CORONADO, CALIF. — Strategic planning is about making tough choices about the future of your company. Four plastics firms shared their experience with the concept at the SPI Western Region conference, held May 5-7 in Coronado.
Two years ago, DuPont added an assessment phase to its planning process, starting what one official called a success story that is unfolding in the polymers business.
The company formed about 1,300 profit-and-loss centers in its engineering polymers business unit. The centers were picked based on the product, region, market and segment, said Paul Kalicky, vice president of strategic planning and information technology and regional vice president of the Americas in Wilmington, Del.
``To our great surprise, we found a huge percentage of our volume was negative to the bottom line,'' Kalicky said. ``We were investing too much revenue in places with not enough profit to cover our expenses. So, we now have a new set of data, and we have hundreds and hundreds of people who act as mini-business managers. That is turning out to be very powerful.''
Strategic planning is ``about making tough choices about where you are going to play and choices about how you are going to play,'' said Clint Burdett, who led the five-hour program on strategic planning. ``And once you get past those choices, then you start from there.''
``Lots of research suggests that two things determine your profitability over time,'' said Burdett, an American Management Association seminar leader and retired military organizational strategist. ``One is the profitability of the industry that you choose to serve, and the other is your relative competitive po-sition in that business.''
Strategic planning followed family-led management changes at three other firms.
``If you get to that crossroads of a business, planning is really the only way,'' said Andrew Zogby, vice president of marketing with Temecula, Calif.-based Channell Commercial Corp.
``Without a plan, you continue to operate in the dark or a reactive mode and never know where you are going,'' he said.
``Regardless of your size or situation, there comes a point where it becomes pretty self-evident as to when a planning process is important,'' Zogby said. Channell, a Nasdaq-listed company, makes thermoplastic and metal fabricated enclosures and related products for telephone and cable television network operators.
Michael McGrady said a generational transition challenged market, technology and procurement skills at entrepreneurial Hunter Industries Inc. in San Marcos, Calif. The situation demanded professional management systems.
``We felt we didn't have control of the business anymore,'' said McGrady, vice president of technology. So about six years ago the company launched into strategic planning.
``Now strategic planning is as much an integral part of our organization as your blood system is part of your body.''
Privately held Hunter makes plastic underground sprinkler systems, valves and controls.
Cambro Manufacturing Co. Inc. began the strategic planning process in 1994, using a former Navy strategist as a facilitator.
``We established a seven-year vision'' with a substantial effort, said James Hardenbergh, vice president of operations with the privately held firm in Huntington Beach, Calif.
Cambro uses the strategic plan as a touchstone each year to monitor progress and check validity of the elements, Har-denberg said. ``So four years later, we are closing in on those original goals of 1995.'' Cambro makes equipment for food service operators as well as drinkware, dinnerware and other small plastic wares.
Hardenberg said a firm's chief executive officer must exert leadership in support of a strategic plan. ``If you have a disjoint between the CEO and the rest of the staff, you can't advance.''
Zogby said the process should yield an agreed-upon compromise that a CEO can adopt for the company. Senior managers with differing perspectives and agendas need ``to bring forth a point of view that makes the most sense for the company.''
McGrady suggested writing social contracts with peers and the CEO to bridge differences in personality and business orientation. McGrady said he is a ``high energy person'' while the CEO ``is more thoughtful.''
The program, coordinated by Richard Luci-ano of La Habra Heights, Calif., departed from the region's conference traditions, instead offering professional training from a management perspective.
Similar seminars can cost $700-$1,000 or more ``so it is truly a bargain,'' Paul Appelblom, outgoing Western Region chairman, said in an interview.