- 16th April 2018
- Posted by: Manolis
Strategic planning is a management tool that guides your business to better performance and long-term success.
Working with a plan will focus your efforts, unify your team in a single direction, and help guide you through tough business decisions. A strategic plan requires you to define your goals, and in defining them, enables you to achieve them—a huge competitive advantage.
In this article, we’ll discuss 11 essentials for creating a thorough and effective strategic plan. Each tip is a critical stepping stone in leading your business toward your goals.
1. Define your company vision
You should be able to define your company vision in 100 words. Develop this statement and make it publically available to both employees and customers.
This statement should answer the key questions that drive your business: Where is your company headed? What do you want your company to be? If you don’t know the answer to these questions off the top of your head, then you have some thinking to do! If you have the answers in your head, but not on paper—get writing.
If you have them written down, congrats! You’ve completed the first and most critical step in creating a long-term strategic plan.
2. Define your personal vision
While your personal vision is just as important to your strategic plan, it does not need to be shared with your team and customers.
Your personal vision should incorporate what you want your business to bring to your life—whether that’s enormous growth, early retirement, or simply more time to spend with family and friends.
Aligning your personal vision with your company vision is key to achieving your personal and professional goals. Just as with your company vision, have your personal vision written down in a 100-word statement. Know that statement inside and out and keep it at the forefront of your decision making.
3. Know your business
Conduct a SWOT (strengths, weaknesses, opportunities, and threats) analysis. By knowing where your business is now, you can make more informed predictions for how it can grow.
Questions such as “Why is this business important?” and “What does this business do best?” are a great place to start. A SWOT analysis can also help you plan for making improvements.
Questions such as “What needs improvement?” and “What more could the business be doing?” can help guide your strategic plan in a way that closes gaps and opens up opportunities.
4. Establish short-term goals
Short-term goals should include everything you (realistically) want to achieve over the next 36 months.
Goals should be “S.M.A.R.T.” (specific, measurable, actionable, reasonable, and timely).
An example of S.M.A.R.T. goals include “building out a new product or service within the next year” or “increasing net profit by 2 percent in ten months.” If you’ve already conducted a SWOT analysis, you should have an idea of what your business can reasonably achieve over a specified period of time.
5. Outline strategies
Strategies are the steps you’ll take to meet your short-term goals. If the short term goal is “build out a new product or service,” the strategies might be:
- Researching competitor offerings
- Getting in touch with vendors and suppliers
- Formulating a development plan
- Outlining a marketing and sales plan for the new offering
6. Create an action plan
An action plan is an essential part of the business planning and strategy development process. The best analysis, in-depth market research, and creative strategizing are pointless unless they lead to action.
An action plan needs to be a working document; it must be easy to change and update. But, must also be specific about what you’re doing, when you will do it, who will be accountable, what resources will be needed, and how that action will be measured.
Action plans put a process to your strategies. Using the previous example, an action plan might be: “CMO develops competitor research packet for new offerings by 9/1. Review packet with the executive team by 9/15.”
When The Alternative Board, Bradford West Director Andrew Hartley was responsible for designing and delivering a three year, $10m environmental business support program, a full and detailed action plan was required for funding.
“That action plan allowed me to 1.) manage and measure the evolving program, 2.) ensure resources and staff were where they needed to be, and 3.) track whether the design of the program was working and delivering the level of results we were contracted to deliver,” says Hartley.
“Even I was surprised about how helpful that action plan was,” he says. “I cannot image approaching any significant project or business without one.”
7. Foster strategic communication
To align your team, you must communicate strategically. Results-driven communication focuses conversations and cuts out excessive meetings. Every communication should be rooted in a specific goal.
Include the how, where, when, and most importantly why every time you deliver instructions, feedback, updates, and so on.
8. Review and modify regularly
Check in regularly to make sure you’re progressing toward your goals. A weekly review of your goals, strategies, and action plans can help you see if you need to make any modifications.
Schedule time in your calendar for this. Weekly check-ins allow you to reassess your plan in light of any progress, setbacks, or changes.
9. Hold yourself accountable
Having a business coach or mentor is great for this. If you have a hard time sticking to your plans, you’ll have an equally hard time meeting your goals.
According to The Alternative Board’s September 2015 Business Pulse Survey, the number one reason business owners choose to work with mentors is accountability.
“Having a close—but not too close—space for advice and accountability is really valuable,” says TAB Member Scott Lininger, CEO of Bitsbox. “Someone who is too close to your business (such as board members) often have a perspective that’s too similar to your own. Over time, your coach comes to know your team, your product, and your business, and they help you work through all kinds of challenges in a way that’s unique.”
“All too often I find that leaders accept underperformance against their strategic plan too easily,” adds Hartley. “A coach can rekindle the resolve and ambition of the leader, resulting in a recovery of lost margins, sales, or output.”
According to Hartley, a coach can build accountability by questioning what’s working, making sure everything’s on track, pointing out areas of underperformance, and asking what corrective action needs to be pursued.
10. Be adaptable
Remember: You can’t plan for everything. Just as challenges will arrive, so too will opportunities, and you must be ready at a moment’s notice to amend your plan. Weekly reviews will help enormously with this.
“A strategic plan will likely need to be changed very soon after approval because nobody can accurately predict anything but the very near term future,” says Jim Morris, owner and President of The Alternative Board, Tennessee Valley. “You stay adaptable by monitoring the plan every day. The wise leader will be constantly looking for opportunities to exceed the strategic plan by being opportunistic, creative, and by exploiting weaknesses in the competitive market.”
By doing this, Morris was able to exceed forecast results of every strategic plan he ever approved. “The times when I needed to be flexible were when we met strategic plan goals ahead of time and had to rewrite the plan to keep it current and relevant.”
It’s important to be adaptable because nothing stays the same. “It’s more important to be agile and take advantage of opportunities that weren’t foreseen and make adjustments,” says Morris. “This and a continuous improvement mindset is the best way to exceed plan goals.”
11. Create a strategic planning team
As a business owner, you should never feel like you have to do everything alone.
A strategic planning team can help with every phase of the process, from creating a company vision to adapting your strategy week-to-week. Compose your team of key management staff and employees—some visionaries and some executors.
If you think you’re “too busy” for start strategic planning, then you need strategic planning more than you know. Having a focused plan allows you to focus your energies, so you’re working on your business, rather than in it. As a business owner, it is your responsibility to steer the ship, not put out day-to-day fires.
Yes, creating a strategic plan is challenging, and it’s certainly time-consuming, but it will make all the difference in achieving your long term goals. You’ll avoid making bad decisions and expending more effort than you need.
Try these 11 tips to get started, and then be flexible in your ongoing approach. You’ll be amazed at how much more streamlined your business processes will become when you are working with a long-term strategic plan.