Big Ideas for Small Business Managers : Accomplish your final goal by formulating a tactical plan an
13 Jul 2015 - {{hitsCtrl.values.hits}}
Often, we use the terms strategy and tactics interchangeably. Rather than debate Greek military etymology, Sun Tzu philosophy or the latest publications from the Harvard Business Press, here’s a simple way to look at strategy and tactics by their associated actions:
A goal is a broad primary outcome. A strategy is the approach you take to achieve a goal. An objective is a measurable step you take to achieve a strategy. A tactic is a tool you use in pursuing an objective associated with a strategy.
The phrase ‘tactical objectives’ in the business planning process means applying creative strategic thinking and deploying resources quickly and efficiently. It requires anticipation of market trends, rapid response to competitors’ actions and the flexibility to adjust your strategies if conditions change. Tactics are the specific steps a company takes to execute its strategies.
Assumptions
For objectives to be realistic and achievable, you must first generate assumptions and projections about future trends. List only those major assumptions that will affect your business for the planned period.
Economic assumptions
Comment on the overall economy, local market economies, consumer expenditures and changes in customer buying patterns.
Technological assumptions
Include likelihood of technological breakthroughs and applications of new technology to your business.
Socio-political assumptions
Indicate any positive and restrictive legislation, political tensions, tax outlook, population patterns, educational factors and changes in customer habits linked to media and social network.
Competitive assumptions
Identify activities of existing competitors, inroads of new competitors, with particular attention to surging global competitors.
Objectives
Those are the assumptions. Now we come to objectives. The objectives can be – primary, functional, pricing, promotional, service and others. The objectives can be non-product such as key accounts, marketing, manufacturing, credit, technical sales, research and development (R&D), human resources (HR) and others.
Primary objectives
Focus on the primary financial objectives that your organisation requires. Also include targets of opportunity that you initially identified. These include current and projected sales, profits, market share, return on investment and other quantitative measures. Use a spreadsheet.
Functional objectives Quality: List quality objectives that would achieve a competitive advantage.
Development: Indicate possibilities to acquire new technology through internal R&D.
Modification: Describe major or minor product changes through reformulation, redesign or other.
Differentiation: Diversify into new geographic areas, such as developing markets, by altering the product and delivering new applications.
Diversification: Transfer technology or use the actual product in new applications, or diversify into new geographic areas.
Deletion: Remove product from the link due to unsatisfactory performance. You may keep it if the product serves some strategic purpose such as presenting your company to the market as a full line supplier.
Segmentation: Create line extensions, or adding new products, to reach new market niches or defend against an incoming competitor in your existing market.
Pricing objectives
Include list prices, volume discounts and promotional rebates.
Promotional objectives
Develop sales force support, sales promotion, advertising, social networks and publicity to the trade.
Dealer chain objectives
Add new distributors to increase geographic coverage, develop programmes or services to solidify relationships with the trade, remove dealers from the chain, or maintain direct contact with the end user.
Physical distribution objectives
Identify logistical factors from order entry to the physical movement of a product through the supply chain and eventual delivery to the end user.
Service objectives
Broader the range of services, from providing customer access to key personal in your organisation, to providing on-site technical assistance. Indicate other objectives as suggested in targets of opportunities.
Non-product objectives Key accounts: Indicate those customers with whom you can develop special relationships through customised products, distribution, value-added services.
Manufacturing (if applicable): Identify special activities that would provide a competitive advantage, such as offering small production runs to accommodate the changing needs of customers and reduce inventory levels.
Market research: Cite any customer studies or market data that reveal opportunities for new revenue streams.
Credit: Include any programmes that use credit and finance as a value-added service, or financial assistance to customers in specific situations.
Technical sales activities: Include any support activities, as 24/7 hotline assistance or on-site consultation to solve customer issues.
HR development and training: Identify specialised training and development programmes to upgrade the skills of those individuals who are responsible for implementing the plan.
Other: Include any other activities that would contribute to your organisation’s uniqueness and thereby offer a competitive advantage.
Summing up
Creating tactical objections for your business plan are not difficult if you have studied our previous issues clarifying situation analysis and marketing opportunities.
You must be certain that selective action related to your long-term strategic direction, objectives, strategies and the business portfolio are incorporated into your tactical one-year objectives.
Finally, let us recap what we have done.
Step 1 – First, we define the goal. A goal is an emotional and non-specific statement. It may be, “We want to capture 60 percent of our market within three years.” Whatever it is, it’s not likely to be easily attainable and the definition of what we believe is goal success may change over time.
Step 2 – We define our objectives. Objectives follow the SMART rule. SMART stands for Specific, Measurable, Attainable, Relevant and Time Defined. Many goals will have multiple objectives. As we pursue a goal, we may add objectives over time. For goals and objectives, we define who’s accountable or responsible. It should be one person. Leaders and managers are responsible for goals and objectives.
Step 3 – For each objective, we list the tactics. Each tactic should be a specific task or to-do. Think of to-dos/tactics as tasks that can be completed within days or couple of weeks. While there are exceptions, this is a good general rule. Each tactic is something that we should be able to accomplish and builds on other tactics. Each tactic builds towards accomplishing the overall objective. We define the person or people who will complete each tactic.
For objectives and tactics, we set a deadline. Deadlines will keep us moving ahead. Giving each objective and tactic a deadline allows us to create an ‘actionable’ plan.
Step 4 – We test, track and measure. As we execute our tactical plan, especially for marketing activities, we’ll need to test. We use A/B or split testing to continually improve our ads and a tracking programme or system to record how many suspects turn into prospects and customers. We measure by determining our key performance indicators (KPIs). KPIs will help decide if the marketing activity is profitable or worth continuing.
Step 5 – We learn. We determine what we can learn from executing our plan. Is the goal worth pursuing or should we move on to something else? We record our findings so others in our organisation can benefit from what we’ve learned.
We must have contingency plans thought out. We must also recognize that not all of our strategies will achieve the results we hoped for. We have to be prepared to change course when one tactic does not work well. We prepare what-if scenarios so we have responses ready for strategic actions competitors take, or unexpected changes -- positive or negative -- in our industry or the general economy.
(Lionel Wijesiri, a corporate director with over 25 years’ senior managerial experience, can be contacted at [email protected])
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