We often talk about how, if done well, Strategic Planning, working ‘ON’ your business to coin a Michael Gerber phrase, is going to relieve the pressure of all that needs to be done‘BY YOU’ in your business and, as a result, you’ll have more time and more freedom to do what you want to do – like “go to the beach”.
The problem is that developing and implementing a strategic plan is often not done well , if it’s done at all. Studies show that of those companies who actually do strategic planning , only about 10% of them are able to effectively implement a strategic plan successfully . Said another way – 90% of those businesses who are attempting to plan strategically , fail.
First Plan Then Do
How do you develop and implement a strategic plan that has a higher chance of success?Well the first ‘key to success’ is to make sure you’ve done enough planning.
Most companies, when they start thinking about strategic planning, go right to answering the question ; “ What are we going to do ? ”, and they start filling in the “ To Do ” list .There’s a lot of “ thinking ” that needs to happen before you start going down the path of “doing ” .
There was an excellent article in The Harvard Business Review years ago , (I wish I could put my hands on it) , that illustrated the importance of planning . The story show cased a Chief Information Officer , (CIO) , for a major bank . In the article they cited some pretty alarming statistics about the average IT project for a bank. Almost all IT projects from all of the major banks failed to meet their budgeted time lines by at least 200% .
In other words, almost all projects took more than twice as long and cost twice as much as the bank was planning for – except for this one CIO who remarkably was on time and on budget for almost all of his projects.
What was his secret ? PLANNING.
The requirement for his staff was to spend 75% of the budgeted time line planning out the project. Before they started DOING, 75% of EACH project was time spent on PLANNING.We have already shared a blog post on how to plan your Strategy. Now that you’ve got your plan, it’s time to take ACTION.
Taking Action on the Vision – Your Strategic Plan
One man said, “ When you have a compelling vision backed by clarity of purpose for your future , it becomes a whole lot tougher to put things off to tomorrow .” This is true for your business vision, as well. But the sad truth is that many business owners find that they have crafted an inspiring vision and succeeded in visualizing their desired future for their business, but it never seems to come to pass . Great intentions and stirring visions can only take a company so far down the road to realization and , unfortunately, that isn’t very far at all .
Ideas vs. Actions
For every new business idea or invention that is successfully launched into the marketplace ,there are probably dozens, if not hundreds , of people who had the same idea. But while one person acted on their idea and persisted with it , the rest simply held to a vision and were stalled with inaction . The result being that someone else started a business that they wish they had started instead , or got a product on the market that they feel they thought of first .
Don’t let that happen to you and your vision. As we noted in the previous post, once you’ve written your Strategic Vision, you need a strategic plan, a step by step set of shorter term goals with planned and delegated activities for achieving those goals, so you can stay on course towards achieving your vision.
Why Create a Strategic Plan
You might ask , ” Why go to the trouble of putting together some kind of written plan ? Can’t we simply communicate our vision and move forward ? “
Of course you could. But would you be confident taking an airline flight from Boston to Beijing if you knew the pilot had no flight plan and was just going to “ wing it “ for 7,000 miles ? No , you wouldn’t . So why presume to take your employees and your customers on an epic business development journey without a map and a plan ?
And, with a Strategic Plan, which includes monitored activities delegated throughout your company, you’re engaging your team in your vision. Now everyone, your team, is helping to move the ball, your business, towards the end zone, your Strategic Vision. The strategic context for this next step in the process is that you need to develop a plan so you can stay on course towards you vision. We understand that no one can accurately predict all that can or will happen over the course of, say, the next five years. Specifics in your strategic plan may become irrelevant or unfeasible by the time you get to them. This is fine since you can easily make adjustments to your strategic plan as you go, but having and following the plan ensures you‘re going to reach your destination. Achieving your vision is wholly dependent on the day-to-day activities of you and your employees. The activities and actions that must take place in order for your vision to become a reality must be delineated in your strategic plan. It is this detailed plan that will provide the confidence that comes from knowing that every day your activities are driving you towards your vision. It‘s the plan that gives you the focus you need to achieve all the things you are striving for.
Historical precedent and numerous studies have long established that there is power in both the planning process and in the creation and documentation of a plan. Achieving a grand vision for a business is not a task or an event – it is a process. And, as such, it means there are steps that need to be drawn out and documented.
An excellent discussion of this process can be found in Jim Collins’ book , Built to Last: Successful Habits of Visionary Companies . When discussing the concept of a business vision, he and his co-author Jerry Porras, use the term ‘Big Hairy Audacious Goal ‘, orBHAG. The idea behind a BHAG is to encourage companies to define visionary goals that are more strategic and emotionally compelling created to focus your organization on a single long term , goal which is considered audacious, but not regarded as impossible .
Getting Specific with Your Strategic Plan
Your long term vision is connected to a three to five year mid-term plan for your business .In other words, as we looked at in the previous post , a key component of your Vision Statement is your Mission that describes what your business is going to look like in five to seven years . It is a statement, and sometimes a one to two page document , of what you are intending to accomplish over the course of that time frame. Your vision is further connected to annual and quarterly objectives and priorities . If you envision a business that functions in certain ways and has achieved certain goals five years from now , it is necessary to break down your plan into annual and quarterly installments .
For example, let’s assume your company currently earns $1 million in gross annual revenue.If part of your vision is to have a business that generates $10 million in gross annual revenue five years from now, what should your goals be for next year in order to achieve your vision objective? In addition, if you decide that you can double your earnings during the first year of your plan, what will your quarterly goals need to be in order for that to happen ? These goals and objectives can cover the entire gamut of your business operations, by the way. That means everything from Operations, to Finance, to Human Resources, to Sales and Marketing. This implies that you will have a broad series of annual and quarterly goals populating your strategic plan.
These goals are defined by what we refer to as S.M.A.R.T. goals. In other words, they are goals that are :
- Time bound
Goals that are specific mean just that – clear and recognizable . They must also be measurable. It has been said that ” if you cannot measure it you cannot manage it “ and “ if you cannot measure it , you cannot fix it . “ Goals that are achievable can be audacious and aggressive , but they must be realistic . Far-fetched or pie-in-the-sky goals can be counter-productive and morale defeating . Along those lines, goals must also be relevant . There are many things that can be pursued by a business , but when it comes to your vision your stated goals must serve to further and accomplish that mission . Lastly , your goals must be time bound . What that means is that you must have deadlines , target dates , etc . It is self-defeating to simply make a goal and not plan on a specific completion date. Taking three years to achieve a first-year goal is not very strategic !
There is a Method to the Planning
A good strategic plan is connected, systemic and clearly documented. And there is a step-by-step flow that also achieves a “step up” approach to realizing your ultimate vision. In other words, there are tasks that need to be accomplished during the quarter in order to achieve the quarterly objective. The quarterly objective serves to further the annual priorities and goals. The annual priorities help to further the “mid-term” three to five year plan, or mission. And the mid-term mission is connected to achievement of the Long Term Vision. This connectedness is the key continuity that runs through the strategy planning process.
So what does the process look like on a more granular level ? To begin with, there are annual priorities, quarterly priorities, and monthly priorities. And the monthly goals, or projects, are categorized as S.M.A.R.T.S. goals. Let’s break the process down beginning with the longer term Annual Priorities :
- Annual Priorities :
- These should be comprised of 3-5 priorities to focus on for the first year of your plan. These are designed to leverage your current strengths and to develop new strengths that will move you closer to your Vision, or B.H.A.G. (Big Hairy Audacious Goal)
- These priorities must :
- Support your current Mission
- Be established annually by the leadership team of your organization
- Not become individualized (i.e. they must be organization-focused)
- Quarterly Priorities or Tactical Operating Priorities :
- 3-5 priorities designed to be achieved on a quarter by quarter basis and support the annual priorities
- Follow-up and reporting steps must be scheduled to track progress of each priority
- Monthly S.M.A.R.T.S. Projects or large tasks required to achieve the quarterly priorities . This is where the rubber meets the road in the strategy planning method.
- Specific: Clear and specific enough to be fully understood
- Measurable: Can tell when they’re achieved or completed
- Achievable: Can be achieved or completed
- Relevant: Supports the game plan
- Time bound: Has a deadline (a specific date)
- Single ownership: Each S.M.A.R.T.S. has a single owner
What this means on a practical level is that the strategic plan must be made up of monthly, quarterly and annual goals, with all the necessary tasks to achieve those goals, fully scheduled and delegated to actual people tasked with accomplishing actual projects . In addition, this means that a weekly , monthly , and quarterly oversight and management process must be in place in order to track and quantify ongoing results , initiate any needed adjustments in the plan , and guarantee that all participants are ” on task ” and fully equipped and supported to achieve their individual assignments .
Wrapping It Up
Going back up to a 30,000 foot view of the strategic planning process , there are three primary steps for the execution of the planning strategy :
- You define your MISSION, an achievable goal within the next 3-5 years (your B.H.A.G.)
- You define the 3-5 key strengths that you will leverage to assist you in achieving this B.H.A.G.
- You define the 3-5 key strengths you need to develop to assist you in achieving this B.H.A.G.
“Okay,” you might say, “this is all well and good. But how do we make this happen on an operational level ? “ The key is developing and conducting a set series of strategic meetings specifically designed to create, document, and implement your strategic plan. Why is this so central to the success of an effective strategic plan ? Because when you have productive meetings to assess your progress in your strategy plan, and your progress with your annual and quarterly priorities, you can make course corrections. You can identify priorities for the coming quarter and the year. And you give yourself space to think strategically about the business to think intentionally about what you are trying to accomplish.
And this will be the topic of our next business process documentation post !
F.Y.I : For all TouchStone Users, there is an excellent process called ‘Strategic Planning’ in the General Process Library. You can download this process from the library into your own TouchStone account and follow the Strategic Planning process in a step by step way – editing as you go. The process includes forms to use to track and document your annual, quarterly and monthly priorities and goals as well as delegation and time lines to monitor their completion and achievement and sample agendas for your annual, quarterly, monthly and weekly strategic planning meetings.