Businesses need to engage in some form of strategic planning to help ensure continued stability and profitability. A recent survey by insurance giant Travelers drives home this point.
In its 2024 CFO Study: A Travelers Special Report, the insurer surveyed 610 chief financial officers (CFOs) from companies with 500 or more employees in various industries. One of the questions posed was: What are the most valuable skills needed by today's CFOs?
One might assume their answers would relate to being able to crunch numbers or understand complex regulations. However, the top skill, according to 62% of respondents, was "Strategic planning for future company success and resiliency."
Along with being somewhat surprising, the survey result begs the question: Which leadership skills, specifically, are essential to strategic planning? Among the five most important are the ability to:
Strategic planning starts with a grounded view of the company's current state and a shared vision for its future. You and your leadership team need accurate information - including properly prepared financial statements, tax returns, and sales reports - to establish a common perception of the business's state. From there, you need to be able to reach a mutually agreed-upon vision for the future.
Everyone should be up to speed on the state of their industry and market from the pertinent perspective. Your CFO, for example, needs to be able to report on key performance indicators that place your company's financial status in the context of industry averages and explain how those metrics compare to competitors in your market.
Moreover, everyone must develop the ability to make reasonable, fact-based predictions about the industry and market's future. Not every prediction will come true, but you've got to be able to forecast effectively as a team.
Again, from every member's distinctive perspective, your leadership team needs to know who your customers truly are. This is where your marketing executive can come into play, laying out all the key features and demographics of those who buy your products or services.
Then, you've got to work together to determine what your customers want now and, even more importantly, what they will want in the future. That latter point is perhaps the biggest challenge of strategic planning.
Your company can operate only within realistic limits. These include the size of its workforce, the skill level of employees, and the availability of resources such as liquidity, physical assets, and up-to-date technology.
Every member of your leadership team needs to be on the same page about what your business can realistically do before you decide where you can realistically go. A balanced collective of financial, operational, and technological voices is critical.
Many companies struggle with strategic planning, not because they lack ideas but because they fail to communicate. Leaders who tend to "silo" themselves and the knowledge of their respective departments can be particularly inhibitive. There are also those whose behavior or communication style is simply counterproductive. Continually work on improving how you and your leadership team communicate.
So, does your leadership team have all the requisite skills to succeed at strategic planning? If not, there are certainly ways to upskill your key players through training and performance management. We can help your business gather the financial information it needs to plan for the future confidently and decisively.
© 2024