As a business which specialises in assisting Owner / Operators of retail businesses in this country, it is interesting to take a step back and reflect on why it is that some businesses excel in retail whilst others do not.  Why is it that some are nominated regularly for industry awards and some are not?  Why is it that some have committed teams who are prepared to make the discretionary effort to make the business succeed whilst other businesses do not?  Although there are a variety of answers and theories to these questions, there also appear to be some consistencies in what excellent retailers do and do not.

There are certain fundamentals that need to be in place for ongoing organisational excellence.  They include both structural and people considerations, all orbiting around positive central leadership from the Owner / Operator or Store Manager, geared towards achieving significant organisational goals.  In this article, we focus on the first of these structures – Strategic Planning. 

The Strategic Plan

The blueprint for success

The strategic plan of course is not an end in itself and what it does provide is a platform from which to develop the more operationally focused annual business plan and quarterly operational plan. 

So what are the benefits of developing a written strategic plan for a retail business?  There are many:

1.       The planning process in itself can create the space away from the “busy-ness” of the store to tap into the collective genius of your people.  “Busy-ness” can be the enemy of innovation and excellent retailers take the time to create that space to empower their people.  This in turn can send a powerful message to your key people as to their value in the business. 

2.       A facilitator can not only provide you with a solid process to follow, but create an excellent opportunity for you to work with your key people as a team, including relevant activities in the programme that not only force you to “work on your business” but give you an opportunity to develop as a team, resulting in a very specific & valuable output at the end of the day.

3.       You will come away from the process with a common vision, ensuring that you are all on the same page and heading in the same direction.  Don’t underestimate the power of this - if you don’t know where you are going, it doesn’t matter which path you take!   

4.       A well written plan provides direction for your business for the next 3-5 years, with relevant annual, quarterly and monthly objectives which can act as a valuable scorecard for progress.  This strategic direction provides the big picture requirements from the Owner / Operator and removes much of the daily direction that many retailers fall into the trap of.  Monthly reviews of precise and measurable monthly, quarterly and annual objectives provide the direction, authority, ownership, responsibility and accountability for your departments to get on and produce measurable results.  Remember, what gets measured, gets improved!  

5.       You will have also created a process which can be used year after year to ensure ongoing competitive advantage.  The process is about empowering your business for long term success, which can be implemented without any further assistance from an external facilitator if you don’t wish to. 

6.       A well written strategic plan will be your pathway to profits.  It is both an offensive strategy to drive growth, but also a defensive strategy in tougher times to protect what you have. 

7.       There is no right or wrong way to develop a strategic plan, but a good facilitator will be able to provide you with a process that will get you thinking from a ‘balanced’ perspective, often planning & measuring activity in areas of your business that you have never planned in or measured before.

“For the first time this year we engaged an external facilitator to take us through our strategic planning process.  Cardinal Solutions provided not only the facilitator, but a solid process to follow which gave us a quality, well structured strategic plan which now serves as our blueprint for success over the next few years.  This process also served as a great team development exercise for our management team, empowering them to contribute to the future success of the business.  This plan has the potential to have a significant positive impact on our business.”

- David Richards, General Manager, Mitre 10 Mega Nelson

The Annual Business Plan

Your annual strategy

Whilst your strategic plan will probably have a 3-5 year planning horizon (ordinarily plenty for a retail business), your annual business plan is your plan to ensure that what you have planned for this year actually does happen.  It will contain your updated SWOT analysis, will outline the strategic objectives that you will achieve this year, outline your key business processes and provide a handy reference document when you wish to check an important date in your business.  Of course there is no right or wrong way to write or format your business plan but the mistake often made is believing that only start-up businesses require a business plan.  Your annual business plan is a place to document your client acquisition strategy, client fulfillment strategy, financial objectives, communication plans, marketing strategy, team objectives… the list goes on.  If it is not documented here, where is it documented? 

Of course, an annual business plan that sits in the bottom drawer is as much use as your strategic plan sitting alongside it!    The business plan belongs on your desk and it deserves some dog ears on the corners of the pages as it gets used and referred to on a regular basis!  A well written and structured business plan will indeed serve you and your business well.  It need not be complicated and it needs to be something that works for you and your business culture.

The Quarterly Operational Plan

Translating strategy into action  

The reason many strategic and business plans don’t work is that they are written for a specific purpose (to obtain funding for example) and are not written specifically to drive business performance.  A plan to drive business performance is a different plan & concept to one which follows a set procedure in order to satisfy a third party agenda!  The key to translating your strategy into action is in developing  a quarterly operational plan which provides an action plan for each 13-week quarter.  This operational plan may also contain an operational planning framework which provides some structure to your weekly, fortnightly or monthly routine.  You may for example specify that in a 5-day working week, you will spend:

·         ½ day planning

·         ½ day managing the performance of your managers

·         ½ day on finance

·         ½ day on innovation (creativity is coming up with the idea, innovation is implementing it!)

·         1 day client acquisition

·         1 day client fulfillment

·         1 day floating (leave, personal development, systems development, etc)

Although this approach always need to be flexible to respond to the demands of your business, it can provide the structure you need to ensure that you are spending adequate time on the different aspects of the business which are important (not just urgent  - a completely different concept in itself!). 

For those using Microsoft Outlook, colour coding your Calendar so that the Operational Planning Framework is reflected in your Calendar is a useful way to manage your appointments, meetings & tasks.  So, if Wednesday has been allocated as your strategy day, then your meetings, appointments and tasks related to strategy would be planned for this day.  Tasks and appointments for other Key Responsibility Areas would not ideally be planned for this day but scheduled for the day it is allocated.  The colours allow you to quickly identify when things are getting out of balance!

A well written quarterly operational plan will be the key to linking your strategic plan, business plan and operational plan and ensure that your planning does not slip through the cracks.  It will act as a scorecard, monitoring your progress and providing you and your management team with a clear action plan to ensure your strategy is translated into action, even while you are away at the World Cup!

For an example of a quarterly operational plan, including sample operational planning framework, e-mail enquiry@cardinalsolutions.co.nz and we will be pleased to e-mail you a template illustrating how this could look.  

These three planning frameworks are not separate entities but all part of best practice business planning that is intrinsically linked through strong leadership.  

“The strategic planning process has definitely helped pull my senior managers together as a team. In the retail market, taking the time to get out of the business to plan is sometimes difficult to achieve but in hindsight, has always been worth its weight in gold.  I have no doubts that the process has helped the business to achieve results faster than what we might otherwise have achieved.”

 - Gareth Jones, Owner / Operator, PAKnSAVE Wanganui

Ant Carter, Business Navigator, Cardinal Solutions ant@cardinalsolutions.co.nz