Ask a room full of business owners about their experience around strategic planning and you’re sure to hear some sad stories and more than a few nondescript chuckles.
A company decides it needs a strategic plan to grow the business. The next logical step? Hire a prestigious consulting firm to develop their plan.
Months later, after hours of business school analyses, the consultants present the plan. With a 300 slide PowerPoint they educate the executive team on the plan and provide a well-manicured two-inch binder containing the many plan details.
It doesn’t take long after the glory wears off for the executive team to realize they’re lost as to where to start executing. Upon deeper review, they realize it’s not truly their plan. It’s the consulting firms.
All they really got from the high-priced consulting engagement was another case of strategic plan on top shelf (SPOTS).
This form of strategic planning is overused and completely flawed.
Verne Harnish, author of Scaling Up and Mastering the Rockefeller Habits, redefined strategic planning as strategic thinking and execution planning. It’s a brilliant reframe. After all, a plan isn’t worth its weight in gold if it’s not executed.
These are the key areas that should be in any strategic plan.
Part 1: Strategic foundations
Before you start developing your strategy, it’s vital to clearly define the core elements of your business:
- Core values – the cultural DNA of your business
- Your why (or purpose or mission) – why your business exists, beyond making money
- Your BHAG© (big hairy audacious goal) – your North Star, a giant goal to aim for in the next 10 to 20 years
These elements become the foundation of your business. Most of these don’t change over time or change very little. Would you build a house on a cracked or incomplete foundation? No. The same applies to your business.
Part 2: Strategy
In the strategy section, we start by looking at long term goals. Ask yourself where do you want to be in three years? Describe it distinctly.
Why three years? Most leaders can envision that far ahead and plan for it. Much farther ahead and there are too many factors to manage. Plus, this is an ongoing process—we’re always looking that far ahead. Every quarter you’ll review your plan ensuring its still relevant and course correcting where necessary.
One of the best definitions for strategy I’ve heard is from Michael Porter who said, “Strategy is the creation of a unique and valuable position, involving a different set of actions from the competition.”
To do this, we need to understand several elements:
- What products or services will you offer?
- Who will you sell them to?
- Why would they buy from you (what makes you unique)?
There are a number of other areas that fall into strategy, including people, financial, leadership, operations, growth, and more. We will cover these future articles.
This is the fun, albeit challenging, part of the planning process. When gathering your team’s feedback, watch as they shift gears from day-to-day execution to true strategic thinking.
Part 3: Execution planning
This is the part where the project manager in me rejoices. We finally get to build a plan!
- But how? Break it down. For example:A 3–year vision has 3 years
- A year has 4 quarters
- A quarter has 13 weeks
We break the elements of our strategy down into bite–sized quarterly elements, focused around key needs. This doesn’t include operational tasks—it’s about driving the business forward. Key needs could include people, processes, technology, leadership, operations, finances, marketing, sales or others.
We call these key needs rocks. Rocks need to be explicitly defined with success criteria so you’re certain when they’re complete.
Crushing rocks is how you achieve your goals and make your plan a success. It’s how you build an unstoppable momentum.
Part 4: Your operating framework
You have your plan, and the team is onboard to crush their rocks. But how do you effectively run your business? You need an operating framework that supports:
- Creating a high–performance team
- Fast decision making
- Quick resolution of issues
Your operating framework is the difference between leadership burnout and victory.
How do you create this framework? There are several great ones out there, including the Four Decisions™ and EOS™. We believe in taking the best of the different frameworks to create your own.
When selecting elements of a framework, make sure each covers the key areas of running your businesses, including:
- Cash and finance
- Execution (meetings, delegation, etc.)
This sounds like it’s a lot of work. Thankfully, the process can be broken up into bite-sized chunks (sound familiar?) and is iterative. We refine the elements as we go, improving it with each pass.
Are you ready to start a plan for your vision? Forget the big consulting firms and let’s work together on a plan you can confidently execute.