New Year Strategic Plan Review

By Adrian Hovey, SBDC Lead Consultant

Happy New Year everybody! I’m sure you’ll agree with me that it’s great to see the back side of 2020. Looking toward the future, now is the perfect time to dig into your Strategic Plan. Now, my background includes helping people create strategic plans for the past ten years, and in this short article I’ll give you an overview of how you can approach it in your business. I’m kind of an old hat at this process and I have some fairly strong opinions on how it should be done, but everyone’s approach to planning is different and that’s okay. Your strategic plan needs to fit you, and it needs to fit your business. Nevertheless, in this article I will do my best to highlight some best practices to guide you, so that you can make this an iterative process that will serve you well. If you’d like more help with strategic planning, I’d encourage you to book a free appointment with an SBDC consultant who can help you with the process.

Where I like to start is to explain the differences between some key aspects of a strategic plan: Vision, Strategy, Goals, and Tactics. Many people misunderstand these terms and that can muddy the waters even before we begin. So let’s break it down.

I’ll start with Vision. Vision is your purpose, it’s the ‘why’ behind what you are doing. Sometimes that vision is very customer-facing and sometimes it is internal to your business. Going into detail on how to write a vision statement is a topic for another day, but remember that vision is your purpose. Strategy, on the other hand, is your plan for how to achieve what’s important to you, how to achieve your vision.

Goals are measurable, attainable outcomes we’ll achieve executing our strategy, and Tactics are the specific actions taken to achieve your goals. A well-known and respected principle is to set what are known as SMART goals: Simple, Measurable, Attainable, Relevant, Time-based. This framework for setting goals moves you away from intangibles like, “We will improve our customer service” and towards something like, “In the next 30 days, we will reduce our average customer wait time by 10%.” Hopefully you can immediately see the difference. The first statement is just a feeling, but there’s no way to objectively say if it has happened or not. Whereas the SMART goal can be tracked—it’s much more likely to succeed and to make a difference. Human brains are wired to want to win, and to take the actions needed to win. Once you achieve a SMART goal, it also sets the foundation for setting the next SMART goal. And if you’re not achieving your SMART goal, then it is easy to see how you must change your Tactics.

How to Organize a Strategic Planning Session.

• Step 1: Identify Your Executive Team.

For a solo-preneur, this is easy—maybe it’s just you and a trusted advisor/mentor. For a larger company, it will be your entire team of executive directors. No matter what size your business is, it’s important that you identify and decide who needs to be in the room for your Strategic Plan Review.

• Step 2: Make Time.

This is a multi-day exercise. It’s worth it! I recommend a minimum of a two-day session, with a few hours on each day. If your business is time strapped, maybe you’ll have to do it before or after business hours, but I cannot stress enough how important it is to set aside some time over two days. You’ll need to take some time to reflect on the first day’s decisions before you finalize them.

• Step 3: Define (or Re-define) Your Company’s Vision.

Times change, and we’ve experienced a great deal of turmoil lately. Your vision is the filter that you will pass everything else through, so it’s crucial you establish and write down your company’s Vision. If your vision has changed, talk about why it has changed. If it’s the same, explain why it’s the same. Everyone must agree on the Vision statement, and again it must be written down.

Side note: a Vision Statement should be no more than two sentences, about the length of a tweet. If you can get it down to 150 characters, you have won that game.  

• Step 4: After Action Report

This is something you do now, at the planning point, and it becomes an iterative process that you will repeat at scheduled intervals. The purpose of the After Action Report is for you and your team to critically self-analyze what they are doing. It allows you to keep the best practices, and to shed what isn’t working. The process is simple: everyone involved in the After Action Report must contribute three “Sustains” and three “Improves”, meaning three aspects which worked and three which didn’t work and need to be changed. Think of it as a SMART goal for the After Action Report!

Side note: The unspoken, obvious important point is that your organization needs to periodically review the After Action Report, to review progress. Don’t just write the report and file it away, never to be seen again.

• Step 5: Defining Your Strategy.

For most organizations with employees, defining your strategy needs to happen at three levels: the overall business level, the department level, and the work teams level. There’s a waterfall effect here, where the executive team’s vision creates the business’s overall strategy, which waterfalls down to the departments and the work teams. The work teams’ and departments’ strategies must support the business’s overall strategy.

Side note: Your organization should have no more than three top-level goals. This might seem silly to only have three goals, but it is very powerful to focus solely on a small number of goals. Don’t dilute your plan with long lists of goals.

• Step 6: Communicating Your Strategy.

Finally, you must ensure that every single person in your organization understands the strategy and how their work fits in to the plan. This is what motivates people and gets them excited to perform their best. As the business owner, it is your solemn responsibility to communicate this to your employees over and over, and to cultivate a culture where your people are excited to meet and exceed the goals they have set for themselves. That is what the world’s most successful companies do and it’s what makes them so special. And if you mess this up, the penalties are dire. In fact, Uncommunicated vision and strategy is the #1 cause of employee dissatisfaction in American workplaces, outpacing pay, benefits, working conditions, and everything else. Your people need a mission, and you must provide them with it.

I hope this look at strategic planning is helpful to you. Don’t overlook this opportunity to chart a course for your business. It’s absolutely crucial that you make time for this process. As the saying goes, you need to work in your business and on your business.