Editor’s note: This guest commentary was written by Patti and Ken Leith, the founders of Bentonville-based EDGES, Inc. and Fort Collins, Colo.-based (e)Gauge, Inc. You can download a white paper on this subject and explore other leadership topics at www.getedges.com.
Planning is a key part of the process of achieving goals. Without plans, goals often continue to be talked about but not realized. So, if you decide you want to complete a triathlon, you need a good training plan to reach that goal. If you try to complete it without training, you may fall short in some way. You may not complete it. Or you may complete it at great personal cost.
As a leader of any aspect of your business, you must develop a plan, but more importantly, you need to be sure that what you are planning to do is directly connected to your organization’s strategic goals.
WHAT IS STRATEGIC PLANNING?
In its purest form, “strategy” is the means by which an organization determines what they want to accomplish. A plan encompasses the way an organization wishes to achieve it. Therefore, a truly “strategic plan” aligns the actions of today with the goals of tomorrow. It is long-term, future-oriented, and clearly outlines what needs to occur to reach the organization’s goals.
WHY DO STRATEGIC PLANNING?
In short, good strategy improves business results. So, the main reason to proceed with the process of developing a solid strategy is to grow profits leading to an organization’s substantial growth and/or sustainable recovery.
Some forms of planning commonly needed within an organization may be confused with strategic planning.
“Project Planning” is used by a project manager to determine exactly how that project gets completed. He/she thinks through objectives for the work, who should do it, when it should be done and the necessary communication. Thus, projects within an organization become a key means of achieving strategy, but project managers should always be sure that the projects are connecting to and supporting strategic goals. Project planning, when done in isolation, generates work activity but may not always produce results.
“Annual Goals Planning” is often used by leaders of a company to articulate to others what needs to be done within a given year. Usually, goals are assigned and added to the performance management. Quite often, the goals are financial. It is common to meet with C-Level leaders about strategy who indicate that they have a good strategic plan, but, upon closer review, it is shorter-term, more narrowly-focused, and not likely to be directed towards the organization’s end-game. Calling a plan a strategic plan does not make it one.
“Business Planning” is the way leaders of a company or entrepreneurs starting a company can plan the path they intend to grow revenues and reach financial goals. A formalized business plan is generally required to attract investors or convince a board of directors to make a change. It includes several elements included in a good strategic plan. For example, it calls for financial projections, market analysis and a sales plan. It is most often intermediate in focus. All of these elements should be included in strategic planning and, if not developed, the strategic planning discussions should address. The key difference between a “Business Plan” and a “Strategic Plan” is both the process under which it is developed as well as the execution levels contained in a strategic plan generally not present in a business plan.
HOW IS A STRATEGIC PLAN DEVELOPED?
Organizations should engage their key leadership teams in strategic planning, in order to set the future course. The process of looking forward gives the team purpose. It enables each member to embrace ownership in the longer-term goals.
The strategic plan should define mission (purpose) and vision (clear future goals). Then, the team should clearly identify the initiatives that must happen for the future goals to be met. Finally, the team will work together to develop milestones within each initiative.
As an example, in a Triathlon Training Plan (TTP), the mission is to develop a discipline for fitness and the vision is to build sustainable strength. The initiative is completion and milestones encompass monthly training and nutrition goals.
Finally, the biggest reason a strategic plan often rests in a dusty binder on the shelf of a leader involved in it is the lack of a plan for execution. Completed by the team doing the actual work, the execution plan should include projects and their related steps. In the TTP example, projects are the weekly training and nutrition goals, and steps are each daily workout.
Every strategic plan should be considered as a flight plan. You file it and then you fly where you need to go while you adjust according to the environment. Plans are subject to frequent changes. As a result of the dialogue that leads to strategic planning, teams will realize they can achieve much more than they thought possible.