Photo courtesy of Editor B(CC Attribution)What is strategic planning? It is the process of defining…
As a CEO, you probably fall in one of these categories when it comes to Strategic Planning:
– You are too busy to do it.
– You go through the motion of doing it to check off the box.
– You don’t believe it is necessary.
– You are not sure how to do it well.
– You do it regularly and you are good at it.
If you want to succeed in business, doing strategic planning and doing it right is essential, however NOT sufficient. A solid plan must be coupled with the willingness and ability to execute it to close the dreaded gap between Strategy and Results. On your journey to becoming the MacGyver of Strategic Planning, the 3 key questions you may have are 1) When should strategic planning be done 2) How should it be done 3) What should be done to get it implemented. Let’s cover all three.
. Photo courtesy of thetechbuzz(CC Attribution)
December or January? Are you stressing out trying to figure out when to do your strategic planning session?
You can do it in December while you are also working on closing the year strong and while most folks are starting to wind down for the Holidays. You can do it in the first half of January before the business momentum start building up again. If you think of Strategic Planning as an on going process done quarterly (as you should) rather than a single event, it becomes less important as to exactly when you do it. A far more important question becomes how do I build the right plan and how do I actually make sure the plan is well executed. Create an annual strategic plan at or before the start of the year, review it and update it quarterly.
Annual Plan Reviewed Quartery. Photo courtesy of Joe Lanman(CC Attribution)
In its simplest form, a strategic plan is about assessing where you are now, deciding where you want to be in the future and determining the best way to get there. To build an effective plan, make sure to involve all of the managers and to gather input from all employees prior to holding the planning session with your executive team. This will have the dual benefits of giving the senior team the necessary insights from the front line while making it much more likely the plan will get the required buy-in from employees increasing its chance of success.
Assessing where you are now requires that you examine the current situation in the following four dimensions:
– Industry and customer trends that are impacting your business now or can impact it in the future.
– The position of your current product as it relates to uniqueness and fit to market.
– Your organizational capacity to deliver results including the culture, the habits and the internal processes.
– The financial health of your organization including the trends of your top line, your gross margin, your profitability and cash flow.
Deciding where you want to be in the future requires that you define your Core Purpose (why do you exist), your Core Customer as an individual, your Brand Promise (what do you offer, how is it useful and why is it unique), your Core Values (the rules under which you operate your business) and your Big Vision (where do you want to be 20-30 years into the future). These key elements inform and guide your discussion and decision about where you want to be by the end of this year as a stepping stone to the longer term future.
Determining the best way to get there is about using the balanced scorecard approach to defining your financial, customer, excellence and learning initiatives and targets for the upcoming year. And breaking this further down into each of the upcoming four quarters with extra focus and details for the upcoming quarter. A common sin of CEOs is their exclusive focus on the financial metrics. While important, your financials measure what has already happened in the past. Adding objectives and metrics around customers, operational excellence and on-going learning provides the necessary foundation for sustained success in the future.
Build Your Strategic Plan and Execute it. Photo courtesy of MTAPhotos(CC Attribution)
The 3 essential elements to getting results are:
– Priorities: The ability to set and stick to a few annual priorities and one quarterly priority. As a leader, you have tens if not hundreds of things to be done. You find it very difficult to pick a handful of priorities for the year and possibly unthinkable to pick just ONE priority for the quarter because you may believe that if you pick ONE priority nothing else will get done. The reality is far different. Picking the right priority ensures that it gets done propelling your business forward while all of the other day to day things necessary to keep the business running also get done.
– Data, metrics and transparency: What get measured get done. What get measured and reported get done faster. Executing your plan requires defining, measuring and reporting on a few key metrics. These metrics should cover the 4 areas of financial, customer, excellence and learning. Actual results against these metrics should be widely shared within the company on a frequent basis (weekly is best). This provide positive feedback when things are going well and early warning signs with enough time to intensify effort and catch up when things fall behind.
– Communication rhythm: The most common challenge in organization larger than 10 people is one of communication. This, if not addressed, can become a major results impacting problem once you go beyond 25 employees. To execute, communication must be frequent, fluid and frank. This is best done by instituting a meeting rhythm of daily huddles, weekly, monthly, quarterly and annual meetings. Managers should also have weekly one-on-one meetings with their direct reports. The top leader should have monthly all-hands-meetings. Isn’t this a lot of meetings you might say. The more relevant question is, what is the impact of getting the flow of communication right on productivity, relationships, collaboration, clarity, alignment, harmony and focus, and ultimately RESULTS.
Strategic Planning Helps You Succeed. Photo courtesy of StockMonkeys.com(CC Attribution)
Way #1: Strategic planning is required and is an on-going process that should be done before or at the start of the year, reviewed and updated quarterly.
Way #2: Strategic Planning must be done the right way as outlined above and should cover much more than just financial targets.
Way #3: Strategic Planning can be worse than useless without actually executing it. Prioritization, data/metrics/transparency and communication rhythm are the key ingredients for executing the plan and getting results.
While you may not become the MacGyver of Strategic Planning overnight, implement this methodology and you will soon start seeing much better business results while expanding your capacity to lead, grow and profit while having more time and less anxiety. Stick with it for a couple of years and you will become the MacGyver of Strategic Planning.
