It’s year-end planning time. Hopefully my last blog convinced you of the importance of having a strategic planning process--you just can’t get to where you realize your full potential without one. Again, this isn’t the most exciting topic in the world, but I can assure you that following these steps and guidelines could skyrocket your business to levels you never dreamed possible.
What are the key components of an effective strategic plan?
1) Markets and Customers: All great growth companies are customer-focused, so the No. 1 element in a plan is "markets and customers.” You need to begin with "Who do we serve, what do they need and why do/would they buy it from us? No company is efficiently and profitably "all things to all people.”
2) Mission, Values and Vision: Mission: What are we in business to do, i. e., what’s our mission? Values: How do we do it, i. e., what values define the way we interact with each other, or to put it another way, the terms of engagement with customers, employees, vendors and suppliers? Vision: Where will this company be in three to five years? Leaders must have a vision--and must communicate it to everyone. Most people want more than a paycheck, and great companies are built on mission, values and vision.
3) Strategies and Goals: As I’m very fond of saying, if you don’t know where you want to go, you’ll never figure out how to get there. Each year, you need to determine what goals you’re going to pursue and the strategies you’ll use to achieve them. If the goal is to increase revenues by 30 percent, then your strategies could include changing the customer mix, launching a major marketing campaign, expand into new markets, opening up regional offices, hiring regional sales reps or going global.
One of the things I have learned over the years is that during the planning process it really helps to identify the obstacles that are in the way of achieving your goals; then develop a plan to get around those individual obstacles and achieve the desired result.
4) Milestones and Metrics: These are essential elements in the plan--otherwise there’s no way for people to know how far we expect them to go; no way to measure how far they’ve come (or not come); and no basis for celebrating success. As Dick Schultz, CEO of Best Buy, said, "If you don’t measure, you miss all kinds of opportunities to recognize employees who have performed extraordinarily.” As the famous saying goes, "what can be measured, can be improved.”
5) People Responsible: Goals and strategies should always be broken down into an action plan that includes a "by whom and by when” accountability component. One of my favorite tools for this part of the plan is a software program called the Strategy Circle by Strategic Coach.
6) Resources Required: Be as specific as possible about what resources will be required to accomplish the critical tasks in the plan. Is it more staff? A new website? More marketing dollars for search engine optimization? Money for trade shows? Money for a new office? money for technology upgrades? A plan without specific activities is a dream. A plan with no resources allocated to implement it is a nightmare--not to mention what that would do to employee morale.
Remember, a plan by itself isn’t enough to ensure a successful growth. It’s the actual implementation of this plan that drives growth and profitability. It’s the heart of the whole process. It’s all about execution.
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