Schramm, Inc., President Ed Breiner believes strongly in the value of strategic planning. Since 2000, he had led Schramm’s strategic planning process, using it to help guide the company’s growth. In 2006, Breiner made the decision to have DVIRC take the reins of the strategic planning process. “I felt that I could be more effective as a participant in the process, rather than a facilitator,” notes Breiner. “We had a relationship with DVIRC on other projects, and felt they were the right resource to lead and support our planning efforts.” Working with DVIRC, the Schramm management team developed action plans for five key initiatives: new products, new geographic markets, improved manufacturing, more aftermarket sales and service, and management succession. By 2008, the business had made a quantum leap in terms of volume, continuing an upward trend that began in 2005. Sales doubled as new products and innovations were introduced, and new markets were penetrated. But, between 2008 and 2009, as the global economy fell into recession, Schramm’s business dropped 54 percent. Sales decreased from $105 million to $48 million, and the company laid off one third of its workforce. By the fall of 2009, business was picking up again, Schramm began hiring, and new international markets were being developed. The company’s strong management, with DVIRC’s guidance, formulated and adjusted the strategic plan, helping Schramm seize opportunities and surmount obstacles in this fluctuating business environment.
Through a structured Strategic Planning Process, DVIRC works in partnership with Schramm management to help them envision where the company wants to be in the future, assess where they are today, and map out initiatives that will help the company reach its goals. Future State discussions help Schramm management determine where they want the company to be in four years. DVIRC helps them to define this vision in terms of sales, revenue, markets, products and other criteria. Current State assessments provide insight into company strengths, weaknesses, opportunities and threats. With DVIRC facilitation, Schramm management determines where gaps exist and what areas need to be strengthened. Plan Development determines 12 months of actions to address the key initiatives necessary to make progress toward future state goals, and assigns related responsibility and measures of success. Follow Up meetings with the DVIRC consultant are held at regular intervals throughout the year to assure execution, review progress and make adjustments in response to changing conditions. The Strategic Plan is updated annually, and reviewed every quarter. Revisions are made in response to market conditions and new opportunities.
Breiner believes that the company’s commitment to strategic planning, and DVIRC’s support, have helped them manage effectively through the cyclic nature of their business. “As a business manager, planning is what you get paid to do,” says Breiner. “You can’t just be shoveling coal into the furnace. You have to step back and ponder outcomes and put plans in place.” While Breiner notes that strategic planning in itself does not generate sales and profits, it does create a structure and pathway for continual growth and business enhancement. “It helps us look ahead and be ready,” he says. “With a strategic plan in place, we are able to be proactive, rather than reactive. That can make the big difference when markets and the economy change.” For Schramm, Inc., and the management team, specific results and benefits related to strategic planning have included: Succession Planning. From 2006 to 2007, the company developed a succession plan that met individual and company interests. Plans were developed around five key initiatives and in each case noticeable progress was made. Growth and Profitability. From 2007 – 2008, Schramm was well positioned to pursue growth opportunities. The company reported an increase in sales of $35 MM, retention of sales of $5 MM, increase in investment of $2MM and the avoidance of unnecessary investments of $5 MM. Resilience and Recovery – In 2009, Schramm weathered a steep decline in sales due to the global economic slowdown and the strengthening of the U.S. dollar. Despite the downturn, Schramm strategic planning initiatives continued, and new opportunities were targeted in China, Australia, the Marcellus Shale and the U.S. Geothermal market. When the time was right, Schramm was prepared to pursue those opportunities. Agility – The strategic planning process has helped Schramm be ready for change. “Our strategy discussions are helpful as we prepare for the field of play,” says Breiner. “We have a plan, and we’re able to adjust accordingly as we go.” Market Intelligence – While strategic planning has helped Schramm enter new markets, it has also helped them make informed decisions about issues that could negatively affect the company. Discussions of future possibilities and challenges recently helped them make the decision not to pursue a proposed joint venture in China. “When the opportunity came up, we had the intelligence to make the right decision for the company,” says Breiner.
Founded in 1900, Schramm, Inc., originally manufactured portable air compressors. They later pioneered air flush drilling, and in the 1970s turned their focus to the engineering and manufacture of mobile drilling equipment. Today, Schramm, Inc., produces mobile drilling rigs for the water well, shallow oil and gas, mineral exploration, geothermal and environmental markets. In 2005, after more than 100 years of operation by the Schramm family, the business was purchased by the company management team. Schramm drilling rigs are currently used throughout the world.
Thoughts from Ed Breiner on the Strategic Planning Process
“It’s essential for company leadership to take time to step away from the daily battles and assess strengths, weaknesses, opportunities and threats. Strategic planning helps you do that.” “It’s short sighted NOT to take the time and ponder how you differentiate from competitors. You have to understand your strengths. Strategic planning is about discovery.” “Regular, formal planning processes bring clarity to decision making.” “Our business is very cyclic. Changes can be dramatic. Strategic planning helps you develop a playbook for when that happens.”
Third party challenge and perspective is crucial. DVIRC provides that. Our DVIRC strategic planning consultant keeps us on task and honest.” “We’ve been working with our DVIRC consultant since 2006. He’s effective, credible and has become an integral part of our team,” notes Breiner. “We are better managers because of the strategic planning process and the support we get from DVIRC.