7 Steps to Make Your Strategic Plan Really Strategic
Everyone wants to have a strategic plan. But do we really understand what a strategic plan is?
A strategic plan is one which is flexible and more long-term than your usual plan.
Generally, plans are made to achieve goals of every kind. But a strategic plan is different in that it covers a wider scope. Typically, this big goal would be your company’s vision.
Many organizations seek to have a strategic plan in place.
Unfortunately, a majority of them don’t reap its benefits despite spending the resources to come up with one.
Although there could be many possible reasons for this, one possibility stands out. The reason is simple yet big in effect. And that is a lack of proper planning.
Since we’re talking about strategic planning, not planning well means that the plan is not really strategic. When you make a strategic plan which is not strategic, you lose out on the benefits.
The plan will not work as expected and you’ll likely end up frustrated.
But there is hope.
In this article, we’ll guide you through the process of making a strategic plan.
One which will help your business not only grow but also achieve its long-term goals.
When you achieve your business goals, the possibilities of improved customer loyalty increase.
This is because business goals are usually solution-focused and solutions are what keep customers loyal.
As such, the first thing to remember about making a strategic plan is that you need to keep the end in mind.
“Every effective winning strategy is mapped out by focusing on the desired end goal.” – Wayne Chirisa
FORMULATING A STRATEGY
Understanding the importance of having a strategic plan is great.
But then for you to benefit from it, you have to develop the strategy.
This is a process which requires some effort. Some people find this process to be challenging.
Others just don’t believe they can do it successfully. Although you can engage strategic planning consultants, the process is not too difficult such that you can’t do it yourself.
In any case, developing the plan with your team enhances the bond between the members.
Moreover, whatever you have participated in building usually has more value to you.
Take this opportunity to engage your team for this task.
Share with them the benefits which await and the potential lying untapped. Once everyone is onboard, follow the below steps and you’ll end up with your strategic plan.
1. Identify the Problem
The first thing to do in any situation requiring action is to identify the problem. If you are to solve a problem, you must accurately identify and even understand it.
There are two aspects of a problem which can get you confused:
- Symptoms – these are the signs that there is a problem. If you need any evidence, these will prove it. Examples of symptoms of a problem in business include low sales, cash flow issues and expired goods.
- Causes – these are the root of the problem. Like what happens with a big tree, the roots hold it in place. The bigger the problem, the bigger and deeper the roots are. If tackling a problem is proving a problem in itself, then know that the issue is deep-rooted.
Just as is the case with diseases, it’s easy to focus on the symptoms and start fighting them.
This will only lead to frustrations as the signs will go away but soon show up again. And the next time they come up, they might be worse.
You cannot afford to waste your resources strategizing against symptoms. For good results and maximum benefits, you need to address the root problem.
Considering that you’re strategizing with an end in mind, targeting symptoms guarantees a series of failures. This will lead to frustration and a negative attitude towards striving to achieve your goals.
You started a bakery business last year. You had done your market research well and decided on this business idea. You love baking and enjoy coming up with new recipes. You have hired talented and equally enthusiastic staff consisting of a sales person, cashier and 2 bakers.
With sales coming from family, friends and their referrals, the first 9 months of business were a success. However, despite breaking even within 9 months, you’re yet to achieve 5% market share.
In the course of the 15 months you’ve been operating, you have made changes in your operations policy twice. That didn’t make much of a difference though. Whereas you’re still making profit, you’re not growing fast enough.
One of your bakers, the more skilled of the two, was poached by a competitor. Now you’re training a new hire. This is quite a setback given your desire to grow fast.
Do yo need to make more changes to your operations policy? Do you need to start making more cake flavors? Buy advertising space on TV and the dailies? What do you do? What exactly is the problem? And how do you solve it?
Identifying the Problem
As mentioned, there are symptoms and causes. This is also true in this situation.
Here are the signs that there is a problem in this bakery business.
- Resignation of a skilled employee (the poached baker)
- Slow growth
- Increased operational costs (training new baker)
- Reduced profits
Having recognized that there is a problem, do not rush to assume what caused them. Take your time to find out why the problem exists.
From our example situation, the possible causes of the baker’s resignation could be many. It could be an unfriendly working environment, low compensation, low employee engagement, lack of career growth opportunities etc. Since ours is an example, the list of possibilities can be long.
In your case however, you will have to drill down to the specifics. Even if the majority of businesses relate certain symptoms to specific causes, you better confirm that it’s the case with you. Do not just tackle the problem as others are doing.
There are at least three ways of identifying the problem. But then, these depend on the status of your business.
Are you already in business and looking to make improvements? Or are you researching on strategic plans as part of your plan to start your business?
If you’re yet to start your business, then the first idea given below may not be relevant to you. Read it for insight though so you’re informed. All the same, the other two will come in handy as they can be part of your market research.
- Talk to your employees – your employees know a lot about the company’s workings than you think. They may not match your education, experience, determination, wisdom or even wealth. Still, being the ones driving operations, they always have suggestions to make.
As a wise manager or business owner, it’s important to recognize the importance of employee engagement. Having your staff engaged has many benefits. Here is a short video on employee engagement.
One way to foster engagement is by using the management strategy called Management By Walking Around. This method encourages the management team to intentionally interact with lower-cadre employees. This helps them understand the working environment and assist accordingly.
Another way of talking to your employees is by using the bottom-up communication strategy.
If you stick to the top-down communication method as many organizations do, you’ll miss some valuable insight from your team.
- Talk to customers – this is crucial for any business as customer feedback tells you how to satisfy customer needs. If you haven’s started your business yet, the customers you talk to can be your family, friends or even a stranger in the shop you’re planning to compete against.
It’s all about finding out his opinion about the business—how it treats customers, the quality of their products, favorite products, quality of services etc.
If your business is already running, you have some extra cards at your disposal.
You can choose to include Live Chat in your website or blog, feedback forms, email surveys or even make periodic calls to your customers. And being in the digital world we are in, do not forget or ignore social media platforms.
To benefit greatly from social media, use social listening tools.
These tell you when and where your products or services are being discussed. Checking out those pages or platforms will give you great customer feedback.
- Check alternative offerings – your solution is only good when it delivers on the needs and wants of the customers. And if your goal is to beat the competition, then you have to know where the competition is failing.
If alternative products or services can be purchased, that would be good. Buy and test them. If buying seems challenging, then read online reviews and comments from the manufacturers and their customers.
This stage of identifying the problem to be solved is often the most challenging. For you to be unique and grow, you have to solve a real problem.
Kevin Systrom and Mike Krieger, the founders of Instagram, realized this before they developed the photo-sharing app. They found out that the algorithm part was not the most difficult.
The biggest challenge was identifying the problem to solve. Watch Kevin talk about it in the below video.
2. Define the Solution
Once you know what the real problem is, it’s time to define the solution. This is a very simple step to take.
If the customers are not happy with certain aspects of the options currently available, then your product should fix that. Succeeding in doing so is what will prove your prowess and establish you as the solution.
This way, what you offer will sell well. And upon satisfying customer needs, you’ll move towards becoming the market leader.
When you define your solution, communicate it and ensure everyone understands it.
One way of simplifying this is by coming up with a solution statement. This will guide the daily operations and serve as motivation for achieving the set goals.
You can have a solution statement for the whole business or for individual departments.
For instance, you may have a product which needs improvements so as to compete better against the competition.
For that to happen, the solution may include making changes to the product, changing the marketing strategy and improving on logistics.
The production department can have their own solution statement telling them how they should improve the product so as to make it better.
The marketing department can have one telling them how to market the product better. The logistics guys can as well have a solution statement telling guiding them on how to improve product availability.
Here is an example that has been perfectly crafted showing both the need (problem) and the solution. It’s from the African Leadership Academy.
3. SWOT Analysis
Having a solution statement is like knowing where you’re going. This is the vision you have to achieve.
If you’re developing a product, you know what you want it to do and even how it will look like. You know the needs it should satisfy and in which way.
With that, you now find out how best to go about the process.
This will lead you to the SWOT analysis which looks at your Strengths Weaknesses Opportunities and Threats.
After analyzing these, you will know which route is the best to follow to reach your goal. This is the route that is most efficient and least expensive.
For a successful SWOT analysis, you should check the whole business and not just yourself or the management team. It is said that a chain is only as strong as its weakest link. This is true in every team formation.
Do not overlook any team or department and assume that they are strong enough. Check them out individually to ascertain their contribution.
Here is how to do it:
- Strengths – your strengths are the things which give you a natural competitive edge. Note the word “natural.” As much as you may improve your skills and even learn new ones, start by first listing those which come naturally.
For example, if a member of your team loves engaging with others and easily influences people to follow her, then you have a marketer. This is regardless of whether she is currently holding that position or not.
If you have someone who loves details, is very analytical and loves proving theories right or wrong, then you have a potential data analyst. This person can also be an accountant or even an internal auditor.
Checking out your strengths should not be limited only to human resources. Do you happen to have a fat bank account? Maybe you can hire the best talent. Many company vehicles? You could have more efficient deliveries.
What about your location? If you’re close to the market then you can save transport costs.
Do you have special relationships with suppliers, marketing agencies, media personalities, influencers etc?
Those could come in handy too. Especially if the competition doesn’t have the same.
- Weaknesses – though not the most fun things to discover, your company’s weaknesses are nevertheless important to know. Ignoring them will be like allowing a broken wall to remain unrepaired.
Knowing your weaknesses helps you know what to avoid. You can also use the knowledge to improve specific skills which are required to fulfill your goals.
For example, you may have financial constraints. This will prevent you from hiring the best marketing agency. And since you don’t have any employee naturally good at marketing, you can opt to pick one and train him on social media marketing.
Obviously, the marketing agency would have done more.
They can come up with a marketing strategy, create blog content (text, images and videos), advertise in the dailies etc.
However, you can substitute much of that through social media marketing.
- Opportunities – opportunities are all over and businesses never lack these. In most cases, opportunities come in the form of problems. Whenever there is a problem, it is an opportunity to come up with a solution. It’s just a matter of who comes up with a solution first.
Related to providing the solution, take heed not to be distracted by the need or desire to develop the best solution all at once. This will delay your progress.
By the time your perfect solution is out, your competitor may have several versions of imperfect solutions and has built his brand.
Having gone through the step of identifying the problem, you certainly have an opportunity to showcase what you have.
More than that, anything else related to the problem you’re solving is an opportunity.
For example, you may have picked the problem of delivering purchased products to your customers since others don’t do it.
A related problem is creating convenience in payments. Add different payment options and ensure the whole system is secure.
If you decide to handle the absence or limited availability of healthy drinks, you can later on venture into healthy snacks.
As you do your research, it’s important to consider the possibilities of growing your brand. Generally speaking though, opportunities always abound. You just have to keep your eyes and mind open and have the right attitude.
- Threats – depending on your industry, the threats facing your business may be many or little. It’s important to note that threats are very different from weaknesses though the two may be connected.
Whereas weaknesses are usually internal in nature, threats are external. Threats are all about the factors which you can neither control nor accurately predict. As such, it can be very difficult identifying threats to your business.
Some threats include economic factors, cyber crime, climate changes to weather-dependent businesses, political support and government regulations. Business threats can bring an established company tumbling down very easily.
The best thing to do is to try and do a lot of research prior to settling for a business idea. And while the business is still running, do your best to stay informed and anticipate changes.
You can check out this article for some questions to help you identify potential business threats.
Knowing what you can do and what to avoid, you can now proceed to work on the execution of the strategy.
4. Define Departmental Goals and Set Timelines
The strategy will be executed at the departmental level.
that doesn’t mean that everyone just goes ahead and implements their own interpretation of the strategic plan. There has to be order.
As the business owner or leader or part of the management, you’ll have to break the vision into something smaller.
Instead of posting the vision on the company notice board and letting people work towards it, let every department know what they’re expected to do and achieve.
This will make it easier since everyone knows what their contribution is. It also motivates the individual employees as they see the relevance of what they do and how it adds to the end results.
As you break down the big goal into smaller departmental goals, try and make your goals smart.
You have most likely read or heard much about SMART goals. True to their popularity, they are indeed helpful.
They are even revolutionary if you have fallen into the pit of frustration from failing to achieve your goals.
Here are some examples of how this could work out:
Find and install the best freeware tools to help improve the security and efficiency of the company’s IT Infrastructure.
Tools to be used include firewall systems, antivirus systems and system cleanup and speedup tools.
This should be achieved within 3 months.
Perform an internal audit of the financial status of the company and advise on ways to improve cash flow without interfering with the marketing budget. This should be finished within 3 months.
Draft policies on employee training, compensation and non-discrimination. Implement the same to achieve a minimum of 20% employee engagement at work. This should be achieved in 6 months.
Every other department should have similar goals clearly defined and committed to.
Departmental goals should be communicated from the top management to the departmental heads. This will make the managers accountable.
Even if the communication in the organization is great, you should avoid calling a meeting and presenting this to all the staff at the same time.
Though many people aren’t huge fans of being held accountable, this is a necessity if success is to be realized. In case your employees do not appreciate accountability, then you have to instill it into them.
Here is a great video showing how to hold people accountable. And the most important part of it is that it all starts with you.
As the head of each department takes the responsibility of overseeing the realization of his department’s goals, he is to communicate the expectations to his team.
The individual teams will divide the work among themselves and work towards the goals.
It’s crucial to help the managers understand how their work affects the other teams’ work.
For example, if the IT team doesn’t secure the company systems, there may be a ransomware attack.
That could negatively affect the company as operations may be affected and money used to pay the attackers.
If the HR department doesn’t work on improving employee engagement, employees are likely to be unproductive at work.
This results in reduced productivity and loss of business opportunities. In that situation, no goals will be achieved in spite of the strategic plans in place.
With everyone understanding the role they’re to play, it’s now action time.
As you roll out your strategic plan, keep in mind that implementing a plan is a process. Every department must come up with a way of achieving their goals.
“Strategy without process is little more than a wish list.” – Robert Filek
Key in successfully implementing the plan is to identify any task dependencies. If the execution of one task depends on another’s results, then they should be arranged accordingly. The idea is to help avoid a backlog of tasks.
With a smooth flow of tasks, resources are also well planned for. There will be less wastage and whatever is available will be put to good use.
7. Review and Improve
The set timelines are essential in tracking the progress of the individual and overall business plan.
However, you must remember that you have dealt with the factors you are able to. There are factors which are beyond your control.
Apart from the threats you identified at the third stage of this process, the nature of business is that it’s simply unpredictable.
It therefore becomes necessary to make relevant changes to your strategic plan as time goes by.
The beautiful thing about a strategic plan, or more simply, a strategy, is that it doesn’t change much.
You’ll not need to make big changes but small improvements as the business environment changes.
“After a business implements a strategy, competitors will react, and the firm’s strategy will need to adapt to meet the new challenges. There is no stopping point and no final battle. The competitive cycle continues on perpetually. Produce and compete or perish.” – Thomas Timings Holme
The reviewing and improving part of implementing a strategic plan is crucial. Understand that flexibility is part of the strategy. So the overall strategic plan anticipates changes.
The responses and reactions of the competition should be watched keenly and responded to quickly.
Try and understand what the competitor’s reaction means and where it could be intended to lead.
As you think of making a strategic plan, keep in mind that the biggest challenge is in identifying the problem.
It’s possible that a business produces a solution to a non-existent product.
Once you understand the problem and come up with a solution, launch it and have a clear path to follow towards achieving your goal.
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