26 Dec 3 Steps for a Strategic Plan
For many small to medium sized businesses a strategic plan is an after thought or something needed to obtain funding, because the immediate need is to focus on execution. Businesses ignore the importance of a strategic plan and the subsequent tactical execution plan. Each of these plans are essential elements of a strategic management framework to help a business define their long-term vision, their strategy to define their objectives and goals, and the resources (money, people, machines, processes, etc.) to execute and adequately support their businesses with resources and capital for the long term.
It is hard to accomplish anything without a plan. When was the last time, as a business, you spent thinking about what is needed for a grand opening or breaking into a new territory, or selling your products in a new market, or creating a communication strategy? As many of you may have found, it is MORE THAN thinking about it. A well thought out strategic plan needs to have objectives with success criteria identified, defined measures and measurement systems, clearly identified processes, and leadership competencies and skills for execution. This is maybe the boring part for many business owners, however this is THE MOST essential part for your company’s success. The strategic plan defines the road map for the future, assists with the tactical execution steps, and identifies the needed resources and competencies (money, people, machines, skills, etc.) to produce the results for the company.
3 Steps to Get Started
1. What is the current state (as-is) of the business? This is one of the hardest and most important steps. It is hard because we tend to ask ourselves, “What do we want the business to become?” versus “What is the business now at this point in time?”
For an accurate current state picture, it is essential to perform an audit of your business from your customer’s perspective. This means putting yourself in the shoes of your internal customers (employees, investors, stakeholders, owner, etc.) and from your external customers (buyers, suppliers, markets, competitors, regulators, environmental, etc.). This helps you better understand the market and competitive landscape and the competencies (the real competencies, not the perception) your business needs to succeed. Also consider the current risks. What risk mitigation has been done? Has it been successful? All questions and responses you capture should be related to, “What is the business doing now, at this particular point in time?”
2. What is important for the future (future-state) of the business? This is where you dream a bit and think about the future of the business. Where do you want the business to be in 3, 5, 10 years? Really think about the volatility or changing landscape of your industry to define a relevant strategic time frame. The learnings from step 1 will be used as inputs into step 2 and 3.
This step helps identify the most important and critical focus areas for the organization. This is where the owner and stakeholders should focus their collective energy and this becomes the strategic plan for the future.
What is the mission of the company? This is where you define your customers, markets, and products. The mission statement should be short, succinct and memorable. What are the potential risks? What could be done to mitigate the risks? What is the vision of the company? (Dream and conceptualize what your company could be!). Through the prioritization process thoughtful and chronological steps can be defined, planned and communicated so execution becomes simpler.
3. What are the business objectives and measures for success? This step helps the business identify their key objectives and their corresponding leading and lagging indicators. It is important to be as specific as possible and to use the SMART objective format (specific, measurable, attainable, realistic, timely) to help the business monitor and measure the progress towards their future goals.
Spend some time brainstorming on what indicators would help the business monitor the progress and take action when needed. Brainstorming will help you identify a variety of measures. To begin, keep it simple, select the most impactful 3-5 key leading indicators and 3-5 lagging indicators. Safe the rest for later it is likely they will become more necessary as you move forward on your journey.
Using the SMART format will help you with the selection of the most important measures. For example, “We want to grow our business”, doesn’t meet the SMART format. A SMART objective it should be stated, “Grow sales by $120k with our top 5 customers by the end of 2017.” By using a SMART objective the method for measuring success would be, sales by month with a target of $10k/month. This would be considered a lagging indicator, because it follows an event, the sale of a good, product or service.
Make the Time
Strategic plans are important for all businesses, so make the time to work through the three steps above. Whether you are just getting started or already established, this thinking way helps you build your business, communicate to your employees, and develop your success plan. Next week –Tactical execution of the strategic plan
Make 2017 AMAZING! Call Gail Kulas at Leading to Unlock, LLC. We can provide a fun and creative working session to help you define your strategic plan and unlock the potential within your organization. 860-930-6521 or www.LeadingtoUnlock.com.