25% per year
  • Grow market share 5% in our top two product categories
  • Expand implementation of “Customer First” design services to all stores
  • Redevelop floor plan model to maximize profitability per square foot
  • Launch E-commerce business, including direct-to-consumer mailings
     

Note how the goal represents a broad aim; the objectives are specific, measurable targets that quantity achievement of the goal and usually start with a verb such as increase, decrease, reduce; and the strategies are definable actions to be taken, not outcomes to be achieved. 

During times of economic uncertainty, we recommend that you use your strategic plan in the following way.

  • Start with the objectives.  Decide which objectives are the most critical in the immediate term.
  • For some organizations, objectives related to survival (e.g., increase profit per square foot) will be the most important.
  • For others, the key objectives will be those related to revenue enhancement (e.g., increase store revenue). 
  • And still others will focus on objectives that help achieve future positioning (e.g., grow market share).
    •
  • Once the most critical objectives are isolated, review the priority strategies to determine which strategies will have the greatest impact on the critical objectives.  Based on the review, divide the strategies into three categories.
  • Heavy Focus – These strategies will likely have the greatest impact in the immediate term and should continue to be resourced at the maximum level possible.
  • Light Focus – These strategies will have some impact in the immediate term and can continue to be resourced, but at a much lower level than originally planned.
  • Suspend – These strategies will have limited impact in the immediate term and should be suspended.
    •
  • Adjust the measurable targets set for each objective as needed in light of adjustments to the plan.
  • Communicate adjustments in the plan to all involved.  Be sure to indicate the anticipated period for the adjustments and when you expect the full plan to be reinstated.
  • Monitor progress and adjust as needed.

To learn more about these pitfalls and how to avoid them, consider our Strategic Planning training class or Springboard Online!, our online course.

About the Author

Michael Wilkinson is the Managing Director of Leadership Strategies - The Facilitation Company, and a much sought after trainer, facilitator and speaker. He is a Certified Master Facilitator and a Certified Professional Facilitator. As a past president of the Southeast Association of Facilitators and a board member of the National Institute of Facilitation, Michael is a national leader in the facilitation industry. You can get more tips from either of Michael's books, The Secrets of Facilitation or The Secrets to Masterful Meetings. You can receive a signed copy through our website.