Five Steps to A Successful

Five Steps to an Effective Strategic Plan: A Snapshot

By Richard Magid, SoundBoard Consulting Group LLC 

Ever try to complete a jigsaw puzzle without a picture of the finished product? Then you’ve got a good idea how tough it is to create a strategic plan when you don’t know where your business is headed. 

To many business owners, strategic planning is an intimidating process. At first glance, it seems overwhelming — too time-consuming, too introspective, and frankly just too hard. You’re not alone…just 14% of all businesses operate with a current plan in place.

So, why bother with strategic planning if most businesses seem to be doing just fine without one? Sure, you can run a business without having a plan in place, but picture how much stronger, efficient and profitable that business could be if you had a roadmap to guide you.

 Where are we going, and how do we get there?

Every business has what we call “strategic moments” that come along in every business cycle: turning points that require choices to be made. These events can be calendar-driven, like the start of a new year, or growth-driven, such as having to seek outside capital for the first time. 

Other strategic moments:

• You’re profitable, but your margins are being squeezed
• Competitors seem to be growing at a faster rate
• The sales cycle is getting longer
• Your brand differentiators are becoming blurred
• There are lots of opportunities out there, but you’re not sure which one(s) to pursue

 Clearly, it’s time to step back and gain some clarity on where your business is headed, and the best path for getting there. By breaking down the planning process into five manageable steps, you’ll come away with a more focused vision for your business. 

Though the following is simply a brief recap of the required steps in the process, it’s enough to give you a glimpse of the power — and necessity — of strategic planning.

 Phase I: Reflection

Call this the “Who are we?” stage, where you take an honest look at your current reality. Ask yourself and your staff questions like these: What do we do well? What can we do better? What must we do better?

Take a fresh look at your mission and vision statements, as well as your core values. Are you still headed in the same direction? Is the company’s vision in alignment with the personal visions of the leadership team?

 Speaking of leaders, the reflection phase is where you assess the effectiveness of your leadership team. With an understanding of the strengths of each team member — yourself included — organizations can determine what skills can be better leveraged, what development needs to take place, and what gaps must be filled in order to move the company forward.

 According to Jon Brandt, CEO of National Healthcareer Association, "Sometimes we are running so fast, we don't take the time to slow down, look in the mirror and see if we have the right team in place for the next level of growth. As the company grows, we need to re-evaluate the make up of our team; are we missing skills that will support managing our growth more effectively?"

 Once you’ve assessed your organization’s leadership strengths and weaknesses, it’s time to do the same for the business itself. From a macro perspective, evaluate the effectiveness of key business drivers such as marketing, sales, finance, management, and operations. Ask your managers to rate your organization’s success in these areas, then compare their responses. 

For each macro area, you then want to “peel away the layers” and take a closer look at critical individual components. For example, marketing can be further segmented into elements like market share/penetration, price, promotion, and market research. Note areas of less-than-optimal performance that need specific attention.

 Finally, it’s time to summarize everything you’ve discovered during the reflection phase. You’ve hopefully deepened your understanding of who and where you are, and have a sense of where you want to be…and why.

 Phase II: Validation

How do you figure out if your findings are valid? Just ask! 

During the validation phase of the strategic planning process, key stakeholders — both internal and external —— are queried to determine if their opinions support or dispute the leadership teams’ reflections.

 For internal validation, ask managers and staff questions like these:

• What do you believe the company does well? What could we do better?
• If you had full control of all decisions, what one change would you make immediately?
• What is your understanding of where the company is headed? 

Be sure to include staff at all levels, especially your organization’s informal leaders — those individuals who, regardless of title, have the respect and attention of their colleagues at all levels.

External validation comes from clients, vendors, advisors and strategic partners, who answer questions like these: 

• In your own words, can you explain what our company does?
• What words would you use to describe our brand?
• What would you like to see more of from your relationship with us? Less of? 

By validating your reflections, you’re forced to operate in the real world — knowing your assumptions are accurate before basing a plan on them.

Phase III: Collaboration

col · lab · o · ra · tion

The act or process of working together, especially in a joint intellectual effort.

In this phase of the planning process, your goal is to build a shared vision with your team, then define a practical mix of short- and long-term objectives based on that vision.

 Bring together your leadership team, key stakeholders and informal leaders to hash out a plan for moving forward. Look at any gaps that exist: 

• Between your desired objectives and current performance.
• Between your current reality and the shared vision you’ve outlined. 

How wide are these gaps? Do you have the resources to bridge them? Think about any outside assistance you may need — a consultant, freelancer, advisor or new hire whose expertise is necessary for your organization to meet its objectives.

 Finally, use the collaboration phase to define the success drivers that will help the business reach its objectives most effectively. Using the tenets of your shared vision as a framework, ask the team: 

• What must we stop doing?
• What must we start doing?
• Where must we stay the course? 

Here’s an example: your company struggles with pricing issues. Salespeople cut deals to close new business, which was OK in the beginning but has turned into an accounting headache — never mind cutting into both your margins and your credibility.

 Your success driver might look like this: We need to stop giving salespeople pricing flexibility, start creating more formal pricing procedures, and agree to use these new procedures consistently, even though it will be difficult at the start. 

Phase IV: Action

Here’s where the strategic planning process really starts to show its value. During the action phase, you’ll nail down the details of your plan, and allocate the necessary resources for implementation.

 With your team, start mapping out: 

• The strategies required to meet the objectives you outlined in Phase III.
• The tactics or operating steps necessary for translating these strategies into tangible business.
• The funding you’ll need.
• An order of priority so resources (financial, human capital and energy) can be properly allocated. 

Your strategic plan should be concise, clear, and most of all, usable. Don’t get so wrapped up in the details of the plan that you forget to make it actionable! Be sure to include: 

• Re-statements of your mission, values and vision
• Summaries and explanation of key objectives (what and why)
• Descriptions of primary strategies
• Outlines of tactics with timelines for execution
• Preliminary financial projections, which can be adjusted along the way 

Says Kevin Burke, founder of Lucid Marketing, “Our strategic plan ends up being the roadmap for the year to come. Though the tactics may change as opportunities present themselves, the overarching strategy remains consistent.”

 Remember the basic SMART principles when outlining your action plan: all tactics should be Specific, Measurable, Action-oriented, Results-focused, and Time-sensitive for your best shot at success. 

Break every goal into bite-size action steps, assign a realistic timeline, identify any roadblocks or obstacles, then determine and allocate the necessary resources to achieve it.

 Phase V: Execution

Whew! You’ve established some ambitious objectives for your organization. Now it’s time to drill down to the details — refining the who and how of getting it done. 

• Clarify roles and responsibilities — Revisit job descriptions, task analyses, and reporting channels so everyone’s on the same page.
• Create systems of accountability — Are clear expectations and checkpoints in place?
• Define performance measurements — Do people know exactly what is being measured, and what success looks like? What are the ramifications if goals are not met?
• Establish rewards and incentives — Spell out the positives when objectives are achieved. 

Next, create a system for managing the implementation process and monitoring your progress. Identify the reports and metrics that will be needed, how often they’ll be reviewed, and by whom. 

Of course, you’ll need a means to communicate your strategic plan to your staff. Determine the channels — individual department meetings, weekly email blasts, blogs, or company-wide “town hall meetings” are some options — and the frequency needed to keep everyone informed.

 Building a productive dialogue can be both formal and informal as you roll out your strategic plan. Keep in mind you’ll also need a way to gauge the accuracy of the message as it filters out — are people’s interpretations correct? 

Finally, know that your plan is always a work in progress. Every day brings new information, new opportunities, and new people to your team. Keep your plan alive with regular refinements, and make planning a regular tool for business growth.