WRITTEN BY Jeff Hughes
Our Business Planning & Execution Expert Toni Nell
Strategic Planning is the “how” that takes you from your current state to your desired future…
If you want to be an effective business planner, then you need to become a conscientious strategic thinker. Employees want to follow the business leader with a good business plan. And if you hold a position of leadership in the organization, strategic thinking is a core competency. Strategic thinking can help you simplify complex issues and long term objectives in order to see a clear path to achieving your strategic plan.
Sound strategic thinking dictates that you plan before you implement and gives you the opportunity to look to the future more effectively. Key guidelines for strategic thinking include:
- Breaking down the issues into smaller parts allows you to focus on the issues more effectively. To solve a problem, it must be clearly defined. So, don’t rush to conclusions for you may end up solving the wrong problem.
- Ask why before how. Asking why helps you think about all the reasons for decisions. Asking why will switch you on to thinking about the possibilities and opportunities.
- Ask probing questions to expose the real issues and challenge your assumptions. Discovering and understanding your current state is essential if you are to plan effectively.
- Continue to collect data even after you think you have identified the issues.
All good strategic thinkers are exacting in their thinking. They can match the right strategy to the corresponding objective because they have uncovered the root cause of issues and prioritized them.
Strategic thinking aligns you with your target and permits you to create strategies that positively impact the results sought.
Strategic thinking is the connector between where you are today and where you want to be. By methodically thinking through the above questions increases your likelihood for success tomorrow.1
Begin by gathering and reviewing your organization’s past and current business performance and trends– Financial, Human Resources, IT, Sales and Marketing, Operations and other key areas of the business to get a baseline of performance. If you use Key Performance Indicators (KPIs) check those trends carefully for they will tell you a lot about your organization’s ability to achieve goals. If you do not use KPIs, these measurements help you evaluate the success (or shortfalls) in an organization relating to its important initiatives, objectives, or programs.
Additional pieces of your research should include a SWOT analysis and an Environmental Scan. The SWOT helps you identify your company’s current strengths, weaknesses, opportunities and threats. An Environmental scan will help you look at the current state and trends that, on the outside of the walls of your business, could influence the emphasis you place on certain elements of your strategic plan. A competitive market assessment and gathering intelligence about your consumers should also make up part of your research undertaking. Finally, check your vision and mission statement for relevance and accuracy relative to your strategic plan. Be certain that your strategies, objectives and action plans line up with your mission and vision. In this way you have congruity in your strategic plan.
Asking questions throughout the process of strategy building is a must even after you have come to a conclusion. Select a team of colleagues, those with strategic mindsets, who represent as many points of view within the company that you can. This “think tank” will help expose any shortfalls in your thinking and identify creative solutions that will become part of your strategic plan. Do not rush to solutions. If you do not focus on the right objectives and their respective strategic levers, you will likely not achieve your desired result.
Here are some questions to ask of the group you assemble:
- Do we have the right objectives currently? What needs to stay and what needs to be modified or eliminated?
- Who is responsible for what? Who is responsible for whom? Do we have the right people in the right places?
- What is our projected income, expense, net? Can we afford it? How can we afford it?
- Are we on pace to hit our financial and operational objectives this year?
- Are we achieving the quality we expect and demand of ourselves?
- How can we be more effective and more efficient as we move toward the vision?
- Have you described your ideal client and how will you attract them?
- What are the products you sell?
- What services do you provide?
- What is your business model?
- How will you increase or decrease the metrics that are held within your current strategic objectives?
If you are satisfied that your research has identified root causes are solid, then ask “How?” You are now set to create your strategies. “No matter how you go about planning, start with the obvious. When you tackle an issue, it brings unity and consensus to the team, because everyone sees those things.”2
Keep your thinking on just one page. Why? It forces you to focus only on what is truly important. A One Page Plan approach to strategic plan building and management offers many benefits. It can succinctly state your plan, making it easier for associates to understand. It makes the points you want to emphasize. It focuses your planning on 5 key areas: Vision, Mission, Objectives, Strategies and Action Plans. The One Page Business Plan created by The One Page Business Plan Company provides both guidance and insight into the components of a strategic plan, making your task of building and implementing the plan effective and efficient.
Putting Your Thinking into Action:
You’ve decided achieving aggressive growth is your key strategy. With one of your long term business objectives defined, e.g., Increase market share by 50% in the next three years, you will need a combination of strategies and action plans to begin to build out the mechanisms that will help you achieve your objectives. Those strategies will generally span several areas of consideration including:
- Process Improvement
- Learning & Growth
To frame the intent of your strategic plan, use words like:
Become nationally known for…
Provide excellent customer service by…
Invest in technologies to improve…
Continuously improve profitability by…
Select the combination of strategies that will most likely be the basis of your strategic plan, ones that will help you achieve your strategic objective(s). Each objective should have up to 4 strategies to support each strategic objective. And remember, that each objective should be couched in the acronym SMART: Specific, Measurable, Achievable, Realistic, Timebound.
- Do the objectives, together with the strategies and action plans, provide enough lift to achieve the 3 year business plan?
- Do these strategies support our mission and vision? Do these strategies best ensure achieving the objectives?
- Are action plans completely thought through and create clarity of the strategic objectives, and strategies that others in the organization charged with developing and implementing aligned objectives, strategies and action plans understand and can operationalize them?
- Do you have a place to record your best thinking so it is easily available to all team members? If not, consider The One Page Planning and Performance System.
As you can see, a lot of strategic thinking, research, feedback, and communication is necessary to craft a sound strategic business plan. Breaking down tough issues into smaller parts will help you get to the root cause of unacceptable performance. Asking why before how is crucial to ensure that the plan you create addresses the business issues you are trying to solve.
Once you have gone through this process, you will need to keep thinking about the future. A three year time horizon, today, is a long time. A one year review of the complete plan and its KPIs should be part of the ongoing process. And when you are ready to build your next strategic plan, repeat the steps and processes that have been outlined above. You will improve your performance and gain more insight each time you go through this critical exercise.
Originally posted on http://onepagebusinessplan.com
- John Maxwell, How Successful People Think (New York: Center Street, 2003)