New tools are only great if you know how to use them.

Every business, whether they know it or not, develops a long-range strategic plan. Some have a formal process they follow, often timed to take place during summer months before the task of compiling a budget for the next year. Others follow a less formal process every few years, while the majority of companies, especially smaller ones, have no formal process, but occasionally, when asked by their accountant or banker, sit back and dare to dream about their business’s future.

Long-range planning is essential if the ultimate goal is to be around well into the future. The process followed is less important than the need for documentation. Writing down those gems of ideas enables you – besides to remember them – to benchmark performance: Are you moving toward dreams fulfilled, or viewing a mirage called your long-term goal?

Any type of planning, be it short-term budgeting or long-range strategic, must address the four “Cs”: Capability, Capacity, Capital and Competence. Most tend to start by calculating how much capital they have, or are willing to invest, in order to expand, change or enhance capability and capacity. Next to no effort is spent thinking about competence.

In our industry, thinking, if not dreaming, about capability seems to be the most provocative area to plan around. We are, after all, at the epicenter of technology and all that it means in the way of cutting-edge requirements from our customers and the need to invest in capital equipment with the ability to create the designs, tooling, and product to cost-effectively support the seemingly never-ending creative demand placed on us by our customers. Yes, capability is sexy. And, yes, capability can be equally costly, once again making us think long and hard about the capital required to develop desired and competitive long-range capability.

Capacity is another issue. Some think there is too much; others see a need for more, but all would probably agree that the type and location of capacity is a moving target. In each scenario we need to think long and hard about how much we need to scale our operations to maximize customer service and profits. Many a company has foundered by misjudging the appropriate amount of capacity, and its location, utilization and affordability. With the danger of any ebb tide revealing perilous rocks, many spend the majority of their time thinking and rethinking the appropriate scale of business and location.

Of course, neither adding that sexy capability nor scaling an operation to anticipated capacity needs can be done without capital. The availability of, and appetite to spend, existing or borrowed capital also requires serious thought. When interest rates are low, the ROI hurdle to invest those hard-earned renegade dollars may be extremely attractive. But an inability to produce a satisfactory rate of return leveraging your balance sheet or spending everything in the reserve tank may be a recipe for disaster. The availability of and wise use of capital will most likely constrain if and/or how you implement the long-range plans you formulate. Equally, if you formulate solid, well-conceived and thought-out plans, the availability of capital through earnings could make all the difference.

Yes, these three “Cs” are important, require a focused approach to think through, and the related due diligence to ensure long-term success of your business. But what about the fourth “C?”

All too often it is assumed that the competence is already in place and, if not, readily available on the open market. Regrettably, I am not sure that is the case, and am convinced that the one “C” that requires the most forward thinking is Competence.

Let’s face it: Our industry has a lot more gray hair than many. Most executives I speak with observe the significant numbers of workers approaching retirement age. They equally pine about how difficult it is to find capable employees – ones with both the basic skills and the desire to actually show up on time and work! While youth might be found in the design and engineering departments, on the shop floor the look is decidedly more “seasoned.”

Competence is the hallmark of our industry. You can invest in the best equipment, have unique cutting-edge capability and the perfect balance of capacity, but without competent people to translate customer data into usable tools and oversee complex and varied processes to ensure high-yield, cost-effective product delivered on time, all that capital will be wasted.

The printed circuit industry is not alone. Almost every manufacturing business cites the availability of competent employees as the leading detriment to growth and the leading contributor to waste and inefficiency. Despite this, while executives are feeling the pain, they tend not to spend much time strategically thinking about what or how in the long run they could develop competent employees.

So whether you follow a rigorous, highly structured long-range strategic planning process or just sit down on a Sunday afternoon with a pad of paper and dream about your business’s future, the place to start your thought process should be planning how to identify, attract, develop and retain competent employees who will enable your business to best add capability and utilize capacity so to generate, rather than waste, capital. Competence might not be sexy, might be hard to achieve and may well require scaling differently than you wish, but will ultimately enable achieving your long-range goals, no matter what they are.

Peter Bigelow is president and CEO of IMI (imipcb.com); pbigelow@imipcb.com. His column appears monthly.