Strategic planning is about setting goals, designing a plan to achieve them and then implementing the plan with a series of action steps. The process often begins with mission and long-term vision statements, and usually includes some kind of analysis of the current conditions within and outside of the organization. This kind of assessment allows the planner to craft an action plan that uses current capacities to develop new capacities and/or reach the goals initially set.

Unfortunately, most of these kinds of plans end up in the desk drawer, never to be seen again. This is because change is hard, and often, strategic plans require significant organizational change in order to be implemented. Or, they are forgotten because these plans don't relate to what's really possible given the capacity of the firm, the overall economic climate, or the personal proclivities of the principals involved. Most significantly, typical strategic plans neglect to consider deeply held patterns and values that are subtly expressed in the operations of an organization.

How is it possible, then, for a firm owner to create the kind of practice he/she would find most satisfying? For small businesses, a type of strategic planning known as Scenario Planning may be the most effective and useful. A typical process is as follows:

• Reflect on personal values and what means “success” to you. Is it money? Is it winning awards, spending time with family, getting to do design, having leisure time, working with others in a peak team experience, managing/leading others? Keep in mind that your measure of success may change over time; it may not be the same now as it was when you started you firm.
• Assess your firm: what's working, what isn't? What are the strengths and core capacities? What are the weaknesses? Think about the organization in terms of: structure (how things are organized), processes (how things are done), and culture (how meaning is created).
• Analyze your firm quantitatively: look at profitability, workload projections, projected revenues, average expenses, income statements over time, billing multiples, utilization rates, staff balance. What are your profit goals and are you reaching them?
• Develop scenarios: using quantitative data and a fixed time period (3-5yrs), project 3 or 4 possible scenario futures for the firm. You will have to make both assumptions and projections in order to do this. For example, future expenses may be projected from past expenses, assuming no significant inflation in the next few years. Keep your assumptions and projections consistent from one scenario to the next and make a list of your assumptions as you go along. Examples of a typical scenario might be—“what would your firm look like if it doubled in size by 2004?” What gross revenues would be required? How many jobs of what size and type would it take to generate that revenue? What staff balance would be required? How would your job tasks as principal change and how many hours/week would you need to work? Or perhaps, “what would your firm be like if you laid everyone off and just worked as a sole proprietor?” (Answer all questions above.) Consider the current status as one of the scenarios, because staying the same takes planning too.
• Develop action plans: Think about the steps it would take to get from where you are now to each of the scenarios. If you want to grow, what will it take, quantitatively in new jobs, revenue, physical space and equipment, to support more staff? If you want to downsize, or change direction, what will it take to complete your current commitments? Make a list of action steps for each scenario. One of the scenarios may turn out to be an interim step for another.
• Evaluate scenarios: How likely are you to be able to do what you envision? How interested are you in trying. Did one of the visions really excite you or scare you half to death? Check back in with your values and meaning of success. Check back in with your assumptions to see if they make sense. Does one of the scenarios work better than the others?

The result of this process is to develop a rational firm plan, grounded in the reality of firm capacity and guide by strong vision of a preferred future.

RM Klein Consulting offers strategic planning services to firms of all sizes, including business plan writing and financial planning.