Strategic Planning and Goal Setting: Overview In this lesson you’ll learn about the: – Importance of Strategic Planning and Goal Setting – Factors that influence goal setting process – Personal vs. business goals – Role of employing an integrated process in strategic planning – Strategic planning process – Integrated Management Planning – ‘SMART’ goals – Goal selection and tactical objectives

Strategic Planning and Goal Setting Strategic goals should be openly identified, discussed and prioritized before management decisions are made

Strategic Planning and Goal Setting: External Factors and Internal Factors Goals are influenced by: – External factors Global economics Government policies Environmental factors – Internal factors Resources Management philosophy Risk attitude

Strategic Planning and Goal Setting: Changing Your Attitude Insanity has been defined as doing thing the same way and expecting a different result Carroll’s advice still applies in business and life today asking the questions: – Where are you going in business? – What do you want to achieve? – What are your goals? Be specific about where you’re going- choose your goals make a map or plan, and follow through on that plan – Which road are YOU choosing?

Strategic Planning and Goal Setting Change is the Norm – In today’s business world, change is becoming the norm while stability is becoming the exception – Focus on integrating processes and life- long learning to make your goals into realities

Strategic Planning and Goal Setting Organizational Structure of Management: – An integrated process is needed to manage resources – Changes and variations in resource quality and quantity must be accounted for The goals of the manager and/or owners must be kept in mind

Strategic Planning and Goal Setting

Strategic Planning and Goal Setting: Risk Management Manage your risk by: – Identifying the potential risks and areas affected – Understanding the potential size of the risk – Determining the probability of the risk occurring – Formulating an action plan to handle the risk

Strategic Planning and Goal Setting: Strategic planning Tells you where you are heading and what it might look like once you arrive Keeps the operation focused to the established goals Allows for proactive management

Strategic Planning and Goal Setting: Strategic thinking Ties your mission statement to your resource inventory

Strategic Planning and Goal Setting: Integrated Management Planning In the Integrated Management Planning: – The overall operation is like the tree top – Strategic goals are like the branches and leaves – Mission statement is like the root and trunk of the tree

Strategic Planning and Goal Setting: Strategic Goals Why do I need to use strategic goals? – They clarify what’s important to my operation – They provide a basis for evaluating my progress – They provide direction and focus for my plans – They are a proactive strategy

Strategic Planning and Goal Setting: Teams and Goals Use a management team concept Identify the key people and their roles in the management team: – spouse, parents, children, siblings – partners, employees, technical or financial advisors – you Determine accountability for each aspect of the operation Seek input and consensus from the team members

Strategic Planning and Goal Setting Your Strategic Goals To-Do List: 1.Write concise goal statements 2.Project realistic levels of achievement and establish time- lines for accomplishment of goals 3.Prioritize your goals 4.Estimate the goal costs 5.Avoid preoccupation with tactics and tools until your strategic goals are well-defined

Strategic Planning and Goal Setting: SMART Goals Specific- Clearly defined and stated goals Measurable- Meet objective standards Attainable- Realistic goals with appropriate effort Related- Goals that are not in conflict with other goals or your values Tractable- Progress that can be monitored over time

Strategic Planning and Goal Setting: SMART Goals S- M- Specific goal example- to generate enough income to allow us to maintain ownership of the operation Measurable goal example- to generate $10,500/year for a mortgage payment, allowing us to maintain ownership of the operation

Strategic Planning and Goal Setting: SMART Goals A- R- Attainable goal example- to generate $10,500/year for a mortgage payment, allowing us to maintain ownership of the operation Realistic goal example- Realistic only if the operation usually returns more than $10,500 over direct expenses each year

Strategic Planning and Goal Setting: SMART Goals R- T Related goal example- Related to other goals that move the operation toward higher returns and long-term ownership “To generate $10,500/year for a mortgage payment, allowing us to maintain ownership of the operation” Tractable goal example- To generate $10,500/year for a mortgage payment, allowing us to maintain ownership of the operation while not requiring more time or new skills from management

Strategic Planning and Goal Setting: Strategic Goals - An Example Warm Springs Ranch Strategic Goals 1.Pay off $5,000 of non-current liabilities a year and be debt free in 20 years 2.Develop a livestock enterprise that will generate income for two families 3.Increase the tonnage of alfalfa produced on the farm to 2,000 tons per year by increasing the amount of ground under tillage and increasing yields 4.Invest $250 a month into a college education fund and $250 a month into a retirement fund 5.Develop a range management plan that will increase forage availability by 10% and also promote the sustainability of the range resource

Strategic Planning and Goal Setting: Goal Directed Management A strategic planning process in which high-priority goals provide focus and direction is goal- directed management In goal-directed management, several facts are recognized

Strategic Planning and Goal Setting: Goal Directed Management (Cont.) In goal-directed management: – The farm or ranch business unit and the family unit are closely linked and interact with each other – Business operations and family life put competing demands on physical, financial and human resources – Goal conflicts and resource limitations can best be dealt with through prioritization and tactical planning

Strategic Planning and Goal Setting: Organizational Changes Changes in the organization demand changes in priorities – Goals are not final or unchanging – Resources will change over time – New interests and goals will emerge – Priorities will change – Management will change priorities and goals

Strategic Planning and Goal Setting Why Strategic Goals? – Do you remember what the Cheshire Cat said to Alice? Select goals that will get you to where you want to go. – Concentrate on six to eight goals that have the highest impact – Review long-term strategies – Prioritize your goals – Identify goals that support your mission – Select goals that are likely to be accepted by the team – Make the goals visible to the organization

Strategic Planning and Goal Setting Strategic Goals - Benefits – With your goals prioritized on paper, assigning costs to them makes them seem real – Estimating the costs of each goal helps you measure each step of the process Goal accomplishment leads to greater satisfaction

Strategic Planning and Goal Setting: Tactical Objectives - “TO” Tactical objectives relate to strategic goals and the mission statement Try to start each objective with “to” and then add your action For example: – To reduce… – To increase… – To replace… – To grow…

Strategic Planning and Goal Setting: Operational Plans Operational plans should answer these questions: – What information exists about each action? – What resources must be included in the action steps? – What are the interrelationships among the various resources? – What is the ordering and timing of the various steps? – Who should be accountable for completion of each of the action steps?

Strategic Planning and Goal Setting: Goal Setting Format Decide the goal setting format that best suits your needs, but make sure it includes: – Each strategic goal – Costs associated with each goal – Tactical objectives – Operational plans

Strategic Planning and Goal Setting: Summary In this lesson, you have learned: – Some of the basics for setting goals for your operation – That written goals are like a road map for your mission statement – How to write objectives – That your goals must be SMART