Over the course of 2011, I completed strategic planning consultations with 15 mining supply firms. These ranged from small start-ups to companies with over 50 employees. Through my work, I observed an interesting commonality: with already healthy accounts in hand, all of these firms are choosing to focus on expanding and diversifying their businesses.
While the key to expansion and diversification lies in a solid marketing plan, a company’s success is rooted in its ability to develop a strategic plan that takes into account all facets of its business, namely, finances, production, management and ownership or governance.
Each of these 15 projects unveiled between three and eight issues that a firm must manage better in order to be more successful (only one of which is a marketing issue). Thus, given an abundance of potential initiatives, questions arise about how to prioritize issues, strategies and tactics.
Even if your company has not experienced an overall strategic planning exercise, you no doubt have a list of initiatives that you want to move forward. As this is the time of year during which many firms do planning and budgeting, perhaps the following advice will be most valuable.
Start by making a list of all your initiatives and organize it according to issues, strategies and tactics. An “issue” is a major concern, for example, marketing. There may be several strategies that will move an issue forward, and each may require a number of tactics. Generally, “tactics” will be the items that require resources to push strategies and issues forward.
Second, determine the resources needed to implement each tactic. These may include funding, work absorbed by existing staff, additional staff requirements, consultants, etc.
Third, determine any factors (dependencies) outside the given tactic on which successful implementation may depend. For example, one tactic may affect another, or a key scarce resource controlled by another department may be required to implement that tactic.
Fourth, decide how you will measure the success of the areas you identified, for example, will you see an impact on the organization or a return on investment of time or money? This is easily done if revenues are expected to increase, or if costs are expected to decrease because of the tactic. At other times, the measures of success will be more qualitative, such as a tactic that will increase staff morale. Classify these impacts as high, medium or low.
Fifth, based on the resources, dependencies and expected returns, prioritize the projects according to the following:
- Low-hanging fruit – small projects with few or no dependencies that are expected to have an immediate impact and can be achieved with minimal additional resources. Given that little is invested or risked, even a small return can be justified.
- Intermediate tactics – small- to medium-sized projects that will make a measurable return but require new resources; they may have dependencies that have to be taken into account.
- Major tactics – usually longer-term initiatives that are expected to have a significant impact, although they may require important resources and they may have appreciable dependencies outside the influence of the project team.
Now you can put everything together. Begin with the low- hanging fruit. This will give you the satisfaction of getting projects off your list that may have been nagging you for a long time.
Even if you are unable to justify the resources for intermediate and major initiatives, you will have begun to analyze them and will have placed them in the hopper of ideas for future implementation.
Of course, you cannot escape the reality of your business and the environment in which it exists. Not every good idea bears fruit. However, having a realistic strategy developed through methodical planning will keep you moving steadily towards your goals.
Jon Baird, managing director of CAMESE and the immediate past president of PDAC, is interested in collective approaches to enhancing the Canadian brand in the world of mining.