Strategic and Business Planning for Ensuring of Cooperatives Sustainability Dr. Hakkı Çetin TARIS Union of Olive and Olive Oil Agricultural Sale Cooperatives Strategic Planning Consultant South and South Triangular Cooperation For Agricultural Development and Enhanced Food Security January 2016 UTAEM / Menemen /Izmir 1

The term “STRATEGY” is derived from the Greek word “STRATEGOS” which means “General” or army leader. As a military term, strategy is; use of the resources with the most economically and efficiently way against the opponent in order to reach victory. After 1950’s with contribution of the studies about strategy, private companies started to use strategic planning as a management model in order to develop their business and make profits. After 1980’s strategic planning became a standard management tool every Fortune 500 company. A brief history of strategic planning 2

Today’s the dynamic business environment in which cooperatives operate a complex array of structures and influences ranging from local to global in scope. In responding to the changing needs of members within today’s dynamic business environment, many farmer cooperatives have integrated strategic planning systems into their organizational structures. In order to claim the sustainability, business decisions must be made on the basis of strategic planning, rather than in reaction to adverse internal or external developments. 3 Why cooperatives need strategic planning?

An organized, documented method of letting organization objectives and defining them how they will be accomplished. It describes how an organization will get to where it wants to go. Strategic Plans are usually generated with three or five years time frame. Basic Definition of Strategic Planning 4

Phase 1 Reading current situation Strategic Planning Process Internal and external analysis Vision - Mission, strategic goals, objectives, actions Annual Business Planning and Budgetting (implamentation) Monitoring and evaluation Phase 2 Creating a road map Phase 3 Moving to the future Phase 4 Controlling where you go 5

Strategic Planning Process Phase 1 Reading current situation Internal and external analysis Phase starts with collecting data from internal and external space of the organization. After collecting data we must interpret the current situation with an analyzing method. SWOT analysis is using for completing this phase 6

Strategic Planning Process Reading Current Situation with SWOT Analysis StrengthWeaknesses OportunitiesThreats 7

Strategic Planning Process Reading Current Situation with SWOT Analysis StrengthWeaknesses OportunitiesThreats - Cooperative possibilities, -New products, -New investment areas, -Cost reduction possibilities, -Credit and grant opportunities, etc. -Movements of the competitors, -Black economy, -Other effects to increase costs, etc. -Organization culture, -Brand value, -Financial assets, -Technology, -Production capabilities, -Organization structure, staff, etc. -Organization culture, -Brand value, -Financial assets, -Technology, -Production capabilities, -Organization structure, staff, etc. 8 Internal Analysis External Analysis

Strategic Planning Process Every cooperative has goals. But, without formal planning these goals may not be written and consequently become vague or incorrectly perceived by directors, the managers, the employees, or worse yet the members. This results in a lack of clearly defined focus. Phase 2 Creating a road map Vision - Mission, strategic goals, objectives, actions 9

A model for creating a road map Objective B2 Objective A1 Mission & Core Values Action A1-1 Objective B1 Objective A2 Goal B Goal A Action A2-2 Action A2-1 Action A1-2 Action B1-1 Action B1-2 Action B2-1 Action A1-1 Vision 10

The Key Elements of Strategic Planning Vission and Mission Objective B2 Objective A1 Vision Mission & Core Values Action A1-1 Objective B1 Objective A2 Goal B Goal A Action A2-2 Action A2-1 Action A1-2 Action B1-1 Action B1-2 Action B2-1 Action A1-1 Vision is a long term image which the organization want to be. What will our organization look like in 5 to 10 years from now? “To be a global cooperative brand” Example expression Mission statements are normaly short and simple statements which describes the organization purpose. It is the answer of the question; Why do we exist? 11

The Key Elements of Strategic Planning A goal is a target for medium to long range accomplishment. (3 or 5 years) Goals describe what the cooperative wants to achieve. Strategic Goals Objective B2 Objective A1 Vision Mission & Core Values Action A1-1 Objective B1 Objective A2 Goal BGoal A Action A2-2 Action A2-1 Action A1-2 Action B1-1 Action B1-2 Action B2-1 Action A1-1 Example expression* "Beeing a leader cooperative brand in national agriculture markets in 3 years." 12

The Key Elements of Strategic Planning Goals are reached through objectives. An objective is a short-term, practical target related to a particular goal. Objectives are specific, measurable related to a specific time frame. Several objectives may be needed to meet each goal. Strategic Objectives Objective B2 Objective A1 Vision Mission & Core Values Action A1-1 Objective B1 Objective A2 Goal BGoal A Action A2-2 Action A2-1 Action A1-2 Action B1-1 Action B1-2 Action B2-1 Action A1-1 Example expression At least 2 new products will be served to the market in

Actions are specific tasks which have to be performed in order to achieve objectives Actions The Key Elements of Strategic Planning Objective B2 Objective A1 Vision Mission & Core Values Action A1-1 Objective B1 Objective A2 Goal BGoal A Action A2-2 Action A2-1 Action A1-2 Action B1-1 Action B1-2 Action B2-1 Action A1-1 A survey will be made to determine customer expectations about new products Example expression Every single action is very important in order to reach the long term goals. With an intelligent action plan, small actions will make a powerful impact for reaching the cooperative vision. 14

Strategic Planning Process Annual Business Planning and Budgetting (implamentation) 15 Even a perfect plan doesn't enough to move the organization further. Annual budget must be connected to the mid and long term strategic plan. If not, the perfect plan would become a wishing document. Phase 3 Moving to the future

Strategic Planning Process The management committee should use reports against its annual business plans to review progress towards meeting the strategic aims and objectives. Therefore, they must ensure that whoever is doing the work is keeping appropriate records so that progress can be assessed. Phase 4 Controlling where you go Monitoring and evaluation 16

Sample Strategic Plan Form Goal 1. No Strategic Objectives and Actions Responsibles / Cooperation Partners Time Frame Resource Needed Performance Indicator Explanation Objective Action Action 2. Objective Action Action Action Action 4. 17

Advantages and challenges of Cooperatives Cooperatives have some advantages and challenges for applying strategic planning model in their management cycle. Cooperatives combine people for common ideals, Cooperatives are democratic organizations, Presence of universal cooperative principles, Cooperatives are also social organizations which have high brand value in the society, Cooperative members seeking satisfaction while cooperative works in high compatitive markets, Black economy must be prevented by the state. Effective state supports are needed about agricultural production. AdvantagesChallange areas 18

Sample Case: TARIS Olive and Olive Oil Union In 2001, Union of Taris Olive and Olive Oil Cooperatives generated its short, mid and long term strategies in three dimensions which were about production, membership and marketing. 19

Sample Case: TARIS Olive and Olive Oil Union Adapting high tech production systems Member education and training Member education and training Professional Marketing System Professional 20

The Benefits of Strategic Planning Strategic planning is also a “change management” tool. With an effective strategic plan, a single cooperative can make big changes to the external space; Cooperatives can effect their national agriculture politics with their strategic plans, With well prepared strategic plans cooperatives can achieve national and international grants and credits with low interests and can focus the sustainable projects. A participated strategic plan is an opportunity to make new deals with the business partners. 21

Thank you... 22