Strategic Planning For LSPS: A Guide To Annual Business Planning

Strategic
Planning
for LSPs
A Guide to Annual
Business Planning
By Hélène Pielmeier and Donald A. DePalma
October 2013
Strategic Planning for LSPs
By Hélène Pielmeier and Donald A. DePalma
October 2013
Copyright © 2013 by Common Sense Advisory, Inc., Cambridge, Massachusetts,

United States of America.
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Strategic Planning for LSPs i
Table of Contents
Topic ........................................................................................................................................................ 1
Overview ................................................................................................................................................ 3
What Is Strategic Planning? ............................................................................................... 3
Why Should You Take a Formal Approach to Planning? ............................................. 4
When Should You Start Planning? ................................................................................... 5
Who Should Be Involved? ................................................................................................. 7
Situation Assessment......................................................................................................................... 10
Revisit Why Your Company Exists ................................................................................ 10
Review the Performance of Functional Areas of Your Company .............................. 11
Develop a Solid Understanding of Your Overall Business Performance ............ 11
Map the Market Landscape ....................................................................................... 12
Investigate Your Sales and Marketing Efforts ......................................................... 13
Evaluate the State of Your Production ..................................................................... 14
Scrutinize Your Support Functions .......................................................................... 15
Perform a SWOT Analysis ............................................................................................... 16
Strategic Direction .............................................................................................................................. 19
Define Your Desired State ............................................................................................... 19
Formalize Your Vision Statement ............................................................................. 19
Define Values for Your Organization ....................................................................... 20
Dissect Your Vision into Objectives ............................................................................... 21
Leverage Your Differentiators to Target Clients .......................................................... 23
Decide on Differentiators to Exploit ......................................................................... 23
Firm Up the Client Base You Want to Pursue ......................................................... 23
Plan Design .......................................................................................................................................... 26
Compare Present and Future States ............................................................................... 26
Perform a Gap Analysis on What You Need to Reach the Desired State ............ 26
Identify Barriers that Stand in the Way.................................................................... 27
Determine Which Factors Can Help You Meet Your Objectives .......................... 28
Develop a Roadmap to Achieve the Vision ................................................................... 29
Design Plans by Functional Area .............................................................................. 29
Prioritize Resource Allocation ................................................................................... 32
Align Your Company and Promote Your Strategy Internally .............................. 33
Monitor the Performance of Your Plan .......................................................................... 34
Document Your Strategic Plan .................................................................................. 34
Act as the Compass that Keeps the Team on Target .............................................. 35
Recognize the Signs of a Poorly Executed Strategy ................................................ 35
Live by the Plan but Readjust When Needed ......................................................... 36
The Hardest Step Is Getting Started ......................................................................... 37
Related Research................................................................................................................................. 38
About Common Sense Advisory .............................................................................. 39
Future Research ........................................................................................................... 39
Applied Research and Advisory Services ............................................................... 39
Copyright © 2013 by Common Sense Advisory, Inc. October 2013

Unauthorized Reproduction & Distribution Prohibited
ii Strategic Planning for LSPs
Figures
Figure 1: The Strategic Planning Process ............................................................................. 4

Figure 2: Build a Strategic Planning Team ........................................................................... 7
Figure 3: Executives Should Take a Staged Approach to Strategic Planning ................. 9
Figure 4: How to Structure a SWOT Analysis ................................................................... 17
Figure 5: How Objectives Lead to Functional Goals ........................................................ 21
Figure 6: Create a Profile of Your Most Wanted Buyer Types ........................................ 24
Figure 7: The Hurdles an LSP Has to Jump Over to Ensure Success ............................. 27
Figure 8: The Elements that Drive Organizations toward Success ................................ 29
Figure 9: Strategies to Boost Growth .................................................................................. 30
Figure 10: Elements You Should Include in Your Strategic Plan.................................... 34
Figure 11: Factors in Managing Complex Change............................................................ 36
Tables
Table 1: Assess Your Readiness for Strategic Planning ..................................................... 6

Table 2: Sample Metrics to Assess Business Performance ............................................... 11
Table 3: Sample Metrics to Assess the Client and Competitive Landscape .................. 12
Table 4: Sample Metrics about Sales and Marketing ........................................................ 13
Table 5: Sample Metrics for Production-Related Functions ............................................ 15
Table 6: Sample Metrics for Operational Functions ......................................................... 16
Table 7: Objectives Can Come from Many Areas ............................................................. 22
Table 8: Estimate the Gap between the Present and Your Vision .................................. 26
Table 9: Set Revenue Targets by Type of Revenue Source .............................................. 31
Table 10: Elements to Include in an Action Plan............................................................... 31

October 2013 Copyright © 2013 by Common Sense Advisory, Inc.

Strategic Planning for LSPs 1
Topic
Executives at language service providers (LSPs) must periodically take a step
back and look at the full picture of their service or technology business. They
should do that at least once a year. However, given the fast pace of projects or
the lack of business skills, these best intentions for strategic planning often fall by
the wayside. This report lays out a methodology that will allow any LSP
executives to reach their objectives.
In Common Sense Advisory’s partner program, we guide LSPs through the

journey of strategic planning. This report uses that experience and feedback from
participants in the program to provide a framework to do it on your own. It also
relies on our qualitative and quantitative research from the last 11 years.
Take note: It is not realistic for someone new to strategic planning to perform
everything listed in this research report. Ramp up your planning over time. Also,
keep in mind that this is a high-level guide. You will need to complement your
reading of this report with other Common Sense Advisory research to fine-tune
your knowledge of sub-topics such as differentiation or marketing.
The guide is especially useful for small to mid-sized LSPs that don’t do any
formal strategic planning today, have not updated their plan in a while, or are
struggling to do so. Larger organizations will find this report helpful as they
refine their analysis and planning or formalize their process.
The report includes the following sections:
 Overview. Why do you need strategic planning? This section describes the
basics, from benefits to the process to follow.
 Situation Assessment. Who are you? Where are you now? In this section,
LSPs learn how to write a solid mission statement, perform an in-depth
assessment of the state of their company, and complete a SWOT analysis.
 Strategic Direction. What do you want to become? This section covers vision
statement, objectives, and goals. It guides you to identify differentiators and
select markets, assisting LSPs with determining what they can become.
 Plan Design. How will you achieve your vision and get to the next level? We
show LSPs how to convert the information from the two previous sections

2 Strategic Planning for LSPs
into strategies to achieve the objectives. We wrap it up by showing you how

to monitor progress and make in-flight adjustments.
 Related Research. We recommend other Common Sense Advisory research

reports and briefs related to this topic.

Overview
Many LSPs executives conduct informal strategic planning by combining their
knowledge of industry trends with what they want to accomplish with their
business. However, true strategic planning is a more disciplined process. It is a
multi-step approach that defines the direction and strategy for the organization.
If you are already familiar with the benefits and basic logic of strategic planning,
move on to Situation Assessment.
What Is Strategic Planning?
Strategic planning is a process for defining a business strategy to shape and

guide your operation. It focuses on a vision of the future and what you must do
to achieve it. Executives use the technique to make decisions on what the
company does, where it is going, which actions are required to make progress,
what level budgets and which resources are necessary to pursue the strategy,
and how the company will determine success.
There are many frameworks and methodologies for strategic planning, but most
follow a similar pattern (see Figure 1):
1. Situation assessment. You research the current state of your company to

develop an understanding of its internal and external environments.
2. Strategic direction. You articulate the vision of what the company wants to
become and objectives you want to achieve.
3. Plan design. You develop strategies to translate the high-level plan into
action items and budgets.
4. Implementation and monitoring. You set your plan in motion and evaluate
the progress toward the goals to provide ongoing refinements to the strategy.
In this report, we combined this step with Plan Design.

Figure 1: The Strategic Planning Process

Source: Common Sense Advisory, Inc.
Why Should You Take a Formal Approach to Planning?
While we have seen LSPs grow without a strategic plan, such success is typically
not sustainable. Any company can get a lucky break or have a streak of good
fortune. Even if you did experience strong growth, how much more would you
have grown if you had formally targeted certain goals? Consistently achieving
your business goals can’t just be left to chance.
Our research and advisory practices show that most small LSPs hit a roadblock
when they reach US$1 to US$2 million – unless they develop a methodical
strategy to grow. Some argue that strategic planning curbs creativity, innovation,
and agility because the team feels restricted by the plan they put in place.
However, a well-designed plan supported by a strong corporate culture will

streamline the opportunities to pursue so that you achieve your goals

consistently and not just in spurts.
While growth and profitability represent the success factors for most businesses,
we find in our research that some executives are satisfied simply with
maintaining a certain lifestyle or making the company attractive to potential
buyers (see “The Owner’s Guide to Maximizing LSP Value,” Apr10). We treat
financial objectives as the primary success factors in this guide, but other targets
can benefit from strategic planning. Why? It is a framework to:
 Communicate “why your company exists” to others. You can ensure all
business partners are on the same page, and investors will see that you have
a solid grasp of how to reach milestones.
 Formalize the long-term direction. Employees are most productive when

they understand the bigger picture behind what they are doing. Clear
direction also contributes to increasing morale in teams.
 Build a framework for decision-making. Daily decisions about running the

company become easier when your goals are clear. Strategic planning enables
you to set priorities and logically allocate energy and resources.
 Direct change. Strategic planning is a catalyst for business transformations to

steer the implementation of new plans for the company. It can also help your
organization respond to changing environments or business situations.
 Guide operational planning. Having to always find ad hoc solutions stresses

the team and the processes. The planning discipline forces LSPs to
systematize efforts to strengthen operations.
 Align the company to the goals. Strategic planning establishes agreements

around intended results so that all stakeholders work toward common goals.
It also creates a framework for accountability.
When Should You Start Planning?
Strategic planning is a time-consuming exercise. Most executives conduct it

when they:

 Prepare for the next fiscal year. Successful companies conduct a yearly
strategic planning session and review the results at least quarterly. We focus
on this type of planning in this report.
 Undertake a major change. Strategic planning allows you to prepare

efficiently for radical modifications to your operation such as adding a new
service or department.
 Do long-term planning. When your organization matures to the point where

you no longer operate from year to year, you’ll need to plan three, five, or
even 10 years out.
 Start running the company like a business. Strategic planning enables you
to professionalize a small or medium organization, and even make it more
attractive for a merger or acquisition (see “The Owner’s Guide to Maximizing
LSP Value,” Apr10).
If you are just starting formal annual planning, check that you are ready for it.
You need a strong commitment from top managers, transparency on company
matters, a metrics-driven mentality, and a positive company culture. The
ultimate factor that makes or breaks the initiative is resources (see Table 1).
Readiness Factor What You Need

Resources You need to be willing to set time aside for you and your staff to
conduct the necessary steps of the planning process. Spread out the
effort over time so that you don’t try to cram in one day what it takes
most companies weeks to achieve.
Commitment You need the will to change and to be accountable to your staff for
proper leadership to reach the goals. Once you start strategic
planning, your employees will watch for any return to the old way of
doing things. They will view such reverting as a management failure
that will be detrimental to their motivation.
Culture You need to have a healthy corporate culture to drive the changes
that are bound to come with your vision or with aligning the staff to
the goals. Pushback can make the vision crumble.
Transparency You need to be willing to regularly share information about the
company’s performance to empower employees with data to make
decisions in line with the company’s goals.
Metrics-driven You need the mindset to scrutinize data. LSPs that operate as profit
and loss centers or conform to a standard such as ISO 9001 often
have data more readily available.
Table 1: Assess Your Readiness for Strategic Planning


Schedule the time to complete the steps in the planning process. Otherwise, you
risk being dragged down by day-to-day work commitments. Proper planning
can create bandwidth issues, especially for owners who do it all by themselves. If
you fall short on any of these points, consider ramping up your operation to be
in a position to do so.
Who Should Be Involved?
Strategic planning is not an activity that executives should conduct behind closed
doors. Instead, it should be a collaborative effort. Involve senior managers and
critical team members plus line workers to represent the staff (see Figure 2).
Some smaller companies often include their entire staff.
Figure 2: Build a Strategic Planning Team


Dedicating a team to the task helps:
 Keep the effort on track. You can spread the work when designing the plans
or when implementing action items. Delegate as much as you can and focus
on the big picture and putting all the pieces of the puzzle together. Planning
requires basic data collection and preparation from all your company’s
divisions and departments, business information sources, and market
research companies.
 Obtain a different perspective. Your employees’ feedback and ideas may be

quite revealing, because they will have different outlooks based on their job
duties. You may get some great insight into what they think is unique about
the company and what its mission is.
 Get buy-in from team members. Including staff in the development steps
helps get them excited about what you are trying to achieve – and invests
them in the outcomes. They will also assist with selling the plan to the rest of
the staff.
Take note: We advise deciding on the team size based on its role. Smaller teams
make decision-making more efficient. Larger groups are helpful for
brainstorming phases.
Also, include people outside your company. For example, investors and business
partners may want to protect their interests and play a role in setting your
direction. Personal or financial advisors can provide support and input. As an
executive at a small LSP pointed out, don’t neglect to seek external sources
for help.
Advice from an LSP executive who actively plans: “Strategic

planning will help you immeasurably. Don’t wait until you have been in
business 10 years. Rely on people with business skills, experience
creating value, marketing expertise, and industry knowledge.”
Whenever possible, bring your team to the same location to kick off the process.
This can be effective if you can free up everyone’s schedule. Use that time to
define mission and vision statements, and perform a SWOT analysis.

Figure 3: Executives Should Take a Staged Approach to Strategic Planning

Even with a strategic planning team in place, you may find that initial bursts of
energy fizzle out after a while. To avoid that loss of momentum, chunk the
initiative into smaller pieces – each with a well-defined goal or endpoint.
Common Sense Advisory regularly recommends a multi-week approach where
you spread out the steps (see Figure 3). The rest of this report explains the detail
of the steps represented in this figure.

Situation Assessment
The first step of the strategic planning process is to take a comprehensive look at
the state of your company. Focus on past and present only – do not worry about
the future at this stage. While many executives would like to jump straight into
goals and strategic plans, successful strategies require a clear picture of the
present to put the proper action plans in place to take you to the desired place.
This section guides you through developing a mission statement, reviewing

different facets of your organization, and conducting an in-depth assessment of
your strengths and weaknesses. It addresses fundamental questions such as
“Why does the company exist? How are the different functional areas
performing? Where do we excel – and what do we find most challenging?”
Revisit Why Your Company Exists
Work with your key staff to develop a mission statement for your organization. It
should explain your fundamental purpose as a company and how it helps clients
and stakeholders. As homework for this task, answer the basic questions about
your business: Why did you start it? Whom do you intend to service? What are
the benefits of your services for your clients? In short, get to the soul of your
company. Think hard about your motivations and intentions: Your statement
must withstand the test of time and you should rarely need to modify it.
Tips for a good mission statement:

1. Keep it short.
2. Show your passion for the business.
3. Focus on the long term.
4. Don’t make it a promotional piece that summarizes your service offering.
Many companies publish their mission statement on their website. Your

competitors and successful global brands of consumer products are good sources
of inspiration about what you like – or don’t like.
If you’re having trouble defining your mission, review your company’s history,
how it came into being, and any major milestones that you passed along the way.
Often we find that by asking a company about its past, we can identify a solid
reason for its existence that sometimes even the founders and owners of the
company had not realized.

Review the Performance of Functional Areas of Your Company
The next step is the most time-consuming of the entire process, yet it is the
cornerstone that will enable you to make effective decisions when planning your
future course. It requires an in-depth analysis of the functional areas of your
company. Involve your accountant and department managers to gather the
necessary data. You may be tempted to skip the collection and analysis of data,
and instead rely on gut feel. Don’t. No matter what, you must have quantifiable
data to develop a realistic view of where you stand today, and whether or not it
will be possible to accomplish the goals you have in mind.
The tables in this section provide metrics frequently used by LSPs. They do not
represent an exhaustive list. Successful planners will review more factors or
adapt these to their needs. The tables also provide handy links to Common Sense
Advisory research to either figure out how to calculate a specific metric or to
benchmark your results against your peers.
Develop a Solid Understanding of Your Overall Business Performance

Your review must include an assessment of revenue, growth, and profitability.
These are the high-level metrics that help determine the financial health of your
organization (see Table 2).
BUSINESS PERFORMANCE
Metrics Frequently Used by LSPs Resources
 Revenue  “The Top 100 Language Service
 Growth Providers” (May13)
 Profitability  “The Fastest-Growing LSPs” (Jun13)
 Performance against sales goal  “Profitability in the Language Services
Market” (Feb13)
Table 2: Sample Metrics to Assess Business Performance

You should also revisit the big news events at your company. Have you created a
new service, offer, or product in the last year? Have you grown organically only,
or have you added the power of mergers and acquisitions? What is the value of
your intangible assets such as patents? Do your numbers include any
extraordinary capital source such as government aid, grant, tax relief or rebates,
insurance collection, and other non-recurring inflow? Do you carry a
significant amount of debt? Look at the business from 10,000 feet, as any good
investor would.

Map the Market Landscape

Next, review your client base and your competitors (see Table 3).

CLIENT BASE
 Client activity  “The Language Services Market:
 Business from top accounts 2013” (May13)
 Average client value  “LSP Differentiator: The Localization
 Average project size “Maturity Model” (Jun13)
 Location  “Where the Global Translation Money Is:
 Distribution of client types 2013” (Oct13)
 Client maturity
 Industry mix
 Certification and legal requirements
COMPETITION
 Your track record of winning against  “The Top 100 Language Service
them and why/why not Providers” (May13)
 Price comparisons  “Translation Pricing by Language
Pair” (Sep12)
 “What Translation Suppliers Need to
Know about Pricing” (Sep12)
Table 3: Sample Metrics to Assess the Client and Competitive Landscape

 Profile your clients. Slice and dice your client information to know who is
buying from you (see “How LSPs Can use Client Analytics,” Sep13). How
deeply do you manage to penetrate accounts? Does any customer represent
more than 5, 10, or 20% of your revenue? This exercise should identify the
profile of buyers interested in your services and those you cannot reach.
Survey your clients to define what they like and don’t like about working
with your company and what they would like to see happen in the future.
 Get to know your competition. List the firms that you run into all the time.
Go beyond intuition and conjectures to realistically assess their
competitiveness against your offerings. Just as you do with your clients,
profile which peers are more likely to be your match, and which you are
more likely to lose to. Establish the role of differentiation in those results but
also new features or trends in your rival’s offerings.

Investigate Your Sales and Marketing Efforts

The next step involves reviewing all activities that allow you to capture business
(see Table 4).

MARKETING
 Total reach (the number of people  “Marketing Language Services
you can reach with your marketing Online” (Feb10)
message)  “Return on Conference Attendance
 Return on investment of marketing for LSPs” (Sep11)
campaigns, tradeshows, and events
 Website analytics
 Ranking in search engines
 Social media statistics
SALES
 Revenue coming from new business  “The Language Services Market:
 Service and product mix 2013” (May13)
 Average client value vs. average  “How to Drive Translation Sales”
client value of new clients (Mar11)
 Average revenue by salesperson  “Localization Maturity Model 2.0”
 Number of new clients (Mar11)
 Source of new clients
 Maturity level of clients
 Number of quotes
 Sales cycle time
 Closing ratio
 Percentage of quota achieved
 Number of referrals received vs.
closed
ACCOUNT MANAGEMENT
 Client retention rate  “An LSP’s Guide to Account
 Number of clients lost Management” (Sep13)
 Satisfaction results and trends
 Top patterns in praises and
complaints
Table 4: Sample Metrics about Sales and Marketing

 Review what you do to lure clients. Look at your website and web analytics
results, the conferences and tradeshows you attend, your advertising
campaigns, marketing collateral, or social media initiatives. What is the most
successful method for driving business to your organization? Marketing
feeds your sales efforts, so carefully select the channels that generate the most
leads. Evaluate your material from the perspective of buyers – not your own.

Ask clients for input and seek external advice to ensure you spend your
marketing budget wisely.
 Gauge the results of your sales strategy. Review the steps in your sales
process to identify what efforts lead to the most successful sales. Are there
enough opportunities in your sales pipeline? Is your strategy to sell on value
or on price? Take a hard look at your failures and shortcomings. What else
could you have done to win the business? Assess whether you structured
your team to succeed. Is your sales force organized to serve your selling
geography efficiently? Are your salespeople coached daily? Do you have a
formal sales recruiting and training process that consistently yields top
performers?
 Stay on top of client retention and growth. Assess why clients stay, spend
more, or leave. Check out the characteristics of your best clients. What can
you do to find other similar accounts? Likewise, review your “worst” or least
favorite accounts and how they may disrupt your business.
Evaluate the State of Your Production

Afterward, turn your analysis inward and look at the state of your production
center(s). This may involve many sub-groups, from project management to
engineering or vendor management. The specifics will vary based on the services
and products you offer and the support groups you have available for your
project management team (see Table 5).
 Assess your production performance. First, review the results of each group
and evaluate missing resources to perform better. Then, dissect success
stories to see how you can replicate them to win more such business. Analyze
projects that went wrong to identify your weak points. Your goals are to
ensure you have the capacity to scale and to optimize your process. Finally,
determine whether you need to achieve or give up certain certifications (see
“What to Consider Before You Seek ISO Certification,” Jan13).
 Inspect the state of your technology. The majority of LSPs use software to
support the translation process or the production of projects. Evaluate what
functions you under-utilize in the tools, what is missing, and what clients
want that you can’t offer because you don’t have the technology that
supports their needs. If you develop your own software, review the
development, testing, marketing, and sales efforts that go with it.

 Evaluate the state of your supply chain. Most LSPs outsource the majority of
the task-based work on projects. Do your vendor qualification efforts keep up
with your project needs? Start by assessing the availability of resources, then
inspect their performance records, and finally scrutinize the numbers to see
where most of your vendor budget goes and where you overspend. In
addition, consider surveying your network of freelancers. Find out how they
view you, and how you can do a better job of recruiting and retaining the
best possible talent in your freelance network.

PRODUCTION
 Number of projects  “The Language Services Market:
 Revenue per project manager 2013” (May13)
 Service mix  “Translation Production Models”
 Ratio of projects that require rework (Nov12)
 Analysis of job profiles (e.g., jobs
with rush fees, jobs processed with
TM or MT)
 Cost of rework
TECHNOLOGY
 Technology-related costs  “What Project Managers Wish
 Efficiency or savings Technology Did for Them” (Jul13)
 Usage data – internal and external  “Tech-Savvy Language Service
 Number of incidents and resolution Providers” (Aug10)
time
 Percentage down times
SUPPLY CHAIN
 Percentage of production that is  “Translation Pricing by Language
outsourced Pair” (Sep12)
 Percentage of unfulfilled requests  “What Translation Suppliers Should
 Average purchase order amount Know about Pricing” (Sep12)
 Number of purchase orders issued
 Number of vendors (overall, by
status, by type, by service)
 Rate analysis
 Trends among your top vendors
Table 5: Sample Metrics for Production-Related Functions

Scrutinize Your Support Functions

While you may have tired by now of collecting data, keep at it and review the
functions that support your organization. This review includes accounting, office
management, and information technology. Without those departments, your
business would not be able to sell or deliver your services (see Table 6).


OPERATIONS AND ACCOUNTING
 Number of sales and production  “The Language Services Market:
offices 2013” (May13)
 Number of subsidiaries
 Accuracy and timeliness of payments
 Overhead costs
 Operational vendor performance
STAFFING
 Number of employees  “The Language Services Market:
 Revenue per employee 2013” (May13)
 Ratio of employees per manager  “Language Services Industry
 Payroll load Compensation” (Sep10)
 Gap analysis in employee
performance
 Top patterns in employee issues and
successes
 Staff turnover rate
Table 6: Sample Metrics for Operational Functions

 Review the operational departments that support the organization. Verify

that your vendors are delivering on their services. For example, does your
website hosting service maintain its committed uptime? Ensure that your
accounts payable and receivable are in order. See whether you have
upgraded to the version of software required by your clients.
 Consider your human development needs. Review your organizational

structure, your training program, your inflow system to find new employees,
staff performance, and whatever changes will be required to take your
organization to the next step. Survey your team but create a safe environment
to allow them to express what they feel needs to change.
Perform a SWOT Analysis
Finish assessing the state of your company by putting it all together in a SWOT
analysis – Strengths, Weaknesses, Opportunities, and Threats. This common
business assessment tool helps you summarize positive and negative factors that
are either internal or external to your operation (see Figure 4).

Figure 4: How to Structure a SWOT Analysis

Take note: If you’ve never undertaken a SWOT analysis before, look at what
other companies are doing. BrandGuide contains a collection of examples from
various industries that can inspire you.
 Plug in the major findings from your analysis. Examine the data and
conclusions from the review of the functional areas of your company.
 Brainstorm with your team. They will see things that you may miss from
your perspective. It can also be a good periodic team-building exercise.
However, you must act on the insights that you uncover. If you have the
same SWOT brainstorm year after year and the team sees few, if any,
changes, they will perceive this as a futile exercise.
 Spend extra time on competitor information. Many companies put

conclusions about the competitive situation into a separate document

because it is so specific. Porter’s Five Forces analysis – namely, new entrants,

substitute products or services, buyer bargaining power, supplier bargaining
power, and intensity of rivalry – is a handy tool to track that information.
 Review the results. Incorporate your conclusions into your planning

documents, spreadsheets, and any other tools you use to run the company.
Does a clear differentiation stand out from your completed analysis? Does it
line up with your marketing message and your actual production capacity?
Can you convert weaknesses to strengths, or threats to opportunities?
 Prioritize the action items. This exercise generates more ideas than is
realistic to implement. Work with your team to order them by importance
and likelihood of success.
Tip: Convert your data into an annual report

Don’t waste all the precious data you collected by using it only for your strategic
planning. Turn it into an annual report or presentation that you can share with
relevant stakeholders. Your staff would love to see a “year in review”
presentation. It helps them better understand how they contribute to the bottom
line and their own success. Likewise, your investors will be more likely to
provide additional funding when they have a clear picture of your performance.

Strategic Direction
Now that you understand where your business stands, you need to define what
you want to become. This exercise is fun as you get to dream grand. However,
don’t go too crazy: You have to balance visions of grandeur with the reality of
your business. Your vision should be a stretch, but it needs to be achievable.
This section covers defining a vision statement, core values, and the various
levels of goals to allow you to reach your destination. It assists you in identifying
your differentiators and selecting markets so that you have a clearer picture of
what your company can become.
Define Your Desired State
The deliverables for this step are to develop a vision statement and core values
for your organization. They are about more than growth or profitability. For
some LSPs, they focus on retaining a certain lifestyle. For others, they are about
exit strategies such as going public or doing something good for the world.
Having a vision is important no matter what your plans are, but you should
always keep the focus on the company – not on your personal goals.
Formalize Your Vision Statement

While your mission statement explains why you are in business, your vision
statement plots a destination for your business. What do you want the company
to be? If you could imagine your dream enterprise, what would it look like?
What kinds of clients would you have? With whom would you work, and how
would you carry out the work? What would you do with your success?
We often find that when a company reviews its mission statement and history,
this exercise triggers some of the “big dreams” the principals had when they
started out. Once you have that vision in hand, write a concise, clear statement of
where you want to be three to five years from now.
Tips for a good vision statement:

1. Balance realism with a bit of daring.
2. Focus on what will be your most important accomplishment.
3. It should be inspiring and powerful.
4. Leave out what you sell.
5. If you don’t believe in it, it’s not a good vision statement.

Just as with your mission statement, study competitors’ and global brand
websites for examples of what strikes you as powerful vision statements that
define these successful companies.
The best vision statements have quantifiable goals. For example, if your vision is
to offer the highest-rated customer service in the industry, how will you know
that you’ve succeeded? In addition, don’t simply say that you strive to be the
largest or the best LSP in the world. There are few true contenders for these hot
seats. However, you may be able to become the biggest or the best supplier in a
specific region or in a targeted vertical.
Validate your vision to ensure you have the know-how and resources to support
it. All dreams are not meant to be. What can you realistically achieve in three to
five years?
Define Values for Your Organization

The next element to set a strategic direction is to define core values for your
business. These are beliefs and principles where you can’t think of legitimate
cases where you would override them. They define your culture.
 Craft your values to represent how you think and act. Look at the essence of
who you are. You might base your decisions on speed, quality, financial
responsibility, and flexibility. Others may list integrity, teamwork, diversity,
and passion for results.
 Make the list your own. Don’t create a laundry list of items that would be
“nice to haves” but that are not truly who you are. Don’t list “innovation” if
you strive for “stability.” Likewise, don’t list “financial responsibility” when
you don’t give your staff access to the data to make sound financial decisions.
 Use those values to drive your decisions. They guide your answers to ideas
and proposals from your staff. Get in the habit of responding by tying your
response to your vision and values: “How will this help us achieve [vision]?”
followed by “How is it in line with [relevant core value]?”
Let’s say that one of your staff members asks you for a software upgrade. Your
vision focuses on growth and your values include innovation. If the employee
can show that the investment will allow you to land more business by adding a
capability that few of your competitors have, the answer should be an
unequivocal “buy it.” However, if the software is for internal efficiency but

process optimization isn’t high on your core values, you may delay the purchase
until you have more compelling reasons to approve the expense.
Dissect Your Vision into Objectives
You need more business and organizational tools to make the vision work on a
daily basis. Distill your vision into objectives that, in turn, you will convert into
key performance indicators (KPIs) and eventually functional goals. Figure 5
shows the cascading effect of goals. There are many more branches necessary to
meet an objective.
Figure 5: How Objectives Lead to Functional Goals

What kinds of objectives should you set? It’s common for companies to cover
multiple areas (see Table 7). However, financial goals usually drive everything
else or form the basis of the other objectives.

Type of Objective Description

Revenue goal LSPs often base their growth rates on how much or how quickly
they grew in previous years. Keep in mind that smaller
companies can grow much faster than large ones. By adding a
single large account, a small provider can double, while a
medium-sized company might get only a small bump in revenue
(see “The Fastest Growing LSPs,” Jun13).
Risk reduction Executives want to diversify revenue to reduce risk. They may
increase other business to change the proportion of work
coming from a specific source of revenue or plan to replace
revenue that they anticipate losing – for example, when a
government contract ends.
Profit Companies like to set an objective to reduce their reliance on
low-profit business in order to focus on higher-profit business.
This is also typical for suppliers that mainly service multi-
language vendors but wish to increase their number of direct
clients.
Strategic market LSPs that want to penetrate a certain market that they consider
strategic to their growth will frequently include an objective tied
to that sector.
Customer Many LSPs highlight their customer service and make it a clear
satisfaction objective to stand out based on their ability to service clients.
Innovation Technology-centric companies favor this type of objective to
drive their efforts to be the first or the best in a specific market.
Operational LSPs may need to make major operational changes before they
objectives can even consider advancing toward other types of goals,
especially financial ones.
Human or social Some LSPs like to include a human or social objective. It may be
about staff development and retention. Alternatively, you may
also have goals related to how your business gives back to the
community. This will often relate to your mission and your
corporate culture.
Table 7: Objectives Can Come from Many Areas

Take note: Formulate your goals using the “SMART” format – that is, Specific,
Measurable, Attainable, Relevant, and Time-bound. For example, instead of
saying, “We’ll increase sales,” provide some details, such as ”increase new
business development by 20% by year end.” You don’t need to go into the
tactical “how” you’re going to do each thing exactly yet, but do try to be concrete
and specific.
You’ll often find when you’re listing your objectives that you have dozens upon
dozens of things you’d like to accomplish. Go ahead and list them all. Be
comprehensive at this point, but keep in mind that you’ll later need to choose

just the objectives that your company will benefit most from and that will be
most likely to help it achieve its mission.
Leverage Your Differentiators to Target Clients
Next comes a difficult stage for most LSP executives. You can’t do proper
planning without figuring out what makes you stand out from your peers. And
once you have that, you should compare that information against your desired
client base to see if both are aligned.
Decide on Differentiators to Exploit

In order to have a solid vision of the future, you need to know what special
qualities from your business you can leverage to outperform competitors and
achieve your goals. Consult our brief on differentiation to determine what
constitutes a differentiator (see “Differentiation You Can Bet Your Brand On,”
Oct13). It will help you identify the attributes make you stand out and see what
differentiation looks like in action.
Many companies find that they are not that different from many of their
competitors. While not being able to stand out in a crowded marketplace is not
ideal, it is also a reality that everybody can’t have a niche when the market
consists of more than 28,000 LSPs (see “The Language Services Market: 2013,”
May13). You don’t need to compete with all LSPs in the world. However, you do
have to distinguish yourself from the typical suppliers that cater to your desired
customer base.
Firm Up the Client Base You Want to Pursue

The next step goes hand-in-hand with the previous one. You can’t really
differentiate your offering without having a clear idea of whom you intend to
offer your services to.
 Revisit the existing client profile. Use the review of the buyers from the
situation assessment. Those are the people who historically bought from you.
Are they the clients you want to pursue for more business? Are they in line
with the differentiation you’d like to promote?
 Identify good markets. Use reliable data to guide you through finding the
best markets for your offering. This includes macroeconomic data published
by the U.S. Department of Commerce or similar agencies and ministries in
other countries, information from international organizations such as

Eurostat, and independent market data “Where the Global Translation

Money Is: 2013,” (Oct13).
 Scrutinize the competitors that target your preferred clients. Can you stand
up to them? Is your offering distinctive enough? Would you be more
successful pursuing a path less traveled?
 Create most wanted client profiles. Define the type of customers that are the
best fit for your services and will benefit the most from using your services
(see “Targeting Translations Buyers,” Sep09). The profile, sometimes called a
“persona” by marketers, should include basic demographic details such as
location, financial goals, and service needs (see Figure 6).
Advice from an LSP new to planning: “Understand your market and

identify your targets. It is okay to change and refine it over time, but
start with an idea of the target first.”
Figure 6: Create a Profile of Your Most Wanted Buyer Types


 Limit the list of profiles. Stick to three to five profiles. Your pool of potential
customers should be large enough that you won’t run out of prospects in the
near future – otherwise, that could severely limit your growth. However, also
define the profile specifically enough so that your sales reps understand them
well enough to identify good prospects. A profile that is too vague may cast a
wider net, but it makes it harder to customize your sales and marketing effort
to reach those prospects.
 Figure out where to find those clients. Which events do they attend inside
and outside the language services industry (see “Conferences in the
Language Services Market,” Sep11)? What do they read? What do they search
for online? What are their titles? What do they search for on the web (see
“Marketing Language Services Online,” Feb10)?

Plan Design
You are making progress in your strategic planning. You know where you stand,
and now you know what you want to become. The next question is how to get
there. This section discusses the gaps between the present and your desired state,
the barriers that stand in the way of success, and drivers that must be present to
succeed. LSPs will learn how to convert the information from the two first steps
into a roadmap to achieve their goals. We wrap it up by how to monitor progress
and make adjustments.
Take note: Start working on your plan design early to test the feasibility of your
ideas. For example, your sales goal may be difficult to formalize until you have
researched how you can reach it.
Compare Present and Future States
To map the routes to achieve the objectives, review the landscape. What are the
features of the terrain that could slow or accelerate your journey?
Perform a Gap Analysis on What You Need to Reach the Desired State
The first step is to assess the distance between the current state and what you
want the company to become. To do so, perform a gap analysis by cataloging all
your objectives and goals (see Table 8). Then list current and desired states. The
difference between the two constitutes the gap you’ll need to fill. Include the
different elements of your functional analysis.
Objectives and Goals Current State Ideal State Gap

Sales US$20 million US$30 million US$10 million
Machine translation Only offer post-editing Offer all-inclusive Software and skills
capability of machine translation service including engine
(PEMT) training and file
processing
Certifications None ISO 9001 Need to implement a
quality management
system (QMS)
Coverage 8 am to 5 pm Monday 6 am to 8 pm Monday Two hours in the
through Friday through Friday morning and three
hours at night
Table 8: Estimate the Gap between the Present and Your Vision

Identify Barriers that Stand in the Way

Next, determine what can trip you in the implementation process. Identify the
obstacles that you will have to surmount to be successful (see Figure 7).
Figure 7: The Hurdles an LSP Has to Jump Over to Ensure Success

 Explore the weaknesses and threats to your business. Use the results of
your SWOT analysis. What hurdles did you list, and what can you do to
overcome them?

 Reflect on the state of your leadership. The main obstacles to strategic

growth often lie in the leadership team. Executives may lack the vision and
focus, business and financial skills, or experience to lead their teams to
success. They labor through managing change and sometimes aren’t good at
planning. Many find delegating tasks difficult.
 Investigate and resolve internal issues. Company culture can prevent

changes from sticking when the organizational mindset isn’t in line with the
vision and objectives. High employee turnover can also jeopardize plans.
Communication and transparency are often missing at such firms, leading to
teams that are misaligned to the company objectives.
 Examine your resources. Smaller agencies sometimes struggle to recruit staff

and vendors so that they can scale to take on bigger jobs and large clients.
Others have a hard time keeping up with technology and productivity.
 Ponder the intangibles. Risk aversion is a barrier too. The fear of failure is
enough to stop many plans in their tracks. Lack of motivation to do whatever
it takes to reach the goal can also hamper executives and their team.
 Include external barriers. Employment legislation can throw a wrench in

your plans. Difficulties in recruiting for open positions may mean you are not
be able to hire the people you need. Price pressure and changing buying
behavior can alter your plans too (see “Trends in Translation Pricing,”
Sept12).
Are any of these barriers unsurmountable? If so, think about workarounds. Be

creative in finding ways to address the issues. Until you do, the action plans you
develop will just be good intentions that don’t come to fruition.
Determine Which Factors Can Help You Meet Your Objectives

The counterpoint to these barriers are the drivers that will generate the desired
results. These elements are required to lift your operation to the next level. In our
discussions with LSPs, we find that strong leadership, engaged stakeholders, and
business agility top the list of enablers (see Figure 8). Explore which drivers are
already well established at your company and which you need to improve.

Figure 8: The Elements that Drive Organizations toward Success

Develop a Roadmap to Achieve the Vision
We are finally getting to the most eagerly awaited part: the moment when you
get to work on the path toward the vision. Dedicate sufficient time to plan your
initiatives in detail.
Advice from an LSP experienced in strategic planning: “Depth in

planning is what matters.”
Design Plans by Functional Area

There are different strategies to reach the goals. Using your gap analysis,
brainstorm alternate ways of filling in each shortcoming. Go beyond the obvious,
but get rid of the ideas that don’t work for you at this time. Cover all the
functional areas in your company just as you did in the situation assessment. For
each, explain what has to be done and how it will be done. List who is

responsible and what internal, external, and financial resources they’ll need.
Don’t forget to specify what success will look like.
Take growth, for example. You can increase sales organically by beefing up your
sales efforts, but you can also decide to enter new markets, service new verticals,
or add new products or services. You can also grow by merger and acquisition
(see Figure 9). Weigh the pros and cons of each option. Think about combining
several approaches to reach your goals.
Figure 9: Strategies to Boost Growth

Paying attention to the details is important. For example, it is not enough to say
you will work on getting new business or that you will acquire a complementary
company. Rather, you should establish revenue targets for each of the strategies
or segments you are considering for the next three to five years. Having such
details in hand will better prepare you to meet those goals (see Table 9).

Revenue by Year in Millions of US$

Growth Strategies
2014 2015 2016
Existing clients $5,000,000 $6,500,000 $7,000,000
Mergers and acquisitions $2,000,000 $2,600,000 $3,000,000
New business $1,500,000 $2,000,000 $2,600,000
Total revenue: $8,500,000 $11,100,000 $12,600,000
Table 9: Set Revenue Targets by Type of Revenue Source

Next, document your strategy in an action plan that specifies desired outcomes,
steps to achieve them, a timeframe, responsibilities, and resources needed. Pay
particular attention to the budget. Include your assumptions, success criteria,
risks, and the impact on the rest of the company (see Table 10).
Action Plan Example

Objective Increase sales by 30% by year-end
Assumptions Client retention rate and spend of existing clients stays stable
Success criteria Bill US$1.5 million by end of year
Action steps Timeline for Responsibility Resource needs (quantify)

completion
Hire one experienced 01/01/2014 President Salary, recruitment firm
salesperson fees, workstation and
equipment
Implement client relationship 01/31/2014 President and Cost of software training
management software (CRM) salesperson implementation, and
maintenance
Generate prospect lists in 02/15/2014 Salesperson Access to information
targeted industry sources such as Hoovers
Complete the training of the 02/28/2014 President and Internal and external
new recruit in translation production training
sales manager
Develop strategy for lead 02/28/2014 Salesperson Consensus from concerned
follow-up and president staff
Revamp website 06/30/2014 President Website designers fees,
hosting fees, cost of
updates
Risk Strategy relies on the ability of the new recruit to ramp up quickly
Impact Production needs to be able to support the increased volumes of work
Table 10: Elements to Include in an Action Plan


You should end up with not just one but a series of action plans – more than
you’ll be able to implement. The next step will enable you to order projects.
Prioritize Resource Allocation

Big changes don’t happen by magic or overnight. They require time, effort, and
investment. Weigh the need for change against the reality of what you can
accomplish. Prioritize objectives and plans accordingly. Postpone some until
other conditions are met. Otherwise, you may consume all your resources.
 Calculate the resource requirements. Include direct costs but also the time
commitment required from the different members of your team and the
know-how required to implement the plans. Some of your initiatives may
just be too costly for the state of your operation or would create capacity
issues in your team.
 Review the motivation. Don’t jump on an opportunity just because it sounds

good or because your biggest competitor does it. It has to work for you.
 Assess the impact of postponing a goal. You can’t delay investments

forever, as you will hit a roadblock once your infrastructure is too archaic or
your operation can’t scale to your ambitious project or client goals.
 Balance risks. A grandiose plan could put your company under by

inappropriately investing too much in hopes of new business that doesn’t
have guarantees.
For example, assume that you are interested in setting up an operation in another
country. You’ve worked with your team to establish that it’s a good match for
your company. You can enter the market in one of three ways: start from scratch,
acquire a competitor in the target country, or form a joint venture.
You decide on the first option – building a business on your own. You open an
an office in that country and staff it locally with an experienced salesperson. By
the time you take into account compensation, recruitment fees, infrastructure-
related costs, and the standard cost of selling such as traveling or entertaining
clients, the expenses quickly add up. For example, we hear from executives that
opening an office in the United States often runs around US$500,000 for a first-
year investment. Because a single salesperson is not likely to bring in more than
that with new clients in their first year, you will probably operate at a loss. How

long can you sustain not making a profit? Are there other ways that would allow
you to increase sales faster?
Align Your Company and Promote Your Strategy Internally

Once you’ve settled which plans you will pursue to meet your vision, draw on
your sales skills to sell the ideas and strategy to everyone on your team,
including business partners. Moving to a business planning philosophy can be a
big change that creates a culture shock that you need to proactively manage.
Advice from an LSP experienced in strategic planning: “Document

the vision or goals and make a plan from top to bottom. Then repeat this
message to all involved so that everyone is moving in the same direction.
Effective communication and breakup of the vision down to the most
junior employee helps achieve the goals quicker.”
 Use your newly articulated vision as a guiding principle. This step requires
ongoing communication and a consistent message. All team members must
know the vision and understand what the big goals mean to them in their
job. For example, an aggressive sales objective requires your vendor
managers to beef up the linguist database so that they can scale the operation
as the work comes in.
 Make team members a part of the solution. Get them excited about the
changes that lie ahead, and their own chance to contribute and make some
important improvements. We often find that too many LSP owners and
executives fail to delegate or involve other team members sufficiently.
Remember that the weight should not fall on just your shoulders – empower
your team to help you execute your strategy.
 Tie goals to performance reviews and incentives. When staff members

benefit financially from reaching the company’s goals, they are more likely to
put in extra effort and deal with the changes. Financial rewards allow you to
speed up from a gradual change to a rapid transformation of your operation.
However, just as with any incentive plan, design it carefully so that it doesn’t
generate counter-productive behaviors such as turf wars or reduced
collaboration.

Monitor the Performance of Your Plan
Your work doesn’t stop once you have decided on the action plans that
implement your strategy. First, kick-start the implementation of your plan.
Second, carefully monitor progress and remove the roadblocks that stand in the
way of executing the strategy.
Advice from an executive at a small LSP: “Take the time to actually

implement your plan.”
Document Your Strategic Plan

Compile the results of your strategic planning activity. Some companies create
fancy reports that look good to investors. What you need is simply a workable
document that you can easily update. Collect the deliverables from the various
steps listed in this guide (see Figure 10).
Figure 10: Elements You Should Include in Your Strategic Plan


Act as the Compass that Keeps the Team on Target

Don’t just lock your strategic plan in a drawer until next year when it is time to
update it. Refer to it in your daily decisions. Assess how you perform against it
at least quarterly, if not more frequently. Put keywords from it on your wall in
big letters. If you specified intermediate milestones for your action plan, stay on
top of those deadlines.
Most problems with implementation come from timing and resources. Urgent
project or staffing needs can easily derail the plan. You are the compass that must
keep on redirecting the team toward the objectives. Small detours are natural,
but an entirely new direction shows lack of follow-through.
To teach yourself how to use the plan, announce your key performance
indicators and any progress. When you don’t report to a board of directors or
advisors, the only accountability aside from your own can come from your staff
(or your spouse). Go public in front of them and use your trusted employees as a
proxy for a board to keep you on track with the objectives.
Recognize the Signs of a Poorly Executed Strategy

Implementing strategic plans often comes with significant structural changes in
the organization to add a capability, improve results, or simply to meet targets.
Many executives fail to manage the change process effectively.
Ambrose presented a model in 1987 that details the five success factors to
implement significant changes (see Figure 11): vision, skills, “what’s in it for me,”
resources, and action plans. The strength of this change management model is
that it presents the symptoms that appear when those factors are missing, which
are in turn, confusion, anxiety, resistance, frustration, or false starts.
These elements can be carefully thought out ahead of implementing the changes.
Use this model to plan drastic changes and adjust the course if you notice one of
the downsides forming.
Ultimately, strategic plans can be successfully implemented only if you manage

change closely. Yet two other roadblocks can mess up the plan:
 The temptation to resist change. When you’ve been doing things a certain
way for a long time, it is hard to deviate from your normal course. Inertia
will prevent results. Don’t let the status quo and a culture of passivity win.

Figure 11: Factors in Managing Complex Change

Source: Ambrose, D (1987). Managing Complex Change.
 The luxury of too many options. Sometimes, it can be overwhelming to

decide which solution or direction to pursue. Each option requires research
and therefore an investment in time. Too many choices can lead to analysis
paralysis – that is, the failure to make a decision. Strategic planning is not just
about eliminating bad options, but also some good ones that you just can’t
pursue right now because of bandwidth or budgets.
Live by the Plan but Readjust When Needed

Lastly, once you have finalized your plan and evangelized it inside your
company, stick with it. If you’ve done it right, you should not need to revise your
strategy more than once every six months. You will need to give it at least that
much time to test it and see if it works.
Take note: Resist the temptation to pull the plug too early. You would short-
change the plan and the team before they start showing results. It can also be
demotivating for your staff when you constantly change your mind. However,
be realistic. If crucial new information comes to light or you seriously misjudged
the situation, sit down with your strategy team and assess the situation.
 Review your plan quarterly. Convene your strategic planning team to

evaluate your performance against the plan. Are you on time with the action
plans or are you falling behind? Are you staying within budget or are you

tapping into other resources than planned? Are you under- or over-achieving
on the results you anticipated both in terms of quantitative and qualitative
targets? What major deviations from the plan have you experienced? Is
everyone doing what they should be doing according to the plan?
 Update the plan. Revise objectives, targets, budgets, and timetables. Your
plan must be a living document that you revise and adjust as the company
approaches its goals. But when you make changes, stick with the gist of the
plan. The direction should stay the same. Analyze the sources of deviations
and their implications to determine whether they are warranted. Conduct
follow-up research on goals to ensure conditions haven’t changed and that
your action plans still make sense.
 Communicate progress. Constantly focus on aligning the staff with the

vision and the goals. An annual declaration of intent isn’t sufficient. Bring up
the achievements in performance reviews and tie incentives to them to
reward the results.
The Hardest Step Is Getting Started

Don’t remain a spectator when it comes to the future of your company.
Capitalize on your intentions to lead your business proactively by taking
immediate action. Before you close this report, pick up your calendar and
develop a timeline to handle the steps in the staged approach from Figure 3.
Identify who should be in your strategic planning team and call a meeting to
brainstorm and discuss ideas. Then request reports from all relevant entities.
Don’t let the ball drop. LSPs that plan experience more sustained growth over
time. It is your responsibility to keep the ball moving.

Related Research
Common Sense Advisory has been writing about various aspects of LSP strategic
planning for a decade. Throughout this document, we referenced previous
research that explained or expanded on issues being discussed. We recommend
the following research on related topics.
 “The Owner’s Guide to Maximizing LSP Value” (Apr10): This report

examines various growth and exit strategies for LSP owners. It helps
executives run their operation like a big business to lead to better company
performance.
 “The Language Services Market: 2013” (May13): This cornerstone report is

updated annually to provide a picture of the state of the language services
market with data on demand, the market, suppliers, services, benchmarks,
and trends.
 “Where the Global Translation Money Is: 2013” (Oct13): In this report,
Common Sense Advisory presents the verticals that generate top revenue for
LSPs around the world and how executives can use that information to refine
the vertical mix they choose to service.
 “Differentiation You Can Bet Your Brand On” (Oct13): This brief goes hand
in hand with this strategic planning report and helps LSPs determine what
constitutes a differentiator and discover techniques to pinpoint what makes
them stand out.
 “How LSPs Can Use Client Analytics” (Sep13): This brief covers why you
need to track client data, what to track, and what to do with the results.
 “Seven Steps to Develop Key Performance Indicators” (Jan13): This brief

provides a seven-step approach to turn company objectives into key
performance indicators.
 

About Common Sense Advisory
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Strategic Planning For LSPS: A Guide To Annual Business Planning

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Strategic Planning For LSPS: A Guide To Annual Business Planning

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Strategic

By Hélène Pielmeier and Donald A. DePalma

Copyright © 2013 by Common Sense Advisory, Inc., Cambridge, Massachusetts,

No part of this publication may be reproduced, stored in a retrieval system or

Permission requests should be addressed to the Permissions Department,

Trademarks: Common Sense Advisory, Global Watchtower, Global DataSet,

Information is based on the best available resources at the time of analysis.

Copyright © 2013 by Common Sense Advisory, Inc. October 2013

Figure 1: The Strategic Planning Process ............................................................................. 4

Table 1: Assess Your Readiness for Strategic Planning ..................................................... 6

October 2013 Copyright © 2013 by Common Sense Advisory, Inc.

In Common Sense Advisory’s partner program, we guide LSPs through the

The report includes the following sections:

Copyright © 2013 by Common Sense Advisory, Inc. October 2013

into strategies to achieve the objectives. We wrap it up by showing you how

 Related Research. We recommend other Common Sense Advisory research

October 2013 Copyright © 2013 by Common Sense Advisory, Inc.

What Is Strategic Planning?

Strategic planning is a process for defining a business strategy to shape and

1. Situation assessment. You research the current state of your company to

Copyright © 2013 by Common Sense Advisory, Inc. October 2013

Figure 1: The Strategic Planning Process

Why Should You Take a Formal Approach to Planning?

October 2013 Copyright © 2013 by Common Sense Advisory, Inc.

streamline the opportunities to pursue so that you achieve your goals

 Formalize the long-term direction. Employees are most productive when

 Build a framework for decision-making. Daily decisions about running the

 Direct change. Strategic planning is a catalyst for business transformations to

 Guide operational planning. Having to always find ad hoc solutions stresses

 Align the company to the goals. Strategic planning establishes agreements

When Should You Start Planning?

Strategic planning is a time-consuming exercise. Most executives conduct it

Copyright © 2013 by Common Sense Advisory, Inc. October 2013

 Undertake a major change. Strategic planning allows you to prepare

 Do long-term planning. When your organization matures to the point where

Readiness Factor What You Need

Table 1: Assess Your Readiness for Strategic Planning

October 2013 Copyright © 2013 by Common Sense Advisory, Inc.

Who Should Be Involved?

Figure 2: Build a Strategic Planning Team

Copyright © 2013 by Common Sense Advisory, Inc. October 2013

Dedicating a team to the task helps:

 Obtain a different perspective. Your employees’ feedback and ideas may be

Advice from an LSP executive who actively plans: “Strategic

October 2013 Copyright © 2013 by Common Sense Advisory, Inc.

Figure 3: Executives Should Take a Staged Approach to Strategic Planning

Copyright © 2013 by Common Sense Advisory, Inc. October 2013

This section guides you through developing a mission statement, reviewing

Revisit Why Your Company Exists

Tips for a good mission statement:

Many companies publish their mission statement on their website. Your

October 2013 Copyright © 2013 by Common Sense Advisory, Inc.

Review the Performance of Functional Areas of Your Company

Develop a Solid Understanding of Your Overall Business Performance

Table 2: Sample Metrics to Assess Business Performance

Copyright © 2013 by Common Sense Advisory, Inc. October 2013

Map the Market Landscape

Metrics Frequently Used by LSPs Resources

Table 3: Sample Metrics to Assess the Client and Competitive Landscape

October 2013 Copyright © 2013 by Common Sense Advisory, Inc.

Investigate Your Sales and Marketing Efforts

Metrics Frequently Used by LSPs Resources

Table 4: Sample Metrics about Sales and Marketing