Have you ever embarked on a long car journey, and suddenly realized that you have no idea where you are going? You drift, you meander, and you can’t figure out how to reach your final destination.
Running a business without a strategic plan is like getting lost on a road trip. You have no sense of direction, and whether you arrive at your destination is left to providence and luck.
Your business fortunes should not be left to chance. Switching to autopilot in the hope that things will go your way is a recipe for disaster. You must look to the future and create a well-thought-out and meticulous plan to help you get there in the way that you want. Failing to plan is planning to fail, but don’t worry if you don’t have a strategic plan now—we’ve got all the information you need to get started.
What is a strategic plan?
A strategic plan is your vision, mission, and goals—a clear and concise roadmap detailing how you will grow your business. Now you may be thinking to yourself, “Hey, I’ve got a business plan, I’ll just take a quick look at that”—but that would be wrong. A strategic plan is not a business plan, and it is a common mistake made by business owners. Essentially a business plan is for public consumption, to show to investors and bank managers who want information about an organization before they commit any funds. A strategic plan is for internal use, a formalized road map to guide growth, and it’s nothing to be scared of. The plan can be created in a day, and you’ll find it an invaluable tool in your organization.
A strategic plan is:
- For established businesses who want to grow
- Designed to give competitive advantage
- Used to prioritize the financial needs of the company
- A detailed roadmap to grow your business
A business plan is:
- For entrepreneurs who want to start a new business
- Designed to attract investment
- Used to define what the business is about
- Used to determine business opportunities
How to make things happen
To create your strategic plan you will need the best brains in your business—a diverse group of clear thinkers who will discuss, debate, and plan in rigorous detail. Ensure that you allow enough time to think really big. This is about your company’s future and is critically important. If possible, power down the computers, switch off the phones, and go off-site. Create the best possible environment that allows everyone to give you their best. Ensure that the key people buy into your strategic planning vision. You have no chance of success if they don’t. Discussions must be free flowing, where everyone is an equal participant, and before the first words are spoken think about how you will execute the plan. Careful thought must be given to its implementation.
And when you’ve done all that it’s time to grab the best people in your organization and start planning.
What a strategic plan looks like
The strategic plan is a vital tool for success, and is not something just to be pinned up on a notice board and occasionally glanced at. Once established, it should resonate throughout your organization from top to bottom, and every member of your staff should be aware of it and believe in it. From the largest multinational to the smallest home-based operation, every company should have a strategic plan if they want to be successful.
Simply put, the plan can be divided into three principal sections— where are we now, where are we going, and how do we get there?
Where are we now?
- Mission Statement
- Core Values
- Competitive Advantage
- Vision
How do we get there?
- Goals
- Objectives
- Strategies
- Scorecard
- Financial Assessment
Time for a Quick Quiz
- Where do you want your business to be in five years’ time?
- What does your company do best?
- Are you passionate about your business?
- Who are your competitors? What are they up to?
If you don’t know the answers to any of these questions it’s time to concentrate, energize, and focus your attention on guiding your company’s growth with a strategic plan.
Why the Planning Process is Powerful
- You look at all kinds of information about your business, customers, and competition. For example, are you meeting and exceeding customer expectations? How can you grow your customer base?
- You examine in fine detail what is really happening in your business and the marketplace.
- You develop new ideas about the best way of growing the business.
- It improves communication among key members of the organization.
- It allows you to adapt quickly to changes in your marketplace.
Where are we now?
Mission Statement:
This describes the purpose of your organization and why you exist. It is the touchstone of your operation and guides your decision making. It should be broad enough to allow for growth and focused enough to give clear direction. Mission statements have a tendency to be wordy or confusing— they should be concise, snappy, and to the point. To create your mission statement, ask yourself three very important questions: 1) What is our business? 2) What do we want to achieve for our clients and customers? 3) Why do we exist?
Some good examples of mission statements:
- Walt Disney—“To make people happy.”
- Mary Kay Cosmetics—“To enrich women’s lives. We will do this in tangible ways, by offering quality products to consumers, financial opportunities to our independent sales force, and fulfilling careers to our employees.”
Core Values:
These are the beliefs that drive your organization. They are your foundation and guide your actions. An example of a core value is “the client always comes first.”
Where are we going?
Competitive Advantage:
Define what is best about your business. Identify those areas where you can provide a greater offering than that of your competitors.
Vision:
This is your statement of ambition. Think big! A strategic vision is your image of where you want to be, the market position you want to occupy, and the customer focus you want to achieve. There is real power in these words. A vision statement should be inspiring and beat the drum for your organization.
Some good examples of vision statements:
Estée Lauder—“Bringing the best to everyone we touch. By ‘The Best,’ we mean the best products, the best people and the best ideas. These three pillars have been the hallmarks of our Company since it was founded by Mrs. Estee Lauder in 1946. They remain the foundation upon which we continue to build our success today.”
Heinz—“To be the world’s premier food company, offering nutritious, superior tasting foods to people everywhere.”
How do we get there?
What do you want to accomplish? A SWOT analysis will give you a clear picture of what you want to achieve. SWOT is an acronym that stands for strengths, weaknesses, opportunities, and threats, and it will help you to identify your most beneficial goals.
These will build on your strengths, shore up your weaknesses, make the most of all opportunities, and recognize the threats to your business. Each goal will be measurable and quantifiable. Set a time frame for each short-term and long-term goal.
Objectives:
These support the goals and detail how they will be accomplished. Arrange them in order of priority and establish responsibility for taking action.
Strategies:
These are the rules and guidelines to help you achieve your goals and objectives. A surefire way of helping yourself develop the right strategies is to ask yourself the question: What is stopping me from achieving my goals?
Scorecard:
You will need to measure the performance of your strategic plan. How will you know what success looks like?
Financial Assessment:
Does your strategic plan make financial sense? Does projected revenue exceed costs?
Book the meeting
Other than asking your employees to work the holiday weekend, there is probably nothing quite like the prospect of a strategic planning meeting to send waves of apathy, cynicism, and sometimes hostility through your organization. Why? Your employees may have had previous bad experiences, and the potential combination of a room full of egos and personal agendas can be disastrous. These meetings can be tough, so you need to prepare accordingly and avoid the traps that lie in wait.
Trap 1: No facilitator
Chairing a meeting is hard work, and no doubt you can do it. But your brain won’t be fully engaged in the process of designing your company’s future if your time is spent trying to make sure the meeting runs smoothly. Let that be the concern of a trained facilitator.
Trap 2: Forgetting your homework
There can be nothing worse than turning up at an important meeting without studying the charts or looking at all relevant data. Make sure all attendees have the information they need, and in good time. Thorough preparation is the basis for sound decision making.
Trap 3: Making it an annual event
A strategic planning meeting should be a habit, not an annual event. Don’t save it for the annual retreat where everyone is in casual clothes, playing softball, and enjoying time out of the office. Hold your strategy meetings several times during the year to check progress and to power on ahead.
Trap 4: Everyone’s welcome
Inviting everyone is a bad move. Large meetings can be confusing, long-winded, and counterproductive. Keep the meeting to key players, but do communicate to everyone in your organization what is happening and why.
Trap 5: No one gets outta here until we’re through!
Strategic planning meetings are tiring and mentally exhausting. Build in several breaks, and incorporate some fun and games.
Trap 6: Assuming they all think like you
They don’t. But you’re a good leader and you know this, so always be mindful that not everyone will be singing from the same hymn sheet as you are. There are so many different thinking types—big thinkers, those that are big on detail, and people who just want to get straight down to business. And you may have all types represented in your company. Structure the meeting in such a way that it allows everyone the time and space to have their say. You never know where the next great idea is going to come from.
Trap 7: Inconclusive ending
The entire proceedings will be a waste of time if there’s no agreement on a way forward. Make sure that you conclude the meeting with attendees agreeing about the new strategic direction. And end on a positive note. Everyone is going to be tired, but they must leave feeling energized and excited about the direction in which you are all heading.
Take action
Now that you have your roadmap, it’s time to begin the journey by taking action. A strategic plan is a living and breathing document that can help to drive your company forward and empower you and your employees to new heights. Like any plan, it should be looked at regularly, and not left on the shelves to gather dust. Growth must not be left to chance, and for implementation to succeed you will need to make sure that the right people with the requisite skills are in place to support the plan. There must be sufficient funds to allow for smooth implementation, and there should be systems in place that let you track progress. The plan should also be fluid enough for you to make any changes as you experience unforeseen events.
Four ways to take action immediately:
Share ownership—When you allow people to have a stake in the plan, they will feel responsible for its outcome.
Maintain momentum—Encourage your employees to keep up the good work, and instill a renewed sense of energy and enthusiasm about your future direction.
Use powerful words—Ensure that the vision and mission statements have a powerful and emotional connection with every member of the team.
Take the next step—The document is not an end in itself. It is the starting point for the next great chapter in your company’s life.
A strategic plan allows you to reconnect with why you started your business in the first place, to create something special for you and your customers, and to grow and make a profit. Successful entrepreneurs don’t leave anything to chance. Growth is their choice, and they plan it every step of the way. A strategic plan is the start of a new, bold, and exciting chapter in your business career. –P.A.
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