Most business plans are high on theory and optimism, but weak on actual business strategy and planning.
To be honest, for several years I put very little emphasis on (so-called) strategic planning models with my clients, because it felt like a guessing game, and there was rarely a direct impact on results. It took significant amounts of resources to create a plan that would ultimately sit in a binder or digital folder, never to be looked at again.
I figured, “don’t waste your time.”
However, a number of years ago I was introduced to a framework that changed my opinion about what strategic planning is, and how it can work effectively, and it changed how I approach planning with the high-growth companies that I coach.
A strategic plan is a living document that evolves.
Done properly, it typically takes 2-3 years to create an effective plan to scale a successful business sustainably. Think of it like a crossword puzzle, where you start by filling in what you know, and use those data points to try to figure out the more difficult answers. Along the way you will realize that answers you thought you knew weren’t correct after all, as all the sections are inter-dependent, and we learn more as we go.
If your goal is to fill out a strategic plan template, you’re missing the point.
“If you want to get everyone in the company on the same page, then you need to literally get everything on one page.”
– Verne Harnish
Our trademarked Scaling Up One-Page Strategic Plan simplifies: who is doing what, by when, and how will we measure it?
That process requires discussion and healthy debate amongst the leadership team, as we address the Four Decisions businesses must get right, if they want to scale up without added drama and complexity: Strategy, People, Cash and Execution.
It is done in two parts: strategic thinking and execution planning.
When most businesses attempt to plan, what they think is strategy is actually short-term objectives and tactics. When you allow adequate time for strategic thinking before you begin execution planning, the result is a more focused and purposeful plan that engages people at all levels of the organization, giving you a massive competitive advantage.
Strategic thinking is long-term – looking a minimum of 3 years out, and often as far as 10-25 years out. Whereas execution planning takes place in 90-day sprints, toward one-year initiatives. In other words, you are constantly revisiting the business strategy, taking a bite sized chunk out of the long-term goals.
What is our core purpose? Why do we exist, and what difference are we making? (Avoid wordy or generic mission statements.)
Where are we going? Where’s our north star? And what’s the next peak we need to climb on that journey?
What is our BHAG? As Jim Collins defined it, the Big Hairy Audacious Goal is the intersection of your core purpose, what the company does best, and what drives profit.
Who is our Core Customer? That is, customers that will come back or refer repeatedly, values your product or service, and will buy at optimal profit. This is the key to increasing market share.
What are our Brand Promises? Think of this like a unique selling proposition, but one that you can measure through Brand Promise KPIs.
What is our profit/x? In other words, what are the biggest drivers of profit, and how can we achieve margins that are 2-3x higher than industry average?
These questions are a critical part of the strategic plan process, no matter the type of business, or it’s size.
Execution Planning is about the “how”:
What are the top 5 key initiatives for the next 12 months that will put us on track for the big picture goals?
Next, break that down into quarterly priorities, or “rocks.” Rocks make your goals concrete by taking a chunk of the annual initiatives and assigning it a measurable milestone.
When done as a leadership team, the next step is for each leader to make an individual plan, for themselves and their department, that is connected to the company plan. This is your action plan that determines who is doing what, by when.
The Importance of Strategic Planning
Every successful business needs a roadmap that outlines where you’re going and how to get there.
Strategic planning is an intentional approach to making decisions and actions that will help you achieve your business goals over the long-term. Having a strategic plan helps businesses stay on track, while course-correcting as needed, in order to adapt to the ever-changing business environment.
When done effectively, strategic planning is key in helping make decisions about what goals the business should pursue, why, and how. The process allows for an evaluation of current resources, capabilities, strengths and weaknesses, opportunities and threats, in a way that can enables long-term business growth and scalability.
Most leaders try to do too much, and end up overwhelmed and accomplishing less. So the benefits of the strategic planning process itself is valuable in helping businesses focus on the right stakeholder outcomes, stay organized, and provide a roadmap for future growth.
Strategic Planning Success Story
“Every aspect of the business has improved with Karie’s guidance, and now our focus is coaching our management team through strategic planning sessions. This has paid massive dividends as we now have a management team that is involved in helping shape the future of the company on top of managing the day-to-day. The business has turned around (annual revenue has doubled and net profit is above industry average) which means we have happy customers, engaged A-Team employees and capital to grow.”
Todd Cuffaro, CEO, Miller CNC
The Key Elements of Strategic Planning
When it comes to strategic planning, there are several key elements that must be taken into consideration.
The first is establishing the core purpose for your company. Some might refer to this as a vision or mission statement, but thinking of it like a “core purpose” helps you to narrow it down to a simple, concrete and meaningful statement. Avoid flowery language that sounds like it was written in a university class. You want this to be a simple statement that your entire company believes in, and engages them to give their best efforts every day.
The second element is determining your targets and objectives, and developing strategies for achieving them. This includes creating measurable goals, setting timelines for when those goals should be achieved, and devising a plan of action.
The third element is monitoring progress. This includes tracking metrics such as revenue, margins, lifetime value of a customer, reviewing feedback, and assessing the effectiveness of your strategies. This is crucial for accountability, and ensuring each member of the team is executing according to the plan.
The fourth key element is resource management. This includes budgeting, staffing, and other activities related to managing available resources to ensure that all objectives can be achieved.
Finally, the sixth key element of strategic planning is review and adjustment. It is not enough to “set it and forget it” when it comes to your strategic plan. Every 90-days you should take time to learn from what is going well, what’s not going well, and take the time to adjust your plan and recalibrate.
Consider the four decisions
1. People Decisions
People are your most valuable resource. .
Decisions around people are the currently the biggest challenge facing high-growth companies. It can either be a source of energy, or an emotional drain.
If you don’t get the “people stuff” right, the rest of the strategic plan is irrelevant. On the contrary, a team in full alignment and clarity of purpose cannot be stopped.
With a focus on getting the right people to do the right things, with clear accountabilities, we will empower your team to grow faster and stronger.
2. Strategy Decisions
Does your firm have a simple strategy & is it driving sustainable growth?
A well-crafted strategy produces consistent revenue growth, with profitability above industry averages.
Through analysis and tools, we will work together to concisely articulate your company’s strategy. With the team aligned on your brand promise, differentiating factors, and economic drivers, priorities come into focus.
A clear strategy harnesses energy and reduces chaos – emphasizing productivity over busyness.
3. Execution Decisions
With a culture of accountability, set your plans in motion.
Without a focus on execution the value of the Strategic Plan cannot be realized.
It’s often said that more businesses die of indigestion than starvation… Meaning that growth can initiate chaos, of processes aren’t running smoothly.
Establishing a communication rhythm throughout the organization is key to keeping on pace.I’ll work with you to break your long-term plans into milestones, with actionable steps and ongoing accountability to see it through.
4. Cash Decisions
Learn critical cash flow rules. .
Growth sucks cash. This is the first law of entrepreneurial gravity.
It’s imperative that high growth organizations understand your Cash Conversion Cycle, and have strategies in place to improve it, in order to continue to fund growth.
Working together, we will determine how long it will take to turn your business investments back into profits, so you understand how fast you can afford to grow.
Your strategic plan may be the best in the world, but it’s useless if it’s not implemented.
Once your plan is set with clear priorities and measurable outcomes, the next step is to assign an owner to each company priority. Now, this doesn’t mean that individual is solely responsible for execution – it means they are accountable to seeing that it gets executed. In other words, responsibility can be shared amongst multiple individuals or departments, but only one person can be the accountable “owner” of each priority. Otherwise, if multiple people are accountable… then no one is accountable.
Once priorities are clear and you’ve agreed on who is doing what, effective meeting rhythms are your best tool for staying on pace. A quarter is a series of 13 weekly sprints, which is why you can’t let a single week go by without reviewing the status of your plan.
Having a weekly leadership team meeting to review the plan and status of each priority is critical for accountability, and solving any problems along the way.
Types of Strategic Planning Skills
There are several skills needed to create a successful strategic business plan.
The first is the ability to facilitate a strategic planning session. Facilitation involves helping groups come up with ideas, work through productive disagreements, find solutions, and commit to a course of action. A good facilitator knows how to keep the conversation focused and constructive, while also providing guidance and support for the group as needed. Facilitation is a learned skill, so it’s important to hire a 3rd party expert or coach to assist with this process, as it’s difficult for a member of the leadership team to be a neutral facilitator and be fully engaged as a participant in the strategic planning process.
Another skill set required for strategic planning is analytical thinking. Analytical thinkers are able to look at data, research and other strategic planning elements to make informed decisions. They can identify trends in the market, customer behaviors, and competition to help inform their decision-making process. Analytical thinkers are also able to take a big picture view of a situation and break it down into smaller pieces in order to gain a better understanding of how one part impacts another.
Strategic planning also requires problem-solving skills. Problem solving involves looking at the big picture and coming up with creative solutions to any issues that come up. This includes identifying potential risks and opportunities, as well as developing strategies to address them. Problem solvers must be able to look at an issue from different angles – which means setting aside your own biases or preconceived ideas, and looking at issues from the vantage point of individual stakeholders, such as customers, employees, vendors, creditors, the community, and the business itself.
Finally, it’s important for strategic planners to have good communication skills. Communication – in fact, OVER-communication – is key when it comes to communicating objectives, strategies, and plans. After all, your team can’t help with execution if they don’t understand, or remember, the plan.