After facilitating one strategic planning session with them, it was clear that the administrative team was overwhelmed and they needed to hire a chief financial officer to make sure the financial data was processed accurately and efficiently. With a CFO in place to move things along, the company was back on track.
Most business owners are so busy putting out fires that they don’t take the time to look at their businesses from a strategic perspective. As Stephen Covey says, we spend most of our time focusing on what is urgent and need to have the discipline to focus on what is important for the long term.
One of the best ways to have fewer fires and more results is for the senior leadership team to spend at least one day per year working on their strategic plan.
While some planning books show you how to write your 50-page plan, we have found that the simpler the strategic plan is, the more likely it is to actually work.
We put our plan on just one page and laminate it for each member of our team. On one page you can see it every day and be reminded of what needs to be accomplished.
Here is our straightforward process for strategic planning:
Keep the group small and limited to leadership. The leaders in your company tend to think strategically. Bring the whole team in later to help implement the plan. If you bring too many people in for the planning, you will get bogged down in details and not get your direction established.
It is best to do your strategic planning every year about the same time so you know when it is due and have a specific amount of time to achieve the goals laid out in the plan.
Hire an outside facilitator so everyone in leadership can participate.
While many companies might want to skip this step, we have found it is critical. An outsider does not have a political stake in the issues and can ask the simple, but vital, questions.
It is wise to choose someone with some knowledge of your industry or company, such as your CPA, attorney or the director of your trade association.
Identify where you are. In advance, prepare your financial statements, growth projections, and other data that can help you make smart decisions.
With this information, you can create the baseline of where you are now in the planning session.
Decide where you want to be in a specific time period, such as one year or three years. While this might be measured in sales, number of employees or market share, use goals that can be accomplished and measured. The more tangible they are, the more likely your goals will be achieved.
Identify the gaps between now and where you want to be. This will help make many decisions, such as hiring, marketing or expansion plans, much easier.
Conduct a SWOT — Strengths, Weaknesses, Opportunities and Threats — analysis. This tool provides a disciplined conversation at the strategic level.
Taking time to step back from your business and do a SWOT analysis often makes certain moves more obvious. For example, if you want to take advantage of an emerging market — an opportunity — it may be easy to decide to hire a new sales person with experience in that market.
If your biggest weakness is having just one major customer, it may be time to diversify your marketing and sales efforts instead of spending all your time serving that customer.
Define your decision-making criteria. You need to evaluate ideas generated during the session on some criteria. It could be cost, impact on the bottom line, familiarity with the market, etc.
Five goals only
Not every idea can be implemented. Put good ideas that do not meet the criteria in the “parking lot.” These can be revisited next year. Be clear from the beginning that all ideas are sought, but not all can be implemented.
Set no more than five major goals. If this is your first strategic plan, focus on two or three. Five goals outside of “business as usual” is a large number for even a disciplined team to accomplish. It is much better to achieve fewer goals in the first year to build momentum for the following years.
On the one-page, laminated plan we distribute to everyone in our firm, the major goals are listed, along with a list of the steps to achieve them, a timeline, and the people responsible. It is very clear what is expected and who is expected to help.
Build in measures to monitor progress. If no one person is assigned to a task, nothing will get done. Be sure to have one person in charge of accountability for the whole plan and keeping the individuals or teams on task.
It is critical to monitor progress. This also helps build a culture of long-term accountability into your company.
Communicate to your whole team. If they do not know what direction you are headed or what is being measured, how can they help the firm achieve the goals?
We meet quarterly with our whole team to discuss the plan and hold ourselves accountable for progress. We include whether we are hitting our financial targets and how the team can work together to accomplish our goals.
With our strategic planning process, we tackle a few of the big issues every year. As a result, we have pushed through many large projects, such as major technology updates, marketing plan and tactics overhauls, a learning and training system for everyone, and other things that are on the “to-do-someday” list for many firms.
