Have you ever asked a candidate to tell you about their “five year plan”? This question earned its place as a cliche or a punchline to an HR joke a long time ago, I know, but stop for a second and think about why. Hiring managers don’t ask this question to find out a candidate’s ambitions, they ask to get a picture of how the person thinks they can achieve those goals. Good strategic planning, whether it’s for an individual or a company, includes four key elements:
Clarity. It is not enough to have an idea of where you want to be personally or as a company in the future. The goals you set must be specific and clear. Are you aiming for a revenue goal? Is there a prestigious recognition within your industry that you want to earn? Do you have an idea for developing a signature product? A strategic plan is not open-ended. A good strategic plan has a clearly defined goal that all other elements move towards.
Action. When you clarified your goal, did you think about any of the milestones along the way? To move from your current annual revenue to your target, what will you need to do to increase productivity or diversify your product line? If you want to gain that recognition, what are the requirements you will need to meet? What steps will you need to take to bring that signature product to the market? As you work through each of these elements, you’ll be identifying key actions and milestones on the path to your goal. A strategic plan does not rely on luck. A good strategic plan is a roadmap of actions that bring you from your current position to your goal.
Time Frames. Whether you thrive on deadlines or they give you hives, you can’t build a strategic plan without a clearly defined timeline. Even with carefully laid out action steps and milestones, it’s too easy to set aside a long term strategic plan in favor of the things that are currently pressing. The Eisenhower decision matrix is a great framework for categorizing the things we do according to their Importance and Urgency. The action steps in your strategic plan are often of high importance but low urgency – especially when you have not clearly defined a timeline for achieving your goal. A strategic plan doesn’t look at your goal as a “someday” achievement. A good strategic plan provides a timeline for achieving each step in the process.
Accountability. What metrics will you use to gauge your success as your implement your strategic plan? What baseline will you use to measure improvement? It’s important to establish checkpoints throughout your plan so that you know where to adjust and where to concentrate your efforts. Even a straightforward goal like increasing your revenue by a certain percentage needs to have a method for measuring your progress vs growth that may come from other sources. A strategic plan doesn’t just look at points A and Z. A good strategic plan reviews metrics and data points throughout the process.
If all of this sounds important, that is because it IS!
Strategy, according to Harvard Professor Michael Porter, “is the creation of a unique and valuable position involving a different set of activities”. Strategic planning is the process of creating and defining these activities within your company. Perhaps it is time to pull together your company’s strengths, improve the weak areas, and ready yourself for the future.
Many companies don’t do strategic planning. Maybe they traditionally relied on the owner’s instincts to chart the path forward, which is no longer sufficient as the company has grown. Or maybe somewhere along the line, they stopped doing it for any number of reasons.
Common challenges to good strategic planning
- The right people are not included in the process; hence no buy in from the leadership team.
- They don’t confront the brutal facts facing the company or they are unwilling to make the changes to address those facts.
- They don’t include meaningful results and accountabilities.
- It just sits on the shelf.
For whatever reason, strategic planning is not done and they’ve rationalized that the discussions in their weekly and monthly meetings are sufficient for a company strategy session.
As a business coach, I know that growth oriented companies make strategic thinking, planning and execution a part of their regular routine. We use Verne Harnish’s One Page Strategic Plan in the strategic planning process. The document’s concise organization makes it the go-to archive for quarterly and annual planning. Leadership team members usually keep it handy and reference it regularly, making it an important communication tool. Some companies even display it for everyone to see to drive alignment at every level.
Effective planning involves a number of important considerations. We can help you work through the crafting and implementation of a winning strategic plan and put you squarely on the growth path.
Schedule a free call with Mark today to get started.