Whether attending or coordinating, annual planning events can be overwhelming. Strategic planning processes can fail to develop the right strategies or prevent successful execution. From Fortune 100 corporations to startups, The Spur Group specializes in building solutions to common troubles that can set back strategic planning. The most common reasons strategic planning processes fail include:
Lacking a clear roadmap for planning
Relying too heavily on large quantities of data
A lack of alignment between business groups
Our expertise lies in optimizing and strengthening our clients’ annual strategic planning efforts, from the C-suite to group or division levels. Our approach is based on both successful client experiences and internally testing a variety of strategic planning concepts.
From our experiences, we’ve collected 14 tips to help you develop a strategic plan, run the plan smoothly, and ensure it’s a success:
How to develop a strategic plan
Conducting annual strategic planning efforts can be tricky. Before you step into the boardroom, consider four lessons we’ve learned in effectively managing these planning events.
Be ready to adapt
Creating an effective strategy goes beyond developing a plan based on the best available information, according to consultant and Wharton professor, Joe Ryan. The planner must be agile enough to adapt the strategy based on opportunities or threats that may emerge during the life of the plan.
Strategic plans are important, as typified in the many quotes from famous leaders who argue “failing to plan is planning to fail.” However, it is foolhardy to stay locked into a plan without having a clear way to adapt to changing conditions. Life and business strategist Tony Robbins famously said, “Stay committed to your decisions but stay flexible in your approach. It’s the end you’re after.” Further, renowned author and playwright, Jessica Hagedorn once said, “Adaptability is the simple secret of survival.” The key is to develop a process that allows for both an informed approach to structured planning and an opportunistic approach to modify the plan as needed.
Encourage real debates
Asking “What are we going to do?”, is just as important as asking, “What are we not going to do?” To plan correctly, you need to design an environment for executives that promotes thoughtful, structured, and rigorous debates. Those debates need to encourage participants to make specific decisions that will cascade throughout the organization and the rest of the planning process.
Facilitating debates encourage team members to ask and answer questions they would normally be hesitant to ask in a group setting. Debates can help spark conversations about how society has changed, is changing, and how the team or company should evolve accordingly. They are a productive way to inspire a team to adapt and grow, and also contribute to the foundation for future success.
Promote structure and accountability in the planning process
Strategic planning needs to be a process with both analysis and ideation that leads to critical decisions. Without a process, planning turns ad hoc and chaotic. Therefore, corporate planners should be rigorous in developing process and accountability models. An approved calendar should outline deadlines, decisions, and deliverables. The calendar should also show how the decisions and planning artifacts will cascade and affect downstream activities.
Make sure you have the resources
Strategic planning can sometimes be a challenging process that taxes planning teams, executives, and others responsible for analysis, ideation, decision-making, and execution. Your process should actively account for acquiring the needed resources for key steps, incorporating executive engagement at the right time and in the right manner, and finding local teams with the skills and capacity to execute plans.
How to run your plan smoothly
You’ve set yourself up to have a good debate and each attendee should be armed with plenty of anecdotal insights. Now, you need to make sure that conventional business wisdom aligns with the data you have at hand. Preparing the data will either confirm your thinking or force you to reevaluate your business practices.
Once you’re in the strategic planning meeting with all your stakeholders, think ahead to implementation by keeping the following four key points in mind:
Choose a top-down or bottom-up approach
There are two basic models of planning. The first is the classic top-down approach in which the corporate leadership defines objectives, creates plans, and sets top-level budgets. The corporate leadership can also target and cascade those elements to customer segments or geographic-focused groups. There is little choice in implementing these initiatives at a local level as budgets are pre-determined and allotted to key investment areas.
The other approach is a bottom-up empowerment model whereby the corporate leadership solely provides top-level objectives and budgets, leaving execution decisions to individual departments. Determine the right balance between the two for your company. Then, build a plan and approach that aligns with your culture, organization, and strategic situation. Keep in mind that the greater the degree of a centrally planned structure, the greater the need for templates and prescriptive guidance. Likewise, the greater the degree of empowerment, the greater the need for measurement and structured review.
Go beyond baseline models
Typically, the heavy lifting of strategic planning has fallen on the shoulders of the finance team, who is usually responsible for building pro forma models for revenue, growth, and profitability. The models set a strong foundation for conversations, but more is needed for useful planning. After all, these types of baseline models show one type of goal: financial. It’s just as useful to build models that show goals for customers, partners, products, and markets. By comparing and correlating a wide variety of models, you can paint a fuller picture and can make more informed decisions.
Have a plan for communicating the plan
Plans shouldn’t turn into large binders that sit on a shelf or languish on project sites. You need to build your plans with the most direct and effective communication possible for your situation. Most plans are presented one way — at a high level to a variety of audiences such as internal stakeholders, partners, customers, boards, and analyst communities. However, you should segment your plans and build each part with sufficient detail to drive transparency, ownership, and accountability. Additionally, your planning approach should contain an explicit communication plan that manages the information dissemination process for specific audiences within certain time frames.
Track a limited number of useful metrics
It takes more than one metric to measure progress, which is why it’s essential to design a set of KPIs or a scorecard that gives a multi-perspective view of performance. While clearly delivering insights, the right set of metrics will also aid you in decision-making.
However, in today’s digital landscape, we are often overwhelmed with data. It’s easy to fall prey to analysis paralysis when you track more data than management can use. To paraphrase eminent statistician, Nate Silver, the trick is to find the signal hidden within the noise.
How to make your plan a success
We’ve covered how to successfully develop a strategic plan and how to ensure it stays grounded in execution and communication. To ensure your plan produces positive results, you will need to make six key decisions:
Organize your planning process
Strategic planning relies heavily on the methodology behind the plan. To ensure your process is effective, first carefully outline and detail your plan. You should fully understand whom the plan involves, the specific tasks to complete, the deliverables, and the overall process at hand. Remaining cognizant of your plan’s inner workings creates predictability, structure, and accountability throughout the entire process.
Setting long-term goals is fundamental to successful strategic planning. While goal setting positions you to achieve near-term objectives, it also allows you to stay focused on the overall vision. Your goals may be revenue or profit related, or they may be related to other drivers of success such as customer satisfaction, partner success, or internal headcount growth.
With your multi-year goals in hand, you can also set your financial and operational targets for the next fiscal year. This process is extremely important, as it forms a financial base for future strategic plans.
Identify and describe your strategies
Based on your overall goals, identify your plan’s strategies and identify a way to describe them in a practical and actionable way. Your strategies and associated plans form the basis of your executive team discussions going forward. They also allow you to clarify the actions you need to take and the expected benefits of doing so. Strategies are typically related to growing the business, driving operational improvements, or improving the ROI of critical investments.
Prioritize your investments
When considering investments for a project, you must consider your options carefully, balancing the pros and cons of each. Every investment has a unique impact, so it’s important to thoroughly analyze and rank each one. This process provides a way to easily determine which projects have the most potential and need the most resources.
Form a team for each project
Once the group prioritizes each project, form a plan to implement each one across the organization. After implementation guidelines are set in place, ensure each priority project has a plan and dedicated team.
Measure and adjust accordingly
You constantly measure and adapt to determine the actions you will make in your everyday life. Metrics allow you to adjust and change to fit customer needs. Using metrics is like flying a plane; providing the correct strategies and checkpoints improves your ability to adjust to turbulence and keep flying to your destination. Bring informed opportunism into your strategy and leave room to acclimate to inevitable changes and circumstances throughout the year.
The big picture
As you begin the strategic planning process, it’s important to remember that the endeavor begins long before the boardroom discussion takes place. Once you enter the discussions, remember to make your strategic decisions relevant and actionable with every step of your plan.
Successful business planning begins with a strategy. Developing your strategic plan into a set of attainable projects happens with thorough execution, communication, and attention to detail. The decisions we make along the way influence how successful our project will be. Remain mindful of these tips to design a strong plan from the outset and gain successful outcomes.