Does your company have a strategic plan? Has your leadership team sat down to map out how they plan to accomplish their goals? Have you seen it? And most importantly, what is strategic planning?
Strategic planning is the process of creating the roadmap for your company. A strong strategic plan identifies company goals and prioritizes them.
Table of Contents
- The Strategic Planning Process
- When to Do Your Strategic Planning
- How to Implement a Business Strategic Plan
- How Companies Benefit from Strategic Planning
- What Causes Strategic Plans to Fail
The Strategic Planning Process
Sometimes to see something clearly, you have to take a step back and change the angle of your approach. Business is no different. Day-to-day business operations can cloud a leader’s perspective. When in the trenches putting out fires, they can lose sight of the bigger picture and the ability to see things objectively.
Before beginning the strategic planning process, business leaders need to take a step away to work on the business itself.
The Four Steps of Strategic Planning
First, take a step back and reframe your perspective. Ideally, you’ve taken a Clarity Break™ and arranged to host your leadership team in a separate location. Now you can begin the strategic planning process using these four steps:
- Determine your current market position
- Plan out the desired direction
- Execute the plan
- Review and revise regularly
How do you decide the best route to your destination? You have to start with where you are now. The critical path between here and there begins with knowing your starting point.
In strategic planning, it all begins with determining your position in the market.
1. Determine Your Current Market Position
Identifying where your business is positioned with regard to your competitors and customers can take a few different shapes.
One tool, the SWOT analysis, can help highlight your business’s current strengths, weaknesses, opportunities, and threats. Categorizing where each of the following fits into your SWOT analysis can help identify potential areas for growth and your company’s core values.
- Price
- Quality
- Product Benefit
- Product Use
- Competition
Another tool for determining your market positioning is the PEST analysis. The PEST analysis measures your position according to political, economic, social, and technological markers and can also provide some valuable insights.
While working through your market positioning, keep these three essential priorities:
- Customer Insights – Customer feedback can help inform you of consumer behaviors and preferences. These insights can also show how target audiences respond to your products.
- Current Demand – You can assess current demand by referencing multiple data sources such as historical data, market share data, and environmental factors such as inflation and unemployment rates.
- Market Trends – Extrapolating market trends can give you a look into future demand. Anticipating evolutions in technology, the economy, and customer perceptions can help you capitalize on shifting market dynamics.
2. Plan Out Your Desired Direction
With a clearer understanding of your current place in the market, you can start to lay out the path to your long- and short-term goals. The key is having a clear vision of where you want to be in the distant future and breaking it down into more manageable steps.
Great planning is the product of SMART goal setting. Any goal you set for your company should be specific, measurable, achievable, relevant, and time-bound. Without consideration for each of these pre-conditions, you’ll be met with frustration, confusion, misdirection, and, ultimately, wasted time.
Setting carefully considered goals serves as the cornerstone of planning. Below we provide a closer look at long- and short-term goals.
Long-Term Goals
Where do you want your business to be a decade from now? Great long-term goals can serve as incredibly powerful motivators. They can inspire, assemble teams of passionate people, and act as a north star when things get tough. But long-term goals can also often have lofty expectations disconnected from the work your people do every day.
To meet these challenges, you’ll have to stay mindful of them and ensure they follow the SMART goal layout. Remind your people of your long-term goals frequently to keep the fire burning. Then break those goals down into manageable steps so you and your employees can see the progress firsthand.
Short-Term Goals
Short-term goals act like checkpoints. They’re the things your people get done every week that drive you closer and closer to your long-term goals. While people doing the work can more easily understand these goals, they also need to connect to something bigger. Without linking them to the bigger picture, you can’t harness the momentum you need to propel your business forward.
Break down your long-term goals into smaller short-term goals. Take the lofty, decade-from-now vision and mark a checkpoint three years from now, then one year from now. Planning out your goals into smaller increments brings them closer to becoming the step-by-step game plan to making it all within reach.
3. Execute the Plan
Executing your plans for market domination won’t get done in one swoop. It’ll take the collaboration of lots of moving parts and the participation of a dedicated team that wants to be a part of something amazing.
Execution begins by breaking your yearly goals into something that can start right now. Take those annual goals and distill them down into quarterly goals.
Prioritize the three to seven things for each person so you don’t overwhelm your team. Watch the impact this has. Remember to keep each quarterly goal assigned to a single person, or you may run into another problem: accountability.
Check-in on your team’s quarterly goals regularly and verify everyone is on track by measuring and analyzing results. Pretty soon, you’ll be well on your way.
4. Review and Revise Regularly
Markets change, customer expectations change, and so will what you must do to succeed. No strategic business plan should be set in stone. Your competitors can launch new products, the economy may shift, or you may achieve milestones ahead of schedule. Whatever the case, you should adapt your strategic plan to respond accordingly.
Your team should meet regularly to review progress on their goals and to set priorities for the next quarter. Your leadership team should also conduct an in-depth plan review once a year to adjust to market fluctuations.
Evaluation Process
The tools and standards you use to evaluate and review your strategic plan need to remain consistent. During your evaluation process, make sure your leadership team addresses important questions like:
- Do our vision, core values, long-term goals, and business strategy remain relevant? If not, what needs to change to stay on track?
- Do our KPIs still accurately measure progress toward our goals? If not, what needs to change?
- How much progress did we make toward achieving our 1-year, 3-year, and 10-year goals?
- Did we meet our annual goals on budget and within our set timeline?
- What went right? What lessons can we apply to achieve new goals?
- What went wrong? What issues do we need to address? What lessons did we learn?
- What goals should we focus on next quarter or next year?
- Do we have an adequate budget to continue executing our strategic plan?
When to Do Your Strategic Planning
If you’ve yet to put together a strategic plan for your business, now is a great time to start. Work with your leadership team to mark out a date and time to start. Begin by exploring and implementing the strategies discussed in this guide. We recommend hosting your strategic planning session in a location away from your business. This way, the distractions of your usual day-to-day responsibilities don’t derail your planning.
Once you have a strategic plan, you should regularly follow up with additional review sessions. Ideally, your strategic planning sessions take place every quarter so that you can revisit your plan and stay agile.
No strong strategic plan should be immovable. As new innovations roll out or new competitors enter the market, you should be poised to capitalize on new opportunities.
How to Implement a Strategic Business Plan
A strategic plan focuses a team on a single path forward. To create a successful plan, it needs to harness team energy in one direction so you can capture momentum.
As you begin implementing your strategic business plan, ensure your leadership team aligns around it. Every leadership team member should be dedicated and 100% behind your company’s vision and goals. This way, the plan you’ve worked to create together can be followed and executed across the business.
The next step in a truly successful rollout means bringing in employees from every level of the company. Your leadership team will take the plan down to their direct reports, who will share it with their teams. Every employee should be familiar with and have access to the company’s vision. They need to see how their role contributes to the organization’s success and begin executing it.
How Companies Benefit from Strategic Planning
Strategic planning brings the owner’s entrepreneurial visions to the rest of the company. They have ideas swirling around in their mind about where they see the company 10 years from now. A strategic plan puts them in black and white – explored, prioritized, and shared with the other members of the organization.
Companies benefit from this kind of documentation because a strategic plan ensures everyone is on the same page. Strategic plans bring everyone into alignment and work toward the same goals.
Once everyone speaks the same language and understands their part in creating their organization’s vision, you’ll also see more accountability for tasks. People will know their role and how they fit into the grand scheme of things. They’ll own the outcomes expected of them and feel inspired to contribute.
What Causes Strategic Planning to Fail?
According to Harvard Business Review, 85% of leadership teams dedicate less than one hour per month to discussing their business strategy. Another 50% spend no time at all. This same study found that 95% of employees don’t understand a company’s business strategy.
Why Do Strategic Plans Fail?
- Miscommunication
- Dysfunctional goal setting
- Lack of accountability
- Lack of documented processes
- Dissension on the leadership team
Miscommunication
Failing to communicate messages to everyone in the company can cause a strategic plan to fail. Organizations are collections of people working toward a common goal. When 95% of those people don’t know or understand the goal, they’re left to their own devices. Teams with this problem have energy moving in a million directions and cannot collaborate successfully.
Dysfunctional Goal Setting
Other organizations don’t set SMART goals. Organizations can’t declare success with vague goals that are non-specific, immeasurable, unattainable, or irrelevant or that lack a timeline. These issues create a strategic plan that lands flat on its face. There’s no way to tell if you’re gaining traction or to gauge your progress.
Lack of Accountability
Strategic plans can also fail due to a lack of accountability. Without clear and properly established roles, team members lose sight of their role, cross into another role, or end up sharing a role that no one really “owns.” Accountability issues can lead to finger-pointing, toppling all the work that went into a strategic plan.
Lack of Documented Processes
Few things are worse than reinventing the wheel every time a task needs completing. This frustration leads teams to waste time on routine tasks instead of focusing on the bigger-picture items that move the company forward. By outlining the essential steps of predictable work, your team can streamline those things and work on creating your vision. Insert proper training and equip your team with the easy-to-use tools they need to do the job.
Dissension on the Leadership Team
Nothing kills a strategic plan faster than dissension on the leadership team. Commitment to executing the company’s goals starts at the top. If a leadership team doesn’t buy into the laid-out plan, they’ll be slow to implement those plans with their team. And then the strategic plan is as good as dead.
Implementing a strong strategic plan begins with hearing out your leadership team. Listen to everyone, consider their input, and make the strategic planning process collaborative. As you work through the steps, you’ll likely notice the people around you who don’t share your same values. If this happens, then it may be time to surround yourself with leaders that do, and that’s okay too.
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