Articulating a Strategic Plan
EVERY COMPANY HAS A STRATEGIC PLAN. It may not be documented or well-defined, but it can be seen in the accumulated actions of employees, management, and the board of directors.
At the other extreme, a company may have extraordinarily detailed strategic plans that are scattered throughout the various business units and geographic locations, but no clear understanding that unites everyone around core objectives.
And then there's the “Goldilocks” company that gets it just right—a plan that achieves alignment around an overarching strategic framework, with detailed strategies that are developed and implemented throughout the company. This should be the CFO's goal.
Whatever the status of a company's planning efforts, CFOs can play an important role in helping to articulate a strategic plan and analyze its effectiveness. In particular, the CFO can help answer such big picture questions as:
- Will the plan deliver the company's shareholder return objectives?
- Can it be executed successfully by the company's management team?
- Is it consistent with the company's core values and tolerance for risk?
- Does the company have the financial wherewithal to execute the plan?
- Can it be effectively communicated to shareholders, customers, employees, and other key stakeholders?
Most important, CFOs can help to articulate the plan's business objectives; strategic themes; financial objectives; acquisition strategies; and target investors.