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Strategic Planning
Although often overlooked by restauranteurs, strategic planning is one of the most powerful business tools available

INTRODUCTION
The restaurant and franchise industries are among the most reactive of all business sectors. Companies often jump into franchising without doing the appropriate homework, while restaurateurs will often react to new trends (e.g. to becoming involved in the Internet) without carefully examining their options. In many cases, opportunity is only assessed when it knocks on the door. Our industry is unique in that it has been growing for the last seven decades without incorporating the basic business strategies applied by almost every other industrial and retail sector. This reactive approach is one of the main reasons the restaurant industry has an 80 percent bankruptcy rate, and why average industry profit level is only five percent of gross sales.

Instead of being reactive, restaurateurs must realize that one of the most significant and powerful business tools available to the industry is strategic planning. Strategic Planning is a proactive methodology which can assist in determining future goals and growth strategies. It also helps create and structure action plans to achieve those goals.

The strategic planning process has a variety of components, including a mission statement, external and internal environmental assessment, strategic objectives and priorities, strategic and tactical actions/initiatives, and performance analysis. Because it is an ongoing process, operators should continually re-evaluate the strategic plan to ensure it keeps pace with corporate, economic and industry developments.

PLANNING
The first step in any process is the planning stage, whereby operators determine how they will develop the strategic plan. Objectives at this point include:

• ensuring senior management is committed to the strategic planning process and will implement the actions arising from the process
• establishing a planning time frame
• outlining the steps and actions needed to complete the strategic plan
• identifying possible barriers and solutions
• targeting those employees involved in the strategic planning process (In a restaurant, this should include the owner, manager, assistant managers and any key staff members. In a franchised organization, those involved will be the Chief Operating Officer (COO), president, Chief Financial Officer (CFO), operations director, franchise director, one field manager and several franchisees.)

MISSION STATEMENT, GOAL SETTING AND VALUES
The mission statement is generally a one-sentence definition of an operation's purpose within its own market. In developing the mission statement, many companies also define their goals and values. Goals are simply what the company hopes to achieve in terms of economic results, community participation, social responsibility and the elimination of certain problem areas within an organization. For example, a restaurant's goals may include increasing sales, increasing profit levels and reducing accidents in the kitchen.

Many organizations also add a value statement at this stage, providing companies with an opportunity to put forward what is important to them. For instance, a value statement may be the objective to move employees into management, and ultimately to provide long-term opportunities for all company employees.

ENVIRONMENTAL ASSESSMENT
The external and internal environmental assessment is sometimes referred to as a strengths, weaknesses, opportunities and threats analysis (SWOT). The first part of any SWOT analysis is an assessment of a company's internal resources through a review of their strengths and weaknesses. Results could show, for example, that a restaurant's design and concept is strong and that menu items are unique, meaning the company has a superior edge within the marketplace. However, the analysis may also uncover weaknesses within the organization ranging from product or service inconsistency, high staff turnover, to poor street signage. Ultimately, results of the analysis allow operators to capitalize on their strengths and focus on improving weaker areas.

After the internal analysis comes the external environmental assessment. In this phase of the strategic plan, the operator reviews outside factors affecting growth and objectives of the business, such as government intervention. For example, several municipalities across Canada and the United States have passed legislation that limits smoking within restaurants, a move which has had a dramatic impact on the industry. Instead of taking a proactive approach to determine how to continue to appeal to smokers, the industry's reactive approach has been to merely complain about the legislation. a company which does a proper opportunity-and-threat analysis will instead be better able to identify future threats and meet them head on.

In addition to legislative threats, foodservice companies should assess the competition, population trends, food trends and other external influences. These external factors can either threaten your organization by making it more difficult to increase sales, or they may provide new growth opportunities.

STRATEGIC OBJECTIVES
Strategic objectives are the measurable outcomes to be achieved within a set time frame. They can have a variety of characteristics, ranging from taking the company to new heights to advancing the business in the direction set out by the mission statement. During strategic objective sessions, it is important to ensure that objectives can work within the framework of the mission, value and goal statements developed earlier in the planning process, and that the organization develops strategic measures or benchmarks to assess how well it does in obtaining it objectives. For example, if the strategic objective is to reduce employee injuries by 50 percent over a three-year period, a strategic measure would assess the actual reduction of accidents over that time.

STRATEGIC PRIORITIES
By developing strategic priorities, companies can determine which items must be dealt with in the short-term, mid-term or long-term. This will help management and staff prioritize their efforts while budgeting time and money for the plan's implementation. Priority setting is important since resources are usually limited.

STRATEGIC AND TACTICAL ACTIONS/INITIATIVES
Once the strategic objectives have been set and prioritized, operators must develop an implementation plan, whereby each objective is matched to a series of action steps. This implementation plan also allows operators to assign responsibilities to specific people within the organization.

PERFORMANCE ANALYSIS
During the performance analysis segment of the strategic planning process, managers have the opportunity to review objectives and priorities, assess how well the plan was implemented and how effective the actual outcomes were. This information is then used to improve future strategic plans. Progress can also be evaluated using the benchmark measures and strategic objectives; the outcome is "positive" if it outperforms the strategic objective, or "negative" if performance falls short of the intended goal.

FACILITATING THE PLANNING PROCESS
Conducting the strategic planning process requires an outside facilitator who can offer assistance and training expertise, while allowing management to participate in the planning process directly. A facilitator should also be involved in documenting the final strategic plan and all planning sessions. These ideas can then be reviewed during subsequent sessions in the planning cycle.

BENEFITS OF STRATEGIC PLANNING
Not only does strategic planning establish consensus among management and line employees by having each participant focus on the future direction of the company, it also enables organizations to define future objectives, prioritize goals, and assign responsibility to specific players within the company. Furthermore, the process gives both management and staff "collective ownership" of the final strategic plan, something that should encourage employees to work hard to ensure that the outcomes are achieved.

The process of strategic planning also allows for team building at a high level within an organization. Senior management and line staff have the opportunity to learn how each other deals with certain situations, and how each views the future of the organization. As a result, each employee comes to understand and participate as a team in setting the plan for growth, thereby increasing interest, ownership and productivity. A strategic plan also enables the planning team to focus on strategic questions and place less emphasis on tactical issues, focusing on why the company takes certain actions or seeks specific goals. Once the strategic plan is established, the tactical issues of how the team will accomplish the goals become much easier to deal with.

Strategic planning has been proven in the industrial and manufacturing sectors. It is also proven in the hotel sector, but has yet to be implemented on a wide basis within the foodservice industry. Those few restaurant and foodservice franchise companies that had gone through the strategic planning process successfully found the results of their efforts paid for themselves tenfold.

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