How are strategic planning and growth even related? Everyone loves growth, yet “strategic planning” are two of the most dreaded words in business. Don’t make it that way!
A strategic plan is your future. It documents where you are, where you are going, and how you will get there. It forces your thought processes to get organized beyond the day-to-day tasks of running your business and places you in the mindset of the future growth of your company.
Many, if not most organizations that even do a strategic plan are just going through the motions. Someone from above told them they have to put together the notebook and the slide deck. Once it’s reviewed and blessed, it typically goes back on the shelf for next year.
And, if you are not one of the lucky ones that have a demand on you, from a banker, and investor, a board, or from someone… to do an annual plan, you may not have one. For most persons, that can be a bureaucratic relief.
Don’t be one those people!
Let’s take a minute to see it from the other side. There are logical reasons that you need a plan, even if it seems difficult.
- Strategic direction is real and it is how you achieve growth! It’s not just the sum of short-term tactics. It requires thought and documented market knowledge.
- The data portion of a plan should be factual. That forces learning, discussions and information gathering. It also forces a specific discipline within your business. It is NOT easy to turn directional market opinions into verifiable facts.
- It is a time allocation thing. Putting together a plan, and identifying a person who is the ongoing keeper of the plan, requires you to identify resources to be your strategic and/or informational eyes and ears. Most organizations don’t have time for a plan. Which means, most organizations either don’t have time or don’t take the time to really look forward strategically.
- A plan can serve as the impetus for you to find the “thinkers” within your organization. You may also need to reach out to outside resources to help with the process.
Find the big idea. It’s not (just) an academic process. Don’t stop at the numbers and format.
- One of the best leadership skills in the world is intuition.
- For intuition to be accurate, you must base your thoughts on a mutually accepted set of facts and market dynamics.
- For you to have the skills and bandwidth to really create a vision for your company, you have to start with the foundation. The basic set of facts. Then you must remove yourself from the clutter and truly find a strategic direction. The two (facts and vision) are often separate tasks, but you cannot consistently rely on one without the other.
The market moves. Don’t forget!
- The biggest danger of fact gathering is to forget that everything is moving.
- Your big ideas need to be based on where the market is going, not just where it is.
Your goal is marketplace leverage.
- What is the one big thing that makes you better than your competitors?
- What is the element of your business that distinguishes you in the eyes of your customers?
- Will that one thing be enough going forward to continue to lead you where you’d like to go, or do you need to find another leverage point?
- The numbers and planning in the life of your company will not replace the need to prioritize, synthesize and identify the strategic leverage points for you to grow.
- Most organizations can identify 10-12 major tasks or elements within your business.
- Two to three of those elements can be critically important for growth.
- Two to three of them can be buzz killers, which, if not managed properly, can kill your momentum entirely.
- The remainder of the items on the list are qualifiers. You must have them to be in business, and you must perform at a decent level. But they are also not strategic leverage points.
- Pick a direction that is realistic, and fit within your financial and organizational means.
- The plan literally should tell you where you are going, and how to get there.
- Businesses have a natural ebb and flow. One highly effective measure of future growth potential is market maturity.
- New, undefined and/or rapidly growing markets offer opportunities for rapid growth.
- Mature markets and companies can be opportunities, roadblocks and/or an impetus to go in an entirely new direction. Make sure your plans are aligned with market reality.
- Be creative, strategic, committed but also pragmatic.
- Companies should understand where they are with their current business, what their chances are to achieve renewed growth and at what cost.
Commit Your Plan to a Financial Forecast
- Everyone has their own terminology. My definition of a forward financial projection is a “forecast.” Many view that as “budgeting” although it goes deeper than a budget. Regardless of the terminology, you need tracked, verified and continuously monitored financial projections.
- A forecast makes your plans real. There is NOTHING better to force the tough conversations and commitments than to translate your plans into financials.
- It must start with a forecast of sales, overall, and by product or service.
- The forecast then goes to costs of goods, overhead, investments, profits and cash flow.
- Gather, organize and maintain a set of relevant facts. You need ongoing knowledge and an analytics about your company, customers, competitors, and marketplace.
- Center your initial thinking around a traditional set of planning documents, but don’t stop there!
- Step back from the plan and think. The numbers are not the plan. The numbers help you with the comfort, process, and facts to discover the real plan.
- Great plans are about creativity, vision, and intuition. Step away from the spreadsheets and day to day in order to really think.
- Allocate the necessary time and proper human resources. Don’t be afraid to ask for outside help. Planning is a specialized task.
- Create strategic leverage. You must have leaders dedicated to managing all aspects of your company. But, you must also understand where the true leverage points are that will create our opportunities to win over the less wise and the less organized.
- Create and maintain a detailed forecast. Without financials, the plan is hollow.
- Be realistic with your growth goals. Grow where you can, and don’t overplay your hand. It’s a competitive world out there, and few are invincible.
- Make your plan a living breathing document. Review regularly, not just annually. Task a “keeper of the plan” with the ongoing responsibility to keep the document current, relevant, and fresh within the minds of your teams and company.