Welcome to Coursera's Essentials of Management and Strategic Planning. My name is [inaudible]. In this module, we're going to focus on the strategic planning meeting; what it should look like and how your company can benefit the most from this meeting? Welcome to Coursera, the module for strategic planning. In the previous module I gave you an indication of why and the reasons for strategic planning. Now I'm going to help with you how to. Many businesses have similar cycles where you grow and then you get to a point and then you hit a wall. We are using strategic planning so we can either get through the wall or get over the wall. But developing a strategic plan is really a process so I'm going to share with you how you can develop that process. This is something that you should do with your business every year. If you can't do it every year, maybe every other year. People used to do strategic planning once every five years while things change too fast now so we need to really be focused on going through the strategic planning process every year. When I talk about strategic planning we really need to have a strategic planning session and that's where we come up with getting consensus on what the strategies for the business should be based on conversations and then follow-ups from the decisions on the strategies. In order to have a strategic planning session, I'm going to start with a timeline because it takes a while to be properly prepared for a strategic planning session. I gave a talk similar to this to a group of people and the next month when we met this person in the room thanked me for providing this information because she held her strategic planning session and it turned out wonderfully and what I'm thinking is she didn't hear really what I said because when I talk about strategic planning I mention a timeline because it takes time to properly prepare for your strategic planning session. You really need to start a couple of months if not three months in advance getting prepared for the strategic planning session and I'm going to tell you on the next slides what that means. This is where entrepreneurs roll their eyes, data. We need information to make good decisions in the strategic planning session. There's a lot of data that you need to accumulate. You need to get the financials from the past two or three years and look at trends. You need to look at some of the marketing plans that you've had in the last couple of years. What did you try? What worked and what did not work? If you have information about market share that's good to bring to the strategic planning session. Also I'm looking for ideas. I go to association meetings and get ideas about what other people are doing in their businesses and then that's something that we can discuss. But this is data that I accumulate and I need to accumulate this prior to the meeting and be able to distribute it to the other attendees before we actually hold this strategic planning meeting. I'm sure many of you have heard of the SWOT analysis; strengths, weaknesses, opportunities, and threats. Putting together a SWOT analysis is another piece of data that we need for the meeting. When I talk about the SWOT analysis, I asked all my senior members. There were four people that I asked for their opinions about what our strengths, weaknesses, opportunities, and threats were so that I can put that together in one document and that helped us. When you put together a SWOT analysis that can be an hour of discussion because why we need a SWOT analysis? We need it because we use our strengths to offset our weaknesses, we use our opportunities to offset the threats. That is a really good discussion for any business to have. It takes time to put together this data. It takes time to put together the financials for several years and also you want to probably use some trends, like what's my gross profit been doing as a percent to revenue? What's my net profit been doing as a percent to revenue? Quarter over quarter for the last three years, how has that been fluctuating? If you don't look at it in that regard that tells you a lot about the revenue that you're going towards. One of the things that I realized, in putting together of the gross profit, as a percentage of revenue, it was that my revenues were going up, my gross profit was going down. If I hadn't put that together, and looked at it, and tried to figure out what happened I would have lost a lot of gross profit in the following time period. But since I figured it out, I can do something about it. This is data that you need to look at. Marketing history what have you done in the last several years? What has been successful? Also, your org chart. Identify your org chart, what it is now? What it should be? Then evaluate your employees. Who are your A players, your B players, and your C players? Have your staff, your executive team rate their employees. Then there has to be a discussion, around the C players. What are you going to do with them? Are you going to up your game with your level of employees? Then operational issues. If you're a manufacturing company, what's your output per man-hour going into your manufacturing? What machinery do you have? How long has it been since you've purchased new machinery? How about some technical background? What IT are you using? Do you need to up your game on that, or other opportunities out there that you can look at? Then what does your industry have for future projections about your industry? What's the new up and coming and what is going out of style? These are all pieces of information that you should have, number one, conversation around and when I bring the data I have an agenda that goes with this data. I'm not putting together the data, just to have it, the data is for conversations around all of this data. A good strategic planning session maybe 2 days, 3 days. It really depends upon, the size of your business. But a good strategic planning session might take some time, and it's best to have a location away from the office so that people are not interrupted and distracted, by things going on in the office. We used to have a session at hotels. When I wanted to have a creative strategic planning session, we actually spent the morning at Disneyland and walking around Disneyland and looking at what they did, to be inventive, creative, different, or to provide an atmosphere for the guests. Disneyland puts a lot of time and effort into their people and time and effort into the, I would say illusions, that you as a guest don't really notice, but they're there and they're actually the cast members, will tell you about these illusions if you ask. Also, we need so much focus on what the conversations are. Believe me, as the conversations are around sensitive issues, particularly when it comes to employees, they may be a little loud. I know we had some very loud discussions, conversations about certain issues, and it wouldn't have been good if other people were around in the office, they would have thought we were having an argument. We weren't, but they're very active and lively conversations, it would be good for you to be able to have. Meeting location really does have an input, on how you can have a meeting and how effective you are meeting is. I would have to tell you be careful about trying to have a meeting location that, invites too much creativity. I had a strategic planning meeting on a boat in the Newport Harbor, which is a local area that's beautiful, with wonderful very large homes. But that really took away from the focus on the meetings, because people were busy looking out the windows, watching those big glorious houses go by. I would say avoid meeting locations with distractions but focus on meeting locations where you can have really good conversations. People are not interrupted, and you can get some things resolved in your strategic planning meeting. I mentioned going to Disneyland as a good jolt to the creative juices. Some things that if you have a business where you need more creativity, whether it's physically or mentally, Disneyland really is a great place to go. You can look at your resources. One of the strategic planning sessions that we had, we used a video about a business that was stuck in a rut, and what the business owners did about that. There are a number of videos out there that are good for businesses to look at. There's one on Who Moved My Cheese. There's The Road to Abilene. There are possibilities. There are a number of videos that you can look at to start before you even get everybody in the room. It's morning, you're starting your strategic planning session. You've got coffee and donuts or something healthy and started whether video so that you can have a conversation around that video before you even dive into some of the topics related to your business. You can get conversations going and started. You can get good ideas from the internet. again, influencers, people that are in your business that have done some great creative, unusual things. We got some ideas from our association meetings. We did not do exactly what these people did. Quite frankly, half the time they only say that they did this stuff but they really didn't. But we took some of what people said they did and modified it to where it wasn't as expensive, but was equally helpful as far as marketing was concerned. You've put together all of the data that you need. You've decided where you're going to have the meeting. You need to make sure that you identify who should attend and you want to get this meeting on their calendar a month out in advance. Any been busy executive, he's going to have their plate full. You want to make sure that number one, they have the meeting on their calendar, two, they have time to review the data before they attend the meeting. All the data that I told you about should be put together in a notebook with dividers identifying those sections that you're going to be talking about as you have the meeting. It's always good to have some prep for these key executives before they even attend the meeting. Like I said before, I had input from people and my association. I had input from my vendors. Now this goes to are you paying your vendors in a timely manner? I personally think you ought to treat your vendors like your partners because they can tell you a lot about what is going on in your competitors business. They might do so if you treat them well, so get some input from your vendors and of course, if you've been paying them after ninety days, you may not want to do that. I believe in paying your vendors in 30 days and not stringing them out. That's good business practices in my opinion, you're going to treat your vendors like partners, they will help you get information. You do not want anybody to attend a negative influence in your company. If you have a key executive, that's a negative influence in your company, then shame on you. You really need to be looking at your personnel policies before you even hold a strategic planning session. But you want to not have a negative person attend the strategic planning session. I feel that brings down the vibe and brings down the creative and brings everything down. Not helpful. I know business owners think that they would be the break facilitator for a strategic planning session. I disagree with that. I always had a facilitator at my strategic planning sessions because I wanted to be involved in the discussions. If I was focused on who's speaking, where are we on the agenda or the notes getting recorded, all of that. I am not going to be able to run the meeting and focus on the discussions. It just doesn't work. I encourage you to have a facilitator. You can get a lot of executive coaches would be a good facilitator. You want to make sure that, number one, they understand a little bit about your business, or at least to have seen that data that you put together for the strategic planning session. They should help you put together the agenda. And they should help make sure everybody in the room contributes. As I am a facilitator, I don't have any skill in the game. I just want a good lively conversation about each topic. The facilitators should be able to identify any elephants on the table. We had a strategic planning session, or I have been lucky to have good facilitators for the most part. After the first session, I've really focused on having a good facilitator. But we had one session where we had a very long-term employee who was creating so many problems in the operations of the business. She was hugely knowledgeable, of course, because she'd been in the business a long time, but she was so negative and so mean and so counterproductive because of her attitude that it created so many problems with operations. Well, her supervisor, of course, did not want to replace her because she was very knowledgeable, and knew what she was doing. But we really had to put that on the table as the elephant in the room, she's either got to shape up or she's got to go. That conversation lasted at least two hours because there are people in the room that thought that was a bad idea, and there were people in the room that thought she was creating too many problems for the business to let that go on. It actually worked out that that issue was addressed, and it really was to the benefit of the organization. Make sure you identify the facilitator can make sure that we draw any elephants in the room. The facilitator should be able to put together the agenda for the meeting. A good methodology would be to get input from the executive staff on what they thought the critical issues were in the business, put it together in an organized fashion, but always get approval by the CEO before the strategic planning session. You don't want to be talking about something in a strategic planning session that is really off-limits. Whatever that might be. Put together the agenda, and this should be done so that people have a chance to look at the agenda, but ultimately it must be approved by the CEO. Where I'm getting on this is before the meeting, a week before the meeting, and this goes into the timeline, I should have the agenda, I should have all the data in a notebook in the order following the agenda. If I'm going to discuss marketing, if that's the first thing I'm going to discuss, I need to have the tab with marketing upfront first thing. So my data, and my notebook should follow the agenda items in order when you're going to be discussing them. I also want to have an agenda I have a time when I'm going to start a topic discussion, when that's going to end, where the breaks are, where the lunches, and in the right order so I know what the agenda, how much time we're going to a lot, and make sure the facilitator can make sure that we start, and end that topic on time. Now, if that topic requires additional discussion, then in the meeting, you need to say, "This is too important to drop, and to stop discussing, we need to keep discussing it. That's going to mess up our timeline a little bit as far as the agenda is concerned." But maybe we could say this is a good dinner topic. So let's discuss this at dinner, and just remember. At dinner, if approved, we always had wine or beer or whatever at dinner, and the discussion is certainly not more lively, but that has to be something that the CEO, and the facilitator discuss in advance. As the meeting progresses, I need to have 3-5 strategies identified as we go along. So 3-5 strategies must come out of the strategic planning session. That's not the only thing that you need to arrive at. So you need to have the action items that will be accomplished to make sure I can get the strategic items done. Rule of thumb. I don't have any action items assigned to anybody who's not in the room, I do not have any action items assigned to anyone who is not in the room. My key executives are there, maybe they are not going to do the action items themselves, but they're going to tell me when they're going to assure me that the action item is going to be done, and when it is going to be done by, and I'm not going to tell them what they're going to do. They're going to tell me, and this is how you get buy-in to what's going to be done now. One mistake that happens in strategic planning sessions, especially the first month or two, is that people think that they're going to be able to do these 30 action items in two months and I'm here to tell you that's not a good idea. Everybody, has work to do, so it's good to make sure and this is where the facilitator comes in, that those action items have to be spaced out during the year. If I'm having my strategic planning session in September and it's going to be from the following January through December, my action items need to be stretched out. Maybe I'm going to do some things or my people are going to do some things in January, February, March and all the way through maybe October or November. But they're not going to be doing everything that they agree to in January and February. That's just not feasible, we need to recognize that my action items, I need to have action items to support my strategies and I need to make sure those action items are spread throughout the year. I need to follow up on those action items, so either monthly or every other month. I need to have a meeting with my team only to go over the strategies and the action items that were agreed to. There needs to be some follow-up. Now, let me tell you what's really effective in this, two weeks before the follow-up meetings send out reminders of the action items that people said they would do and when. Because you would be amazed at how many things are done the day before your follow-up meeting, but if you don't have a follow-up meeting, some of those things will never get done, it's just a matter of the people process. You've got to be realistic and know that everybody is busy, everybody has stuff to do, and this stuff, the action items that we're talking about, these are really working on the business and not in the business. We need to make sure that people have time to do these things, they need to have accountability to ensure that they get these things done. At the end of my meeting, I need to have the 3-5 strategies, I need to have the action items; who's going to do what by when. I need to have a methodology for tracking these, here I need to just tell you that during the meeting somebody needs to keep notes and during the meeting, whenever there is a ding-ding-ding, this is a good strategy, and then the ding-ding-ding, these are the action items that we're going to do to accomplish these strategies, somebody needs to be taking the notes. At the end of every morning, that note-taker needs to identify the strategies, and then they need to get agreement on who's going to do what and by when so that at the end of our meeting. We're not trying to remember what we agreed on as far as the strategies, we are going to document all of this stuff during the meeting. Now, I had a person that helpless with strategic planning meeting and this was a facilitator and this person took a recording of the meeting and that was his idea of helping the business owner follow-up. I think that's a very bad idea, I mean, a recording is good, but not producing notes and not producing strategies, and not producing action items during the meeting is not effective in my opinion. Again, I'm going to have notes from the meeting and I'll have three to five key strategies and everybody is going to agree really as we go along what the strategies are and they're going to agree to the action items. There's usually five or six action items per strategy, there might be more, but at least five to six items per strategy. These aren't easy action items, this is not like, "Oh, I did that last week, so I can do that next week." No, when we talk about strategies, these are things that you haven't done before, so they're not necessarily going to be easy and the people that are doing these action items may not really know what it is that they're committing to. That's why we need follow up and we need to review these action items, and again, the action items need to be clear on who's going to do the action item and when it's going to be done by. Now, who takes these notes? Is a good question. I know that's what you were thinking, "Who is going to take these notes?" Well, I had a variety of people, I tried to take notes myself, I don't think that's a good idea. I had an employee that I trusted, implicitly, who was not going to talk about the strategy meeting outside this strategy meeting, and that was my assistant. If I didn't have somebody in the company, then I would ask the facilitator if they could provide somebody that was a note-taker to be able to do so. Now, the person that's taking notes has to be cognizant enough to identify the things that need to be documented. If I say note taker, this can't be somebody that knows nothing. This has to be somebody that's pretty knowledgeable, that's able to document what the discussions are and follow up with good notes. The action items. I know you're wondering what on earth are they going to look like? Well, the action items need to be very clear and measurable. They need to be measurable. I'm not going to say that I'm going to improve customer service. Now that's not measurable. What is measurable is that I will go from 90 percent satisfaction rate to 95 percent satisfaction rate with my customers buy in six months. That's clear and measurable and I'm going to do this and so that's me, if I have somebody there in the room that should be responsible for, that would be them. They're going to tell me when they're going to get the stand by. They don't have to necessarily do the action item but they need to be responsible for the individuals in the company to get this done. The most effective action item follow-up as monthly. I think that you can do this every other month or quarterly but the most effective follow-up to make sure you get things done is monthly. Then somebody that CEO really should drive accountability. If somebody doesn't get something done, what are you going to do about it? What are you going to do about the accountability if somebody does not get their action item done? Glad to asked, will that requires a discussion with the person not in public, but on a one-to-one, the CEO is going to sit down with this person that didn't do what they said they're going to do, and have a discussion. Why didn't you get that done? What can I do to help you get that done? Then a follow-up on that though. If you have coached somebody a couple of times, and they have not done what they said there were going to do, I've got some people that are going to disagree with what I'm going to say next, but I think you do not invite them to the next follow-up meeting. That's telling them look, you're not doing what you said you were going to do. You're not allowed to play and executive that does not follow up on something they said that they would do should not be in the room and maybe they will end up getting demoted because they aren't following up and they're not accountable to getting things done. In fairness, you should let people know a couple of weeks in advance, the hollow of items. People get busy and they're ever day-to-day. A couple of weeks in advance or even a week prior to you should send a list of the action items and what people said that they would do and when they said they would do it by. Success. This is the fun part. You would be so amazed at what you can accomplish by identifying strategies and following upon them. I know my competitors did not have strategic planning meetings and follow-up on their strategies and I took market share away from my competitors on a regular basis and they made it easy. You be that company that takes market share away from your competitors by following up on your strategies. Then when you have a success, celebrate. Have a nice dinner when you've accomplished something great, just find a way to celebrate. You need to look at your strategies, at least a 1/4 basis, and see if your strategies make sense because maybe you thought something made sense, and then when you go out there and actually tried to do something with it, you find that you're mistaken and maybe it wasn't such a good idea or you find out something isn't cost-effective. You planned to do we actually plan to go into a particular market but to get all of that paraphernalia involved in going into the specific market was going to cost thousands and thousands of dollars. I really didn't think that the payback was going to make that what we had talked about worth it. You may look at your strategies and think, that doesn't really make sense. Can we tweak it a little bit, so that we can come up with a different strategy? You need to look at your strategies and evaluate the validity, and then your vision. Does your vision make sense or maybe you need to have a bigger vision. These are things that can come out of your strategic planning meeting, and then plan your future meetings. Make sure that's on the agenda for next year, because what you wanted to do is start planning. Our strategic planning meetings were in September. They were before the budgeting process or before we finished the budgeting process, I shouldn't say because we started the budgeting process also in August and September for topic completed for a November Board meeting. Make sure you have your meetings plan in advance. You do want to make sure that whatever you've planned, you can include in your budget. That will dictate really when you are going to have your meetings. I hope this information about a strategic planning session helps, what's involved? What you need? How it's going to work, and how you follow up? This can really help you move the needle in your business. I encourage all of you to hold a strategic planning meeting and see where that takes you and how much further you can evolve in your business.