Midsize businesses and businesses at the scale-up stage can use this proven strategic planning process to analyze their current state and develop a future state. The goal of this process is revenue growth and increased profitability. Companies need to have a plan in place so they can chart a course to achieve objectives and make the most of opportunities as they arise. This article will discuss the key steps in the strategic planning process, as well as provide examples of how they can be applied to your business.
Some believe that Strategic Planning is simply a tool to get a management team on the same page so the collective is aware of what each is doing for the coming fiscal. This could not be farther from the truth, and in fact, is likely to lead to decline not growth. For example, what if the current direction of the company is putting them on a collision course with a market force in a battle they cannot win, what if the status quo has the company heading in a direction that puts revenue profits and the company existence at risk.
If the objective is growth then a more sophisticated process must take place. The company must analyze its self-generated data, its competitors and both’s relative position in the marketplace. Then chart a path to the most profitable and least risk growth opportunities(y). The growth path is never a straight line and it will require changes in the business model, products or services (P&S), how the company sells its product or service (channels), and how it uses technology.
The following are the key steps in the Strategic Planning Process for Growth:
Use Internal Data First
This is the data that you have generated from your current activities. Review this data for any trends or patterns that may be indicative of areas where growth may be possible.
Take a look at what your competitors are doing. Are they succeeding in areas where you are not? If so, why? How can you adapt to take advantage?
Tap Industry Reports
In addition to looking at your internal data and that of your competitors, it’s also helpful to look at industry reports. These can provide insights into larger trends that may be affecting your business.
Generate Primary Data to Fill the Gaps
Once you’ve gathered all of the data you can from secondary sources, it’s time to generate your primary data. This can be done through surveys, focus groups, or other research methods. You must know how your company is measuring up with current, lapsed, and prospective clients.
Develop Key Learning
From all of the data you’ve gathered, it’s time to start developing key learnings. These are insights that will help you develop your growth strategy. Some common themes or areas of opportunity that may arise from your analysis include:
Increasing market share
Developing new products or services
Entering new markets
Get the Right People in the Room when defining Strategy
One of the most important steps in the strategic planning process is getting the right people in the room. This includes not only your management team but also other stakeholders so all of the business functions of the company are represented. Also, consider adding those that may have the biggest role to play in achieving the growth.
Develop Objectives and Strategies
Once you have completed all of the previous steps, it’s time to develop a set of objectives and strategies.These will be the goals that you want to achieve for the year and the next three to five years’ major objectives.
Stay Objective and Make the Right Decision
It’s important to stay objective during the strategic planning process. This means not allowing personal biases or opinions to cloud your judgment. Stick to the key learnings you started with, create consensus based on facts, not conjecture.
There is little worse than a company President who has spent this much time and energy to not get a plan that can be executed – this can have long-reaching consequences. The Strategic Planner can also do the bulk of the analysis and create the key learnings. They then can facilitate the strategy discussions and ensure the best growth strategies are the result of the exercise. They then will consolidate the results and create the strategic plan, bringing it down to a very useful one-page format.
The final step is to plan the next steps eg. measurement of objectives or KPIs. An Action Plan includes developing a timeline and budget for implementing your strategy, as well as identifying who will be responsible for each task. A critical action item that should be taken on by the President, is announcing and organizing the next strategic planning session – typically in 12 months.
Properly executed, strategic planning is a powerful tool that can help businesses of all sizes achieve their growth goals. By following the steps outlined in this article, you can ensure that your company is on the right track for sustainable success.
Steve Williams CExP™, CMMA is a Partner at the Incentica Advisory Group in Calgary. Steve has completed over 100 business and strategic plans for some of the biggest and best companies.