Strategic Plan Vital to Managing Growth

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Digital Library > Building and Inspiring an Organization > Strategic planning"Strategic Plan Vital to Managing Growth"

Business plan vs. strategic plan: There is a difference.

Want to control your growth? A strategic plan is the ticket, says Jeff Kryszak, president of K-Technologies, a manufacturer of electronic and electromechanical devices in Hamburg, N.Y.

Kryszak, founded K-Technologies in 1997 and implemented the company's first strategic plan in 2001. "Before that, we were growing — but it was haphazard," he says.

Three years later, it's a different story. K-Technologies wrapped up 2003 with $1.4 million in revenue, reflecting a 58% increase from 2002, and Kryszak is aiming for a 70% increase this year. Perhaps more impressive is a stronger profit picture: earnings growth now nearly matches revenue increases.

Strategic planning became an issue when Kryszak was applying for a state grant through the Industrial Effectiveness Program (IEP). Winning this funding required K-Technologies to undergo a productivity assessment, which revealed the absence of strategic planning as a weakness.

Kryszak had written a business plan when he founded K-Technologies. But this document outlined the market his company would serve and concentrated on short-term goals. In contrast, a strategic plan is a leadership tool that articulates long-term goals and tactics needed to reach those objectives.

Not long after starting the strategic-planning process, Kryszak enrolled in FastTrac, which reaffirmed the benefits of detailed planning. "In fact, I wish I had taken the course before I started the company," Kryszak says.

Gaining clarity. Strategic planning helped K-Technologies clarify its niche, and the company began to focus on high-reliability, custom electronic assembly.

"Instead of grabbing any job that came our way, we began to pursue customers in defense, aerospace and medical industries — applications that couldn't tolerate malfunctions," Kryszak explains. This step led the company to become certified in a number of quality standards, further strengthening its quality orientation.

Strategic planning also revealed a need to build infrastructure, especially in terms of human capital. Although the company couldn't afford full-time senior managers, Kryszak negotiated contracts with two members of the Western New York Technology Development Center, who now serve as K-Technologies' interim CFO and marketing manager.

Getting started. K-Technologies has nine people on its strategic-planning team: Kryszak, five company managers and three consultants.

Kryszak recommends using an outside facilitator to oversee the process.

"It's too easy for insiders to get mired in the details," he explains. "An external facilitator gives you a different perspective — they keep you focused on the process instead of the emotions."

One caveat: A facilitator should be expediting the process rather than providing the answers. "A strategic plan needs to be developed by you for you," Kryszak says.

Revising and refining. K-Technologies revisits its strategic plan at least once a year, and better execution is a current goal. With that in mind, Kryszak is trying to develop a "user-friendly tool" to measure progress — a scorecard that's both easy to produce and digest.

"When we wrote our first strategic plan, we had 30 different performance measures, but that was too much to manage and didn't provide useful information to respond to," Kryszak explains.

The new scorecard will be simpler with about 10 indicators, each color-coded for faster comprehension. Green indicates whether the category is on track, yellow means something is out of balance and red signifies the area needs immediate attention.

Communicating. Employees at K-Technologies know the status of the strategic plan. Kryszak shares progress in monthly employee meetings, and department managers give updates in weekly production meetings.

"If employees know how they impact the plan, they're going to make a greater effort, which is a win-win for us all," Kryszak stresses.

Productivity has increased sharply for K-Technologies. "We've had a lot of revenue growth, but haven't added many employees," Kryszak says. "That's true not just on the manufacturing floor, but in every aspect of our business."

Advice: Execution is crucial. "Don't go through all the motions of creating a strategic plan, only to let it sit on your desk," Kryszak warns. A strategic plan is especially important in tough times, he adds: "It helps you know where you're going and enables you to plot growth — even in an adverse economy."

Writer: T.J. Becker

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