Plant America Test
Answer: Long range planning should be viewed as a continuous process which follows out of a fairly intensive initial effort to develop an initial plan. Once the initial plan is established it should be subject to periodic quarterly, and at least annual, review and discussion. The process should involve all company personnel at some point in the process. This creates “buy-in”, understanding, and commitment throughout the company. A process I would recommend is as follows: First, the owners of the company need to determine what their objectives are for their ownership interest in the company. Is it to maximize current income as an objective by siphoning off cash profit surplus (there are many ways to do this other than high salaries and dividends/distributions) for their separate investment and income needs; or is it to maximize long term shareholder value through reinvestment and growth of the company for long term equity appreciation? Second, the owners need to develop their long term Vision Statement for the company (how it will look and perform if they are meeting their objectives, and then a well worded Mission and Values Statement which describes how the company will operate in fulfilling the Vision. Third, the owners and key management team should develop a statement of Long Range Objectives in all key aspects of the business. I usually recommend they consider the following areas: Product/Services, Customer/Market, Market and Service Area, Quality, Profitability and Equity Growth, Company Growth/Growth Rate, Organization/People Development, Employee Relations and Retention, Financial Systems/Controls, Marketing/Business Development, Image and Community Involvement, Facilities, Equipment and Technology, Working Environment/Safety. Goals and targets, set in a three to five year time range should be as specific and measurable as possible. Fourth, expose the Vision, Mission and Draft Objectives to your people. We used to hold an all-day employee meeting. A Long Range Planning team leader would present the Goals as a draft for discussion first. Then all employees break into morning discussion groups to challenge, add to, or modify the goal statements and discussion leaders summarize and report the results prior to lunch. In the afternoon field level employees are excused and management/supervisory leadership try to refine the morning input to finalize the goals and objectives. Fifth, key management and/or Board members meet to finalize and approve the results at a separate time and place. Once this is done the resulting document of Vision, Mission, and Objectives/Goals becomes a document useful in long term internal management, recruiting, marketing and working with outsiders such as your banker and key customers. I would recommend you repeat this process in some form on an annual basis. The “Goals” document then becomes a key instrument in your annual budgeting and planning process where decisions are made regarding planning for what can be accomplished in the next year that leads to long term goal achievement. As you can see, this is not a quick or short process, and when you include the annual budget planning process in the effort it becomes on-going process that integrates with day-to-day management operations. I would suggest that the five steps outlined above would proceed over the period of two to three months. Don’t try to do it all in one meeting and do it in the fall or early winter. Meetings should be separated from the normal work-a-day environment. The annual review should precede the budget planning period so that this year’s goals can be considered in the budget process. How long or how much time all this will take is largely a matter of the size and complexity of your operation. There’s good news and bad news here. The bad news is that it does take time and concentrated effort to initiate (allocate 15-20% of your management team time) during the initial stages and much less than that during the annual review process. The good news is, Long Range Planning is the most valuable tool you can use and, IT WORKS! Rod L Bailey, CLP – Consultant Alder Springs Enterprises Phone (425) 788-3328 Cell (206) 612-2704 Fax (425) 844-1088 e-mail: [email protected]