“According to research outlined in the Harvard Business Review, 85 percent of business leaders spend less than one hour per month discussing strategy, and 50 percent spend no time at all. It’s no wonder, that 90 percent of businesses fail to meet their strategic plans”.
What is a strategic plan, and why do we need one?
One of the most valued skills in leaders today is the ability to think strategically. How do we ensure that within our own businesses we can think strategically and plan for the future? With uncertainty being ever present in today’s world, having a robust plan is essential if we are to remain competitive.
Strategic planning needs to be de-mystified as an onerous, unclear and ‘corporate’ sounding task. Put simply, strategic planning is the process of defining an organisations direction or strategy with simple steps to achieve goals and objectives.
It is often thought that a strategic plan needs to be a large document covering all aspects of your organisation, this is not actually the case. Your strategic plan needs to be concise, relevant to your direction and ideally on one page (double sided if needed). I like the idea that your strategic plan can be stored in your back pocket and called upon anytime, anywhere.
There is certainly a process to achieving a strategic plan that is authentic to your business, below I have outlined some elements that need to be considered when constructing a plan. The best results are often achieved when your planning is facilitated by someone independent, however there is also nothing stopping you giving the below some thought.
Elements of a Strategic Plan
Defining your businesses Why, What and How. Your purpose needs to include and convey why your company does what it does for its customers.
Vision (Business & Personal)
The Vision needs to describe what your business will look like in 5-10 years’ time. This can often be explained through the acronym BHAG (Big Hairy Audacious Goal). Where do we want to be and how, what steps, changes are we going to need to undertake to get there. The Vision needs to be broken down into what the business wants and what the owners want – it is important to define the differences.
Values are the key principles or work ethics that the business upholds.
Bottom up Budget
It helps to define your Gross Revenue Targets for each year, but more importantly what cash can the business provide to owners after covering costs. Often defining what the business needs to provide owners can enable actionable goals to meet targets. The bottom up budget needs to reflect current year but also what it would look like when the vision is achieved (5-10 years’ time).
These are drivers within your business that are monitored to ensure your plan is on track. These can be measured daily, weekly or monthly and should be unique to your business and plan. There are literally hundreds of examples of KPIs but best practice is to have no more than five you monitor regularly.
Opportunities & Risks
I like to summarise this with using a sporting analogy, a well-executed performance needs a good offensive attack and defensivestrategy. It is important to identify opportunities that could enable you to exceed your plan, but also understand any potential risks that could jeopardise your plan.
Goals & Objectives
Any goal needs to be SMART – Specific, Measurable, Achievable, Realistic and Time-Based.
Goals should cascade from twelve months to five years.
Any actions or activates need to be clearly defined and assigned to individuals, this creates responsibility and accountability in completing the actions.
If you want to create or discuss your strategic plan, but do not know where to start, please get in touch with us to see how the Schurr & Ireland team can help.
Article by Floyd Wicksteed