Tactical planning: the development of a tactical plan is a good way to stimulate ideas and concerns in your office.

French author Antoine de Saint-Exupery once said, "A goal without a plan is just a wish." There is no evidence that the author of The Little Prince ever worked in the insurance industry, but he has summed up the way the industry often approaches the planning process.

The planning process is something we all go through in the insurance world. To a certain extent it is a necessary evil: necessary because you need to devise budgets and Financial expectations; evil because it can be time-consuming, cumbersome and eventually a fruitless endeavor.

The problem with planning is that it usually involves only the financial view of the upcoming period. Most insurance professionals who are not directly involved in the financial planning see it as a task done by management, not by them. A cynical analysis would say that planning involves a week or so of day-long meetings, concluding with a financial plan projecting premium goals (too high), loss ratios (too low), and the additions to staff (none).

What is missing here is the grand opportunity to pursue true planning through the development and implementation of a tactical plan. If the financial plan is the destination, the tactical plan is the road map. The following are some things to think about as you develop your map:

Do tactical planning at all levels of the organization. A desk underwriter has as much need for this type of plan as a senior executive. The development of this plan will give ownership of the work, regardless of the level. Goals and responsibilities change according to the position of seniority, but the need for a clear path is always present. As Lewis Carroll said, "If you don't know where you are going, any road will take you there."

Visit the plan regularly. The plan is not a homework assignment to show the boss at the beginning of the year, never to be seen again. The tactical plan should be a working document. Stick to the plan if you are on the fight path, but remember that things change quickly in our business. Don't be afraid to make adjustments.

Be creative. Use the tactical plan the way an artist uses a canvas. Pablo Picasso said, "Every child is an artist. The problem is how to remain an artist once he grows up." A central focus of your tactical plan should include ways that you are going to differentiate your business and yourself.

Objectively analyze your current position. No plan is complete without recognition of where you currently stand in the marketplace. A good way to evaluate your position is through a SWOT analysis: looking at your business's Strengths, Weaknesses, Opportunities and Threats.

* Strengths are the things that you and your company do well. You should continue to reinforce your strengths so they remain an arrow in your quiver. Your strengths are the things that set you apart from the pack, so publicize them.

* Weaknesses are the items that you would rather not address. Improve on them if you can, and if you can't, minimize their significance. Weaknesses will cost you business, so you need to have methods for countering their presence.

* Opportunities are the best areas for growth, possibly for significant growth. This includes a true recognition of where you stand in the marketplace. Back up identified opportunities with a method for acquiring the resources to exploit those opportunities. Be as ambitious as you can.

* Threats are the potential problems that are lurking in the shadows: a new competitor, a lost customer. Don't allow yourself to get blindsided; identifying potential threats is a critical step. Once you have identified the threat, you need a plan of action if the threat comes to fruition.

Be realistic. There is a great story in the book Jack about former General Electric Chief Executive Officer Jack Welch. After the nuclear crisis at Three Mile Island was averted, the GE nuclear division went on to prepare a business plan as though the frightful experience had never happened. Welch refused to accept the plan from the division, and he was right: Not a single nuclear reactor has been built in the United States since that incident. When you develop your plan, be hopeful but realistic.

Emphasize the route, not the destination. Remember, this is your road map. The financial goals are a separate matter, and you probably have little control over the financial plan.

The development of a tactical plan is a good way to stimulate ideas and concerns in your office. The creative juices will flow when you creatively look for ways to improve your business.

You may not hit on every cylinder with your tactical plan and not every idea will work, but going through the process is invaluable. As Thomas Edison said, "Just because something doesn't do what you planned it to do doesn't mean it's useless."

Michael P. Egan, a Best's Review columnist, is director of Properly Programs at NSM Insurance Group in Conshohocken, Pa. He can be reached at [e-mail]