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Strategic Planning Team – What Company Functions Should Be Represented?

M Dana Baldwin, Senior Consultant

Strategic Planning Expert

Strategic Planning Expert

How many people does it take to develop a good, actionable strategy for your company?  The most straightforward answer is: it depends.  It depends on how big and how complex your organization is.  It depends on how entrenched people are in silos.  It depends on how good your internal communications are.  It depends on the trust levels within the organization.

We use a device to point out the interdependence of the three main functions within a company that we call the Tension Triangle.  Realistically, there are many different levels of tension in most companies, but in general there are three major areas which should be a significant part of strategic planning.  The three are comprised of the sales and marketing team, the finance and administration group and the production and internal operating team.  The sales/marketing group is pretty obvious in its make-up.  The second, finance and administration includes finance and accounting, HR and IT.  The third group, which we label “operations”, is comprised of much of the rest of the company.  It can include, but may not be limited to, manufacturing, engineering, purchasing, shipping and receiving, etc.

The size of the planning team needs to be large enough to have a variety of inputs and viewpoints, and small enough to be responsive and involved within the team.  We suggest a team of 6-9 people, with an outside limit of 12 when absolutely necessary.

In no specific order, as all three are key to successful strategic planning, we look at the financial administrative sector of the company.  There are natural tensions between finance/admin and operations and between finance/admin and sales/marketing.  Operations wants lots of inventory to cover what sales might sell.  Finance/admin wants low levels of inventory to keep the investment low, and wants operations to work on materials which have arrived just in time, so the company is working on other people’s money.  Operations want capital investments to keep manufacturing equipment close to the state of the art, and finance would prefer to minimize capital investment in order to minimize depreciation expense.  These are typical of the kinds of tensions that naturally occur in companies.

Between finance/admin and sales there are similar tensions.  Sales wants low prices, easy credit terms, longer payment times and higher commissions on their sales.  Finance/admin want higher prices, tighter credit terms, quicker payment and lower commissions.

As far as operations and sales tensions, these are predictable, too.  Sales want all kinds of options, to meet anything a customer might want to order.  Operations want close to zero options, so the product will be easier to manufacture.  Sales wants almost immediate delivery promises, while operations want enough time to do everything correctly and to check it twice.

The reason we have gone into this discussion so far is to point out that without having all three major components of the company represented, any strategic plan developed would be missing key inputs.  By having a balanced team, the different needs and wants of the various elements of the organization are represented and the plan that they develop will be much better balanced and actionable.  A side benefit here is that by all the groups being a part of the planning, they will have heard the input and ideas of the other parts of the company.  This means that not only will internal communications be enhanced, but the challenges that each area within the company will be more readily apparent to the other parts of the company.

In conclusion, your strategic planning team should include key people from the three areas of Sales, Operations and Finance, plus the executive team.  Try to keep the number of people on the team reasonable, so that the team will be able to get its work done in an appropriate amount of time.  We suggest, depending on the size and complexity of the company, that you strive to have somewhere in the range of five to twelve people on the team, with the sweet spot ranging from six to nine.  This should assure that multiple points of view are heard and considered, so the team will reach appropriate strategies which are actionable and appropriate for the resources of the company.  If you are having difficulty in reaching a strategic plan which is appropriate for your resources, please contact us at baldwin@cssp.com for guidance and leadership in your strategic planning.

For other ways to enhance your strategic planning process please watch our video:  Why Isn’t My Strategic Planning Working?  This video will give you tips for enhancing the strategic thinking during your next strategic plan update.

M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. He can be reached by email at: baldwin@cssp.com

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