It is not uncommon for a strategic business plan to be developed during a retreat, approved at a subsequent board meeting and then filed away. Actions will be taken, and maybe after 6 or 12 months, it will be pulled out to tick-off progress. But what is ‘best practice’ when it comes to getting the most out of this strategic document?
Active Knowledge Question:
Where is your strategic plan located right now?
Whilst a formal printed document may be created out of your business’s strategic planning process and approved under your corporate governance regiment, it actually is never finished and should never be ‘considered completed and filed’.
I always describe any strategic plan that I am involved in as a ‘working document’. It is actually a living document as its purpose is to capture ‘the strategic thinking’ at a point of time to support actions and to remind us why we chose that path. It is constantly referred to, to remind the team what we have decided to do, what we are not going to do and what are the most important things we need to remember and focus on. There is never a board or management meeting at which the strategic plan is not in every hand and the key reference point.
It drives the entire organisation and sets the agenda for all the work that everyone is going to strive to deliver. It provides unity through direction, alignment and focus and thereby lifts the competitive performance of the business.
It is not a static document and not set in concrete. Strategy is rarely deliberate, with actions locked down and delivered as first envisaged. Strategy sets how the business will engage the market, the intended journey forward and the destination. And it does so with the reality check that strategy is often emergent as it is only as we do engage the market and commence the journey that we discover the most effective path to follow. Strategy is sometimes unrealised as an opportunity appears in front of us, which we had never considered. And hopefully, we have the adaptability and freedom as an organisation to grab that opportunity with both hands and make it real.
In strategy, we do hope that the destination we have set remains more or less fixed and constant, but usually, that depends on how well we have identified and described that destination. Destinations are best described as the value we will deliver to our customers in fulfilment of their needs and aligned with the purpose for which we exist as an organisation.
A strategic plan comprises many different components and touches every aspect of a business. Once settled, it is literally ‘ripped-apart’ so it may be actioned, and its impact felt throughout the entire organisation.
Here are some of the components that are normally found within a strategic plan; it defines:
- Markets: the markets in which the business has chosen to compete and the boundaries of those markets – customers, regions, products/services, pricing etc. but not rigid unmovable boundaries but ones which create focus.
- Compete: the competitive posture of the business, being how it intends to dynamically position itself and its offerings to deliver a winning value to its customers.
- Watch: those areas of change that will influence the value delivered to customers and the business’s operations and which are subject to a continual watch and act as necessary.
- Capabilities: the areas in which the business excels that underpin its competitive posture and into which it will invest and those areas of capability that must be grown.
- Structure: the operating structure of the business; no, it’s not the organisational chart. Rather the way in which all the various activities in the business come together to deliver the customer value expected by its competitive posture.
- Vision: the summit that the business has set as its quest so as to muster and enlist the combined effort and talent of everyone working within and with the business.
- Growth: specific areas of activity and investment that will enable all the outcomes sought by the strategic plan to be delivered.
- Culture: the personality (culture) of the business that must be seeded and sustained to underpin the competitive posture of the business and again all the outcomes sought. Culture is more than just a list of desired values; it is the inherent personality traits of the business and all the systems and process etc. that go into making that real.
- Simple Guiding Principles: a plain English, easy to understand, set of guidelines that instruct anyone and everyone how they are to act in any task at hand so as to underpin the competitive posture of the business and uphold the culture.
- Risks: the key risks that the business must mitigate and monitor arising from this plan.
- Metrics: the key areas of monitoring that will reflect progress and performance, and not just financial performance, consistent with the outcomes sought through the plan. These metrics also reflect who must have access to what information to deliver on their responsibilities.
- Purpose: a reaffirmation of the reason why the business exists and the motive that drives all of its actions founded in customer need, customer value and the intent to compete.
A strategy once developed is rich in the guidance it provides to the business and the actions that it calls for. It must be dissected to ensure that it is brought to life and not just another document.
Your Every Action
A strategic plan speaks into every decision and action that will be made in the business. I cannot think of one area of a business’s life and activity that a well-prepared strategic plan will not touch.
Often the time allocated to the strategic planning process does not allow for the full consideration or development of the actions that will need to be taken to deliver on the plan. And a strategy not delivered is no strategy.
It, therefore, becomes vital that once the strategy is settled that the ‘goal achievement plans’ that will enable and support all of the relevant actions in the delivery of the strategy are prepared. These typically come about by the senior management team coming together and workshopping the impacts and actions necessary to bring the strategy to life. There will be conflicts, crossovers, duplications, priorities, and sensibilities to be sorted. Unity and unison in actions will only be achieved through a coordinated approach by a team with responsibility and authority.
I call the action plans that arise from these processes as ‘goal achievement plans’ that typically tier-down through the entire organisation, each taking their cues from the plan above so as to form a unified organisation-wide action plan.
These are vital for the leadership teams at all levels to recognise where their focus and priorities must be, provide accountability and resourcing, and a workable method to keep everything moving forward.
If your strategic planning process is not to be simply an annual exercise of governance but a real effort to guide and impact the performance of your business, then it must never be allowed to gather dust but must be the most referenced and applied decision-making and actioning tool used in your business.
An entirely new level of performance.
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All the best in the success of your business,