As a business leader, you probably participated in or even spearheaded your company’s yearly planning event. How did it take off? Was it a one-time big-time activity that allowed you to produce brilliant and creative targets for the upcoming years that got shelved and forgotten?
Strategic planning is a crucial business practice that aligns your team to a single plan and guides you, as a leader, in decision making, gearing you up for success. This endeavor generates a working document, known as your strategic plan, which contains a roadmap for the direction of your company.
Before we dig deeper into the essential components of a strategic plan, we need to ensure we’re doing it for the right reasons and not just because it’s an awesome “buzzword.” We also need to know how to create a strategic plan properly.
As every goal entails a plan to determine the steps you must take to achieve it, you need a strategic plan to direct your efforts towards realizing your business goals, whatever they are.
At its heart, a strategic plan helps you identify the following aspects of your business:
Destination – Where do you want to take your business?
Baseline – Where are you now?
Journey – How you’ll get to your destination?
Checkpoints – How you’ll know you’re on the right track?
One of the main functions that you, as the leader in your business, need to undertake is that of the company’s figurehead and strategist.
By now, you’ve hopefully learned to step back from the daily routine of business and conduct frequent status checks to determine whether or not the business is heading in the right direction.
Your strategic plan will come in handy during these times.
Here are the 7 key elements which you need to establish a stimulating strategic plan.
How do you see your company in a perfect world or in your ideal scenario?
Your vision statement translates how you envision your firm despite any business risks within the environment it operates. Though far-reaching, what is the ultimate target that your company strives to achieve? Your vision serves as your compass, directing you to your chosen destination.
For IKEA, its vision statement is, “To create a better everyday life for the many people.” While Amazon’s vision is “To be Earth’s most customer-centric company.”
You can start by identifying what impact you’d want to leave on your customers or humanity in general. Your vision must have a certain depth but be simple enough for everyone to understand.
It should also convey your aspiration, what you believe in, and your strategy.
2. Mission statement
If your vision describes your desired destination, your mission emphasizes your journey to where you want to be. It also reveals why your company exists, what makes you memorable, and how you engage your prospects through your products or services.
McDonald’s boasts of its mission, ‘To make delicious feel-good moments easy for everyone.’ So, likewise, our mission here in Waking Giants is ‘To make leadership and strategy easy,’ as we help you, great leaders, create clear and focused strategies for success.
By focusing on your mission, you move closer to reaching your vision. In addition, with a compelling mission, you get to narrow down your options or widen them.
3. Core values
What does your company stand for?
Your core values uphold your beliefs and principles that support reaching your vision and mission.
Google’s philosophy is not just displayed on its page; its core values are discussed concretely, with specific examples. Below are the ten things they uphold.
i. Focus on the user, and all else will follow.
ii. It’s best to do one thing well.
iii. Fast is better than slow.
iv. Democracy on the web works.
v. You don’t need to be at your desk to need an answer.
vi. You can make money without doing evil.
vii. There’s always more information out there.
viii. The need for information crosses all borders.
ix. You can be serious without a suit.
x. Great isn’t good enough.
4. SWOT analysis
Performing a reversed SWOT analysis (Strengths-Weaknesses-Opportunities-Threats) allows you to assess the factors that may affect your business.
By initially scanning your external environment’s Opportunities and Threats, you discover opportunities you can tap into and benefit from while equipping your company to counter the threats or challenges you might face.
Then looking into your internal environment’s Strengths and Weaknesses, you can establish a strategy that highlights your strengths, making you stand out from your competitors. Knowing your weaknesses lets you minimize the risk by managing them.
A SWOT analysis is an essential tool that leaders utilize to position their companies better and successfully compete in the market.
5. Long-term objectives
Since your vision may seem like a long shot, creating long-term objectives spanning from three to five, even 10n years on the horizon, makes it clearer, more realistic, and obtainable.
It can be stated as – to increase profits, expand your operations, or strengthen your position in your business location. These should be specific in regards to both time and size of the objective.
Interpreting long-term objectives as milestones tied with your vision and mission statements guides your operations through a prolonged perspective.
6. Short-term goals
Your long-term ambition must be further expounded into short-term goals. These goals translate into three months and annual targets to be simple and more attainable. By setting your annual targets into SMART goals – Simple, Measurable, Attainable, Realistic, and Time-Bound, your long-term objective becomes closer.
SMART goals also encourage transparency and alignment, showing how they were created and will be fulfilled in the organization.
7. Action plans
Also known as initiatives or activities, action plans detail how you accomplish short-term goals. The particulars depend on your targets’ complexity and the flexibility you’re granting your team members.
The bottom line is that your team must clearly understand your strategic plan through the initiatives lined up to fulfill your goals. Though getting too detailed limits the freedom of your members, a clear and specific strategic plan promotes transparency and accountability regarding what needs to be done, the timelines, and the team members responsible for it.
Crafting a strategic plan should not be considered ‘the end.’ Instead, it is just the beginning of something extraordinary for your company, and you should ensure your ideas are well-executed through regular review, performing adjustments when necessary.
A strategic plan can drive your business to the exciting and innovative venture you strive for when properly implemented.