Former U.S. First Lady Eleanor Roosevelt once said, “It takes just as much energy to wish as it does to plan.” Of course, wishing doesn’t net results, but be careful because strategic planning always will. In our industry, what exactly does it mean to plan? Some helpful tips in this piece will ensure your business or organization’s continued growth.

The lack of a long-range plan can be a major weakness for any business. Once your business has set its short- and long-term goals, business planning can involve any number of actions, including deducting and balancing approaches, making decisions, setting a destination (or direction), and action planning. Without that crucial planning, you are setting your business up for failure. Perilous as it sounds, it happens all too often. In fact, one manager even told me once, “Hey…we just bid and pray.”

When it comes to responding to competitors, it isn’t enough to outmaneuver them. You must out-think the competition in ways both large and small to develop a distinctive, unique point of view about the future to help your organization get there before anyone else does. Today, innovation in the business world happens at a pace once unimaginable. Did you know that if you would have purchased the computing power found in today’s iPhone in 1991, it would have cost you $3.5 million? Yes, the world is changing and adapting to innovations that quickly.

In running a business, there are many factors that all require planning, including:

• Succession planning is crucial to the continued solvency of a company’s leadership and operations.
• Product and services expansion. Offering new and exciting innovations that will help your business attract new customers and retain the longtime ones.
• Strategic responses to the competition must be planned well and executed with confidence.
• Personnel development. Empower your employees by ensuring that they have access to the resources that will help them grow both personally and professionally.
• Technology implementation. Keep up to date with the latest technological innovations, which themselves are changing even faster than our own business plans.
• Costs and margin improvements. Always use your company’s funds to look ahead to its future (within reason and within your means, of course).
• Leveraging strengths while addressing weaknesses. Be ready to shift employees and resources within your organization to places where they can be best utilized.

Strategic planning involves stepping back from your day-to-day operations and asking, “Where should my business be headed?” and, “What should my priorities be?” The Balanced Scorecard (BSC) is a strategy performance management tool used by managers to keep track of staff accomplishment activities. This benefits our business because it focuses our efforts in a laser-sharp manner.

The Balanced Scorecard (BSC)

The BSC was developed in the early 1990s by Drs. David Norton and Robert Kaplan of Harvard Business School. In naming the system “The Balanced Scorecard,” the focus evolved from attention to the design of the BSC to the use of BSC as a focal point within a more comprehensive strategic management system within less than a decade.

The BSC isn’t a mere measurement system; it stands as an entire management system. The BSC can be called truly transformative in this way, meaning organizations can not only explain their vision and strategy but also ensure that those ideas become actions, such as a series of actions and initiatives. The BSC does this by providing feedback around both the internal business processes and external outcomes. With this feedback from all sides considered, a company is constantly able to improve its strategic performance and its results.

If used correctly, your business will see its strategic planning undergo a major change. The BSC makes a successful transformation from the theoretical realm (such as an activity) to actions, control points, and metrics that are easily measured. You should see the successful marriage of the qualitative becoming quantitative.

Kaplan and Norton describe its innovation as follows:

“The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success.”

Still, more must be done, the authors add; in other words, addressing a company’s financial measures simply isn’t enough. In the Digital Age, companies must look to the future and plan for investment and change in a variety of fields. Kaplan and Norton continue:

“These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation.”

The traditional BSC undergoes a detailed, three-step process. First, it views the organization from four perspectives, which are listed below. It then facilitates the development of goals, metrics, and data collection. Finally, it analyzes these relative to each of the following perspectives:

• Learning and Growth Perspective
• Internal Business Perspective
• Customer Perspective
• Financial Perspective

Kaplan and Norton do not disregard the traditional need for financial data because traditionally, more than enough focus has been placed on it. Instead, the current emphasis on the financials leads to the “unbalanced” situation with regard to other perspectives.

Ultimately, the BSC’s emphasis moved away from crafting a strategy and shifted to the dual emphases of execution and control of a strategy. As a user of the BSC as a strategic planning tool for nearly 20 years, I, like many others, found the effort provides too much emphasis on balancing the individual perspectives as a distraction. Instead of the continuation of rigid adherence to the BSC, I designed my own step-by-step process to develop a tactical plan that could be Measured & Monitored. The inclusion of and focus on hard data has proven to be a wise decision. The objective was to develop a strategic plan but, more importantly, to operationalize it.