Updated: Jan 7, 2020
“A goal without a plan is just a wish.” -Antoine de Saint-Exupery
Step 1 - Commit to an exceptional business strategy
Your responsibility as a business leader is to ensure the business thrives. Treat the development of a superb strategic plan as your supreme responsibility, and don’t even consider starting unless you are deeply committed to its completion with your best possible effort. Be passionate about the prospects for growth and transformation of your business. Use your commitment to increase your odds of success by building a plan with a clear understanding of the issues affecting your business, long-term strategic goals, bold growth initiatives, and then implement it with discipline and passion.
Step 2 - Determine and communicate the plan’s purpose
Strategic planning is often brought about by a significant critical event affecting a company, such as financing, a market changes, management changes, new investment, lackluster performance, or new ownership. Be clear in understanding why you are developing a strategic plan at this time, and which will help you focus on the right goals, right issues, and the right people necessary to get the job done. A compelling purpose will help you communicate with your employees while driving greater alignment among strategy, values and execution.
Step 3 - Engage the right team, leader, and resources
Socialize your intention to develop a winning strategy with the key influencers in your company before you start the formal planning process, including your Board of Directors, Executive Team, key shareholders, strategic partners, and key employees. Then directly solicit support from these groups, and seek out individuals that have the interest, capability, and drive to be engaged in the project. Appoint a formal strategic planning team, including a project leader with cross-function responsibility, establish scope, timeline and budget, and ensure the team has direct support of the top executive to ensure a successful outcome.
Step 4 - Understand the issues
Start the formal strategic plan development process with a comprehensive review and analysis of the issues affecting your business, including: internal and external environment; market and customer; and technological trends. Undertake a comprehensive discussion with your customers and market leaders, with a series of clear questions, in order to understand the changing nature of the market and their developing pain points. Ensure a mechanism exists to avoid group think and capture the best information possible, which may be quite contrary to your current beliefs. Be open minded to new market opportunities at this time, and check your assumptions.
Step 5 - Focus on your strengths
Develop a very deep understanding of your company’s core capability, or competitive advantage, in addition to its other strengths. Become an expert on what your company does very well and spend the majority of your strategic planning time reinforcing core capabilities and building new ones. While it is important to be mindful of the weaknesses in the organization, do not make that the primary focus of your plan unless your issues analysis indicates it is materially adverse or has the potential to become so. Developing a dominant market position based on your core capabilities in the market is the best offensive strategy to develop, as long as those capabilities are consistent with growing market opportunity.
Step 6 - Develop strategic goals, initiatives and financial projections
Determine a set of mid-term (1-3 year) and long-term (3-5 year) strategic goals, and determine the key steps necessary to achieve them. These steps are your strategic initiatives that will transform your company and reposition it for greater growth. There should be a manageable number of strategic initiatives (5-10), and they should be cross-functional, customer focused and based on leveraging your core capabilities. Build a comprehensive financial model based on the implementation of these initiatives and the achievement of the strategic goals. Communicated openly and clearly with key influencers, soliciting input and guidance, while you continue to document your progress.
Step 7 - Build a scalable business model
Review and understand your value proposition precisely, by being clear on how your company solves your customer’s problem and how you make money in the process. Conduct a comprehensive financial review to ensure your decisions are based on fact, not assumptions. Review options to improve your business model, including adding additional revenue streams, selling more to existing customers and changing distribution channels or cost structures. Check your decision for scalability and uniqueness. Consider using tool like The Business Model Canvas to help you in the process.
Step 8 - Document the strategy and build an implementation plan
Document the strategic plan, in a simple, clear and easy to communicate format. Assign cross-functional accountability and responsibility to senior managers for each of the initiatives, and convert them into an implementation plan by building cascading near-term functional actions. There should be a clear line of sight from each employee’s actions to the key strategic initiatives, and they should include key metrics, accountabilities, and the resources required to execute the actions. Communicating with all levels of the organization and with key external customers and partners is paramount at this stage. Make your communication sticky by following the principles of Made to Stick.
Step 9 - Measure and reward achievement
Check that all your key metrics are in place, and a repeatable and disciplined process exists to track, report, and improve these metrics. The most important aspects of measuring success are to keep it simple, look for trends, assign responsibility, take action, and then reward accomplishment. It is best to have only a handful of top level metrics (i.e. <10) that will monitor the effectiveness of your strategy. They should include both leading indicators (i.e. sales funnel health) and lagging indicators (i.e. customer satisfaction), financial measures (i.e. cash flow) and employee measures (i.e. turnover), for instance. It is critical to align financial rewards at all levels of the organization, with the achievements of goals that support the accomplishment of the strategic plan. This will ultimately drive the behaviors that create the culture that will take your company to the next level of growth.
Step 10 - Establish a strategic planning process
Determine and then establish a strategic planning process that includes an annual review of the plan, update of the issues, status of progress, and changes as necessary. The process should be clear and simple, and becomes a regular business process that enables you to take advantage of evolving market opportunities while scaling up your business and creating long-term shareholder value.
Afterword – Start executing and get really good at it!
Most strategic plans fail due to poor execution. Even the best plan becomes useless if it is not implemented well. Start executing on the key elements of your strategic plan, as soon as practical, in order to start building momentum and demonstrate that this is a real exercise, not a paper one. Once the plan has been finalized, properly resourced and communicated, ramp up the implementation dramatically. Make its implementation the top priority of management, and ensure you continue to communicate the plan’s purpose, merit, outcomes, and expected benefits to the affected parties. Pick a proven implementation system that fits with your company like Lean Thinking, or develop a system that works best for you. Seek out or hire individuals that are exceptional at getting things done, and make them core to your team. Be relentless.