All too often I hear about board planning sessions where the board gets together at a nice location and plans for the future. Then, of course, they return to their full-time lives and leave execution up to the management team. Next year they do it all over again. This is the wrong approach and could end up in disaster or, at the very least, in slow or no growth with very little profit for all the effort.

In the 1990s, the big three athletic shoe companies were fighting for position in the worldwide marketplace. Adidas was the clear leader outside of the U.S., and Reebok and Nike were battling it out in the U.S. At Nike, we kept increasing our market share and growing revenues and were getting quite complacent about believing that our company could win the battle until the year our revenues went backwards. We were in shock. The great swoosh machine had failed to grow. Why? What did we do wrong? Were we going to lose the battle?

The management team assembled for yet another yearly planning session at the Oregon coast about 50 miles from the Nike campus. We were ready with our individual department budgets, which we each had assembled on our own to present to the group. Our usual process was to present our budgets the first day, have some general discussions about new products and innovations the next morning, then, if we were lucky and the weather held, we would go out for a round of golf in the afternoon before heading home. However, something very different took place.

Before the meeting got started, our CEO introduced someone we had never met and said he was going to be in charge of the meeting. We figured, “Oh, great, a facilitator who knows nothing about our business.” After an awkward start and a few hours of soul searching about what went wrong the previous year, we were off and running with a new plan that we were developing together. Our charge was to keep it simple both short- and long-term. We were to have no more than five key objectives (which seemed a bit simple for a $3 billion company), a strategy that could be employed to reach that objective and an execution plan for the strategy.

We learned in this process that a strategic plan need not be complicated or lengthy. Instead it needed simplicity and measurability. We did not want to lose interest and get frustrated because the plan was too complex, and we also wanted to be able to periodically measure our successes so we could make adjustments before too much time passed.

As an example, one of our key long-term objectives was to displace Adidas as the international leader and become a global company. Our strategy was to control our own destiny around the world with Nike-owned operations in every country and get away from distributors. Our execution plan was to buy out the distributor in each country or cancel the distributor agreements and start our own subsidiary operation in that country. Then we would sign the best soccer teams and stars we could to Nike contracts. Soccer is, of course, the most international sport there is. The plan was simple and measureable. We could see the growth in business in each country, and we saw sales grow in every category. By 1998, Nike's worldwide sales approached $10 billion.

The point of this story is that any company or financial institution can benefit from a well thought out strategic plan. If you look back at the plan you developed last year can you measure your successes? Can you figure out why you failed at certain goals? If not, your plan may be too complicated. Maybe you even need to start over with a blank sheet of paper.

Bob Falcone is an adviser to JRF Consulting Services.Contact503-349-0010 or
[email protected]