Strategic planning came into its own during the 1950s and 1960s and has grown into an annual event for organizations of all types, including for profit and nonprofit.
The strategic planning process places tremendous pressure on leaders and their teams in terms of time and resources. There are innumerable factors to weigh, such as market acceptance of the organization’s brand, financial considerations for funding the potential opportunities that are designed, and a host of other considerations. The goal of any strategic plan is to design a straight line to success that includes improving the company’s top and bottom lines by finding ways to cost-efficiently execute the plan.
The business environment of the past several years has been volatile, and the prospect of rising inflation is causing many firms to design reactive strategies rather than ones that are proactive. The primary downside to a reactive strategy is it’s designed for the short-term but typically requires as many resources and time to execute. This short-term mindset runs counterclockwise to forward-looking, proactive strategies and does not allow the company to more fully address future opportunities or risks.
Develop and execute strategic planning in three simple but critical steps:
Step 1: Know your organization inside and out.
The process of sound strategy formulation should first begin with a thorough assessment of the company’s current situation by performing both an internal and external organizational audit. Our firm conducts a specific organizational assessment using our software, SmartPlan360™ to help identify the organization’s strengths and weaknesses, as well as the perceptions held by its customers. This analysis provides managers with hard data that helps them avoid costly mistakes due to misjudgments of their organization, marketplace and customers.
It also allows them to determine the best allocation of their company’s resources by finding sound areas to invest their people’s time and energies. Taking this approach allows management executives to make wiser, long-term decisions that lead to organizational growth and success.
Step 2: Create a series of intermediate objectives.
Once a strategy has been formulated, there is a natural rush to establish tactics to put the strategy into immediate action, however, the next step is to create a set of intermediate objectives that each have built-in measurements to evaluate organizational success. Thinking in terms of stages often helps managers plan effective executions by more clearly defining and communicating throughout the company the various parts of the new strategy.
Leveling up all employees’ understanding increases their buy-in power and it motivates a strong desire to put the strategy into action. To develop a solid strategic framework that ensures the strategy will be effectively implemented requires a lean and mean organizational focus, and that comes from everyone understanding the intermediate objectives and their timeline.
Step 3: Remain in a state of strategic development and questioning.
So often, once a strategic plan is put into motion there is an unspoken stigma associated with questioning its wisdom. This is an unhealthy cultural behavior because it discourages self-evaluation and redirection. As Mike Tyson once famously said, “Everyone has a plan until they get punched in the mouth.” This applies to any strategic plan because they more than often require adjustment and amendment once they are put into the market.
No one has a crystal ball and no one can predict the future as well as the future itself. Knowing what is going to happen can only be discovered by trying out a strategy with the understanding that it might require some redirection. Allowing your organization to question things and measure key metrics doesn’t guarantee success, but it does guarantee you will find things out faster than discouraging this practice.
A successful strategic plan requires a razor-sharp focus by mid to upper-level management. The keys and insights necessary to success are within the leadership team. No process can in and of itself produce a brilliant strategy. Only the people in the room with the most to gain and lose can do that.