AUTHOR'S NOTE: In our last column we presented Part One of a Grade Card for the feed and grain business. This month we give you Part Two of the Grade Card — additional criteria you can use to evaluate your firm in some key strategic management areas. Our grade card can be thought of as a method to assess where your business is — a subjective measuring tool relative to your own perceptions, and perhaps relative to other firms in your industry.
As with our last column, we start with the presentation of our grade card. Please utilize the grade card we have provided in Figure 1 to grade your business in the areas listed. Once you have rated yourself on the measures provided, rank the areas according to their importance to you as a manager. Following this, determine which areas need improvement (It's your call — but we would say if you have a "C" or below in an "important to highly important" area, this would be a good place for some follow-up.) Then read through the accompanying sections where we provide insight, ideas, tools and resources to assist you in raising your grades!
Business planning and strategy
Business planning is a process that some managers and employees find challenging and a form of drudgery while others find it invigorating and forward looking. We think the difference lies in how a business executes and utilizes the planning process. Manager's Notebook covered this topic in several previous columns (see January '01 and October/Novemer '01 — available from John Foltz at email@example.com).
Question 1 refers to whether or not your feed and grain business engages in a "successful" strategic planning process. As mentioned above, strategic planning has significant benefits:
- it provides a "road map" to help guide your business;
- helps determine successes and items for improvement (often carried out through a "SWOT" type analysis – which stands for Strengths, Weaknesses, Opportunities and Threats);
- it gives you the opportunity to look at new directions or opportunities;
- helps focus resource allocation (time, talent, money) for those most beneficial activitiest;
- strategic issues can be brought up for management review;
- and finally, strategic planning can help develop better inter nal coordination of activities.
Many firms report that strategic planning just allows for better communication, coordination and profitability for the company — helping put everyone on the same page.
You might feel that our question is a loaded one – focusing on the term "successful." We define success here as 1) a process that's done with some regularity; 2) is inclusive and incorporates input from all key decision makers and driving key decisions in the company; 3) it is truly strategic in the longer term. While success may lie in the eye of the beholder, we suggest successful strategic planning provides you with better performance on almost all of the grade card criteria.
Our second question asks about whether you are entering new markets, or offering new product lines or services (see Fig. 1).
The astute manager is always on the lookout for new markets, new products or new services. Ways to increase your grade here primarily relate to several issues we touched on in last month's column — scouring information sources to keep abreast of your industry and networking. If you can "leapfrog" your competition by garnering new and useful information through reading or networking, you may have a first mover advantage that may pay off handsomely. Of course, a very deep understanding of your customers' business, and their issues provides great insight (more on this below).
Question 3 asks if your firm is taking advantage of strategic alliances. This topic was covered in our April/May '01 Managers Notebook column on Innovative Business Arrangements (https://www.agecon.purdue.edu/cab/research/articles/expandingefforts.pdf).