Using the Simplified Strategic Planning Model in a Multi-Divisional Company
Compass Points Talks to:
Tapemark President, Bob Klas, Jr., and CEO, Jim Burmeister
Note: This article was originally published in Compass Points in April 1999.
TAPEMARK, located in West St. Paul, Minnesota, began operations in 1952 as a producer of custom printed, self wound adhesive tape. Using its technical expertise in developing automated processes to manufacture adhesive products to very close tolerances, the company has grown into a diverse manufacturer. Its varied product line includes custom printed labels, disposable medical products, electronic and industrial components and specialty coatings. Compass Points recently took the opportunity to interview Tapemark’s President Bob Klas, Jr., and CFO Jim Burmeister about how Tapemark uses the Simplified Strategic Planning process in a multidivisional company.
CP: Jim, how long has Tapemark been using Simplified Strategic Planning?
Jim: We began using the process in 1995. Our planning covers a three-year period and we have just completed our planning for 1999-2002.
CP: You have three divisions at Tapemark that are involved in different products and markets. How is the Strategic Planning structured to accommodate that situation?
Jim: We have 3 manufacturing divisions. Each division has it’s own Strategic Planning Committee which includes division managers from manufacturing, sales and technical development as well as representatives from corporate support areas. These committees are responsible for developing strategic plans for their division. In addition, we have a corporate Strategic Planning Committee consisting of executive management and managers of the corporate support functions.
CP: Did you consider any alternative approaches, such as having the corporate group conduct a “top down” approach to planning?
Bob: We briefly considered just having the people at the corporate level do the planning and make decisions that they considered to be in the best interest of the company, but we rejected that approach for two reasons. First, since properly identifying each division’s strategic issues is critical, we felt that division managers were in the best position to identify those issues. Second, since so much of the success of the planning process is dependent upon work outside of the formal meetings, we felt we needed the division personnel involved to create the necessary buy in.
CP: You’ve stated that the key corporate managers sit on each of your divisions’ Strategic Planning Committees as well as their own corporate team. This is obviously a very significant time commitment on your part. How do you justify this?
Bob: The process itself is efficient so that the amount of time is somewhat limited. What we get out of that time commitment is more important. It presents the opportunity to provide direction where that is required. It also allows the division managers to hear firsthand whether their proposed initiatives will be supported or, if there is any doubt about the company’s ability to support certain initiatives, to get that feedback immediately.
Jim: Another justification of the time commitment is due to the centralized nature of Tapemark’s support functions. Many of the issues that come up during the planning sessions require the expertise and input of the support area managers.
CP: What specifically is the mission of the corporate planning group?
Jim: Each member of the corporate group becomes familiar with the division plans. That facilitates the “roll-up” of the plans into a 3 year picture for Tapemark regarding the finance, people and systems that will be required to support future growth.
Bob: Another aspect involves assuring that the divisions are OK to move ahead with their plans and that there are no conflicts with what another division may be planning. There also may be some strategies that have a crossover nature between the divisions. Often there is not a clear-cut structure for ownership of these initiatives so the corporate team will take ownership and drive progress. The corporate team might also need to mediate situations where two divisions approach a similar market or customer but do not share the same strategy.
Jim: Another very important role of the corporate team is in addressing the company’s culture. We regularly assess progress towards being the kind of company we want to be and the status of initiatives that support the desired culture.
CP: Have you encountered any pitfalls in your approach?
Bob: We had to be very careful in defining the role of the corporate people. At Tapemark we try to provide our divisions with considerable autonomy. From the corporate perspective, we had to be careful to give input, but not to drive or dominate the division planning sessions. It took a couple of years to evolve to where there is a good balance in that respect.
CP: Can you share some of the benefits of using Simplified Strategic Planning?
Bob: Well we’ve been on a very dramatic climb in both sales and earnings over the past several years so that has certainly been one measurable benefit.
Jim: Because the Simplified Strategic Planning process requires you to “live” with the plan – on a daily, monthly and yearly basis, and not just put it aside, it allows us to do a better job in focusing our resources and adapting quickly to change.
Bob: Without the process we had a situation where strong willed people could move the company in the direction they supported. This process lets us determine the best direction in a systematic and participative manner.
Are you a multi-divisional company? How do you approach your strategic planning? Attend the Simplified Strategic Planning Seminar for more instruction on how to develop achievable targets as well as all other aspects of Simplified Strategic Planning.
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