Module 1 ; Formulation of Financial Strategy –

1. Define the meaning of financial strategy in accounting.

2. What is strategic financial management?

3. Explain the reasons for financial strategies.

4. Define the key elements of financial management.

5. Which are the frameworks for financial strategies?

6. Which are the types of financial strategies?

7. Who are the stakeholders? How do they contribute to the business?

8. How to build relationship with the stakeholders?

9. Explain the tools to help stakeholder management.

10. Which are the survival procedures for financial strategies?

11. Define the role of finance manager in the modern business.

12. Write the various ways to protect wealth.

13. What is strategic planning and decision making process?

14. Who are all involved in strategic planning and implementation?

15. Which are the internal and external factors to be considered while implementing the financial strategies?

16. Explain the steps to save our organizations.

17. What is action plan? Why it is prepared?

18. What is conventional strategic planning? How does it work?

19. What is issue based strategic planning.

20. What is organic strategic planning?

21. What is real time strategic planning?

22. What is alignment model of strategic planning?

23. What is inspirational model of strategic planning?

24. Define VMOSA. Write their meanings.

Financial Strategy in Accounting; Financial strategy outlines an organization's financial short and long-term goals.
Three components of financial strategy: financing, investment and dividends.
Financing; Molly asks the students to identify two ways an organization finances assets. One student mentions 'debt'
while another states 'equity.' Molly affirms and explains that debt falls into two categories: obtaining a loan or
selling bonds. Organizations can seek a loan from financial institutions, which is dependent on their credit rating and
the health of their financial statements. The benefits of financing assets with a loan include increased credit rating if
payments are paid on time and retaining cash. Drawbacks include the loan's interest payments and having a
contractual arrangement, which means creditors have legal stance to enforce the contract. Bonds are similar to a
loan, whereby an organization receives money from investors with a promise to repay sometime in the future. The
organization pays interest to the investor and the partnership represents a contractual arrangement, which are
disadvantages to the organization. A benefit of selling bonds is the delay in repayment, which can have a longer
term than a loan, sometimes extending 20 to 30 years. Next Molly explains that financing with equity includes selling
stock. When investors purchase stock, the organization receives cash to finance their assets. She groups students
and asks them to identify the advantages and disadvantages of selling stock. The Importance of Financial Strategy;
Any business big or small needs a financial strategy. Its role is to establish how the company will use and manage its
financial resources to pursue its objectives. Basically, it outlines the steps you need to take to grow your business
and reach your financial goals. Think of it as a road map for your company's future.

What Is Strategic Financial Management? In order to develop a consistent financial strategy, it's necessary to have a
plan and define your objectives. That's where strategic financial management comes in. This process encompasses
the financial aspects of your business plan, such as revenue and expenses, investment decisions, capital budgeting
and cash management. At the most basic level, you need to precisely define your business goals, assess your current
and potential resources and develop a plan for using those resources effectively. There's a big difference between
trying to generate revenue and having a clear financial goal and deadline in mind. Strategic financial management
involves studying the market, collecting data, forecasting cash flow and implementing a strategy to meet your
objectives. If you're a startup or a small business, decide who will be in charge of the financial decision-making
process. You may be a skilled entrepreneur with innovative ideas, but this doesn't necessarily mean you have strong
finance skills. Depending on your budget, you can either build a finance department for your company or hire a
consultant. Certain tasks like payroll and cash management can be outsourced to an accountant or bookkeeper.
Other tasks, such as strategic planning, dividend decisions and profitability management, require expert knowledge.
If you cannot afford to hire an entire team, employ an experienced financial manager to handle these aspects. A
professional can identify optimum investment and financial opportunities, maximize the returns and mitigate risks.

Why Have a Financial Strategy? A common misconception is that only large companies require a financial strategy.
Even if you're just getting started, you need a clear plan to optimize your return on investment and make smart
decisions. Strategic financial management can help you set realistic goals, identify potential pitfalls and develop an
actionable road map for your business. Take the time to read articles on planning and decision making. Research
other organizations in your niche, check out case studies and learn how to turn risks into opportunities. Consult a
financial adviser to help you get started. A well-planned financial strategy can take your business to the next level
and give you a competitive advantage. It will also help you eliminate distractions and give you a clear goal on which
to focus. In the long run, it can increase your profits and reduce debt. You will be able to allocate resources more
effectively and avoid unnecessary expenses.

Key Elements of Financial Management; Strategic financial management has the role to establish that your
organization will finance its operations to achieve each milestone and maximize its profits. Liquidity and working
capital decisions, budgeting, financial planning and financial control are all key aspects that you need to take into
account. Also, it's important to determine how your financial strategy fits into your business plan and what changes
are needed to ensure it stays relevant. First, determine where your business is right now. Analyze existing resources
and opportunities as well as the risks your company is facing. Conduct a cash-flow analysis. Next, set key financial
targets for the next two, three or five years. Get everyone involved in the financial decision-making process,
including your marketing department, sales teams and business partners. Ask them to describe the current situation
and provide detailed reports. Use this information to develop a financial strategy that aligns with your goals. Make
sure that enough funding is available to meet the needs of your company. Review the financial plan every few
months and make adjustments if necessary.

FINANCIAL STRATEGY FRAMEWORK; 1. OPPORTUNITY. 2. SOURCES AND DEAL STRUCTURE (DEPARTMENT, EQUITY
AND OTHERS). 3. FINANCIAL STRATEGY; DEGREES OF STRATEGIC FREEDOM; (TIME TO OOC, TIME TO CLOSE, FUTURE
ALTERNATIVES, RISK, REWARD, PERSONAL CONCERNS). 4. BUSINESS STRATEGY (MARKETING OPERATIAONS,
FINANCE, VALUE CREATION). 5. FINANCIAL REQUIREMENTS; (BURN RATE, OPERATIONG NEEDS, WORKING CAPITAL,
ASSET REQUIREMENTS AND SALES).

Financial strategy framework, Financial Strategy; Social enterprise is a means to achieve sustainability through
earned income; however, it is important to note that financial objectives differ among organizations. Unlike the
microfinance field, the financial objective of a social enterprise is not by default viability (generating sufficient
income to cover all costs). Social enterprises don't need to be profitable to be worthwhile. They can improve
efficiency and effectiveness of the organization by: reducing the need for donated funds; providing a more reliable,
diversified funding base; or enhancing the quality of programs by increasing market discipline. 1. Nonprofit
organizations have varying financial motives for incorporating social enterprises into their organizations, ranging
from income diversification to full financial self-sufficiency: Income Diversification -- For many nonprofit
organizations, social enterprise serves as a strategy to diversify their funding base, decrease reliance on donors, and
recover or subsidize program costs. In these cases, the social enterprise offers a means to reduce program deficits
and employ resources more efficiently. Organizations seeking means to diversify income may set modest financial
objectives. For example, the costs of a program previously 100% grant-funded now covered 40% by earned income
is success for many organizations.

Financial Self-Sufficiency -- Financial self-sufficiency is achieved by increasing nonprofit organizations' ability to

generate sufficient income to cover all or a substantial portion of their costs or fund several social programs without
continued reliance on donor funding. Organizations seeking to maximize profit will opt for external subsidiaries
expressly for the purpose of funneling money back to the parent organization. Experienced nonprofits may use
complex structures and have multiple mixed enterprises and income streams.

Cost Savings and Resource Maximization -- This financial objective is usually combined with financial self-sufficiency
or income diversification and is concerned with optimizing resources and leveraging assets for economic, social, and
community development.

Cost savings--is achieved by sharing back office functions, optimizing systems, and streamlining efficiencies to
increase business performance and margins.

Resource maximization--is achieved through leveraging the nonprofit's financial assets, tangible assets (space,
equipment, plant, building, etc.), and intangible assets (proprietary content, methodology, relationships, goodwill,
name recognition, skills, and expertise).

Financial Spectrum of Social Enterprise; The level of social enterprise self-sufficiency is based on financial objectives,
the type of enterprise, and its maturity. Social enterprise methodology does not dictate breakeven or profit-making;
rather, financial performance is appraised by the ability of the social enterprise to achieve the financial objectives it
has set.
Methods of Income Generation; Social enterprises use a variety of methods to generate commercial income to
sustain operations. At any given time, a social enterprise may use one or a combination of methods, based on the
type of enterprise and business strategy.

Access to Capital; Social enterprises, like any other business--micro or corporation, need capital to grow. It's not only
a question of financing, but also of the right kind; capital must correspond to social enterprise financial needs,
business cycles, and maturity. Furthermore, like any other business, the best make good use of borrowed capital and
their own risk capital.

Access to capital, however, is a constraint social enterprises continue to face. The reasons are fourfold: Nonprofit
capital markets are immature and underdeveloped, and there is little availability of financial instruments
appropriate for capitalizing nonprofit businesses. Ownership and regulatory issues bar nonprofits from access to
financing--they cannot issue equity or distribute profits. Nonprofit managers are financially risk adverse and hence
often steer clear of options to leverage or borrow funds in order to capitalize their enterprises. For the nonprofit
manager willing to borrow, the lack of collateral, credit history, or financial competence are other factors that
prohibit access.

Market Maturity; Market maturity and limited available resources present significant problems. Agencies such as the
Inter-American Development Bank and social investors such as Calvert Foundation or Partners for the Common
Good have worked to fill funding gaps with low interest loans and innovative financing programs, such as SEP. On
the other hand, few donors have come to the table to fund start-up or early stage social enterprise with grants. In
cases where donors have funded social enterprises, the philanthropic funding cycle is typically slower than the social
enterprises' business cycle (production and sales cycle), which can further challenge capitalization. To exacerbate
matters, there is the worrisome misconception that once an organization has launched a social enterprise, it no
longer needs grants for social programs, when in fact early capitalization of the enterprise dictates the opposite.
There is also the misperception that social enterprises only need loans. Capitalizing a nonprofit social enterprise may
take four or five times longer than its private sector counterpart, due to the social costs and encumbrances of
supporting dual objectives. These financial limitations hinder efforts of many social enterprises to take their
activities beyond the start-up stage and to stabilize, expand, and diversify. 1

Funding Instruments; Appropriate funding instruments and greater awareness of capitalization issues is needed to
facilitate the growth of the social enterprise field as a viable sustainability strategy for nonprofits. Assisting the
development of social enterprises' capital markets is a role that onors, philanthropists, and local governments can
play. The following exhibit shows the range of funding across the nonprofit and for-profit spectrum. Many of the
same funders support both traditional nonprofit and hybrid nonprofit enterprises; however, greater participation
and diversity of funding instruments are needed in the latter if this field is to emerge as a mainstay of international
development.

A FRAMEWORK FOR DEVELOPING YOUR FINANCIAL STRATEGY; Despite its impact on value, many organizations do
not have an overarching framework for systematically assessing their financial strategy to ensure it is internally
consistent and aligned with the operations of the company. Boards of directors and management teams that are
sharply focused on maximizing the value of the firm will recognize the importance of reviewing and adjusting their
financial strategy just as rigorously and frequently as their operating strategy. The perceived shroud of complexity
surrounding financial strategy can be lifted by analysis that is well grounded in finance theory but made intuitive to
decision makers. A measured and deliberate approach to changing financial policy can provide sufficient time for the
company and investors to digest the significance of changes. Communicating both internally within the company
and externally to investors can help refine a financial strategy and possibly avoid costly missteps. While financial
strategy is just part of a broad arsenal of tools available to enhance shareholder value, it is an important one
because it provides a number of levers that can be fine-tuned on a regular basis. Its effectiveness relies on
management teams' and boards' willingness to evaluate and adjust those levers as frequently as they do those of
their operating strategies. An organization's financial strategy often receives a very limited critical review by
management teams and boards of directors. This article asserts that a firm's financial strategy should be evaluated
and adjusted just as frequently as its operating strategy.

Financial strategy-the set of policies that determines capitalization, the sourcing of funds, and distributions to
shareholders-has a significant impact on a company's ability to invest for value creation, provides important signals
to the investment community, and can capture for shareholders the value created in the company. Yet financial
strategy frequently receives limited critical review by management. While key components of operations are
frequently scrutinized and updated, our experience reveals that, despite its impact on value, many organizations do
not have an overarching framework for systematically assessing their financial strategy to ensure it is internally
consistent and aligned with the operations of the company. As a result of a number of converging factors, we have
seen a rise in demand by boards of directors and management teams to reassess their financial strategy. To
illustrate the issues involved and the framework for establishing an aligned financial strategy, we examine how the
senior management team and the Board of Directors of "Willow, Inc."1 worked to realign its financial strategy to
address the company's growing balances of cash on hand. Willow is a mid-cap industrial services company that
operates in an industry where it and its three top competitors collectively have 70 percent market share. This leaves
very few significant acquisition targets in an industry that was once rife with consolidation opportunities. Over the
previous 24 months, Willow had focused on extracting operating efficiencies from its past acquisitions and was at
the point where significant, steady cash flows were being generated. Revenues, however, were expected to grow
only in line with the GDP (gross domestic product). The company's expressed strategy was to remain focused on its
core business in the domestic market (i.e., no growth was planned from vertical integration or acquiring businesses
outside its core industry). L.E.K. was engaged to help Willow's management develop a customized financial strategy
that best suited the organization's circumstances and to create a framework for the Board to judge both short-term
financial tactics and the evolution of the strategy over time. To achieve these goals, the following process was used:
* Step 1: Establish an appropriate capital structure, following which a determination would be made of the
magnitude of its cash surplus. It was apparent that Willow was a victim of its success, being both under-levered and
generating significant excess cash flows that could not be profitably reinvested into the business. * Step 2:
Understand whether Willow is undervalued or overvalued in the market, by examining investors' expectations from
growth, margins, investments, and other financial measures, in order to define the options Willow could exercise
with its excess cash. * Step 3: Develop a financial strategy, to be proposed to the Board for approval, ensuring
Willow's operations are sufficiently funded, that financial balance is achieved, and that its growing cash reserve is
deployed appropriately.

Step 1: Establish an appropriate capital structure. Capital structure is often viewed as a minefield of undecipherable
finance theory. Because of this, many executives default to the status quo that, given changing circumstances over
time, rarely results in full value creation. An important key to solving the capital structure puzzle is remembering
that equity funds (even for private companies) are not free-in fact, they are very expensive. While there is not a
contractual obligation to pay shareholders in the same manner as there is for debt holders, there is a very real
opportunity cost inherent in equity funds. The cost of equity is high because shareholders bear the systematic risks
of being in a particular industry and will suffer the most in a bankruptcy. In comparison, debt financing is less costly
because, being subject to contractual obligations-paying interest and repaying principal-debt holders exchange more
certainty for a lower expected yield. Additionally, debt is in a preferred position in a bankruptcy and is tax
deductible, further reducing its cost to the company. While this favors using leverage, doing so increases financial
risk, the cost of debt, and the cost of equity. How do these and other factors interact to determine an appropriate
capital structure for a company?
At Willow, we relied on three methodologies to shape our recommendations on the appropriate capital structure: *
Downside cash flow scenario modeling- a capital structure is derived from a set of downside cash flow scenario
forecasts. By definition, this yields a framework that can withstand the shocks of the downside scenarios. * Peer
group analysis-peers' current capital structures and trends are analyzed for insights into operating characteristics
that might indicate the ability to support more or less debt. * Bond rating analysis-the debt capacity within given
debt ratings is assessed. The process of establishing base case and downside scenario cash flows turns this process
from a theoretical exercise to an intuitively insightful analysis. By including the assessment of risks, management
preferences, and cash flows into the capital structure decision, the analysis is shifted from a theoretical framework
to a concrete, actionable discussion. To understand the magnitude and volatility of cash available for debt service,
the first step is to build a base case cash flow forecast for the next three to five years. In Willow's case, its four-year
base case forecast was as indicated in Exhibit 1.

Collaborating with management, a number of key risks were identified and quantified to develop a series of
downside cash flow scenarios. In each scenario, decisions were made about the level of capital investment that
would be made and whether the dividend should be changed in order to work from a realistic set of forecasts.
Willow decided that, under all but the most severe downside scenarios, it would seek to maintain at least 80 percent
of its base case capital expenditures. Under no downside scenario would it increase dividends.With the downside
cash flow scenarios quantified, the next steps were to do the following:* Identify repayment terms for debt that
were realistic in a downside scenario. It was agreed to use repayment of 50 percent of the initial debt outstanding
within five years, reflecting the expectations of Willow's bankers.* Value the potential for making acquisitions and
keeping some "dry powder."* Discuss with management the safety margin that would appropriately balance
shareholder value with the risks in the business. Given the steady nature of the industry, management chose to use
75 percent of the downside cash flows to support its debt (separate from seasonal needs).* Calculate the amount of
debt that met the cash flow constraints and made full utilization of the interest tax shield.The results of the analysis
suggested that Willow should target a capital structure with $762 million of debt, which added $117 million more
debt to Willow's existing capital structure. As a consequence, Willow now had $117 million of additional capital to
manage. Analysis of the peer group proved not to be insightful, as most meaningful competitors continued to
struggle with overleveraged balance sheets as a result of past acquisitions. Synthetic bond rating analysis, on the
other hand, was instructive in outlining the debt levels at which Willow's debt rating might be watch-listed and
possibly downgraded. The $762 million target for debt fell within those levels, which precluded, in this case, the
debate over whether to accept a lower debt rating in exchange for the benefits of higher debt levels. Discussions
with bankers and rating agencies also identified additional debt capacity that could be borrowed, should it be
required for unexpected investments. Willow's management decided that, while not optimal over a long period of
time, it would be agreeable to borrow an additional $300 million of debt for the right investment. This did not
include the cash flow contribution from an acquisition, which could potentially support additional debt as well.

Step 2: Understand whether Willow is undervalued or overvalued in the market. For share repurchases to be a
viable option, it was important to understand whether the company's stock price was appropriately valued to avoid
repurchasing overvalued stock. To make that determination, we quantified the performance expectations
embedded in Willow's stock price and compared them with management's forecasts. Through research of
investment reports, interviews with sell-side analysts, and discussions with institutional investors who held Willow's
stock or that of its peers, a consensus forecast was created of investors' expected value driver performance that
explained Willow's $12.50 stock price at the time. By comparing investors' expectations of performance on a
company's value drivers- sales growth, operating profit margins, cash tax rate, incremental fixed and working capital
investment-to management's expectations, it is possible to pinpoint the areas where they differ and investigate how
they can be addressed. The key difference between investors' expectations and those embedded in management's
forecast was the operating profit margins. Willow's management maintained a strong belief that the recent changes
it had made to reduce costs and gain efficiencies would add noticeably to operating profit margins. In addition, the
aggressive pricing strategies applied by competitors seemed to have abated (although this formed the basis for one
important downside cash flow scenario). A discounted cash flow valuation of management's base case strategic plan
yielded a value of approximately $15.00 per share for Willow, indicating the stock was undervalued by 20 percent.
Scenario analysis, where different outcomes for the business are captured in the value drivers, was conducted with
particular attention on the impact of growth, pricing, and efficiencies on the operating profit margin. This analysis
identified the range of under-valuation to be between 15 percent and 25 percent.

EXHIBIT 3 Excess Cash Flow Forecasts; Commentary was also gathered from investors indicating that they were
pleased with the fiscal discipline that Willow's management had demonstrated. As a result, they expected Willow
either to find acquisition opportunities or to begin returning cash to shareholders. In summary, the conclusions from
the market expectations analysis were that Willow was undervalued by up to 25 percent and that investors
supported a gradual realignment of the firm's financial strategy to reflect its continued strong cash flows.

Step 3: Develop a financial strategy. The scenarios developed in the capital structure phase served as the basis for
quantifying the amount of excess cash Willow expected to generate from operations. The definition of excess cash in
Exhibit 2 incorporates not only operating and finance expenses (in net income), but also includes expected outlays
for capital expenditures and acquisitions. Excess cash is money for which Willow currently had no immediate use.
Management's base case forecast indicated that Willow would generate $489 million in excess cash over the next
four years. With the addition of $117 million in new debt, Willow expected to have $606 million in excess cash to
dispense over the next four years, as shown in Exhibit 3. Senior management recommended to the Board that
Willow return a significant portion of the excess cash to shareholders. To help decide the exact amount and the
manner in which it should be done, L.E.K. and Willow's management created a financial strategy framework that
defined the elements of the company's sources and uses of cash. The policy illustrated how those elements could
change over time-but remain balanced-as the company evolved (see Exhibit 4). Preferably, the first use of cash from
operations is to invest in capital expenditures and acquisitions. In Willow's case, however, the investment
opportunities possible at the time could not absorb the available cash. Thus, the other options for the monies were
to return it to shareholders through various mechanisms such as dividends or share repurchases, repay debt, or
accumulate the cash on the balance sheet.

Cash sources. Cash balances: Willow had $92 million in cash balances. An analysis of Willow's seasonal needs and
cash collection cycle determined that $74 million was a sufficient amount to maintain, leaving $18 million as excess.
The Board's debate about this amount centered on the need to keep "dry powder" in the event of an adverse event
or an acquisition opportunity. However, there is a cost to keeping cash on hand. As with any other asset the
company employs, it must earn a return for shareholders. A simple measure is to multiply the excess cash by the
cost of capital ($18M × 9% = $ 1.6M for Willow). This annual "carrying cost," and Willow's ready access to debt
capital, drove consensus of the required cash balances to $74 million.

WEXHIBIT 4 Balancing Willow's Sources and Uses of Cash; Operating cash flow: As shown in Exhibit 3, which
incorporates capital expenditures and acquisitions, Willow was expected to generate more than $489 million in
excess cash over the next four years. New debt: From the capital structure phase, it was determined that Willow
should borrow an additional $117 million to move towards an appropriate capital structure. This added to the
amount of excess cash destined for distribution. New equity: Given Willow's under-valuation, it was deemed the
wrong time to issue new equity. However, at some point in the future, an issuance of equity could be an appropriate
mechanism to balance Willow's sources and uses of cash. Presumably, that point would occur when Willow was
over-leveraged, overvalued, in need of cash unavailable from other sources, or some combination of the above.
Cash uses. Cash balances: One option for employing Willow's incoming cash flow was to keep accumulating cash on
the balance sheet. However, accumulating an additional $489 million over four years was clearly excessive. Once
management and the Board assessed the carrying cost of unneeded cash, they decided to return the cash to
shareholders if it could not be invested at attractive returns in the business. Repay debt: It seems natural that if a
company is cash rich, it should free itself from the burdens of debt. However, the capital structure analysis
demonstrated that the opportunity cost of equity capital should instead lead to increasing Willow's debt levels by
$117 million to better balance the benefits of leverage with its costs. The Board agreed that Willow should make use
of this low-cost form of financing, while still maintaining sufficient access to the debt markets to finance an
unexpected acquisition that could create a competitive advantage for the company. Share repurchase: Another
option was to initiate a share repurchase program and establish it as the main instrument for distributing cash to
shareholders. The key reasons were that a share repurchase program accomplishes the following: * Creates value
for remaining shareholders if the stock is undervalued; * Signals to the market that the stock is undervalued, helping
to raise the stock price closer to management's valuation; * Returns cash to the shareholders who want to sell their
stock, thereby not imposing a possible taxable event on those who do not want one, as would be the case with a
dividend;

EXHIBIT 5 Considerations for Amount of Repurchase* Provides flexibility to distribute cash as fits the company's
circumstances; and * Can return larger amounts of cash to shareholders than an increase in regular dividends.
Repurchasing shares also shows a continuation of management's fiscal discipline. There was little concern among
investors that Willow would be perceived negatively if it openly acknowledged, through a repurchase of shares, that
attractive acquisitions or investments were not available. It was understood that there were few acquisition targets
and that their prices likely made them value destroying. Hence, returning cash to shareholders was seen as a sign of
strong fiscal discipline. While Willow believed it was undervalued in the market, it wanted to approach share
repurchases cautiously. This, together with the fact that it felt its shares were potentially only mildly (as low as 15
percent) undervalued, and the amount of shares it sought to repurchase was relatively small, led them to favor an
open-market repurchase program. One of the three approaches to repurchasing shares, an open-market program
permits the company to buy back shares without a premium (as it must with the two other methodologies) when, if
and to the degree it chooses, within established boundaries. The magnitude of the repurchase program was largely
defined by the capital structure and excess cash flow analyses. However, to determine repurchase amounts for the
future, a mechanism was created to make explicit the key considerations, as shown in Exhibit 5. This framework
allowed management and the Board to discuss (1) the amount of excess cash that could be returned to
shareholders, (2) specific management issues to consider, and (3) investor considerations and market conditions; all
of which served to help decision makers reach consensus on the size of the repurchase program. Regular dividend:
Dividends communicate a strong, continuing commitment to return cash to shareholders and indicate the
company's comfort level with its ability to generate sufficient cash to do so in the future. Willow had initiated a
nominal dividend two years earlier but had not planned on it being a regular element of returning cash to
shareholders. However, new changes in the tax treatment of dividends had removed significant tax disadvantage
compared to capital gains. In addition, investors have come to appreciate and to a certain degree expect cash-rich
companies to issue dividends. A nominal dividend is generally not sufficient for a company such as Willow. The
decision was made to increase the dividend moderately to yield 1 percent, which was approximately half the S&P
average dividend yield at the time but signaled a step in the right direction. Special dividend: A special dividend can
be considered a pressure relief valve when other avenues for utilizing cash are deemed inappropriate. It is used by
companies that have significant excess cash (after investments and acquisitions), overvalued stock, and who do not
want or need to repay debt or increase the regular dividend. In those circumstances, repurchasing shares would
destroy value; so issuing a special dividend would relieve the pressure of cash accumulating on the balance sheet.
Since Willow's stock was undervalued, a special dividend was not considered.
Implementation and results; Ultimately, Willow decided to increase its financial leverage by $117 million over an
eighteen-month period, leave its dividend payout untouched, and undertake a multiyear open-market share
repurchase program, starting with an amount up to $75 million in the first year, to be revised annually. As expected,
the announcement was well received by investors and created a small but important abnormal return for the stock
during the week following the announcement. Willow went on to repurchase the full amount of stock it had
targeted, and, within nine months, the Board agreed to raise the dividend to a yield of 1 percent with the intention
of gradually increasing it to 2 percent. The following year, Willow increased its share repurchase program because
excess cash flows exceeded original estimates, and, with experience, management and the Board gained a level of
comfort that their financial strategy was appropriate for the company's situation. Willow's stock continues to rise,
outperforming both the S&P 500 and an index of its peers. The company's performance targets also continue to rise.
When L.E.K. values management's internal plans on a semiannual basis, we note that, while the value gap is still
present, it is shrinking. Clearly, Willow's strong financial results, its self declared focus on cash flow, and its financial
strategy have now led investors to reevaluate their expectations of future performance to be more in line with those
of management. The existence of a value gap indicates that open-market share repurchases continue to be an
appropriate tool for Willow to manage its excess cash position, especially as it provides the flexibility to act in the
event that a significant investment opportunity is revealed.

Applying the lessons; Willow's case, while specific to its conditions and needs, provides important lessons for
companies that are looking to align their financial strategy with their operations in the ongoing effort to maximize
shareholder value. First, boards of directors and management teams that are sharply focused on maximizing the
value of the firm will recognize the importance of reviewing and adjusting their financial strategy just as rigorously
and frequently as their operating strategy. The latter supports the former, but many companies stop after having
addressed only their operating strategy, leaving on the table the opportunity to create even more value. Second, the
perceived shroud of complexity surrounding financial strategy can be lifted by analysis that is well grounded in
finance theory but made intuitive to decision makers. Without sufficient financial data, relevant frameworks, and
effective decision-making processes in place, critical financial decisions can be misguided and/or next to impossible
to execute. Facts-not aphorisms-provide the basis for the best financial strategies. Third, a measured and deliberate
approach to changing financial policy can provide sufficient time for the company and investors to digest the
significance of changes. It is rare that all cards need to be played at one time. Directionally correct moves toward an
appropriate target, combined with an approach that avoids the costly mistakes of hoarding unneeded cash, not
utilizing debt capacity, etc., can create significant shareholder value. Fourth, communicating both internally within
the company and externally to investors can help refine a financial strategy and possibly avoid costly missteps.
Creating a common framework within which Willow's Board could discuss financial strategy in a holistic manner
proved to be constructive and avoided endless debates. Shareholders have benefited from Willow's realignment of
its financial strategy through an increasing share price, an appropriate amount of leverage, and ongoing fiscal
discipline. These benefits continue to add significantly to the firm's shareholder returns and to the overall health of
the organization. While financial strategy is just part of a broad arsenal of tools available to enhance shareholder
value, it is an important one because it provides a number of levers that can be fine-tuned on a regular basis. Its
effectiveness relies on management teams' and boards' willingness to evaluate and adjust those levers as frequently
as they do those of their operating strategies.
types of financial strategies,

Different Types of Financial Planning Models and Strategies; Types of Financial Planning Models and Strategies: ...
Cash Flow Planning: ... Investment Planning: ...Insurance Planning: ...Retirement Planning: ...Tax Planning: ...Real
Estate Planning: ...

Define your Long Term and Short Term Financial Goals: Different Types of Financial Planning Models and Strategies
Financial is a very broad concept and planning is a difficult and disciplined mission. Some key categories of financial
planning includes source of finances, assessment of your financial necessities, calculating the risk factor and a plan
to achieve your financial goal. Investment plans, retirement plans, tax plans, Business planning, personal financial
planning are some of the sub-types of financial planning. In this e-learning tutorial chapter, we will understand some
of the important types of financial planning which everyone should learn and understand in their life. Types of
Financial Planning Models and Strategies: Here we will list out key important types of financial planning strategies
and models which one has to start thinking on it. There are various different types of financial plans which one has
to draft to achieve the goals of the life. Let us understand in detail below. 1. Cash Flow Planning: It is one of the
important types of financial planning. An individual or a company forecast its short term and long term expenses
against the projected cash flow. But there are time when emergency expenses or unexpected expenses occurred.
Once should plan its cash flow appropriately. Incorrect cash flow planning can lead to bankruptcy. 2. Investment
Planning: Once should make your investment plan to achieve your goals in your life. Your investment plan is always
based on your savings. Once you know your amount of savings, you can take the help of financial adviser for various
investment opportunities like: fixed income, investment in stocks, gold, forex market, bonds, mutual funds, etc. You
can either invest lump sum amount or you can start systematic investment plan (SIT) for a long term to fulfill the
long term financial goals. 3. Insurance Planning: Insurance coverage for a long term is very crucial type of financial
planning. Under unforeseen situations, if you haven’t plan your insurance well in advance then it can spoil your
other financial plans as well. Insurance planning is dependent upon individual lifestyle. You should analyze first
before you buy any insurance. For Example: If you travel a lot every year then you should purchase travel insurance
for coverage on unfortunate events. Likewise you can decide on health insurance, auto insurance, flood insurance,
home insurance, etc. 4. Retirement Planning: It is the event which occurs in everyone’s life. It is one of the important
type of financial planning. Mostly you will hear that people set their financial goals for their retirement income due
to rising inflation and rising standard of living. You will have to start your saving and investment early in your life for
your retirement so that you do not have to comprise on standard of living during retirement. 5. Tax Planning: Proper
tax planning can help you to maximize your finance saving. There are various benefits and exemptions provided by
countries for the tax payers. You should take the education and draft a plan on it. At the end of the year, you can
take the benefits of exemptions and minimize your taxes. Everyone should keep your knowledge up-to-date on your
tax planning as a part of your financial planning strategy. 6. Real Estate Planning: Asset creation is again one of the
important type of financial planning. Wealth creation or retirement planning can be achieved with real estate
planning. Real estate is considered as a low risk and high return investment option. So everyone should think of
draft such plan as a part of financial planning. In case of unforeseen situations in life, real estate planning turn out to
be one of the best plan for your family safety. Define your Long Term and Short Term Financial Goals: When you
draw a road map of your financial goals, it is equally recommended to categorize into short and long term financial
targets. General rule you can apply to categorized would be any financial goals within 0-5 year’s duration should be
categorized as short term goals and anything beyond that should be considered as long term goal. For example: If
you are planning to buy a car or saving finance for your marital expenses with next 3-4 years then you should pack
these goals into short term targets whereas if you are looking forward for children education plans, retirement plans
for longer duration then 5 years then you should arrange these into long term goals. Conclusion: There is a time in
everyone’s life that one has to start thinking on short-term and long-term financial goals. There are various different
types of financial planning which once need to draft and implement to achieve the financial goals of the life. Hope
this e-learning chapter has enlighten your knowledge on the same. We hope this would help you to better plan your
finance now. Eleven ways to boost and protect your wealth

Small and mid-size business are the backbone of the US economy. Entrepreneurship and creativity have been
moving the American economy for centuries. In fact, US has one of the best grooming environments for start-ups
and small businesses. Many flagship consumer brands like McDonald’s, Starbucks, and Apple started very small with
one restaurant, a coffee shop, and a garage workshop to become international leaders in their industry. Business
owners spend several years building up their business. They invest a significant amount of personal time and capital
to grow their companies. Almost always these entrepreneurs will have their family fortune locked in their business.
Those who succeed can go public or pass their wealth to the next generation. Entrepreneurs are a special breed.
Many have a vision or a single idea that that drives their pursuit for success. Others have a unique skill or talent that
make them stand out from their competitors. They are independent, self-driven and bold. Focused on their
business, more often than not entrepreneurs ignore or delay their personal financial planning. In this post, I would
like to discuss several practical steps that business owners can follow to establish their successful financial plan.

Balance your business and personal goals; The first and most crucial step in the personal financial planning process is
setting your short and long-term financial goals. In many cases, the business goals can interfere and clash over
personal financial goals. Business goals to expand into a new market or purchase a new factory can negatively
interfere with your personal goals such as saving for retirement or college education for your children. Striking the
right balance between your business and personal goals is a key to achieving them. Prioritizing one over the other
may hurt your long-term financial success.
Explore different financing alternatives; Every new business idea requires capital to start. The success of the venture
depends on the owner’s ability to secure financing. Sometimes, the funding comes from personal savings or the sale
of a property. Other times, the owner needs to look for external funding within his or her social circle or even
approach a financial institution. The external financing can be in the form of a loan or equity stake. Both debt and
equity financing come with embedded costs. The cost can vary depending on the company’s size, industry, history,
economic conditions, etc. One of the main advantages of debt financing is that the interest on the loan is tax
deductible. One the other hand equity financing may allow for more flexibility. Another great way of financing your
idea is your customers. Indeed, your clients are one of the best and inexpensive sources of financing. If your
customers love your product, they will be willing to give you an advance payment, subscribe to your platform or
consider a product/service exchange. In any case, the entrepreneurs should seek to minimize the overall cost of
capital of its business by exploring multiple financing channels.

Control cost; Even the best idea can fail if it doesn’t generate profit. In simple numerical terms, the company
revenue should be higher than its expenses. Many ventures do not succeed because the company cannot generate
enough revenue to cover all costs. Clearly, the first answer will be to generate more revenue. However, many
successful companies are notorious with their focus on cost control. Business owners must stay on top of their
expenses. They must track and analyze your cost. Owners should look for operational deficiencies and overlaps,
result-based compensation, economies of scale and ways to increase productivity.

Manage liquidity; Businesses need cash to maintain healthy growth. Not surprisingly, the prominent investor
Warrant Buffet prefers to invest in companies generating significant cash flows. The capacity to produce cash from
its operations will determine the company’s ability to pay its employees, creditors, and vendors. Building a
disciplined system of managing receivables and payables and maintaining a cash buffer for emergencies are keys on

Manage your taxes; Filing and paying taxes is a long and painful process. Tax law is very complex. Many hidden
threats can trigger tax events for you. There are also many opportunities to save on taxes. Often, your tax bill
depends on your company legal status. Sole proprietors have different taxation rule from c-corporation. Speak to an
accountant or tax lawyer to find out what legal status works best for you. To avoid missed opportunities and last-
minute mistakes, you have to prepare for the filing process in advance. Start early. Keep a clean record of all your
expenses. Track all tax filing dates. Remember to pay all federal and state taxes, social security, Medicare, local
permits, and fees. Consider using a professional bookkeeping software and working with a CPA.

Manage risk; Risk comes in all shapes and forms – business risk, operational risk, financial risk, disability risk and so
on. Managing the risk from different sources is a mandatory skill for any successful business owner and executive.
External threats can impose significant obstacles to profitability and expansion but if managed successfully can
create substantial opportunities for long-term growth. Business threats can come from new competitors, new
technology, changes in consumer demand, new regulatory requirements and so on. Business owners have to be on
top of these changes and often even drive the change. Operational risk impacts the companies’ ability to serve its
customers. Financial risk can come from interest rates, volatile stock markets, and liquidity crunches.
Macroeconomic factors can affect your clients’ ability to pay off their debt. Having a solid financial strategy, building
buffers and managing cash will allow the business to withstand unexpected financial turbulence. Short-term and
long-term disability will prohibit the owners and key employees to perform their duties. Injuries and sickness of key
personnel can significantly hurt any business. Prolonged disability can limit owners’ ability to make a living, support
their families and grow their business. Having disability insurance can help bridge the financial gap during a time of
recovery. Moreover, having a disaster plan can save your business at times of emergencies and unforeseen
circumstances.
Establish a retirement plan; Having a company retirement plan is an excellent way to save money in the long run. A
pension plan contributions could reduce current taxes and boost employee’s loyalty. While there are few
alternatives – 401k, SEP IRA, and SIMPLE IRA. I am a big supporter of 401k plans. Although they are little more
expensive to establish and run, they provide the highest contribution allowance over all other options. The
maximum employee contribution for 2016 is $18,000. The employer can match up to $35,000 for a total of $53,000.
Individuals over 50 can add a catch-up contribution of $6,000 for a total of $59,000 annual contribution. Self-
employed individuals can also take advantage of this option by setting up a solo 401k plan. Moreover, they can
contribute up to $53,000, $18,000 as an employee of your company and $35,000 as an employer.

Build a safety net; Creating a safety net is a critical step to protecting your wealth. Many business owners hold a
substantial amount of their assets tied up to their personal business. By doing it, they expose themselves to a
concentrated risk in one company or industry. Any economic developments that can adversely impact that particular
sector can also hurt their personal wealth. The best way to build a strong safety net is asset diversification. Owners
can significantly decrease the overall risk of their portfolio when investing in a broad and uncorrelated range of
assets, sectors, and regions.

Start your estate planning; Estate planning is the process of arranging the disposal of your assets after your passing.
It further involves your family members, other individuals, and charitable organizations. Estate planning starts with
setting up a family trust and personal will and can also affect financial, tax, medical and business planning.
Additionally, you can use estate planning to eliminate uncertainties over the administration of a probate and to
maximize the value of the estate by reducing taxes and other expenses. The ultimate goal of estate planning can be
determined by your specific goals and may be as simple or complex as your needs dictate.

Plan for business succession; A successful business can impact various parties such as owners, employees,
contractors, vendors, clients, landlords, and suppliers. Therefore, creating a business succession plan will ensure that
all parties interests are met in the event you decide to discontinue your business or pass it to another person.
Moreover, a robust plan will address numerous tax and financial issues which will result from the succession. The
complexity of the succession plan will depend on the size, industry and legal status of your business.

STAKE HOLDERS MANAGEMENT; a project is successful when it achieves objectives and meets or exceeds the
expectations of the stakeholders, any individuals who either care about or have a vested interest in project. Key
stakeholders can make or break the success of a project. Executives, project team, employees, customer,
contractors, suppliers, government, investors, civilians, society, peers, resource managers, politics about the
project,Stakeholders have conflicting interest, identify and meet the requirements of different stakeholders. i.
assess the situation, ii. Identify goals, iii. Define the problem, iv. Culture of stakeholders, v. manage stakeholders.

RELATIONSHIP BUILDING TIPS; i. analyze stakeholders, ii. Assess influence; measure the degree to which
stakeholders can influence the project, the more influential a stakeholder is, the more a project manager will need
their support. Iii. Understand their expectations, iv. Define success, v. keep stakeholders involved, vi. Keep
stakeholders informed. How to relate to different types of stakeholders. By conducting a stakeholder analysis,
gather information to build relationships, keep each stakeholder’s expectations and needs in mind throughout each
conversation. Supportive stakeholders are essential to project success.

TOOLS TO HELP STAKEHOLDER MANAGEMENT; i. identify who are the stakeholders, ii. Power and the intentions
towards the project, iii. Relationship s amongst the stakeholders iv. Analyse the stakeholders.

stakeholder analysis in the context of financial strategy and development, Stakeholder Importance and Influence,
Participatory planning requires the involvement of concerned stakeholders. This includes identifying public concerns
and values and developing a broad consensus on planned initiatives. It is also about utilizing the vast amount of
information and knowledge that stakeholders hold to find workable, efficient and sustainable solutions (CAP-NET
2008). The stakeholder analysis is the process of identifying and analysing stakeholders, and plan for their
participation (RIETBERGEN-McCRACKEN et al. 1998). There are a great number of methodologies concerning
stakeholder analysis with a wide range of complexity (see e.g. RIETBERGEN-McCRACKEN et al. 1998; NETSSAF 2008;
CAP-NET 2005). Here, we present a four-step methodology, that can be done fully or shortened according to one’s
needs: (1) Stakeholder identification, (2) Stakeholders’ importance and influence (3) Stakeholder interests and (4)
Stakeholder strategy plan. After identification, the next step is about analysing how important it is that certain
stakeholders are involved, and about the degree of influence and power a stakeholder has to affect the outcome of
an initiative.; Advantages 1.Provides an understanding how to associate with important and with sensitive
stakeholders.2.Hence, conflicts can be avoided.3.Gives a planner a first overview about important
stakeholder groups and possible problems one has to deal with.4.Facilitates planning.

Disadvantages.1.Is not representative and hence can lead to misinterpretations.2.Be aware not only to
consider the stakeholders with a high degree of influence.3.Is not meant to be a way of excluding
stakeholders with less importance and influence.4.In fact, it just gives one an image how to cope with
different stakeholders.5.If only done with the matrix, important information which can be valuable later on
can be forgotten.

Stakeholders must play a central role in setting up priorities and objectives of water and sanitation initiatives in
order to ensure relevance and appropriateness. It is important that all stakeholders are involved in the development
of projects and not just direct beneficiaries of an initiative. When planning a strategy on which stakeholders to
involve into the decision making process and how to communicate, cooperate and associate with them, it is
worthwhile to find out more about the stakeholder characteristics. This will later on help to attribute roles and
responsibilities to different stakeholders so that the implementation is successful and so that no conflicts arise
between the stakeholders. Firstly, the degree of importance of the stakeholders is analysed, i.e., the degree how
much somebody is concerned by an initiative. Importance means the priority given to satisfying stakeholders’ needs
and interests from being involved in the design of the project and in the project itself in order for it to be successful.
In other words, this is about how important or essential is it that certain stakeholders are involved (WORLD
AGROFORESTRY CENTER 2003).

Secondly, influence and power of a stakeholder can affect the success or failure of an initiative. Power refers to the
ability of the stakeholder to affect the implementation of a project due to his or her strength or force (WINDBERG
2009). Power can be important in terms of supporting as well as in terms of constraining an initiative. For the
success of an initiative, it is very important know whether (and how) a stakeholder can take action, how he/she can
be involved, and how much capacity he/she has to contribute. Concerning failures, it is important know the possible
(negative) influence a stakeholder has to constrain or even stop an initiative.

Draw the matrix below on a large flipchart. Write the name of each stakeholder included in the list made already on
a separate card or ‘Post-it’ and stick the cards on the matrix according to the participants’ view of each stakeholder’s
relative importance and influence (don’t use glue, or it will be difficult to move them around). Don’t worry about
locating them exactly, since this is by nature a rather subjective exercise. Once all the cards are in place, stand back
and have a look. If necessary, move some of the cards around until a consensus is reached. Then read the comments
below about the relevance of each box.
Analysis of the Importance-Influence Matrix and its Application: Factsheet Block Body BOX A: This group will require
special initiatives to protect their interests. BOX B: A good working relationship must be created with this group.
BOX C: This group may be a source of risk, and will need careful monitoring and management. BOX D: This group
may have some limited involvement in evaluation but are, relatively, of low priority.

Sometimes, it is worth also to further think about the reasons why stakeholders are important and have a certain
influence and to keep this recorded. This helps planners not to forget important aspects of different stakeholders
and to get a deeper insight of different stakeholder perspectives to better understand them. In particular in SSWM,
where stakeholder interests and potential conflicts are often complex and many-sided, it can be worthwhile to take
this time to understand stakeholder relations and importance and hence to avoid conflicts and implementation
failures.Factsheet Block Title. Stakeholder Table. Factsheet Block Body. A simple possibility to develop qualitative
information about stakeholder’s importance and influence is to list the main aspects why they are important and
can influence the initiative and to add this information to the previously developed stakeholders list.

Survival of financial strategies, Depending on how severely the economic meltdown has affected you personally,
here are some financial strategies to help you survive.

Strategy: Get Out of Debt; Here’s an idea that often gets overlooked: It takes more energy to earn a living and
service debt than to just earn a living. Debt is dumb. If you are in debt, getting out of debt is “do or die.” The
strategy for debt during my economic meltdown was simple. First, I made “getting out of debt” my overarching
business goal. For seven years that was my #1 business priority. I knew that to survive, I had to get out of debt. So do
you. Second, I told everyone with whom I did business, “I am pledging all of my business assets to all of my business
debts.” Third, I told everyone, “I promise that I will treat everyone exactly the same.” I agreed to give no one
preferential treatment as we divvied up my business assets. Again, a great confidence builder. Of course, you have
to deliver on the promise! So, to summarize, my debt strategy was: To make getting out of debt my overarching
business goal. To pledge all of my business assets to all of my business debts. To promise that I would treat all my
creditors equally. These three strategies stabilized my situation—step one. These same strategies, or some
derivative, can probably stabilize your situation too. Now let’s look at strategies that can correct the problem.

Strategy: Accessibility; I quickly discovered that the people who do “work outs” think very differently than the
people who made the loans! Basically, they believe no one, trust no one, and assume you are always lying all the
time. Why? Because with most customers it’s true! Their customers tend to dodge calls, not return calls, not do
what they promise, and miss deadlines. This creates a fantastic opportunity for you to distinguish yourself and get
some mercy. Here are some strategies to try—for both debt and overdue payments. First, for your initial contact,
proactively meet with your creditors to explain your circumstances and propose a plan—always in person if possible.
A phone call is a distant second for the first contact, and mail is a non-starter. As a wise man once said, “Go. If you
can’t go, call. If you can’t call, write.” Second, if someone you owe money tries to make contact, you must always
take their call or return their call as soon as possible—let’s call this the strategy of “accessibility.” And, third, if a
creditor sends you email or snail mail, pick up the phone and give them a call. They will be blown away! It’s all about
keeping or restoring trust. Fourth, don’t wait for your creditors to call you. Call them periodically and give them an
update if you feel up to it. Or you may want to send them a written monthly update (always include your contact
information so they can easily get hold of you if they need a clarification).

The accessibility strategies are: To proactively meet with creditors in person, To always take your creditors’ calls. To
respond to mail by picking up the phone. To update your creditors regularly I didn’t say it’s easy. I hated it. My ego
was already bruised, and it was embarrassing. Yet, it’s a key strategy to make it through. Why? Because so few
others will do it. Motivate yourself with the axiom I mentioned earlier: Sometimes you have to substitute discipline
for a lack of natural interest.

Strategy: Live “Within” Your Means; People either live “above” their means, “at” their means, “within” their means,
or “below” their means. If you’ve been living “above” or “at” your means, then this is your opportunity to get loose
from the snare of materialism and worldliness. In times like these, the wise cut back. How? The first step is to get
out of denial that you are not living within your means. Frankly, denial is a much stronger force than most people
understand. There are appearances to keep up. Denial means that you actually believe a story that you’ve made
up—a lie. The second step is to repent. The Apostle Paul wrote, and I feel the same way: Even if I caused you sorrow
by my letter, I do not regret it. Though I did regret it—I see that my letter hurt you, but only for a little while—yet
now I am happy, not because you were made sorry, but because your sorrow led you to repentance. For you
became sorrowful as God intended and so were not harmed in any way by us. Godly sorrow brings repentance that
leads to salvation and leaves no regret, but worldly sorrow brings death. (2 Corinthians 7:8-10)

The third step is to grieve what could have been. You will no doubt be filled with shame, guilt, regret, anger, and
many other emotions. Let them out—preferably with an understanding spouse or same gender friend. Fourth, don’t
be a victim. Be a victor. God is big enough to work it out. This is a matter of faith and attitude. Finally, make a budget
that you can afford. If you have to move in with your parents for a season, so be it. Pay off your debts—start with
the ones that carry the highest interest rates. If you can’t figure this out on your own, see a financial counselor. Take
a Crown Financial Ministries course (www.crown.org). If you must, see a bankruptcy lawyer (as I said earlier, it’s not
an irreparable disgrace).

Oh, and one more thing. If it’s possible, you may want to consider living “below” your means. Why would you want
to do that? First, for your children—so they don’t grow up materialistic and suffer financial dysfunction. Second, for
God’s kingdom—because you don’t want to be distracted by life’s worries, riches, and pleasures (Luke 8:14). And
you don’t want to be engrossed by the things of this world (1 Corinthians 7:30-31). And you recognize that the world
and its desire pass away, but the one who does the will of God lives forever (1 John 2:17). The steps to live within
your means are: Get out of denial that you’re overspending, Repent for being materialistic and worldly, Grieve what
could have been, Don’t be a victim; Prayerfully consider living “below” your means. Starting a new business is not for
the faint of heart. But even harder is growing it and eventually seeing it thrive. Survival rates for small and medium-
sized businesses in Canada decline over time, current Industry Canada data shows. About 85 per cent of startups
survive one full year, 70 per cent make it to two years and 51 per cent to five years. However, arming yourself with a
clear strategy and vision can set up your early-stage business for success. Regardless of the size of your business or
the industry, there are key strategies that can help any business survive the competitive Canadian business
landscape:

How feeDuck hopes to challenge real estate commissions in Ontario and across Canada. Education startups find
profit in re-examining the way we teach children

1. Have a solid plan ; For early-stage businesses in the process of raising capital, a solid business plan is needed for
lenders to evaluate and understand your financial projections. Your plan should address key items potential
investors look for. Clearly state your market opportunity and address ways your business will manage its
competitors. This demonstrates you’re looking toward future sustainability of the business. Also, include a minimum
of three years of financial projections and cash flow statements to show your investors how much your business
stands to make versus how much it stands to lose. This will put investors’ minds at ease about the risk they are
taking in investing in you.

2. Explore access to funding ; Funding shortfalls in launching and scaling a business can be the most challenging
aspect of launching a business. As the company grows and develops, the sources for finance you rely on will change.
The traditional venture capital industry continues to invest in early-stage companies, but there are also government
programs that can help with financing options to meet your changing requirements.

3. Build a winning team; This is essential to the success of your early-stage company. It’s crucial to understand the
skill sets required to fill key positions within your business. Having strong leadership in areas of operations, finance,
sales and marketing can help build an engaging company culture that supports the company’s vision and mission
statements. You may need to change your team as the business grows and priorities change, but hiring the right
people in the early days is a great way to start your new venture.

4. Listen to what your customers want ; Successful businesses actively involve customers from the start. Most
innovative companies find their best ideas by talking to their customers. Customers can often provide ideas you may
not have thought of, and can give you the insight needed to come up with better business ideas faster.

5. Think globally; If you’re somewhere where your competitors aren’t, you have a major business advantage. So if
you want your company to grow, you need to consider globalization as a realistic opportunity. There are many new
businesses in Canada that do not survive, mainly due to poor planning and not having proper funding in place.
Starting out your business with sufficient capital, the appropriate skill-set, workforce and business plan in place will
help set you up for success. Take advantage of every resource at your disposal to ensure your early-stage business
evolves into a long-standing and productive operation.

Financial strategic planning approach to develop business plan.;

JAIN COLLEGE; FINANCIAL STRATEGY; 4TH SEMESTER. MIME. MODULE;1.

THE ROLE OF FINANCE IN STRATEGIC PLANNING AND DECISION MAKING PROCESS; GOAL HELPS.

STRATEGY TO ACHIEVE SUCCESS DEPENDS ON; i. firm’s alignment with the external environment, ii. A realistic
internal view of competency, iii. Sustainable competitive advantages, iv. Careful implementation and monitoring.

Strategy helps to know; who we are, where are they at present, where they want to be, how to get there. Know
what is to be done, how, when and where. Have an edge over the competitors. The optimal utilization of the
resources including finance.

Strategic planning; 1. VISION; values, purpose, future direction, core ideologies, vision for the future.
2. MISSION STATEMENT; target customers, markets, products, services, area, technology, commitment to survival,
growth, profitability, profitability, philosophy, self-concept, desired public image.

3. ANALYSIS; business trends, opportunities, resources, competencies. PORTER’S MODEL; for external analysis;
industry competition, threat of substitute products, potential for new entrants, bargaining power of suppliers and
the customers. For internal analysis; Industry evolution model; for technology, quality, performance features, cost
reduction, innovation tactics to maintain and increase market share, elimination of marginal products, improvement
of value chain activities, secondary activities. SWOT analysis.

4. STRATEGY FORMULATION; long term strategy, PORTER’S generic strategies model: i. low cost leadership; buyers
are price sensitive, few opportunities for differentiation, ii. Differentitation: buyers’ needs and preferences are
diverse and there are opportunities for product differentiaon, iii. Best cost provider; buyers expect superior value at
a lower price, iv. Focused low cost, for specific tastes and needs, v. focused differentiation; unique preferences and
needs.

5. STRATEGY IMPLEMENTATION AND MANAGEMENT; Balance score card (BSC) to align strategy with expected
performance, financial goals for employees, functional areas, business units. Translate strategy in to objectives,
operational actions, financial goals, financial factors, employee learning, growth, customer satisfaction, internal
business process.

THE ROLE OF FINANCE; monitor specific, measurable financial strategic goals on a coordinated, integrated basis, to
operate efficiently and effectively. 1. FREE CASH FLOW; measures financial soundness, how efficiently financial
resources are utilized to generate additional cash for future investments, and working capital. 2. ECONOMIC VALUE
ADDED; risk adjustments, make effective, timely decisions to expand businesses, implement corrective actions ,
economic value added goals to effectively assess business value contributions and improve the resource allocation
process. 3. ASSET MANAGEMENT; efficient management of current assets/liabilities, working capital management.
4. FINANCIAL DECISIONS AND CAPITAL STRUCTURE; debt or leverage ratio to minimize the cost of capital, optimal
capital structure determines reserve borrowing capacity, risk of potential financial distress. 5. PROFITABILITY
RATIOS; measures operational efficiency, indicate inefficient areas for corrective actions measure profit
relationships with sales, assets, net worth. 6. GROWTH INDICES; evaluate sales and market share growth, determine
the acceptable trade off of growth to cash flows, profit margins, returns on investment. 7. RISK ASSESSMENT AND
MANAGEMENT; address uncertainties by identifying, measuring, controlling risks in corporate governance,
regulatory compliance, chances of occurrence, economic impact, Mitigate the causes, effect of those risks. Predict
and anticipate future problems. 8. TAX OPTIMIZATION; manage the level of tax liability, tax planning through
mergers, units in SEZ, export, returns after tax. CONCLUSION; Balanced score card shows financial performance for
the success, link strategic goals to performance, provide timely information facilitate strategic, operational control
decisions.

WAYS TO PROTECT WEALTH; All the big businesses were small at the beginning, developed over the periods due to
strategic planning, for successful financial plan; 1. Balance business and personal goals. Set short and long term
goals. 2. Explore different financing alternatives. Optimization of debt and equity based on size and the nature of the
company, economic conditions, flexibility approaches. 3. Control cost but do not compromise quality. 4. Manage
liquidity. 5. Manage taxes. 6. Manage risk. Both internal and external. 7. Build a safety net. 8. Plan business
succession.

TYPES OF STRATEGIES; 1. Research and development strategy for innovation. 2. Operations strategy; to reduce the
cost, good administration, plant layout. 3. Financial strategy. 4. Marketing strategy. 5. Human resources strategy, 6.
Constraints and strategic choice.
STRATEGY SELECTION CRITERIA; i. responsive to the external environment, ii. Off sustainable competitive advantage,
iii. Consistent with order strategies, iv. Provide adequate flexibility v. conform to the mission and long term
objectives, vi. Organizationally flexible.

STRATEGY IMPLEMENTION; a process of translation of strategies and policies into action through programs, budgets,
procedures. Implemented through the right organization structure and appropriate management practices, a
progress towards, objective according to plan rigorous process of control voer important activities. Motivate to
implement a new strategy , do the job the way it to be done, use modern techniques to inspire for performance.

STRATEGIC PLANS TO SURVIVE; i. have a solid plan, ii. Explore access of funding, iii. Build a winning team, iv. Listen to
what the customers want, v. think globally, vi. Acknowledge the good and the bad, vii. Stop holding to things for
sentimental value, viii. Link wages to productivity, ix. Share salary information, x. share company performance, xi.
Appoint people on merit, xii. Pay on performance, xiii. Have a long term policy, xiv, use the current situation for
changes, xv. Retrench non performing people, xvi. Reassign leadership team, observe the consequences from the
stakeholders.

ACTION PLAN; helps to turn dreams into a reality, way to make vision a concrete, describes the wy group will use its
strategies to meet objectives, consists steps, changes to be made in terms of criteria for good action plan like
complete, clear, current, time, goals, cost etc. Develop an action plan composed of action steps that address al
proposed changes. Review completed action plan carefully to check for completeness, keep everyone informed
about what’s going on, keep track of what and how well done, assign work to team mates to perform. Refer
different planning model and choose the best as per the given situations. Types of models; 1. Conventional strategic
planning, 2. Issue based strategic planning.3. organic based strategic based: on the basis of organization needs. 4.
Real time strategic planning (intensive research) v. alignment model of strategic planning, goal based, vi.
Inspirational model.

MODULE 1; The Role of Finance in the Strategic-Planning and Decision-Making Process. Financial Goals and Metrics
Help Firms Implement Strategy and Track Success The fundamental success of a strategy depends on three critical
factors: a firm’s alignment with the external environment, a realistic internal view of its core competencies and
sustainable competitive advantages, and careful implementation and monitoring. This article discusses the role of
finance in strategic planning, decision making, formulation, implementation, and monitoring. Any person,
corporation, or nation should know who or where they are, where they want to be, and how to get there. The
strategic-planning process utilizes analytical models that provide a realistic picture of the individual, corporation, or
nation at its “consciously incompetent” level, creating the necessary motivation for the development of a strategic
plan. The process requires five distinct steps outlined below and the selected strategy must be sufficiently robust to
enable the firm to perform activities differently from its rivals or to perform similar activities in a more efficient
manner. A good strategic plan includes metrics that translate the vision and mission into specific end points. This is
critical because strategic planning is ultimately about resource allocation and would not be relevant if resources
were unlimited. This article aims to explain how finance, financial goals, and financial performance can play a more
integral role in the strategic planning and decision-making process, particularly in the implementation and
monitoring stage.

The Strategic-Planning and Decision-Making Process. 1. Vision Statement; The creation of a broad statement about
the company’s values, purpose, and future direction is the first step in the strategic-planning process. The vision
statement must express the company’s core ideologies—what it stands for and why it exists—and its vision for the
future, that is, what it aspires to be, achieve, or create.
2. Mission Statement; An effective mission statement conveys eight key components about the firm: target
customers and markets; main products and services; geographic domain; core technologies; commitment to
survival, growth, and profitability; philosophy; self-concept; and desired public image. The finance component is
represented by the company’s commitment to survival, growth, and profitability. The company’s long-term financial
goals represent its commitment to a strategy that is innovative, updated, unique, value-driven, and superior to
those of competitors.

3. Analysis; This third step is an analysis of the firm’s business trends, external opportunities, internal resources, and
core competencies. For external analysis, firms often utilize Porter’s five forces model of industry competition,[
which identifies the company’s level of rivalry with existing competitors, the threat of substitute products, the
potential for new entrants, the bargaining power of suppliers, and the bargaining power of customers. For internal
analysis, companies can apply the industry evolution model, which identifies takeoff (technology, product quality,
and product performance features), rapid growth (driving costs down and pursuing product innovation), early
maturity and slowing growth (cost reduction, value services, and aggressive tactics to maintain or gain market
share), market saturation (elimination of marginal products and continuous improvement of value-chain activities),
and stagnation or decline (redirection to fastest-growing market segments and efforts to be a low-cost industry
leader). Another method, value-chain analysis clarifies a firm’s value-creation process based on its primary and
secondary activities. This becomes a more insightful analytical tool when used in conjunction with activity-based
costing and benchmarking tools that help the firm determine its major costs, resource strengths, and competencies,
as well as identify areas where productivity can be improved and where re-engineering may produce a greater
economic impact. SWOT (strengths, weaknesses, opportunities, and threats) is a classic model of internal and
external analysis providing management information to set priorities and fully utilize the firm’s competencies and
capabilities to exploit external opportunities, determine the critical weaknesses that need to be corrected, and
counter existing threats.

4. Strategy Formulation; To formulate a long-term strategy, Porter’s generic strategies model is useful as it helps the
firm aim for one of the following competitive advantages: a) low-cost leadership (product is a commodity, buyers
are price-sensitive, and there are few opportunities for differentiation); b) differentiation (buyers’ needs and
preferences are diverse and there are opportunities for product differentiation); c) best-cost provider (buyers expect
superior value at a lower price); d) focused low-cost (market niches with specific tastes and needs); or e) focused
differentiation (market niches with unique preferences and needs).

5. Strategy Implementation and Management; In the last ten years, the balanced scorecard (BSC) has become one of
the most effective management instruments for implementing and monitoring strategy execution as it helps to align
strategy with expected performance and it stresses the importance of establishing financial goals for employees,
functional areas, and business units. The BSC ensures that the strategy is translated into objectives, operational
actions, and financial goals and focuses on four key dimensions: financial factors, employee learning and growth,
customer satisfaction, and internal business processes.

The Role of Finance; Financial metrics have long been the standard for assessing a firm’s performance. The BSC
supports the role of finance in establishing and monitoring specific and measurable financial strategic goals on a
coordinated, integrated basis, thus enabling the firm to operate efficiently and effectively. Financial goals and
metrics are established based on benchmarking the “best-in-industry” and include: 1. Free Cash Flow; This is a
measure of the firm’s financial soundness and shows how efficiently its financial resources are being utilized to
generate additional cash for future investments. It represents the net cash available after deducting the investments
and working capital increases from the firm’s operating cash flow. Companies should utilize this metric when they
anticipate substantial capital expenditures in the near future or follow-through for implemented projects. 2.
Economic Value-Added; This is the bottom-line contribution on a risk-adjusted basis and helps management to make
effective, timely decisions to expand businesses that increase the firm’s economic value and to implement
corrective actions in those that are destroying its value. It is determined by deducting the operating capital cost
from the net income. Companies set economic value-added goals to effectively assess their businesses’ value
contributions and improve the resource allocation process. 3. Asset Management; This calls for the efficient
management of current assets (cash, receivables, inventory) and current liabilities (payables, accruals) turnovers and
the enhanced management of its working capital and cash conversion cycle. Companies must utilize this practice
when their operating performance falls behind industry benchmarks or benchmarked companies. 4. Financing
Decisions and Capital Structure; Here, financing is limited to the optimal capital structure (debt ratio or leverage),
which is the level that minimizes the firm’s cost of capital. This optimal capital structure determines the firm’s
reserve borrowing capacity (short- and long-term) and the risk of potential financial distress. Companies establish
this structure when their cost of capital rises above that of direct competitors and there is a lack of new
investments. 5. Profitability Ratios; This is a measure of the operational efficiency of a firm. Profitability ratios also
indicate inefficient areas that require corrective actions by management; they measure profit relationships with
sales, total assets, and net worth. Companies must set profitability ratio goals when they need to operate more
effectively and pursue improvements in their value-chain activities. 6. Growth Indices; Growth indices evaluate sales
and market share growth and determine the acceptable trade-off of growth with respect to reductions in cash flows,
profit margins, and returns on investment. Growth usually drains cash and reserve borrowing funds, and sometimes,
aggressive asset management is required to ensure sufficient cash and limited borrowing. Companies must set
growth index goals when growth rates have lagged behind the industry norms or when they have high operating
leverage. 7. Risk Assessment and Management; A firm must address its key uncertainties by identifying, measuring,
and controlling its existing risks in corporate governance and regulatory compliance, the likelihood of their
occurrence, and their economic impact. Then, a process must be implemented to mitigate the causes and effects of
those risks. Companies must make these assessments when they anticipate greater uncertainty in their business or
when there is a need to enhance their risk culture. 8. Tax Optimization; Many functional areas and business units
need to manage the level of tax liability undertaken in conducting business and to understand that mitigating risk
also reduces expected taxes. Moreover, new initiatives, acquisitions, and product development projects must be
weighed against their tax implications and net after-tax contribution to the firm’s value. In general, performance
must, whenever possible, be measured on an after-tax basis. Global companies must adopt this measure when
operating in different tax environments, where they are able to take advantage of inconsistencies in tax regulations.
Conclusion’ The introduction of the balanced scorecard emphasized financial performance as one of the key
indicators of a firm’s success and helped to link strategic goals to performance and provide timely, useful
information to facilitate strategic and operational control decisions. This has led to the role of finance in the
strategic planning process becoming more relevant than ever. Empirical studies have shown that a vast majority of
corporate strategies fail during execution. The above financial metrics help firms implement and monitor their
strategies with specific, industry-related, and measurable financial goals, strengthening the organization’s
capabilities with hard-to-imitate and non-substitutable competencies. They create sustainable competitive
advantages that maximize a firm’s value, the main objective of all stakeholders.

• Eleven ways to boost and protect wealth. Small and mid-size business are the core the of the US economy.
Entrepreneurship and creativity have been moving the American economy for centuries. In fact, US has one of the
best grooming environments for start-ups and small businesses. Many flagship consumer brands like McDonald’s,
Starbucks, and Apple started very small with one restaurant, a coffee shop, and a garage workshop to become
international leaders in their industry. Business owners spend several years building up their business. They invest a
significant amount of personal time and capital to grow their companies. Almost always these entrepreneurs will
have their family fortune locked in their business. Those who succeed can go public or pass their wealth to the next
generation. Entrepreneurs are a special breed. Many have a vision or a single idea that that drives their pursuit for
success. Others have a unique skill or talent that make them stand out from their competitors. They are
independent, self-driven and bold. Focused on their business, more often than not entrepreneurs ignore or delay
their personal financial planning. In this post, I would like to discuss several practical steps that business owners can
follow to establish their successful financial plan.

• Balance your business and personal goals The first and most important step in the personal financial
planning process is setting your short and long-term financial goals. In many cases, the business goals can interfere
and clash over personal financial goals. Business goals to expand into a new market or purchase a new factory can
negatively interfere with your personal goals such as saving for retirement or college education for your children.
Striking the right balance between your business and personal goals is a key to achieving them. Prioritizing one over
the other may hurt your long-term financial success.

• Explore different financing alternatives Every new business idea requires capital to start. The success of the
venture depends on the owner’s ability to secure financing. Sometimes, the funding comes from personal savings or
sale of property. Other times, the owner needs to look for external funding within his or her social circle or even
approach a financial institution. The external financing can be in the form of a loan or equity stake. Both debt and
equity financing come with embedded costs. The cost can vary depending on the company’s size, industry, history,
economic conditions, etc. One of the main advantages of debt financing is that the interest on the loan is tax
deductible. One the other hand equity financing may allow for more flexibility. Another great way of financial your
idea is your customers. In fact, your clients are one of the best and inexpensive sources of financing. If your
customers love your product, they will be willing to give you an advance payment, subscribe to your platform or
consider a product/service exchange. In any case, the entrepreneurs should seek to minimize the overall cost of
capital of its business by exploring multiple financing channels.

• Control cost. Even the best idea can fail if it doesn’t generate profit. In simple numerical terms, the company
revenue should be higher than its expenses. Many ventures do not succeed because the company cannot generate
enough revenue to cover all costs. Clearly, the first answer will be to generate more revenue. However, many
successful companies are notorious with their focus on cost control. Business owners must stay on top of their
expenses. They must track and analyze your cost. Owners should look for operational deficiencies and overlaps,
result-based compensation, economies of scale and ways to increase productivity.

• Manage liquidity. Businesses need cash to maintain healthy growth. Not surprisingly, the prominent
investor Warrant Buffet prefers to invest in companies generating significant cash flows. The capacity to produce
cash from its operations will determine the company’s ability to pay its employees, creditors, and vendors. Building
a disciplined system of managing receivables and payables and maintaining a cash buffer for emergencies are keys
on

• Manage your taxes. Filing and paying taxes is a long and painful process. Tax law is very complex. Many
hidden threats can trigger tax events for you. There are also many opportunities to save on taxes. Often, your tax bill
depends on your company legal status. Sole proprietors have different taxation rule from c-corporation. Speak to an
accountant or tax lawyer to find out what legal status works best for you. To avoid missed opportunities and last
minute mistakes, you have to prepare for the filing process in advance. Start early. Keep a clean record of all your
expenses. Track all tax filing dates. Remember to pay all federal and state taxes, social security, Medicare, local
permits, and fees. Consider using a professional bookkeeping software and working with a CPA.

• Manage risk. Risk comes in all shapes and forms – business risk, operational risk, financial risk, disability risk
and so on. Managing the risk from different sources is a mandatory skill for any successful business owner and
executive. External threats can impose significant obstacles to profitability and expansion but if managed
successfully can create significant opportunities for long-term growth. Business threats can come from new
competitors, new technology, changes in consumer demand, new regulatory requirements and so on. Business
owners have to be on top of these changes and often even drive the change. Operational risk impacts the
companies’ ability to serve its customers. Financial risk can come from interest rates, volatile stock markets, and
liquidity crunches. Macroeconomic factors can affect your clients’ ability to pay off their debt. Having a solid
financial strategy, building buffers and managing cash will allow the business to withstand unexpected financial
turbulence. Short-term and long-term disability will prohibit the owners and key employees to perform their duties.
Injuries and sickness of key personnel can significantly hurt any business. Prolonged disability can limit owners’
ability to make a living, support their families and grow their business. Having a disability insurance can help bridge
the financial gap during a time of recovery. Moreover, having a disaster plan can save your business at times of
emergencies and unforeseen circumstances.

• Build a safety net. Creating a safety net is a critical step to protecting your wealth. Many business owners
hold a substantial amount of their assets tied up to their personal business. By doing it, they expose themselves to a
concentrated risk in one company or industry. Any economic developments that can adversely impact that particular
sector can also hurt their personal wealth. The best way to build a strong safety net is asset diversification. Owners
can significantly decrease the overall risk of their portfolio when investing in a broad and uncorrelated range of
assets, sectors, and regions.

• Plan for business succession. A successful business can impact various parties such as owners, employees,
contractors, vendors, clients, landlords, and suppliers. Therefore, creating a business succession plan will ensure that
all parties interests are met in the event you decide to discontinue your business or pass it to another person.
Moreover, a robust plan will address numerous tax and financial issues which will result from the succession. The
complexity of the succession plan will depend on the size, industry and legal status of your business.

• Different Types of Strategy

• Research and development strategy. Businesses cannot grow and survive without new products. It is the
role of R&D specialists to generate new product ideas, nurture them carefully and develop them fully into
commercially viable propositions. Where innovation proves to be a costly exercise imitation could also be tried as a
fruitful option. Many Japanese electronics companies were quite successful in copying American technology and by
avoiding R&D costs, improved their competitive strength significantly.

• Operations Strategy: This strategy outlines steps to keep costs under check and improve operational
efficiency. The focus is on arriving at decisions regarding plant layout, plant capacity, production processes,
inventory management etc.

• Financial strategy. It deals with financial planning, evaluating investment proposals securing funds for
various investments and controlling financial resources. Thus raising funds, acquiring assets, allocating funds to
operations, using funds efficiently etc are all part of the strategy.

• Marketing Strategy. It deals with strategies relating to product pricing, distribution and promotion of a
company’s offering important issues here cover what type of products at what prices through which distribution
channel and by the use of which promotional tool and sales force etc.

• Human Resources strategy. HR strategy deals with hiring, training, assessing, developing rewarding
motivating and retaining the number and types of employees required to run the business effectively, internal
(union contracts, productivity indices, labor turnover, absenteeism accidents etc) and external factors (labor laws,
son of the soil, reservation, equal employment opportunity, employment of children and women etc) need to be
carefully evaluated while formulating HR strategies.

• Constraints and strategic choice. Viewed collectively the R&D strategy should encourage innovation;
marketing should stress brand loyalty and reliable distribution channels of production should maintain long
production runs, cost reduction, finance should focus on cash flows and positive returns and HR department should
develop strategies for retaining and developing a stable workforce. Of course organizations do come across
constraints while formulating functional level strategies in several forms, how to finance the proposals what kind of
risk to be taken, how to combine suppliers and make channel partners happy, how to encounter competitive
retaliation etc. In any case while selecting appropriate strategies at corporate business and functional level the
following criteria should be kept in mind.

• Strategy selection criteria 1) They are responsive to the external environment. 2) The offer a sustainable
competitive advantage.3) They are consistent with order strategies in the organization.4) They provide adequate
flexibility for the business and the organization. 5) They conform to the organization’s mission and long term
objectives. 6) They are organizationally flexible.

• Strategy Implementation: Strategy implementation is the process of translation of strategies and policies
into action through the development of programs, budgets and procedures It is typically conducted by the middle
and lower level management but is reviewed by the top management. However, programs and procedures are
simply more detailed plans for the eventual implementation of strategy. Unless the corporation is appropriately
organized, programs are adequately staffed and activities are properly directed these operational plans fail to
deliver the goods. To be effective a strategy must be implemented through the right organization structure and
appropriate management practices. In addition, management must also ensure that there is progress towards,
objectives according to plan by instituting a rigorous process of control over important activities. Directing. People
should be motivated to implement a new strategy in desired ways. It is not sufficient merely to have people who can
do the job; it is necessary to have people who want to do the job the way you need it done. In addition to traditional
motivational techniques managers should also make use of modern techniques in order to inspire people to perk
performances.

Financial planning strategies to help survive volatility. The long slow fall of the share market raises many questions
for investors, and challenges some of the “faux wisdom” that had crept into the market. For example, over the past
three years I had many people tell me that the “weight of money” coming into the market on a regular basis from
compulsory superannuation would prevent a repeat of the 1987 share market crash. Others said that the mass of
online data in this “information age” would reduce the volatility of shares because investors would be better
informed and make more rational decisions. It seems the most recent share market downturn has proven both
these theories wrong. Given the dramatic return of the “reality of volatility” in share market investing over the past
12 months, it is worth remembering that a successful personal finance strategy has two parts – the underlying
investments; and the strategy that will help manage tax, build wealth and, over time, move you towards a position
where you can retire. It is important to evaluate these personal financial strategies in light of the current market
volatility. I want to look at six key strategies.

Stakeholder Management. A project is successful when it achieves its objectives and meets or exceeds the
expectations of the stake¬holders. But who are the stakeholders? Stakeholders are individuals who either care
about or have a vested interest in your project. They are the people who are actively involved with the work of the
project or have something to either gain or lose as a result of the project. When you manage a project to add lanes
to a highway, motorists are stakeholders who are positively affected. However, you negatively affect residents who
live near the highway during your project (with construction noise) and after your project with far-reaching
implications (increased traffic noise and pollution).

NOTE: Key stakeholders can make or break the success of a project. Even if all the deliverables are met and the
objectives are satisfied, if your key stakeholders aren’t happy, nobody’s happy. The project sponsor, generally an
executive in the organization with the authority to assign resources and enforce decisions regarding the project, is a
stakeholder. The customer, subcontractors, suppliers, and some¬times even the government are stakeholders. The
project manager, project team members, and the managers from other departments in the organization are
stakeholders as well. It’s important to identify all the stakeholders in your project upfront. Leaving out important
stakeholders or their department’s function and not discovering the error until well into the project could be a
project killer. Figure shows a sample of the project environment featuring the different kinds of stakeholders
involved on a typical project. A study of this diagram confronts us with a couple of interesting facts. First, the
number of stakeholders that project managers must deal with ensures that they will have a complex job guiding
their project through the lifecycle. Problems with any of these members can derail the project. Second, the diagram
shows that project managers have to deal with people external to the organization as well as the internal
environment, certainly more complex than what a manager in an internal environment faces. For example, suppliers
who are late in delivering crucial parts may blow the project schedule. To compound the problem, project managers
generally have little or no direct control over any of these individuals.

Strategy implementation; Top Management. Top management may include the president of the company, vice-
presidents, directors, division managers, the corporate operating committee, and others. These people direct the
strategy and development of the organization. On the plus side, you are likely to have top management support,
which means it will be easier to recruit the best staff to carry out the project, and acquire needed material and
resources; also visibility can enhance a project manager’s professional standing in the company. On the minus side,
failure can be quite dramatic and visible to all, and if the project is large and expensive (most are), the cost of failure
will be more substantial than for a smaller, less visible project. Some suggestions in dealing with top management
are: Develop in-depth plans and major milestones that must be approved by top management during the planning
and design phases of the project. Ask top management associated with your project for their information reporting
needs and frequency. Develop a status reporting methodology to be distributed on a scheduled basis. Keep them
informed of project risks and potential impacts at all times.

The Project Team. The project team is made up of those people dedicated to the project or borrowed on a part-time
basis. As project manager, you need to provide leadership, direction, and above all, the support to team members as
they go about accomplishing their tasks. Working closely with the team to solve problems can help you learn from
the team and build rapport. Showing your support for the project team and for each member will help you get their
support and cooperation. Here are some difficulties you may encounter in dealing with project team members:
Because project team members are borrowed and they don’t report to you, their priorities may be elsewhere. They
may be juggling many projects as well as their full-time job and have difficulty meeting deadlines. Personality
conflicts may arise. These may be caused by differences in social style or values or they may be the result of some
bad experience when people worked together in the past. You may find out about missed deadlines when it is too
late to recover. Managing project team members requires interpersonal skills. Here are some suggestions that can
help: Involve team members in project planning. Arrange to meet privately and informally with each team member
at several points in the project, perhaps for lunch or coffee. Be available to hear team members’ concerns at any
time. Encourage team members to pitch in and help others when needed. Complete a project performance review
for team members.
Your Manager. Typically the boss decides what the assignment is and who can work with the project manager on
projects. Keeping your manager informed will help ensure that you get the necessary resources to complete your
project. If things go wrong on a project, it is nice to have an understanding and supportive boss to go to bat for you
if necessary. By supporting your manager, you will find your manager will support you more often. Find out exactly
how your performance will be measured. When unclear about directions, ask for clarification. Develop a reporting
schedule that is acceptable to your boss. Communicate frequently.

Peers. Peers are people who are at the same level in the organization as you and may or may not be on the project
team. These people will also have a vested interest in the product. However, they will have neither the leadership
responsibilities nor the accountability for the success or failure of the project that you have. Your relationship with
peers can be impeded by: Inadequate control over peers .Political maneuvering or sabotage, Personality conflicts or
technical conflicts. Envy because your peer may have wanted to lead the project. Conflicting instructions from your
manager and your peer’s manager. Peer support is essential. Because most of us serve our self-interest first, use
some investigating, selling, influencing, and politicking skills here. To ensure you have cooperation and support from
your peers: Get the support of your project sponsor or top management to empower you as the project manager
with as much authority as possible. It’s important that the sponsor makes it clear to the other team members that
their cooperation on project activities is expected. Confront your peer if you notice a behavior that seems
dysfunctional, such as bad-mouthing the project. Be explicit in asking for full support from your peers. Arrange for
frequent review meetings. Establish goals and standards of performance for all team members.

Resource Managers. Because project managers are in the position of borrowing resources, other managers control
their resources. So their relationships with people are especially important. If their relationship is good, they may be
able to consistently acquire the best staff and the best equipment for their projects. If relationships aren’t good,
they may find themselves not able to get good people or equipment needed on the project.

Internal Customers. Internal customers are individuals within the organization who are customers for projects that
meet the needs of internal demands. The customer holds the power to accept or reject your work. Early in the
relationship, the project manager will need to negotiate, clarify, and document project specifications and
deliverables. After the project begins, the project manager must stay tuned in to the customer’s concerns and issues
and keep the customer informed. Common stumbling blocks when dealing with internal customers include: A lack of
clarity about precisely what the customer wants. A lack of documentation for what is wanted. A lack of knowledge of
the customer’s organization and operating characteristics. Unrealistic deadlines, budgets, or specifications
requested by the customer. Hesitancy of the customer to sign off on the project or accept responsibility for
decisions. Changes in project scope. To meet the needs of the customer, client, or owner, be sure to do the
following: Learn the client organization’s buzzwords, culture, and business. Clarify all project requirements and
specifications in a written agreement. Specify a change procedure. Establish the project manager as the focal point
of communications in the project organization.

External customer. External customers are the customers when projects could be marketed to outside customers. In
the case of Ford Motor Company, for example, the external customers would be the buyers of the automobiles. Also
if you are managing a project at your company for Ford Motor Company, they will be your external customer.

Government. Project managers working in certain heavily regulated environments (e.g., pharmaceutical, banking, or
military industries) will have to deal with government regulators and departments. These can include all or some
levels of government from municipal, provincial, federal, to international.

Contractors, subcontractors, and suppliers. There are times when organizations don’t have the expertise or
resources available in-house, and work is farmed out to contractors or subcontractors. This can be a construction
management foreman, network consultant, electrician, carpenter, architect, or anyone who is not an employee.
Managing contractors or suppliers requires many of the skills needed to manage full-time project team members.
Any number of problems can arise with contractors or subcontractors: Quality of the work. Cost overruns. Schedule
slippage. Many projects depend on goods provided by outside suppliers. This is true for example of construction
projects where lumber, nails, bricks, and mortar come from outside suppliers. If the supplied goods are delivered
late or are in short supply or of poor quality or if the price is greater than originally quoted, the project may
suffer.Depending on the project, managing contractor and supplier relationships can consume more than half of the
project manager’s time. It is not purely intuitive; it involves a sophisticated skill set that includes managing conflicts,
negotiating, and other interpersonal skills.

Politics of Projects. Many times, project stakeholders have conflicting interests. It’s the project manager’s
responsibility to understand these conflicts and try to resolve them. It’s also the project manger’s responsibility to
manage stakeholder expectations. Be certain to identify and meet with all key stakeholders early in the project to
understand all their needs and constraints. Project managers are somewhat like politicians. Typically, they are not
inherently powerful or capable of imposing their will directly on co-workers, subcontractors, and suppliers. Like
politicians, if they are to get their way, they have to exercise influence effectively over others. On projects, project
managers have direct control over very few things; therefore their ability to influence others – to be a good
politician – may be very important .Here are a few steps a good project politician should follow. However, a good
rule is that when in doubt, stakeholder conflicts should always be resolved in favor of the customer.

Assess the environment. Identify all the relevant stakeholders. Because any of these stakeholders could derail the
project, you need to consider their particular interest in the project. Once all relevant stakeholders are identified, try
to determine where the power lies. In the vast cast of characters, who counts most? Whose actions will have the
greatest impact?

Identify goals. After determining who the stakeholders are, identify their goals. What is it that drives them? What is
each after? Are there any hidden agendas or goals that are not openly articulated? What are the goals of the
stakeholders who hold the power? These deserve special attention.

Define the problem. The facts that constitute the problem should be isolated and closely examined. The question
“What is the real situation?” should be raised over and over.

Culture of Stakeholders. When project stakeholders do not share a common culture, project management must
adapt its organizations and work processes to cope with cultural differences. The following are three major aspects
of cultural difference that can affect a project: Communications, Negotiations, Decision making. Communication is
perhaps the most visible manifestation of culture. Project managers encounter cultural differences in
communication in language, context, and candor. Language is clearly the greatest barrier to communication. When
project stakeholders do not share the same language, communication slows down and is often filtered to share only
information that is deemed critical. The barrier to communication can influence project execution where quick and
accurate exchange of ideas and information is critical. The interpretation of information reflects the extent that
context and candor influence cultural expressions of ideas and understanding of information. In some cultures, an
affirmative answer to a question does not always mean yes. The cultural influence can create confusion on a project
where project stakeholders represent more than one culture.

Managing Stakeholders. Often there is more than one major stakeholder in the project. An increase in the number
of stakeholders adds stress to the project and influences the project’s complexity level. The business or emotional
investment of the stakeholder in the project and the ability of the stakeholder to influence the project outcomes or
execution approach will also influence the stakeholder complexity of the project. In addition to the number of
stakeholders and their level of investment, the degree to which the project stakeholders agree or disagree
influences the project’s complexity. A small commercial construction project will typically have several stakeholders.
All the building permitting agencies, environmental agencies, and labor and safety agencies have an interest in the
project and can influence the execution plan of the project. The neighbors will have an interest in the architectural
appeal, the noise, and the purpose of the building.

Relationship Building Tips. Take the time to identify all stakeholders before starting a new project. Include those
who are impacted by the project, as well as groups with the ability to impact the project. Then, begin the process of
building strong relationships with each one using the following method.

• Analyze stakeholders: Conduct a stakeholder analysis, or an assessment of a project’s key participants, and
how the project will affect their problems and needs. Identify their individual characteristics and interests. Find out
what motivates them, as well as what provokes them. Define roles and level of participation, and determine if there
are conflicts of interest among groups of stakeholders.

• Assess influence: Measure the degree to which stakeholders can influence the project. The more influential
a stakeholder is, the more a project manager will need their support. Think about the question, “What’s in it for
them?” when considering stakeholders. Knowing what each stakeholder needs or wants from the project will enable
the project manager to gauge his or her level of support. And remember to balance support against influence. Is it
more important to have strong support from a stakeholder with little influence, or lukewarm support from one with
a high level of influence?

• Understand their expectations: Nail down stakeholders’ specific expectations. Ask for clarification when
needed to be sure they are completely understood.

• Define “success”: Every stakeholder may have a different idea of what project success looks like. Discovering
this at the end of the project is a formula for failure. Gather definitions up front and include them in the objectives
to help ensure that all stakeholders will be supportive of the final outcomes.

• Keep stakeholders involved: Don’t just report to stakeholders. Ask for their input. Get to know them better
by scheduling time for coffee, lunch, or quick meetings. Measure each stakeholder’s capacity to participate and
honor time constraints.

• Keep stakeholders informed: Send regular status updates. Daily may be too much; monthly is not enough.
One update per week is usually about right. Hold project meetings as required, but don’t let too much time pass
between meetings. Be sure to answer stakeholders’ questions and emails promptly. Regular communication is
always appreciated – and may even soften the blow when you have bad news to share.

These are the basics of building strong stakeholder relationships. But as in any relationship, there are subtleties that
every successful project manager understands – such as learning the differences between and relating well to
different types stakeholders.

How to Relate to Different Types of Stakeholders. By conducting a stakeholder analysis, project managers can gather
enough information on which to build strong relationships – regardless of the differences between them. For
example, the needs and wants of a director of marketing will be different from those of a chief information officer.
Therefore, the project manager’s engagement with each will need to be different as well. Stakeholders with financial
concerns will need to know the potential return of the project’s outcomes. Others will support projects if there is
sound evidence of their value to improving operations, boosting market share, increasing production, or meeting
other company objectives. Keep each stakeholder’s expectations and needs in mind throughout each conversation,
report or email, no matter how casual or formal the communication may be. Remember that the company’s
interests are more important than any individual’s – yours or a stakeholder’s. When forced to choose between
them, put the company’s needs first. No matter what their needs or wants, all stakeholders will respect the project
manager who: Is always honest, even when telling them something they don’t want to hear. Takes ownership of the
project. Is predictable and reliable. Stands by his or her decisions. Takes accountability for mistakes

Supportive Stakeholders are Essential to Project Success. Achieving a project’s objectives takes a focused, well-
organized project manager who can engage with a committed team and gain the support of all stakeholders.
Building strong, trusting relationships with interested parties from the start can make the difference between
project success and failure.

Tools to Help Stakeholder Management. There are many project decelerators, among them lack of stakeholder
support. Whether the stakeholders support your project or not, if they are important to your project, you must
secure their support. How do you do that? First, you must identify who your stakeholders are. Just because they are
important in the organization does not necessarily mean they are important to your project. Just because they think
they are important does not mean they are. Just because they don’t think they need to be involved does not mean
they do not have to be. The typical suspects: your manager, your manager’s manager, your client, your client’s
manager, any SME (subject matter expert) whose involvement you need, and the board reviewing and approving
your project. Note that in some situations there are people who think they are stakeholders. From your perspective
they may not be, but be careful how you handle them. They could be influential with those who have the power to
impact your project. Do not dismiss them out of hand. Second, you need to determine what power they have and
what their intentions toward your project are. Do they have the power to have an impact on your project? Do they
support or oppose you? What strategies do you follow with them? Third, what’s the relationship among
stakeholders? Can you improve your project’s chances by working with those who support you to improve the views
of those who oppose you? Figure 5.2summarizes the options based on an assessment of your stakeholders’
potential for cooperation and potential for threat.

1. What is Stakeholder Analysis A stakeholder is any person, group or institution with an interest in the project.
A stakeholder may not necessarily be involved/included in the decision making process. Stakeholders should be
identified in terms of their roles not individual names. Stakeholder Analysis is the identification of a project’s key
stakeholders, an assessment of their interests and the ways in which these interests affect the project and its
viability. A stakeholder need not be directly affected by the project, for example one stakeholder could be a member
of staff who will be using a new system that the project will implement, but the students who that member of staff
provides a service to could also be stakeholders. Stakeholder analysis results should be recorded carefully – the
information can be very sensitive (e.g. a stakeholder may not like to be identified as a blocker). The audience for
reporting results of stakeholder analysis must be considered very carefully if it is outside of the Project Board. You
should use workshops to carry out the information capture and analyses described below. 2. Why carry out a
Stakeholder Analysis? Stakeholder Analysis: • Draws out the interests of stakeholders in relation to the project’s
objectives – stakeholders who will be directly affected by, or who could directly affect, the project are clearly of
greater importance than those who are only indirectly affected; • Identifies actual and potential conflicts of interest
– a stakeholder who is vital to your project may have many other priorities and you need to know this so that you
can plan how to engage with them; • Identifies viability other than in pure financial terms (e.g. includes social
factors) – for example staff who will be using a new system might be worried about the change; • Helps provide an
overall picture; • Helps identify relationships between different stakeholders – helping to identify possible coalition.

Five tips that will help early stage companies survive. Approximately 85 per cent of startups survive only one full
year and just 70 per cent make it to the two year mark. Here is what you need to know to make sure your startup
survives. Starting a new business is not for the faint of heart. But even harder is growing it and eventually seeing it
thrive. Survival rates for small and medium-sized businesses in Canada decline over time, current Industry Canada
data shows. About 85 per cent of startups survive one full year, 70 per cent make it to two years and 51 per cent to
five years. However, arming yourself with a clear strategy and vision can set up your early-stage business for
success. Regardless of the size of your business or the industry, there are key strategies that can help any business
survive the competitive Canadian business landscape: 1. Have a solid plan . For early-stage businesses in the process
of raising capital, a solid business plan is needed for lenders to evaluate and understand your financial projections.
Your plan should address key items potential investors look for. Clearly state your market opportunity and address
ways your business will manage its competitors. This demonstrates you’re looking toward future sustainability of the
business. Also, include a minimum of three years of financial projections and cash flow statements to show your
investors how much your business stands to make versus how much it stands to lose. This will put investors’ minds
at ease about the risk they are taking in investing in you. 2. Explore access to funding . Funding shortfalls in
launching and scaling a business can be the most challenging aspect of launching a business. As the company grows
and develops, the sources for finance you rely on will change. The traditional venture capital industry continues to
invest in early-stage companies, but there are also government programs that can help with financing options to
meet your changing requirements. 3. Build a winning team. This is essential to the success of your early-stage
company. It’s crucial to understand the skill sets required to fill key positions within your business. Having strong
leadership in areas of operations, finance, sales and marketing can help build an engaging company culture that
supports the company’s vision and mission statements. You may need to change your team as the business grows
and priorities change, but hiring the right people in the early days is a great way to start your new venture. 4. Listen
to what your customers want . Successful businesses actively involve customers from the start. Most innovative
companies find their best ideas by talking to their customers. Customers can often provide ideas you may not have
thought of, and can give you the insight needed to come up with better business ideas faster. 5. Think globally. If
you’re somewhere where your competitors aren’t, you have a major business advantage. So if you want your
company to grow, you need to consider globalization as a realistic opportunity. There are many new businesses that
do not survive, mainly due to poor planning and not having proper funding in place. Starting out your business with
sufficient capital, the appropriate skill-set, workforce and business plan in place will help set you up for success.
Take advantage of every resource at your disposal to ensure your early-stage business evolves into a long-standing
and productive operation.

Strategies businesses can use to survive. IT IS a fact that a number if not the majority of Zimbabwean organisations
are struggling. The scapegoat cited in the majority of cases is inconsistency in government policies. My view is that
the majority of problems encountered by some organisations are of their own making. About 80 percent of the
problems faced by organisations now can be traced to internal causes in each organisation. We have seen for
example organisations going for rights issues to raise small amounts equivalent to one million dollars. The same
company will have a wage bill of over five hundred dollars. This honestly is “petty cash rights offer” which is unlikely
to result in the turnaround of the organisation. The fact that the whole Zimbabwean economy has a Gross Domestic
Product less than the market capitalisation of two of South Africa’s biggest mobile phone operators should be a
cause for concern for those charged with running the economy. If you compare our local companies that we are
calling top companies, they are SMEs in other big economies.

Despite the above challenges here is what you can do to save your organisation:

1. Acknowledge that the low hanging fruits most organisations enjoyed in 2009 and 2010 are gone. This is a time to
make very tough decision and for hard work. Remember every crisis produces winners and you can choose which
side you want to be by acting now. The general talk we hear every day of people who have lost hope can be
catastrophic. It is impossible to inspire hope and action in others when you are a feeling hopeless yourself. The
question you need to ask regarding taking tough decisions is: If not now, when? 2. Stop holding to things for
sentimental value. Be prepared to kill certain products or services in order to generate more value and avoid “cash
traps”. The majority of organisations are holding on to “cash traps”; products and services chewing up cash with no
return in sight.

3. Link wages to productivity as it is the only way to sustain higher wages. Do not allow your wages to rise higher
than productivity because you become uncompetitive. Government has learnt the hard way. Do all that you can to
raise your productivity. In the long run that is what matters most.

4. Share salary information with everyone to increase accountability and trust. The confidentiality of salaries is
overrated. If you share salaries with employees they will support your good initiatives. If you cannot share individual
salaries at least be transparent with the pay structure from top to bottom (publishing internally the minimum,
midpoint and maximum salary for each grade).

5. Share company performance information in both good and bad times. Managers must stop the habit of sharing
only bad news. Zimbabwean organisations take confidentiality too far by withholding crucial information that can
assist employees to make important decisions. During times of uncertainty people are hungry for information —
reach out to your employees always with all important information.

6. All senior executives must be appointed on merit. Most of the organisations struggling have a problem of
appointing people based on a patronage system instead of performance.

7. Implement a 60 percent performance based pay and 40 percent guaranteed pay system. At the present moment
Zimbabwean workers have a 100 percent guaranteed remuneration packages. The world over, the trend is to have
people earn more through performance related pay instead of guaranteed pay. 8. Craft survival strategies that go
beyond one year. Look at five to 10 years. This will give your employees hope to focus on current goals. Pressure
test your plans with worst case scenarios and prepare plan B. This will help you act fast before the crisis strikes. You
will be able to test run plan B, C and even D if you plan the sequence properly. 9. Use the current situation to initiate
changes that will be tough to sell in a better economic environment. In this environment employees rarely question
major changes especially changes that do not affect employment status. Take an inventory of poor practices and fix
them one by one. 10. Cut salaries by 40 percent across the board if you can, if not cut salaries for senior managers
by 50 percent. To be restored if peak performance is reached. 11. Reduce the number of managers. Most
organisations are overstaffed at the top. 12. Part ways with people who are not performing: You are not a charity
organisation. 13. Develop targeted retention schemes for those performing. Avoid the tendency to want to please
all employees. 14. Don’t increase salaries on the basis that “revenue may increase.” It might not. Government has
learnt the hard way and it’s a lesson for every business. 15. Ask employee if they want to have a job or more money.
Let them choose, and implement that decision. 16. Have a strong voice in the National Employment Council (NEC) —
many employers miss a glorious opportunity to shape the labour trends by delegating crucial decisions at NEC level.
Have your top executives sit in the NEC and negotiate viable collective bargaining agreements. Most of the collective
bargaining agreements are no longer relevant to our current situation. 17. Reassign your leadership team: Do not
change a winning team but you have every reason to change a losing team: If you are not winning look at the team.
18. Use contract labour. There is no limit to the number of times you can renew a fixed term contract. Get correct
interpretation of the law of contract as outlined in the Labour Act. Some people have misinterpreted the fixed term
contract renewals to the detriment of the business. 19. If you must retrench do it respectfully — Everyone will
remember how you let people go, including those in the broader job market. Educate key stakeholders so that they
understand that retrenchment is part of doing business. 20. There must be consequences to what people do.
Behavior is a function of consequence — people do what they do because of what happens to them when they do it.
If there are no consequences to what people do in your organisation you can forget about turnaround
Developing an action plan can help change makers turn their visions into reality, and increase efficiency and
accountability within an organization. An action plan describes the way your organization will meet its objectives
through detailed action steps that describe how and when these steps will be taken. This section provides a guide
for developing and utilizing your group's action plan.

WHAT IS AN ACTION PLAN?. In some ways, an action plan is a "heroic" act: it helps us turn our dreams into a reality.
An action plan is a way to make sure your organization's vision is made concrete. It describes the way your group will
use its strategies to meet its objectives. An action plan consists of a number of action steps or changes to be brought
about in your community. Each action step or change to be sought should include the following information:

WHAT ARE THE CRITERIA FOR A GOOD ACTION PLAN? The action plan for your initiative should meet several criteria.
Is the action plan: Complete? Does it list all the action steps or changes to be sought in all relevant parts of the
community (e.g., schools, business, government, faith community)? Clear? Is it apparent who will do what by when?
Current? Does the action plan reflect the current work? Does it anticipate newly emerging opportunities and
barriers?

WHY SHOULD YOU DEVELOP AN ACTION PLAN? There is an inspirational adage that says, "People don't plan to fail.
Instead they fail to plan." Because you certainly don't want to fail, it makes sense to take all of the steps necessary
to ensure success, including developing an action plan. There are lots of good reasons to work out the details of your
organization's work in an action plan, including: To lend credibility to your organization. An action plan shows
members of the community (including grant makers) that your organization is well ordered and dedicated to getting
things done. To be sure you don't overlook any of the details To understand what is and isn't possible for your
organization to do. For efficiency: to save time, energy, and resources in the long run. For accountability: To increase
the chances that people will do what needs to be done

WHEN SHOULD YOU CREATE AN ACTION PLAN? Ideally, an action plan should be developed within the first six
months to one year of the start of an organization. It is developed after you have determined the vision, mission,
objectives, and strategies of your group. If you develop an action plan when you are ready to start getting things
done, it will give you a blueprint for running your organization or initiative.. Remember, though, that an action plan
is always a work in progress. It is not something you can write, lock in your file drawers, and forget about. Keep it
visible. Display it prominently. As your organization changes and grows, you will want to continually (usually
monthly) revise your action plan to fit the changing needs of your group and community.

HOW TO WRITE AN ACTION PLAN. DETERMINE WHAT PEOPLE AND SECTORS OF THE COMMUNITY SHOULD BE
CHANGED AND INVOLVED IN FINDING SOLUTIONS. If you have been using the VMOSA (Vision, Mission, Objectives,
Strategies, Action Plans) model, you might have already done this, when you were deciding upon your group's
objectives. Again, try to be inclusive. Most of the health and development issues that community partnerships deal
with are community-wide, and thus need a community-wide solution. Possible sectors include the media, the
business community, religious organizations, schools, youth organizations, social service organizations, health
organizations, and others. Some members of the community you might consider asking to join the action planning
group include: Influential people from all the parts of the community affected by your initiative (e.g., from churches
and synagogues, the school system, law enforcement, etc.) People who are directly involved in the problem (e.g.,
local high school students and their parents might be involved in planning a coalition trying to reduce teen
substance abuse) Members of grassroots organizations Members of the various ethnic and cultural groups in your
community People you know who are interested in the problem or issue Newcomers or young people in the
community who are not yet involved Let's consider some of the people who were involved with the planning group
for the fictional Reducing the Risks (RTR) Coalition that hopes to reduce the rate of teen pregnancy. Some of the
members of this planning group included teachers at the local high school, local teenagers and their parents,
members of the clergy, counselors and school nurses, staff of the county health department, and members of youth
organizations, service agencies, and other organizations that focus on youth issues.

Convene a planning group in your community to design your action plan. This might be the same group of people
who worked with you to decide your group's strategies and objectives. If you are organizing a new group of people,
try to make your planning committee as diverse and inclusive as possible. Your group should look like the people
most affected by the problem or issue. Vision. Mission. Objectives. Strategies. Targets and agents of change (e.g.,
youth, parents and guardians, clergy). Proposed changes for each sector of the community (e.g., schools, faith
community, service organizations, health organizations, government)

Develop an action plan composed of action steps that address all proposed changes. The plan should be complete,
clear, and current. Additionally, the action plan should include information and ideas you have already gathered
while brainstorming about your objectives and your strategies. What are the steps you must take to carry out your
objectives while still fulfilling your vision and mission? Now it's time for all of the VMOSA components to come
together. While the plan might address general goals you want to see accomplished, the action steps will help you
determine the specific actions you will take to help make your vision a reality. Here are some guidelines to follow to
write action steps. Members of the community initiative will want to determine:. What action or change will occur.
Who will carry it out. When it will take place, and for how long. What resources (i.e., money, staff) are needed to
carry out the change. Communication (who should know what) Things to note about this portion of the RTR action
plan: It appears complete. Although this step seems fully developed, we would need to review the entire action plan
to see whether all community and system changes that should be sought are included.. It is clear. We know who will
do what by when. It seems current. We would need to know more about other current work (and new opportunities
and barriers) to judge whether this portion of the action plan is up-to-date.

Review your completed action plan carefully to check for completeness. Make sure that each proposed change will
help accomplish your group's mission. Also, be sure that the action plan taken as a whole will help you complete
your mission; that is, make sure you aren't leaving anything out.

Follow through. One hard part (figuring out what to do) is finished. Now take your plan and run with it! Remember
the 80-20 rule: successful efforts are 80% follow through on planned actions and 20% planning for success. Keep
everyone informed about what's going on. Communicate to everyone involved how his or her input was
incorporated. No one likes to feel like her wit and wisdom has been ignored. Keep track of what (and how well)
you've done. Always keep track of what the group has actually done. If the community change (a new program or
policy) took significant time or resources, it's also a good idea to evaluate what you have done, either formally or
informally. Keep several questions in mind for both yourself and others: Are we doing what we said we'd do? Are we
doing it well? Is what we are doing advancing the mission? You can address these questions informally (ask yourself,
chat with friends and other people), as well as formally, through surveys and other evaluation methods. Celebrate a
job well done! Celebrate your accomplishments; you and those you work with deserve it. Celebration helps keep
everyone excited and interested in the work they are doing.

AFTER YOU'VE WRITTEN YOUR ACTION PLAN: GETTING MEMBERS TO DO WHAT THEY SAID THEY WOULD. Every
community organization has undoubtedly had this happen: you plan and you assign tasks to get everything you've
planned to do accomplished. Everyone agrees (maybe they even offer) to do certain tasks, and you all leave with a
great feeling of accomplishment. The problem? At the next meeting, nothing has been done. Besides tearing out
your hair, what can you do? Fortunately, there are several things you can try. It's particularly tricky in the case of
volunteers, because you don't want to lean too hard on someone who is donating their time and energy to begin
with. Still, you can make it easier for members to get things done (and harder to avoid work) without acting like the
mean neighbor down the street. Some of these gentle reminders include: Regular phone calls from staff members or
dedicated volunteers asking others how they are doing with their tasks. This should be a supportive call, not a "are
you doing what you're supposed to" call. The person calling can offer emotional support "how are you doing?" as
well as see if the group member needs any other assistance. A friendly call such as this can be seen as helpful, give
the member the sense that he is a very important part of the group, and serve as a great reminder to do what he
said he would do. Distributing the action plan in writing to all members, with names attached to specific tasks.
(Additionally, this can be a great time to ask for feedback before the plan becomes "official.") Making sure timelines
(with due dates) are complete, clear and current. At regular group meetings, such as committee meetings or board
meetings, ask members to report on accomplishing the tasks they have set out to do. Consider making this a regular
part of the meeting. Celebrate the accomplishment of tasks. It's important that getting something done actually
means something, and is recognized by the group as a whole. Follow up on the action plan regularly. You are asking
members to be accountable, and to get things done on a regular basis. If they have agreed, you should help them
fulfill their commitment as best you can

Basic Overview of Various Strategic Planning Models. The Series Facilitating Strategic Planning from the Consultants
Development Institute provides virtual courses and numerous downloadable tools to learn to facilitate strategic
planning. Concurrently you customize your own relevant and realistic Strategic Plan and earn a Certificate in
Facilitating Strategic Planning. Also See the Library's Blogs Related to Strategic Planning Models. In addition to the
information on this current page, see the following blogs which have posts related to Strategic Planning Models.
Scan down the blog's page to see various posts. Also see the section "Recent Blog Posts" in the sidebar of the blog or
click on "next" near the bottom of a post in the blog.

Choose the Best Model -- and Customize It as You Go Along. There is no one perfect strategic planning process, or
model, to use the same way all the time with every organization. Each organization should customize the best
approach to suit the culture of its members, the current situation in and around the organization, and the purpose
of its planning. This Web page briefly describes several different models of strategic planning, along with basic
guidelines for choosing each. There is no strong agreement among experts in strategic planning as to which
approaches are indeed “models” or how each is best implemented. The purpose of this Web page is to present
different perspectives and options regarding strategic planning to help planners ensure their plans are the most
relevant, realistic and flexible. Planners can select the most appropriate model and then modify it to suit the nature
and needs of their organization. For example, different organizations might have different names for the different
phases and emphasize certain phases more than others in the model. This document does not include detailed
descriptions and directions for implementing each model. Those are available in the articles and books referenced in
the topic “All About Strategic Planning” in the Free Management Library at managementhelp.org .

NOTE: The following models can be done with different styles. For example, some may prefer a rather top-down and
even autocratic way of planning and making decisions. Others might prefer more inclusive and consensus-based
planning. Some might prefer a very problem-centered approach, while others might prefer a more strength-based
approach, for example, to use Appreciative Inquiry.

Model One - Conventional Strategic Planning. This is the most common model of strategic planning, although it is
not suited for every organization. It is ideal for organizations that have sufficient resources to pursue very ambitious
visions and goals, have external environments that are relatively stable, and do not have a large number of current
issues to address. The model usually includes the following overall phases: 1. Develop or update the mission and
optionally, vision and/or values statements. 2. Take a wide look around the outside and a good look inside the
organization, and perhaps update the statements as a result. 3. As a result of this examination, select the multi-year
strategies and/or goals to achieve the vision. 4. Then develop action plans that specify who is going to do what and
by when to achieve each goal. 5. Identify associated plans, for example, staffing, facilities, marketing and financial
plans. 6. Organize items 1-3 into a Strategic Plan and items 4-6 into a separate one-year Operational Plan.

Model Two - Issues-Based Strategic Planning. This model works best for organizations that have very limited
resources, several current and major issues to address, little success with achieving ambitious goals, and/or very
little buy-in to strategic planning. Using the conventional model of strategic planning for these organizations is a bit
like focusing on the vision of running a marathon and on deciding the detailed route and milestones -- while
concurrently having heart problems, bad feet and no running clothes. This model might include the following
phases: 1. Identify 5-7 of the most important current issues facing the organization now. 2. Suggest action plans to
address each issue over the next 6-12 months. 3. Include that information in a Strategic Plan. After an issues-based
plan has been implemented and the current, major issues are resolved, then the organization might undertake the
more ambitious conventional model. Many people might assert that issues-based planning is really internal
development planning, rather than strategic planning. Others would argue that the model is very strategic because
it positions the organization for much more successful outward-looking and longer term planning later on.

Model Three - Organic Strategic Planning. The conventional model is considered by some people to be too confining
and linear in nature. They believe that approach to planning too often produces a long sequence of orderly activities
to do, as if organizations will remain static and predictable while all of those activities are underway. Other people
believe that organizations are robust and dynamic systems that are always changing, so a plan produced from
conventional planning might quickly become obsolete. That is true, especially if planning is meant to achieve a very
long-term vision for many people, for example, for a community or even generations of people. The organic model is
based on the premise that the long-term vision is best achieved by everyone working together toward the vision,
but with each person regularly doing whatever actions that he or she regularly decides to do toward that vision. The
model might include the following phases: 1. With as many people as can be gathered, for example, from the
community or generation, articulate the long-term vision and perhaps values to work toward the vision. 2. Each
person leaves that visioning, having selected at least one realistic action that he or she will take toward the vision
before the group meets again, for example, in a month or two. 3. People meet regularly to report the actions that
they took and what they learned from them. The vision might be further clarified during these meetings. 4.
Occasionally, the vision and the lists of accomplished and intended actions are included in a Strategic Plan.

Model Four -- Real-Time Strategic Planning. Similar to the organic model of planning, this model is suited especially
for people who believe that organizations are often changing much too rapidly for long-term, detailed planning to
remain relevant. These experts might assert that planning for an organization should be done continuously, or in
"real time." The real-time planning model is best suited, especially to organizations with very rapidly changing
environments outside the organization. 1. Articulate the mission, and perhaps the vision and/or values. 2. Assign
planners to research the external environment and, as a result, to suggest a list of opportunities and of threats
facing the organization. 3. Present the lists to the Board and other members of the organization for strategic
thinking and discussions. 4. Soon after (perhaps during the next month) assign planners to evaluate the internal
workings of the organization and, as a result, to suggest a list of strengths and of weaknesses in the organization. 5.
Present these lists to the Board and other members of the organization for strategic thinking and discussions,
perhaps using a SWOT analysis to analyze all four lists. 6. Repeat steps 2-5 regularly, for example, every six months
or year and document the results in a Strategic Plan.

Model Five -- Alignment Model of Strategic Planning. The primary purpose of this model is to ensure strong
alignment of the organization’s internal operations with achieving an overall goal, for example, to increase
productivity or profitability, or to successfully integrate a new cross-functional system, such as a new computer
system. Overall phases in this model might include: 1. Establish the overall goal for the alignment. 2. Analyze which
internal operations are most directly aligned with achieving that goal, and which are not. 3. Establish goals to more
effectively align operations to achieving the overall goal. Methods to achieving the goals might include
organizational performance management models, for example, Business Process Re-engineering or models of
quality management, such as the TQM or ISO models. 4. Include that information in the Strategic Plan. Similar to
issues-based planning, many people might assert that the alignment model is really internal development planning,
rather than strategic planning. Similarly, others would argue that the model is very strategic because it positions the
organization for much more successful outward-looking and longer term planning later on.

Inspirational Model of Strategic Planning .This model is sometimes used when planners see themselves as having
very little time available for planning and/or there is high priority on rather quickly producing a Strategic Plan
document. Overall phases in this model might include: 1. Attempt to gather Board members and key employees
together for planning. 2. Begin by fantasizing a highly inspirational vision for the organization -- or by giving
extended attention to wording in the mission statement, especially to include powerful and poignant wording. 3.
Then brainstorm exciting, far-reaching goals to even more effectively serve customers and clients. 4. Then include
the vision and goals the Strategic Plan. While this model can be highly energizing, it might produce a Plan that is far
too unrealistic (especially for an organization that already struggles to find time for planning) and, as a result, can be
less likely to make a strategic impact on the organization and those it serves. Many experts might assert that these
planners are confusing the map (the Strategic Plan document) with the journey (the necessary strategic thinking).
However, it might be the only approach that would generate some out word focused discussion and also a Plan that,
otherwise, would not have been written.

MODULE 1; The Role of Finance in the Strategic-Planning and Decision-Making Process. Financial Goals and
Metrics Help Firms Implement Strategy and Track Success The fundamental success of a strategy depends on
three critical factors: a firm’s alignment with the external environment, a realistic internal view of its core
competencies and sustainable competitive advantages, and careful implementation and monitoring. This article
discusses the role of finance in strategic planning, decision making, formulation, implementation, and monitoring.
Any person, corporation, or nation should know who or where they are, where they want to be, and how to get
there. The strategic-planning process utilizes analytical models that provide a realistic picture of the individual,
corporation, or nation at its “consciously incompetent” level, creating the necessary motivation for the development
of a strategic plan. The process requires five distinct steps outlined below and the selected strategy must be
sufficiently robust to enable the firm to perform activities differently from its rivals or to perform similar activities in
a more efficient manner. A good strategic plan includes metrics that translate the vision and mission into specific
end points. This is critical because strategic planning is ultimately about resource allocation and would not be
relevant if resources were unlimited. This article aims to explain how finance, financial goals, and financial
performance can play a more integral role in the strategic planning and decision-making process, particularly in
the implementation and monitoring stage.

The Strategic-Planning and Decision-Making Process. 1. Vision Statement; The creation of a broad statement about
the company’s values, purpose, and future direction is the first step in the strategic-planning process. The vision
statement must express the company’s core ideologies—what it stands for and why it exists—and its vision for the
future, that is, what it aspires to be, achieve, or create.

2. Mission Statement; An effective mission statement conveys eight key components about the firm: target
customers and markets; main products and services; geographic domain; core technologies; commitment to
survival, growth, and profitability; philosophy; self-concept; and desired public image. The finance component is
represented by the company’s commitment to survival, growth, and profitability. The company’s long-term financial
goals represent its commitment to a strategy that is innovative, updated, unique, value-driven, and superior to
those of competitors.
3. Analysis; This third step is an analysis of the firm’s business trends, external opportunities, internal resources, and
core competencies. For external analysis, firms often utilize Porter’s five forces model of industry
competition,[ which identifies the company’s level of rivalry with existing competitors, the threat of substitute
products, the potential for new entrants, the bargaining power of suppliers, and the bargaining power of customers.
For internal analysis, companies can apply the industry evolution model, which identifies takeoff (technology,
product quality, and product performance features), rapid growth (driving costs down and pursuing product
innovation), early maturity and slowing growth (cost reduction, value services, and aggressive tactics to maintain or
gain market share), market saturation (elimination of marginal products and continuous improvement of value-chain
activities), and stagnation or decline (redirection to fastest-growing market segments and efforts to be a low-cost
industry leader). Another method, value-chain analysis clarifies a firm’s value-creation process based on its primary
and secondary activities. This becomes a more insightful analytical tool when used in conjunction with activity-
based costing and benchmarking tools that help the firm determine its major costs, resource strengths, and
competencies, as well as identify areas where productivity can be improved and where re-engineering may produce
a greater economic impact. SWOT (strengths, weaknesses, opportunities, and threats) is a classic model of internal
and external analysis providing management information to set priorities and fully utilize the firm’s competencies
and capabilities to exploit external opportunities, determine the critical weaknesses that need to be corrected, and
counter existing threats.

4. Strategy Formulation; To formulate a long-term strategy, Porter’s generic strategies model is useful as it helps
the firm aim for one of the following competitive advantages: a) low-cost leadership (product is a commodity,
buyers are price-sensitive, and there are few opportunities for differentiation); b) differentiation (buyers’ needs and
preferences are diverse and there are opportunities for product differentiation); c) best-cost provider (buyers expect
superior value at a lower price); d) focused low-cost (market niches with specific tastes and needs); or e) focused
differentiation (market niches with unique preferences and needs).

5. Strategy Implementation and Management; In the last ten years, the balanced scorecard (BSC) has become one
of the most effective management instruments for implementing and monitoring strategy execution as it helps to
align strategy with expected performance and it stresses the importance of establishing financial goals for
employees, functional areas, and business units. The BSC ensures that the strategy is translated into objectives,
operational actions, and financial goals and focuses on four key dimensions: financial factors, employee learning and
growth, customer satisfaction, and internal business processes.

The Role of Finance; Financial metrics have long been the standard for assessing a firm’s performance. The BSC
supports the role of finance in establishing and monitoring specific and measurable financial strategic goals on a
coordinated, integrated basis, thus enabling the firm to operate efficiently and effectively. Financial goals and
metrics are established based on benchmarking the “best-in-industry” and include: 1. Free Cash Flow; This is a
measure of the firm’s financial soundness and shows how efficiently its financial resources are being utilized to
generate additional cash for future investments. It represents the net cash available after deducting the investments
and working capital increases from the firm’s operating cash flow. Companies should utilize this metric when they
anticipate substantial capital expenditures in the near future or follow-through for implemented projects. 2.
Economic Value-Added; This is the bottom-line contribution on a risk-adjusted basis and helps management to
make effective, timely decisions to expand businesses that increase the firm’s economic value and to implement
corrective actions in those that are destroying its value. It is determined by deducting the operating capital cost
from the net income. Companies set economic value-added goals to effectively assess their businesses’ value
contributions and improve the resource allocation process. 3. Asset Management; This calls for the efficient
management of current assets (cash, receivables, inventory) and current liabilities (payables, accruals) turnovers and
the enhanced management of its working capital and cash conversion cycle. Companies must utilize this practice
when their operating performance falls behind industry benchmarks or benchmarked companies. 4. Financing
Decisions and Capital Structure; Here, financing is limited to the optimal capital structure (debt ratio or leverage),
which is the level that minimizes the firm’s cost of capital. This optimal capital structure determines the firm’s
reserve borrowing capacity (short- and long-term) and the risk of potential financial distress. Companies establish
this structure when their cost of capital rises above that of direct competitors and there is a lack of new
investments. 5. Profitability Ratios; This is a measure of the operational efficiency of a firm. Profitability ratios also
indicate inefficient areas that require corrective actions by management; they measure profit relationships with
sales, total assets, and net worth. Companies must set profitability ratio goals when they need to operate more
effectively and pursue improvements in their value-chain activities. 6. Growth Indices; Growth indices evaluate sales
and market share growth and determine the acceptable trade-off of growth with respect to reductions in cash flows,
profit margins, and returns on investment. Growth usually drains cash and reserve borrowing funds, and sometimes,
aggressive asset management is required to ensure sufficient cash and limited borrowing. Companies must set
growth index goals when growth rates have lagged behind the industry norms or when they have high operating
leverage. 7. Risk Assessment and Management; A firm must address its key uncertainties by identifying, measuring,
and controlling its existing risks in corporate governance and regulatory compliance, the likelihood of their
occurrence, and their economic impact. Then, a process must be implemented to mitigate the causes and effects of
those risks. Companies must make these assessments when they anticipate greater uncertainty in their business or
when there is a need to enhance their risk culture. 8. Tax Optimization; Many functional areas and business units
need to manage the level of tax liability undertaken in conducting business and to understand that mitigating risk
also reduces expected taxes. Moreover, new initiatives, acquisitions, and product development projects must be
weighed against their tax implications and net after-tax contribution to the firm’s value. In general, performance
must, whenever possible, be measured on an after-tax basis. Global companies must adopt this measure when
operating in different tax environments, where they are able to take advantage of inconsistencies in tax regulations.
Conclusion’ The introduction of the balanced scorecard emphasized financial performance as one of the key
indicators of a firm’s success and helped to link strategic goals to performance and provide timely, useful
information to facilitate strategic and operational control decisions. This has led to the role of finance in the
strategic planning process becoming more relevant than ever. Empirical studies have shown that a vast majority of
corporate strategies fail during execution. The above financial metrics help firms implement and monitor their
strategies with specific, industry-related, and measurable financial goals, strengthening the organization’s
capabilities with hard-to-imitate and non-substitutable competencies. They create sustainable competitive
advantages that maximize a firm’s value, the main objective of all stakeholders.
 Eleven ways to boost and protect wealth. Small and mid-size business are the core the of the US economy.
Entrepreneurship and creativity have been moving the American economy for centuries. In fact, US has one
of the best grooming environments for start-ups and small businesses. Many flagship consumer brands like
McDonald’s, Starbucks, and Apple started very small with one restaurant, a coffee shop, and a garage
workshop to become international leaders in their industry. Business owners spend several years building up
their business. They invest a significant amount of personal time and capital to grow their
companies. Almost always these entrepreneurs will have their family fortune locked in their business. Those
who succeed can go public or pass their wealth to the next generation. Entrepreneurs are a special breed.
Many have a vision or a single idea that that drives their pursuit for success. Others have a unique skill or
talent that make them stand out from their competitors. They are independent, self-driven and bold.
Focused on their business, more often than not entrepreneurs ignore or delay their personal financial
planning. In this post, I would like to discuss several practical steps that business owners can follow to
establish their successful financial plan.
 Balance your business and personal goals The first and most important step in the personal financial
planning process is setting your short and long-term financial goals. In many cases, the business goals can
interfere and clash over personal financial goals. Business goals to expand into a new market or purchase a
new factory can negatively interfere with your personal goals such as saving for retirement or college
education for your children. Striking the right balance between your business and personal goals is a key to
achieving them. Prioritizing one over the other may hurt your long-term financial success.
 Explore different financing alternatives Every new business idea requires capital to start. The success of the
venture depends on the owner’s ability to secure financing. Sometimes, the funding comes from personal
savings or sale of property. Other times, the owner needs to look for external funding within his or her social
circle or even approach a financial institution. The external financing can be in the form of a loan or equity
stake. Both debt and equity financing come with embedded costs. The cost can vary depending on the
company’s size, industry, history, economic conditions, etc. One of the main advantages of debt financing is
that the interest on the loan is tax deductible. One the other hand equity financing may allow for more
 flexibility. Another great way of financial your idea is your customers. In fact, your clients are one of the best
and inexpensive sources of financing. If your customers love your product, they will be willing to give you an
advance payment, subscribe to your platform or consider a product/service exchange. In any case, the
entrepreneurs should seek to minimize the overall cost of capital of its business by exploring multiple
financing channels.
 Control cost. Even the best idea can fail if it doesn’t generate profit. In simple numerical terms, the company
revenue should be higher than its expenses. Many ventures do not succeed because the company cannot
generate enough revenue to cover all costs. Clearly, the first answer will be to generate more revenue.
However, many successful companies are notorious with their focus on cost control. Business owners must
stay on top of their expenses. They must track and analyze your cost. Owners should look for operational
deficiencies and overlaps, result-based compensation, economies of scale and ways to increase productivity.
 Manage liquidity. Businesses need cash to maintain healthy growth. Not surprisingly, the prominent
investor Warrant Buffet prefers to invest in companies generating significant cash flows. The capacity to
produce cash from its operations will determine the company’s ability to pay its employees, creditors, and
vendors. Building a disciplined system of managing receivables and payables and maintaining a cash buffer
for emergencies are keys on
 Manage your taxes. Filing and paying taxes is a long and painful process. Tax law is very complex. Many
hidden threats can trigger tax events for you. There are also many opportunities to save on taxes. Often,
your tax bill depends on your company legal status. Sole proprietors have different taxation rule from c-
corporation. Speak to an accountant or tax lawyer to find out what legal status works best for you. To avoid
missed opportunities and last minute mistakes, you have to prepare for the filing process in advance. Start
early. Keep a clean record of all your expenses. Track all tax filing dates. Remember to pay all federal and
state taxes, social security, Medicare, local permits, and fees. Consider using a professional bookkeeping
software and working with a CPA.
 Manage risk. Risk comes in all shapes and forms – business risk, operational risk, financial risk, disability risk
and so on. Managing the risk from different sources is a mandatory skill for any successful business owner
and executive. External threats can impose significant obstacles to profitability and expansion but if
managed successfully can create significant opportunities for long-term growth. Business threats can come
from new competitors, new technology, changes in consumer demand, new regulatory requirements and so
on. Business owners have to be on top of these changes and often even drive the change. Operational risk
impacts the companies’ ability to serve its customers. Financial risk can come from interest rates, volatile
stock markets, and liquidity crunches. Macroeconomic factors can affect your clients’ ability to pay off their
debt. Having a solid financial strategy, building buffers and managing cash will allow the business to
withstand unexpected financial turbulence. Short-term and long-term disability will prohibit the owners and
key employees to perform their duties. Injuries and sickness of key personnel can significantly hurt any
business. Prolonged disability can limit owners’ ability to make a living, support their families and grow their
business. Having a disability insurance can help bridge the financial gap during a time of recovery. Moreover,
having a disaster plan can save your business at times of emergencies and unforeseen circumstances.
 Build a safety net. Creating a safety net is a critical step to protecting your wealth. Many business owners
hold a substantial amount of their assets tied up to their personal business. By doing it, they expose
themselves to a concentrated risk in one company or industry. Any economic developments that can
adversely impact that particular sector can also hurt their personal wealth. The best way to build a strong
safety net is asset diversification. Owners can significantly decrease the overall risk of their portfolio when
investing in a broad and uncorrelated range of assets, sectors, and regions.
 Plan for business succession. A successful business can impact various parties such as owners, employees,
contractors, vendors, clients, landlords, and suppliers. Therefore, creating a business succession plan will
ensure that all parties interests are met in the event you decide to discontinue your business or pass it to
another person. Moreover, a robust plan will address numerous tax and financial issues which will result
from the succession. The complexity of the succession plan will depend on the size, industry and legal status
of your business.
 Different Types of Strategy
 Research and development strategy. Businesses cannot grow and survive without new products. It is the
role of R&D specialists to generate new product ideas, nurture them carefully and develop them fully
 into commercially viable propositions. Where innovation proves to be a costly exercise imitation could
also be tried as a fruitful option. Many Japanese electronics companies were quite successful in copying
American technology and by avoiding R&D costs, improved their competitive strength significantly.

 Operations Strategy: This strategy outlines steps to keep costs under check and improve operational
efficiency. The focus is on arriving at decisions regarding plant layout, plant capacity, production processes,
inventory management etc.

 Financial strategy. It deals with financial planning, evaluating investment proposals securing funds for
various investments and controlling financial resources. Thus raising funds, acquiring assets, allocating funds
to operations, using funds efficiently etc are all part of the strategy.

 Marketing Strategy. It deals with strategies relating to product pricing, distribution and promotion of a
company’s offering important issues here cover what type of products at what prices through which
distribution channel and by the use of which promotional tool and sales force etc.

 Human Resources strategy. HR strategy deals with hiring, training, assessing, developing rewarding
motivating and retaining the number and types of employees required to run the business effectively,
internal (union contracts, productivity indices, labor turnover, absenteeism accidents etc) and external
factors (labor laws, son of the soil, reservation, equal employment opportunity, employment of children and
women etc) need to be carefully evaluated while formulating HR strategies.

 Constraints and strategic choice. Viewed collectively the R&D strategy should encourage innovation;
marketing should stress brand loyalty and reliable distribution channels of production should maintain long
production runs, cost reduction, finance should focus on cash flows and positive returns and HR department
should develop strategies for retaining and developing a stable workforce. Of course organizations do come
across constraints while formulating functional level strategies in several forms, how to finance the
proposals what kind of risk to be taken, how to combine suppliers and make channel partners happy, how to
encounter competitive retaliation etc. In any case while selecting appropriate strategies at corporate
business and functional level the following criteria should be kept in mind.

 Strategy selection criteria 1) They are responsive to the external environment. 2) The offer a sustainable
competitive advantage.3) They are consistent with order strategies in the organization.4) They provide
adequate flexibility for the business and the organization.
5) They conform to the organization’s mission and long term objectives.
6) They are organizationally flexible.

 Strategy Implementation: Strategy implementation is the process of translation of strategies and policies
into action through the development of programs, budgets and procedures It is typically conducted by the
middle and lower level management but is reviewed by the top management. However, programs and
procedures are simply more detailed plans for the eventual implementation of strategy. Unless the
corporation is appropriately organized, programs are adequately staffed and activities are properly directed
these operational plans fail to deliver the goods. To be effective a strategy must be implemented through
the right organization structure and appropriate management practices. In addition, management must also
ensure that there is progress towards, objectives according to plan by instituting a rigorous process of
control over important activities. Directing. People should be motivated to implement a new strategy in
desired ways. It is not sufficient merely to have people who can do the job; it is necessary to have people
who want to do the job the way you need it done. In addition to traditional motivational techniques
managers should also make use of modern techniques in order to inspire people to perk performances.
Financial planning strategies to help survive volatility. The long slow fall of the share market raises many questions
for investors, and challenges some of the “faux wisdom” that had crept into the market. For example, over the past
three years I had many people tell me that the “weight of money” coming into the market on a regular basis from
compulsory superannuation would prevent a repeat of the 1987 share market crash. Others said that the mass of
online data in this “information age” would reduce the volatility of shares because investors would be better
informed and make more rational decisions. It seems the most recent share market downturn has proven both
these theories wrong. Given the dramatic return of the “reality of volatility” in share market investing over the past
12 months, it is worth remembering that a successful personal finance strategy has two parts – the underlying
investments; and the strategy that will help manage tax, build wealth and, over time, move you towards a position
where you can retire. It is important to evaluate these personal financial strategies in light of the current market
volatility. I want to look at six key strategies.
Stakeholder Management. A project is successful when it achieves its objectives and meets or exceeds the
expectations of the stakeholders. But who are the stakeholders? Stakeholders are individuals who either care about
or have a vested interest in your project. They are the people who are actively involved with the work of the project
or have something to either gain or lose as a result of the project. When you manage a project to add lanes to a
highway, motorists are stakeholders who are positively affected. However, you negatively affect residents who live
near the highway during your project (with construction noise) and after your project with far-reaching implications
(increased traffic noise and pollution).
NOTE: Key stakeholders can make or break the success of a project. Even if all the deliverables are met and the
objectives are satisfied, if your key stakeholders aren’t happy, nobody’s happy. The project sponsor, generally an
executive in the organization with the authority to assign resources and enforce decisions regarding the project, is a
stakeholder. The customer, subcontractors, suppliers, and sometimes even the government are stakeholders. The
project manager, project team members, and the managers from other departments in the organization are
stakeholders as well. It’s important to identify all the stakeholders in your project upfront. Leaving out important
stakeholders or their department’s function and not discovering the error until well into the project could be a
project killer. Figure shows a sample of the project environment featuring the different kinds of stakeholders
involved on a typical project. A study of this diagram confronts us with a couple of interesting facts. First, the
number of stakeholders that project managers must deal with ensures that they will have a complex job guiding
their project through the lifecycle. Problems with any of these members can derail the project. Second, the diagram
shows that project managers have to deal with people external to the organization as well as the internal
environment, certainly more complex than what a manager in an internal environment faces. For example, suppliers
who are late in delivering crucial parts may blow the project schedule. To compound the problem, project managers
generally have little or no direct control over any of these individuals.

Top Management. Top management may include the president of the company, vice-presidents, directors, division
managers, the corporate operating committee, and others. These people direct the strategy and development of the
organization. On the plus side, you are likely to have top management support, which means it will be easier to
recruit the best staff to carry out the project, and acquire needed material and resources; also visibility can enhance
a project manager’s professional standing in the company. On the minus side, failure can be quite dramatic and
visible to all, and if the project is large and expensive (most are), the cost of failure will be more substantial than for
a smaller, less visible project. Some suggestions in dealing with top management are: Develop in-depth plans and
major milestones that must be approved by top management during the planning and design phases of the project.
Ask top management associated with your project for their information reporting needs and frequency. Develop a
status reporting methodology to be distributed on a scheduled basis. Keep them informed of project risks and
potential impacts at all times.

The Project Team. The project team is made up of those people dedicated to the project or borrowed on a part-time
basis. As project manager, you need to provide leadership, direction, and above all, the support to team members as
they go about accomplishing their tasks. Working closely with the team to solve problems can help you learn from
the team and build rapport. Showing your support for the project team and for each member will help you get their
support and cooperation. Here are some difficulties you may encounter in dealing with project team members:
Because project team members are borrowed and they don’t report to you, their priorities may be elsewhere. They
may be juggling many projects as well as their full-time job and have difficulty meeting deadlines. Personality
conflicts may arise. These may be caused by differences in social style or values or they may be the result of some
bad experience when people worked together in the past. You may find out about missed deadlines when it is too
late to recover. Managing project team members requires interpersonal skills. Here are some suggestions that can
help: Involve team members in project planning. Arrange to meet privately and informally with each team member
at several points in the project, perhaps for lunch or coffee. Be available to hear team members’ concerns at any
time. Encourage team members to pitch in and help others when needed. Complete a project performance review
for team members.

Your Manager. Typically the boss decides what the assignment is and who can work with the project manager
on projects. Keeping your manager informed will help ensure that you get the necessary resources to complete your
project. If things go wrong on a project, it is nice to have an understanding and supportive boss to go to bat for
you if necessary. By supporting your manager, you will find your manager will support you more often. Find out
exactly how your performance will be measured. When unclear about directions, ask for clarification. Develop a
reporting schedule that is acceptable to your boss. Communicate frequently.

Peers. Peers are people who are at the same level in the organization as you and may or may not be on the project
team. These people will also have a vested interest in the product. However, they will have neither the leadership
responsibilities nor the accountability for the success or failure of the project that you have. Your relationship with
peers can be impeded by: Inadequate control over peers .Political maneuvering or sabotage, Personality conflicts or
technical conflicts. Envy because your peer may have wanted to lead the project. Conflicting instructions from your
manager and your peer’s manager. Peer support is essential. Because most of us serve our self-interest first, use
some investigating, selling, influencing, and politicking skills here. To ensure you have cooperation and support from
your peers: Get the support of your project sponsor or top management to empower you as the project manager
with as much authority as possible. It’s important that the sponsor makes it clear to the other team members that
their cooperation on project activities is expected. Confront your peer if you notice a behavior that seems
dysfunctional, such as bad-mouthing the project. Be explicit in asking for full support from your peers. Arrange for
frequent review meetings. Establish goals and standards of performance for all team members.

Resource Managers. Because project managers are in the position of borrowing resources, other managers control
their resources. So their relationships with people are especially important. If their relationship is good, they may be
able to consistently acquire the best staff and the best equipment for their projects. If relationships aren’t good,
they may find themselves not able to get good people or equipment needed on the project.

Internal Customers. Internal customers are individuals within the organization who are customers for projects that
meet the needs of internal demands. The customer holds the power to accept or reject your work. Early in the
relationship, the project manager will need to negotiate, clarify, and document project specifications and
deliverables. After the project begins, the project manager must stay tuned in to the customer’s concerns and issues
and keep the customer informed. Common stumbling blocks when dealing with internal customers include: A lack of
clarity about precisely what the customer wants. A lack of documentation for what is wanted. A lack of knowledge
of the customer’s organization and operating characteristics. Unrealistic deadlines, budgets, or specifications
requested by the customer. Hesitancy of the customer to sign off on the project or accept responsibility for
decisions. Changes in project scope. To meet the needs of the customer, client, or owner, be sure to do the
following: Learn the client organization’s buzzwords, culture, and business. Clarify all project requirements and
specifications in a written agreement. Specify a change procedure. Establish the project manager as the focal point
of communications in the project organization.

External customer. External customers are the customers when projects could be marketed to outside customers. In
the case of Ford Motor Company, for example, the external customers would be the buyers of the automobiles. Also
if you are managing a project at your company for Ford Motor Company, they will be your external customer.

Government. Project managers working in certain heavily regulated environments (e.g., pharmaceutical, banking, or
military industries) will have to deal with government regulators and departments. These can include all or some
levels of government from municipal, provincial, federal, to international.

Contractors, subcontractors, and suppliers. There are times when organizations don’t have the expertise or
resources available in-house, and work is farmed out to contractors or subcontractors. This can be a construction
management foreman, network consultant, electrician, carpenter, architect, or anyone who is not an employee.
Managing contractors or suppliers requires many of the skills needed to manage full-time project team members.
Any number of problems can arise with contractors or subcontractors: Quality of the work. Cost overruns. Schedule
slippage. Many projects depend on goods provided by outside suppliers. This is true for example of construction
projects where lumber, nails, bricks, and mortar come from outside suppliers. If the supplied goods are delivered
late or are in short supply or of poor quality or if the price is greater than originally quoted, the project may
suffer.Depending on the project, managing contractor and supplier relationships can consume more than half of the
project manager’s time. It is not purely intuitive; it involves a sophisticated skill set that includes managing conflicts,
negotiating, and other interpersonal skills.

Politics of Projects. Many times, project stakeholders have conflicting interests. It’s the project manager’s
responsibility to understand these conflicts and try to resolve them. It’s also the project manger’s responsibility to
manage stakeholder expectations. Be certain to identify and meet with all key stakeholders early in the project to
understand all their needs and constraints. Project managers are somewhat like politicians. Typically, they are not
inherently powerful or capable of imposing their will directly on co-workers, subcontractors, and suppliers. Like
politicians, if they are to get their way, they have to exercise influence effectively over others. On projects, project
managers have direct control over very few things; therefore their ability to influence others – to be a good
politician – may be very important .Here are a few steps a good project politician should follow. However, a good
rule is that when in doubt, stakeholder conflicts should always be resolved in favor of the customer.

Assess the environment. Identify all the relevant stakeholders. Because any of these stakeholders could derail the
project, you need to consider their particular interest in the project. Once all relevant stakeholders are identified, try
to determine where the power lies. In the vast cast of characters, who counts most? Whose actions will have the
greatest impact?

Identify goals. After determining who the stakeholders are, identify their goals. What is it that drives them? What is
each after? Are there any hidden agendas or goals that are not openly articulated? What are the goals of the
stakeholders who hold the power? These deserve special attention.

Define the problem. The facts that constitute the problem should be isolated and closely examined. The question
“What is the real situation?” should be raised over and over.
Culture of Stakeholders. When project stakeholders do not share a common culture, project management must
adapt its organizations and work processes to cope with cultural differences. The following are three major aspects
of cultural difference that can affect a project: Communications, Negotiations, Decision making. Communication is
perhaps the most visible manifestation of culture. Project managers encounter cultural differences in
communication in language, context, and candor. Language is clearly the greatest barrier to communication. When
project stakeholders do not share the same language, communication slows down and is often filtered to share only
information that is deemed critical. The barrier to communication can influence project execution where quick and
accurate exchange of ideas and information is critical. The interpretation of information reflects the extent that
context and candor influence cultural expressions of ideas and understanding of information. In some cultures, an
affirmative answer to a question does not always mean yes. The cultural influence can create confusion on a project
where project stakeholders represent more than one culture.

Managing Stakeholders. Often there is more than one major stakeholder in the project. An increase in the number
of stakeholders adds stress to the project and influences the project’s complexity level. The business or emotional
investment of the stakeholder in the project and the ability of the stakeholder to influence the project outcomes or
execution approach will also influence the stakeholder complexity of the project. In addition to the number of
stakeholders and their level of investment, the degree to which the project stakeholders agree or
disagree influences the project’s complexity. A small commercial construction project will typically have several
stakeholders. All the building permitting agencies, environmental agencies, and labor and safety agencies have an
interest in the project and can influence the execution plan of the project. The neighbors will have an interest in the
architectural appeal, the noise, and the purpose of the building.

Relationship Building Tips. Take the time to identify all stakeholders before starting a new project. Include those
who are impacted by the project, as well as groups with the ability to impact the project. Then, begin the process of
building strong relationships with each one using the following method.

 Analyze stakeholders: Conduct a stakeholder analysis, or an assessment of a project’s key participants, and
how the project will affect their problems and needs. Identify their individual characteristics and interests. Find
out what motivates them, as well as what provokes them. Define roles and level of participation, and
determine if there are conflicts of interest among groups of stakeholders.
 Assess influence: Measure the degree to which stakeholders can influence the project. The more influential a
stakeholder is, the more a project manager will need their support. Think about the question, “What’s in it for
them?” when considering stakeholders. Knowing what each stakeholder needs or wants from the project will
enable the project manager to gauge his or her level of support. And remember to balance support against
influence. Is it more important to have strong support from a stakeholder with little influence, or lukewarm
support from one with a high level of influence?
 Understand their expectations: Nail down stakeholders’ specific expectations. Ask for clarification when
needed to be sure they are completely understood.
 Define “success”: Every stakeholder may have a different idea of what project success looks like. Discovering
this at the end of the project is a formula for failure. Gather definitions up front and include them in the
objectives to help ensure that all stakeholders will be supportive of the final outcomes.
 Keep stakeholders involved: Don’t just report to stakeholders. Ask for their input. Get to know them better by
scheduling time for coffee, lunch, or quick meetings. Measure each stakeholder’s capacity to participate and
honor time constraints.
 Keep stakeholders informed: Send regular status updates. Daily may be too much; monthly is not enough. One
update per week is usually about right. Hold project meetings as required, but don’t let too much time pass
between meetings. Be sure to answer stakeholders’ questions and emails promptly. Regular communication is
always appreciated – and may even soften the blow when you have bad news to share.
These are the basics of building strong stakeholder relationships. But as in any relationship, there are subtleties that
every successful project manager understands – such as learning the differences between and relating well to
different types stakeholders.
 How to Relate to Different Types of Stakeholders. By conducting a stakeholder analysis, project managers can
gather enough information on which to build strong relationships – regardless of the differences between them. For
example, the needs and wants of a director of marketing will be different from those of a chief information officer.
Therefore, the project manager’s engagement with each will need to be different as well. Stakeholders with financial
concerns will need to know the potential return of the project’s outcomes. Others will support projects if there is
sound evidence of their value to improving operations, boosting market share, increasing production, or meeting
other company objectives. Keep each stakeholder’s expectations and needs in mind throughout each conversation,
report or email, no matter how casual or formal the communication may be. Remember that the company’s
interests are more important than any individual’s – yours or a stakeholder’s. When forced to choose between
them, put the company’s needs first. No matter what their needs or wants, all stakeholders will respect the project
manager who: Is always honest, even when telling them something they don’t want to hear. Takes ownership of the
project. Is predictable and reliable. Stands by his or her decisions. Takes accountability for mistakes

Supportive Stakeholders are Essential to Project Success. Achieving a project’s objectives takes a focused, well-
organized project manager who can engage with a committed team and gain the support of all stakeholders.
Building strong, trusting relationships with interested parties from the start can make the difference between
project success and failure.

Tools to Help Stakeholder Management. There are many project decelerators, among them lack of stakeholder
support. Whether the stakeholders support your project or not, if they are important to your project, you must
secure their support. How do you do that? First, you must identify who your stakeholders are. Just because they are
important in the organization does not necessarily mean they are important to your project. Just because they think
they are important does not mean they are. Just because they don’t think they need to be involved does not mean
they do not have to be. The typical suspects: your manager, your manager’s manager, your client, your client’s
manager, any SME (subject matter expert) whose involvement you need, and the board reviewing and approving
your project. Note that in some situations there are people who think they are stakeholders. From your perspective
they may not be, but be careful how you handle them. They could be influential with those who have the power to
impact your project. Do not dismiss them out of hand. Second, you need to determine what power they have and
what their intentions toward your project are. Do they have the power to have an impact on your project? Do they
support or oppose you? What strategies do you follow with them? Third, what’s the relationship among
stakeholders? Can you improve your project’s chances by working with those who support you to improve the views
of those who oppose you? Figure 5.2summarizes the options based on an assessment of your stakeholders’
potential for cooperation and potential for threat.

1. What is Stakeholder Analysis A stakeholder is any person, group or institution with an interest in the project. A
stakeholder may not necessarily be involved/included in the decision making process. Stakeholders should be
identified in terms of their roles not individual names. Stakeholder Analysis is the identification of a project’s key
stakeholders, an assessment of their interests and the ways in which these interests affect the project and its
viability. A stakeholder need not be directly affected by the project, for example one stakeholder could be a member
of staff who will be using a new system that the project will implement, but the students who that member of staff
provides a service to could also be stakeholders. Stakeholder analysis results should be recorded carefully – the
information can be very sensitive (e.g. a stakeholder may not like to be identified as a blocker). The audience for
reporting results of stakeholder analysis must be considered very carefully if it is outside of the Project Board. You
should use workshops to carry out the information capture and analyses described below. 2. Why carry out a
Stakeholder Analysis? Stakeholder Analysis: • Draws out the interests of stakeholders in relation to the project’s
objectives – stakeholders who will be directly affected by, or who could directly affect, the project are clearly of
greater importance than those who are only indirectly affected; • Identifies actual and potential conflicts of interest
– a stakeholder who is vital to your project may have many other priorities and you need to know this so that you
can plan how to engage with them; • Identifies viability other than in pure financial terms (e.g. includes social
factors) – for example staff who will be using a new system might be worried about the change; • Helps provide an
overall picture; • Helps identify relationships between different stakeholders – helping to identify possible coalition.
Five tips that will help early stage companies survive. Approximately 85 per cent of startups survive only one full
year and just 70 per cent make it to the two year mark. Here is what you need to know to make sure your startup
survives. Starting a new business is not for the faint of heart. But even harder is growing it and eventually seeing it
thrive. Survival rates for small and medium-sized businesses in Canada decline over time, current Industry
Canada data shows. About 85 per cent of startups survive one full year, 70 per cent make it to two years and 51 per
cent to five years. However, arming yourself with a clear strategy and vision can set up your early-stage business for
success. Regardless of the size of your business or the industry, there are key strategies that can help any business
survive the competitive Canadian business landscape: 1. Have a solid plan . For early-stage businesses in the process
of raising capital, a solid business plan is needed for lenders to evaluate and understand your financial projections.
Your plan should address key items potential investors look for. Clearly state your market opportunity and address
ways your business will manage its competitors. This demonstrates you’re looking toward future sustainability of the
business. Also, include a minimum of three years of financial projections and cash flow statements to show your
investors how much your business stands to make versus how much it stands to lose. This will put investors’ minds
at ease about the risk they are taking in investing in you. 2. Explore access to funding . Funding shortfalls in
launching and scaling a business can be the most challenging aspect of launching a business. As the company grows
and develops, the sources for finance you rely on will change. The traditional venture capital industry continues to
invest in early-stage companies, but there are also government programs that can help with financing options to
meet your changing requirements. 3. Build a winning team. This is essential to the success of your early-stage
company. It’s crucial to understand the skill sets required to fill key positions within your business. Having strong
leadership in areas of operations, finance, sales and marketing can help build an engaging company culture that
supports the company’s vision and mission statements. You may need to change your team as the business grows
and priorities change, but hiring the right people in the early days is a great way to start your new venture. 4. Listen
to what your customers want . Successful businesses actively involve customers from the start. Most innovative
companies find their best ideas by talking to their customers. Customers can often provide ideas you may not have
thought of, and can give you the insight needed to come up with better business ideas faster. 5. Think globally. If
you’re somewhere where your competitors aren’t, you have a major business advantage. So if you want your
company to grow, you need to consider globalization as a realistic opportunity. There are many new businesses that
do not survive, mainly due to poor planning and not having proper funding in place. Starting out your business with
sufficient capital, the appropriate skill-set, workforce and business plan in place will help set you up for success.
Take advantage of every resource at your disposal to ensure your early-stage business evolves into a long-standing
and productive operation.

Strategies businesses can use to survive. IT IS a fact that a number if not the majority of Zimbabwean organisations
are struggling. The scapegoat cited in the majority of cases is inconsistency in government policies. My view is that
the majority of problems encountered by some organisations are of their own making. About 80 percent of the
problems faced by organisations now can be traced to internal causes in each organisation. We have seen for
example organisations going for rights issues to raise small amounts equivalent to one million dollars. The same
company will have a wage bill of over five hundred dollars. This honestly is “petty cash rights offer” which is unlikely
to result in the turnaround of the organisation. The fact that the whole Zimbabwean economy has a Gross Domestic
Product less than the market capitalisation of two of South Africa’s biggest mobile phone operators should be a
cause for concern for those charged with running the economy. If you compare our local companies that we are
calling top companies, they are SMEs in other big economies.
Despite the above challenges here is what you can do to save your organisation:
1. Acknowledge that the low hanging fruits most organisations enjoyed in 2009 and 2010 are gone. This is a time to
make very tough decision and for hard work. Remember every crisis produces winners and you can choose which
side you want to be by acting now. The general talk we hear every day of people who have lost hope can be
catastrophic. It is impossible to inspire hope and action in others when you are a feeling hopeless yourself. The
question you need to ask regarding taking tough decisions is: If not now, when? 2. Stop holding to things for
sentimental value. Be prepared to kill certain products or services in order to generate more value and avoid “cash
traps”. The majority of organisations are holding on to “cash traps”; products and services chewing up cash with no
return in sight.
3. Link wages to productivity as it is the only way to sustain higher wages. Do not allow your wages to rise higher
than productivity because you become uncompetitive. Government has learnt the hard way. Do all that you can to
raise your productivity. In the long run that is what matters most.
4. Share salary information with everyone to increase accountability and trust. The confidentiality of salaries is
overrated. If you share salaries with employees they will support your good initiatives. If you cannot share individual
salaries at least be transparent with the pay structure from top to bottom (publishing internally the minimum,
midpoint and maximum salary for each grade).
5. Share company performance information in both good and bad times. Managers must stop the habit of sharing
only bad news. Zimbabwean organisations take confidentiality too far by withholding crucial information that can
assist employees to make important decisions. During times of uncertainty people are hungry for information —
reach out to your employees always with all important information.
6. All senior executives must be appointed on merit. Most of the organisations struggling have a problem of
appointing people based on a patronage system instead of performance.
7. Implement a 60 percent performance based pay and 40 percent guaranteed pay system. At the present moment
Zimbabwean workers have a 100 percent guaranteed remuneration packages. The world over, the trend is to have
people earn more through performance related pay instead of guaranteed pay. 8. Craft survival strategies that go
beyond one year. Look at five to 10 years. This will give your employees hope to focus on current goals. Pressure
test your plans with worst case scenarios and prepare plan B. This will help you act fast before the crisis strikes. You
will be able to test run plan B, C and even D if you plan the sequence properly. 9. Use the current situation to initiate
changes that will be tough to sell in a better economic environment. In this environment employees rarely question
major changes especially changes that do not affect employment status. Take an inventory of poor practices and fix
them one by one. 10. Cut salaries by 40 percent across the board if you can, if not cut salaries for senior managers
by 50 percent. To be restored if peak performance is reached. 11. Reduce the number of managers. Most
organisations are overstaffed at the top. 12. Part ways with people who are not performing: You are not a charity
organisation. 13. Develop targeted retention schemes for those performing. Avoid the tendency to want to please
all employees. 14. Don’t increase salaries on the basis that “revenue may increase.” It might not. Government has
learnt the hard way and it’s a lesson for every business. 15. Ask employee if they want to have a job or more money.
Let them choose, and implement that decision. 16. Have a strong voice in the National Employment Council (NEC) —
many employers miss a glorious opportunity to shape the labour trends by delegating crucial decisions at NEC level.
Have your top executives sit in the NEC and negotiate viable collective bargaining agreements. Most of the collective
bargaining agreements are no longer relevant to our current situation.
17. Reassign your leadership team: Do not change a winning team but you have every reason to change a losing
team: If you are not winning look at the team. 18. Use contract labour. There is no limit to the number of times you
can renew a fixed term contract. Get correct interpretation of the law of contract as outlined in the Labour Act.
Some people have misinterpreted the fixed term contract renewals to the detriment of the business. 19. If you must
retrench do it respectfully — Everyone will remember how you let people go, including those in the broader job
market. Educate key stakeholders so that they understand that retrenchment is part of doing business. 20. There
must be consequences to what people do. Behavior is a function of consequence — people do what they do because
of what happens to them when they do it. If there are no consequences to what people do in your organisation you
can forget about turnaround

Developing an action plan can help change makers turn their visions into reality, and increase efficiency and
accountability within an organization. An action plan describes the way your organization will meet its objectives
through detailed action steps that describe how and when these steps will be taken. This section provides a guide
for developing and utilizing your group's action plan.
W H A T I S A N A C T I O N P L A N ? . In some ways, an action plan is a "heroic" act: it helps us turn our dreams into a
reality. An action plan is a way to make sure your organization's vision is made concrete. It describes the way your
group will use its strategies to meet its objectives. An action plan consists of a number of action steps or changes to
be brought about in your community. Each action step or change to be sought should include the following
information:
W H A T A R E T H E C R I T E R I A F O R A G O O D A C T I O N P L A N ? The action plan for your initiative should meet
several criteria. Is the action plan: Complete? Does it list all the action steps or changes to be sought in all relevant
parts of the community (e.g., schools, business, government, faith community)? Clear? Is it apparent who will do
what by when? Current? Does the action plan reflect the current work? Does it anticipate newly emerging
opportunities and barriers?
W H Y S H O U L D Y O U D E V E L O P A N A C T I O N P L A N ? There is an inspirational adage that says, "People don't
plan to fail. Instead they fail to plan." Because you certainly don't want to fail, it makes sense to take all of the steps
necessary to ensure success, including developing an action plan. There are lots of good reasons to work out the
details of your organization's work in an action plan, including: To lend credibility to your organization. An action
plan shows members of the community (including grant makers) that your organization is well ordered and
dedicated to getting things done. To be sure you don't overlook any of the details To understand what is and isn't
possible for your organization to do. For efficiency: to save time, energy, and resources in the long run. For
accountability: To increase the chances that people will do what needs to be done
W H E N S H O U L D Y O U C R E A T E A N A C T I O N P L A N ? Ideally, an action plan should be developed within the
first six months to one year of the start of an organization. It is developed after you have determined the vision,
mission, objectives, and strategies of your group. If you develop an action plan when you are ready to start getting
things done, it will give you a blueprint for running your organization or initiative.. Remember, though, that an
action plan is always a work in progress. It is not something you can write, lock in your file drawers, and forget
about. Keep it visible. Display it prominently. As your organization changes and grows, you will want to continually
(usually monthly) revise your action plan to fit the changing needs of your group and community.
HOW TO WRITE AN ACTION PLAN. DETERMINE WHAT PEOPLE AND SECTORS OF THE
C O M M U N I T Y S H O U L D B E C H A N G E D A N D I N V O L V E D I N F I N D I N G S O L U T I O N S . If you have been
using the VMOSA (Vision, Mission, Objectives, Strategies, Action Plans) model, you might have already done this,
when you were deciding upon your group's objectives. Again, try to be inclusive. Most of the health and
development issues that community partnerships deal with are community-wide, and thus need a community-wide
solution. Possible sectors include the media, the business community, religious organizations, schools, youth
organizations, social service organizations, health organizations, and others. Some members of the community you
might consider asking to join the action planning group include: Influential people from all the parts of the
community affected by your initiative (e.g., from churches and synagogues, the school system, law enforcement,
etc.) People who are directly involved in the problem (e.g., local high school students and their parents might be
involved in planning a coalition trying to reduce teen substance abuse) Members of grassroots organizations
Members of the various ethnic and cultural groups in your community People you know who are interested in the
problem or issue Newcomers or young people in the community who are not yet involved Let's consider some of
the people who were involved with the planning group for the fictional Reducing the Risks (RTR) Coalition that hopes
to reduce the rate of teen pregnancy. Some of the members of this planning group included teachers at the local
high school, local teenagers and their parents, members of the clergy, counselors and school nurses, staff of the
county health department, and members of youth organizations, service agencies, and other organizations that
focus on youth issues.
Convene a planning group in your community to design your action plan. This might be the same group of people
who worked with you to decide your group's strategies and objectives. If you are organizing a new group of people,
try to make your planning committee as diverse and inclusive as possible. Your group should look like the people
most affected by the problem or issue. Vision. Mission. Objectives. Strategies. Targets and agents of change (e.g.,
youth, parents and guardians, clergy). Proposed changes for each sector of the community (e.g., schools, faith
community, service organizations, health organizations, government)
Develop an action plan composed of action steps that address all proposed changes. The plan should be complete,
clear, and current. Additionally, the action plan should include information and ideas you have already gathered
while brainstorming about your objectives and your strategies. What are the steps you must take to carry out your
objectives while still fulfilling your vision and mission? Now it's time for all of the VMOSA components to come
together. While the plan might address general goals you want to see accomplished, the action steps will help you
determine the specific actions you will take to help make your vision a reality. Here are some guidelines to follow to
write action steps. Members of the community initiative will want to determine:. What action or change will occur.
Who will carry it out. When it will take place, and for how long. What resources (i.e., money, staff) are needed to
carry out the change. Communication (who should know what) Things to note about this portion of the RTR action
plan: It appears complete. Although this step seems fully developed, we would need to review the entire action plan
to see whether all community and system changes that should be sought are included.. It is clear. We know who will
do what by when. It seems current. We would need to know more about other current work (and new opportunities
and barriers) to judge whether this portion of the action plan is up-to-date.
Review your completed action plan carefully to check for completeness. Make sure that each proposed change will
help accomplish your group's mission. Also, be sure that the action plan taken as a whole will help you complete
your mission; that is, make sure you aren't leaving anything out.
Follow through. One hard part (figuring out what to do) is finished. Now take your plan and run with it! Remember
the 80-20 rule: successful efforts are 80% follow through on planned actions and 20% planning for success. Keep
everyone informed about what's going on. Communicate to everyone involved how his or her input was
incorporated. No one likes to feel like her wit and wisdom has been ignored. Keep track of what (and how well)
you've done. Always keep track of what the group has actually done. If the community change (a new program or
policy) took significant time or resources, it's also a good idea to evaluate what you have done, either formally or
informally. Keep several questions in mind for both yourself and others: Are we doing what we said we'd do? Are we
doing it well? Is what we are doing advancing the mission? You can address these questions informally (ask yourself,
chat with friends and other people), as well as formally, through surveys and other evaluation methods. Celebrate a
job well done! Celebrate your accomplishments; you and those you work with deserve it. Celebration helps keep
everyone excited and interested in the work they are doing.
AFTER YOU'VE WRITTEN YOUR ACTION PLAN: G ETTING MEMBERS TO DO WHAT THEY SAID
T H E Y W O U L D . Every community organization has undoubtedly had this happen: you plan and you assign tasks to
get everything you've planned to do accomplished. Everyone agrees (maybe they even offer) to do certain tasks, and
you all leave with a great feeling of accomplishment. The problem? At the next meeting, nothing has been done.
Besides tearing out your hair, what can you do? Fortunately, there are several things you can try. It's particularly
tricky in the case of volunteers, because you don't want to lean too hard on someone who is donating their time and
energy to begin with. Still, you can make it easier for members to get things done (and harder to avoid work)
without acting like the mean neighbor down the street. Some of these gentle reminders include: Regular phone calls
from staff members or dedicated volunteers asking others how they are doing with their tasks. This should be a
supportive call, not a "are you doing what you're supposed to" call. The person calling can offer emotional support
"how are you doing?" as well as see if the group member needs any other assistance. A friendly call such as this can
be seen as helpful, give the member the sense that he is a very important part of the group, and serve as a great
reminder to do what he said he would do. Distributing the action plan in writing to all members, with names
attached to specific tasks. (Additionally, this can be a great time to ask for feedback before the plan becomes
"official.") Making sure timelines (with due dates) are complete, clear and current. At regular group meetings, such
as committee meetings or board meetings, ask members to report on accomplishing the tasks they have set out to
do. Consider making this a regular part of the meeting. Celebrate the accomplishment of tasks. It's important that
getting something done actually means something, and is recognized by the group as a whole. Follow up on the
action plan regularly. You are asking members to be accountable, and to get things done on a regular basis. If they
have agreed, you should help them fulfill their commitment as best you can
Basic Overview of Various Strategic Planning Models. The Series Facilitating Strategic Planning from the Consultants
Development Institute provides virtual courses and numerous downloadable tools to learn to facilitate strategic
planning. Concurrently you customize your own relevant and realistic Strategic Plan and earn a Certificate in
Facilitating Strategic Planning. Also See the Library's Blogs Related to Strategic Planning Models. In addition to the
information on this current page, see the following blogs which have posts related to Strategic Planning Models.
Scan down the blog's page to see various posts. Also see the section "Recent Blog Posts" in the sidebar of the blog or
click on "next" near the bottom of a post in the blog.

Choose the Best Model -- and Customize It as You Go Along. There is no one perfect strategic planning process, or
model, to use the same way all the time with every organization. Each organization should customize the best
approach to suit the culture of its members, the current situation in and around the organization, and the purpose
of its planning. This Web page briefly describes several different models of strategic planning, along with basic
guidelines for choosing each. There is no strong agreement among experts in strategic planning as to which
approaches are indeed “models” or how each is best implemented. The purpose of this Web page is to present
different perspectives and options regarding strategic planning to help planners ensure their plans are the most
relevant, realistic and flexible. Planners can select the most appropriate model and then modify it to suit the nature
and needs of their organization. For example, different organizations might have different names for the different
phases and emphasize certain phases more than others in the model. This document does not include detailed
descriptions and directions for implementing each model. Those are available in the articles and books referenced in
the topic “All About Strategic Planning” in the Free Management Library at managementhelp.org .

NOTE: The following models can be done with different styles. For example, some may prefer a rather top-down and
even autocratic way of planning and making decisions. Others might prefer more inclusive and consensus-based
planning. Some might prefer a very problem-centered approach, while others might prefer a more strength-based
approach, for example, to use Appreciative Inquiry.

Model One - Conventional Strategic Planning. This is the most common model of strategic planning, although it is
not suited for every organization. It is ideal for organizations that have sufficient resources to pursue very ambitious
visions and goals, have external environments that are relatively stable, and do not have a large number of current
issues to address. The model usually includes the following overall phases: 1. Develop or update the mission and
optionally, vision and/or values statements. 2. Take a wide look around the outside and a good look inside the
organization, and perhaps update the statements as a result. 3. As a result of this examination, select the multi-year
strategies and/or goals to achieve the vision. 4. Then develop action plans that specify who is going to do what and
by when to achieve each goal. 5. Identify associated plans, for example, staffing, facilities, marketing and financial
plans. 6. Organize items 1-3 into a Strategic Plan and items 4-6 into a separate one-year Operational Plan.

Model Two - Issues-Based Strategic Planning. This model works best for organizations that have very limited
resources, several current and major issues to address, little success with achieving ambitious goals, and/or very
little buy-in to strategic planning. Using the conventional model of strategic planning for these organizations is a bit
like focusing on the vision of running a marathon and on deciding the detailed route and milestones -- while
concurrently having heart problems, bad feet and no running clothes. This model might include the following
phases: 1. Identify 5-7 of the most important current issues facing the organization now. 2. Suggest action plans to
address each issue over the next 6-12 months. 3. Include that information in a Strategic Plan. After an issues-based
plan has been implemented and the current, major issues are resolved, then the organization might undertake the
more ambitious conventional model. Many people might assert that issues-based planning is really internal
development planning, rather than strategic planning. Others would argue that the model is very strategic because
it positions the organization for much more successful outward-looking and longer term planning later on.

Model Three - Organic Strategic Planning. The conventional model is considered by some people to be too confining
and linear in nature. They believe that approach to planning too often produces a long sequence of orderly activities
to do, as if organizations will remain static and predictable while all of those activities are underway. Other people
believe that organizations are robust and dynamic systems that are always changing, so a plan produced from
conventional planning might quickly become obsolete. That is true, especially if planning is meant to achieve a very
long-term vision for many people, for example, for a community or even generations of people. The organic model is
based on the premise that the long-term vision is best achieved by everyone working together toward the vision,
but with each person regularly doing whatever actions that he or she regularly decides to do toward that vision. The
model might include the following phases: 1. With as many people as can be gathered, for example, from the
community or generation, articulate the long-term vision and perhaps values to work toward the vision. 2. Each
person leaves that visioning, having selected at least one realistic action that he or she will take toward the vision
before the group meets again, for example, in a month or two. 3. People meet regularly to report the actions that
they took and what they learned from them. The vision might be further clarified during these meetings. 4.
Occasionally, the vision and the lists of accomplished and intended actions are included in a Strategic Plan.

Model Four -- Real-Time Strategic Planning. Similar to the organic model of planning, this model is suited especially
for people who believe that organizations are often changing much too rapidly for long-term, detailed planning to
remain relevant. These experts might assert that planning for an organization should be done continuously, or in
"real time." The real-time planning model is best suited, especially to organizations with very rapidly changing
environments outside the organization. 1. Articulate the mission, and perhaps the vision and/or values. 2. Assign
planners to research the external environment and, as a result, to suggest a list of opportunities and of threats
facing the organization. 3. Present the lists to the Board and other members of the organization for strategic
thinking and discussions. 4. Soon after (perhaps during the next month) assign planners to evaluate the internal
workings of the organization and, as a result, to suggest a list of strengths and of weaknesses in the organization. 5.
Present these lists to the Board and other members of the organization for strategic thinking and discussions,
perhaps using a SWOT analysis to analyze all four lists. 6. Repeat steps 2-5 regularly, for example, every six months
or year and document the results in a Strategic Plan.

Model Five -- Alignment Model of Strategic Planning. The primary purpose of this model is to ensure strong
alignment of the organization’s internal operations with achieving an overall goal, for example, to increase
productivity or profitability, or to successfully integrate a new cross-functional system, such as a new computer
system. Overall phases in this model might include: 1. Establish the overall goal for the alignment. 2. Analyze which
internal operations are most directly aligned with achieving that goal, and which are not. 3. Establish goals to more
effectively align operations to achieving the overall goal. Methods to achieving the goals might include
organizational performance management models, for example, Business Process Re-engineering or models of
quality management, such as the TQM or ISO models. 4. Include that information in the Strategic Plan. Similar to
issues-based planning, many people might assert that the alignment model is really internal development planning,
rather than strategic planning. Similarly, others would argue that the model is very strategic because it positions the
organization for much more successful outward-looking and longer term planning later on.

Inspirational Model of Strategic Planning .This model is sometimes used when planners see themselves as having
very little time available for planning and/or there is high priority on rather quickly producing a Strategic Plan
document. Overall phases in this model might include: 1. Attempt to gather Board members and key employees
together for planning. 2. Begin by fantasizing a highly inspirational vision for the organization -- or by giving
extended attention to wording in the mission statement, especially to include powerful and poignant wording. 3.
Then brainstorm exciting, far-reaching goals to even more effectively serve customers and clients. 4. Then include
the vision and goals the Strategic Plan. While this model can be highly energizing, it might produce a Plan that is far
too unrealistic (especially for an organization that already struggles to find time for planning) and, as a result, can be
less likely to make a strategic impact on the organization and those it serves. Many experts might assert that these
planners are confusing the map (the Strategic Plan document) with the journey (the necessary strategic thinking).
However, it might be the only approach that would generate some out word focused discussion and also a Plan that,
otherwise, would not have been written.