By Steve Williams CExP™, CMMA
Ready to create a high-impact strategic plan for your business? You’re in the right place! This straightforward guide will explain a top-notch example of a strategic plan and outline the key elements that can boost your business’s growth and efficiency.
So what are the 3 key steps you need to focus on? – Analysis, Objectives, and Strategies. If you do these steps properly and objectively you will have a winning strategic plan! There are many steps to consider when developing a strategic plan but by focusing on these three you will get the best results as these are the most likely to take your business in the direction and you are looking for and ensure you business goes to the next level.
But first, let’s back up a step and discuss key principles for a winning Strategic Plan. Then we will provide detail, direction and examples of how to tackle the 3 key steps in a strategic plan.
Table of Contents
Why do Good Companies have Strategic Plans?
“A strategic plan is, at its core, a guiding document that outlines a company’s direction, objectives, and strategies for achieving those objectives. For a business, it’s like a roadmap showing where you are now and where you want to be in the future.”
Whether you’re a small business owner or a corporate executive, having a strategic plan is fundamental for achieving long-term goals and maintaining a competitive edge in the market. It provides a focus, directs efforts and resources, and helps in decision making. Understanding the best practices for strategic planning can turn your vision into a reality faster than you could imagine.
A strategic plan also helps businesses prioritize their activities and allocate resources effectively. It allows them to identify and focus on the most important initiatives that will have the greatest impact on achieving their goals. By setting clear priorities, businesses can avoid spreading themselves too thin and ensure that their limited resources are utilized in the most efficient and effective way.
Strategic Planning Statistics
- Adopting a strategic planning approach can heighten worker productivity by as much as 30%.
- Organizations that follow a strategic plan achieve their goals 63% of the time.
- Organizations that communicate their strategic plan to employees have a 42% higher employee engagement rate.
Key Principles to Consider While Formulating Your Business’s Strategic Plan
The Power of Simplicity in Strategic Planning
Let’s not beat around the bush here – strategic planning can get complex and overwhelming. But trust us, simplicity often brings a level of clarity and focus that beats complexity. This is why a straight-forward and simple strategic plan is often more beneficial. We recommend, once a strategic plan is complete, summarizing into one page that can be easily shared within an orgnization, referred to and revised as needed.
Leveraging Core Competencies for Success
When it comes to strategic planning, identifying and leveraging your business’ core competencies can significantly influence your pathway to success. But what exactly does leveraging core competencies mean?
Core competencies are a unique set of capabilities that a business possesses that give it a competitive advantage in the marketplace. These can range from your talented personnel to unique business processes, patented technology, or strong supplier relationships.
Leveraging these core competencies is about using them to their greatest advantage to propel your business forward. Just like a gifted archer leverages their skill to hit the bullseye consistently, your business can leverage its core competencies to consistently hit its targets.
Here’s a best practice example to illustrate this concept:
|Exceptional customer service reputation
|Make it a selling point in your marketing materials, enhancing your ability to attract and retain customers
|Innovative product development
|Monetize your innovation by creating a new product line or applying for patents
|Efficient supply chain
|Lower costs or improve delivery times, providing a competitive advantage
In leveraging your core competencies, keep in mind that it’s not just about recognizing your strengths. It’s also about understanding how those strengths can be maximized in your strategy. It’s about creating those win-win scenarios where your business not only survives, but thrives.
Indeed, as you explore the process of strategic planning, remember this crucial element: In the heart of your strategic plan, there should be a deep understanding of your core competencies and how you can utilize them to leave a unique stamp on the marketplace.
The 3 Key Steps to build a winning Strategic Plan, with examples
Now let’s get to work! Building a solid strategic plan is similar to preparing a roadmap for your business. You need to have a clear vision of where you want to go and how you’ll get there. Let’s delve deeper into these 3 essential elements: analysis, objectives, and strategies.
1) Performing a Thorough Analysis
An essential part of your strategic planning process is to thoroughly understand where your business currently stands. This is known as conducting a current state analysis. It includes a detailed review of your company’s financials, customer feedback, win-loss analysis, competitive situation, market size, and current market trends. Let’s break each component down.
The secret to success is to know something nobody else knows.
– Aristotle Onassis
Assessment of your business’s financial performance includes looking at revenue, profitability, and growth trends. Remember, historical financial data can provide valuable insights into your operational efficiency and financial health.
Next, customer feedback is critical for understanding how your products or services are performing in the marketplace. Are your customers satisfied? What improvements are they looking for? Their feedback is crucial in shaping your strategic direction.
Performing a win-loss analysis can help you understand why your customers are chosing you and how you are stacking up against alternatives in the marketplace. This analysis can reveal product features you need to improve, market segments to target more aggressively, or sales techniques that need refining.
Speaking of competitors, understanding your competitive landscape is crucial. Who are your primary competitors? What are their strengths and weaknesses? What is their value equation and related pricing? Being aware of these can help you exploit their weaknesses and counter their strengths.
Finally, assessing the market size and trends. Having a firm grasp on the size of your market and the prevailing trends within it is crucial to developing an effective strategic plan. These elements help you understand your potential for growth, identify viable opportunities, and predict future demand. The market size indicates the total demand for your product or service, while trends disclose the direction the market is taking. Rely on sound and verified data sources to evaluate your market size and trends. The stronger your data, the more accurate your strategic plan will be.
So you have completed a thorough analysis, now what? Getting started, layout all your businesses challenges and then prioritize the challenges that need attention in the strategic plan. This may include enhancing product quality, reducing operating costs, or expanding to new markets. Every business is different, hence their strategic priorities will vary too. However, without identifying what matters most, your strategic plan could lose direction, like a ship without a compass.
We’ve just wrapped up our discussion on what current state analysis entails. So, let’s now delve into an example of a key challenge that has been uncovered in the analysis, shall we?
Envision growing an established organic food store named ‘GreenLeaf’. Their current state analysis might uncovers something like this: GreenLeaf prides itself on its wide range of quality organic products, sourced from local farms and suppliers. But recently, a major grocery chain has setup a nearby store, offering similar organic products, posing a significant threat to GreenLeaf’s loyal customer base. GreenLeaf customer feedback has suggested that they prefer and value GreenLeafs product quality and selection, customer service, and instore convenience but they have noticed that the major grocery chain is 10% cheaper at the cash register. Also in the current state analysis – the competitor has got the attention of GreenLeaf’s current customers.
This realization may come as an alarm, but also propels GreenLeaf into action. They’re already one step ahead since they’ve identified the problem. Now, it’s time to use this intelligence to impact the strategic plan. GreenLeaf must address the current state analysis finding, “How do we make sure our customers don’t migrate to our new competitor?”
2) Defining Clear Objectives
Your objectives should be SMART – specific, plan measurable, achievable, realistic, and time-bound. You can’t expect to progress without knowing exactly where you’re headed, right? So, let’s delve a little deeper into what this means.
Specific: Your objectives need to pinpoint exactly what you want to achieve – be it improving conversion rates, increasing revenue, or expanding into new markets. The more specific you are, the more focused your strategies will be.
Measurable: To track your progress and maintain accountability, your objectives should be quantifiable. This not only helps you see how far off or close you are to reaching your goal, but also what tactics are (and aren’t) working.
Achievable: Although ambition is laudable, your objectives need to be realistic and attainable. Unattainable objectives will only lead to frustration and defeat, perhaps even jeopardizing your entire strategy.
Relevant: Your objectives should align with your business’ mission and vision. Irrelevant objectives might divert precious resources away from your core business goals.
Time-bound: Deadlines keep everyone on their toes. Providing a time frame for your objectives instills urgency and prompts action. Without a clear endpoint, your strategic plan may lose momentum and falter.
Now that we’ve covered what SMART objectives are, let’s look at an example:
“Increase our online conversion rates by 25% by the end of Q3, enabling us to boost our quarterly revenue by 15%.”
Notice how it’s specific (increase online conversion rates), measurable (by 25%), achievable (with an effective strategy), relevant (boosts revenue), and time-bound (by the end of Q3). With this objective, your team knows exactly what they’re supposed to achieve and by when.
Setting SMART objectives is arguably one of the most critical steps in strategic planning. It narrows down your focus, ensures you stay on track, and most importantly, motivates your whole team to work towards a common goal.
3) Fleshing Out a Comprehensive yet focused set of Strategies
Your strategies are the ‘how’ behind achieving your objectives. Remember, a strategy that isn’t feasible or aligned with your objectives isn’t really a strategy.
On the path to success, formulating a comprehensive yet focused set of strategies is crucial. The key is to be detailed without losing the bigger picture.
Let’s illustrate this with a hypothetical company: ‘ABC Retail Inc.’ For instance:
One of ABC Retail’s new objectives is to increase e-commerce sales of $10 million by 12% in the current fiscal year. ABC discovered that while they were competitive in pricing, their online presence was weak compared to other retail leaders in the market. After acknowledging this, they cultivated a strategy focusing on leveraging in-house e-commerce capabilities to enhance their digital footprint, leverage their existing infrastructure, and improve their online customer service.
Identifying the Key Strategic Priorities
Let’s dive right into a key component of successful strategic planning: pinpointing your key strategic priorities, the crucial areas where your business needs to focus. It isn’t complicated, but straightforwardness, often holds the key to victory in business.
Now, once the Strategic Plan is in place, this is how to Execute
Now your plan needs to be put into action. This is where action planning comes in, outlining the specific steps, tasks, and assignments to implement your strategic plan. Ensure to include a system for tracking progress and performance. Keep in mind, the most effective strategic plan is worthless if not executed diligently and consistently.
Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.
– Sun Tzu
Finally, a plan without action is simply a plan. Taking decisive actions is final, and possibly, the most challenging part of your strategic plan. Why, you ask? Because this is where your planning meets the reality of your operational constraints and possibilities. It may require restructuring your organization, innovating in your product line, or redefining your marketing approach. But hey, constantly adapting and making these difficult decisions is the essence of running a successful business, isn’t it?
Strategies get implemented by assigning dedicated individuals/teams for specific tasks, setting measurable goals, and monitoring the progress at regular intervals.
To carry out an effective strategic plan, a company must first identify manageable actions. This generally involves creating tasks and assigning them to different individuals/leaders. By divvying up the workload, you ensure the tasks are manageable and set your team up for success.
It is important to ensure that these tasks are measurable. This means each task should come with success criteria that will tell you whether or not the task has been completed successfully. An example of a measurable task could be generating a certain number of sales leads within a specific time period.
Remember, what gets measured gets managed. Making your tasks measurable allows you to adjust your approach as necessary and stay on track to achieving your goals.
Here is a basic action plan template to get you started:
Regular monitoring and evaluation of progress is critical to the successful implementation of your strategic plan. This involves assessing performance data, reviewing strategies, making necessary adjustments, and celebrating successes. Not only does this practice keep your plan on track, but it also promotes a culture of continuous learning and improvement within your organization.
Implementing your strategic plan is an ongoing process, not a one-time event. It requires consistent action, continuous monitoring, and adjustments when necessary. With these steps in place, you can implement actions that will fuel the success of your strategic plan.
Evaluating and Optimizing the Strategic Plan
The ongoing nature of strategic planning means you should schedule regular reviews (quarterly) of your strategic plan and your action plan results. This way your company can assess how well the plan is a fit with the companies objectives. Best practice is do a full review of the plan on an annual basis ensuring learnings from the previous 12 months are taken into account.
Final Thoughts: Building a Successful Strategic Plan – Concentrating on the Essential Three Steps
At the end of the day, building a successful strategic plan is about harnessing the power of insightful analysis, clear objectives, and strategic focus. With these essential three steps you can formulate a strategic plan that deliberately targets your core competencies, keeps sight of strategic priorities, and responds proactively to the competitive landscape.
Remember, while drafting your strategic plan, leverage data-driven insights and your business’s unique strengths. But, even the best-laid plans don’t matter without effective execution. So, once your strategic plan is ready, focus on implementing actions that realize your objectives.
Strategic planning might seem daunting initially, but with careful thought and commitment, it can pave the way for sustainable growth and enduring success for your business. So, go ahead and take the first step towards crafting a strategic plan that truly reflects your business’s ambitions and capacities.
Thank you for investing your time in understanding the best practice example of a strategic plan. Your business’s journey towards strategic success starts here. Good luck!