Strategic Planning. Rarely were there two words viewed with more reluctance, dread, and disappointment.
The process of strategic planning is often considered too time consuming for manufacturers, especially when their immediate needs are more pressing. For others, it’s too intimidating as it comes filled with expectations to conjure up big, bold ideas. As a result, companies will often just rehash plans from previous years to avoid tackling any real strategy development.
It doesn’t have to be this way. These four best practices will help you put aside yesterday’s preconceptions about strategic planning in favor of creating a better future-proof plan.
1. Establish strategy across time horizons
It may be tempting to focus solely on a short-term strategy. But the more short-term your strategy, the more likely your organization will engage in behavior that could actually harm its long-term value.
The best approach is to establish a mix of short-, medium-, and long-term strategic plans, and then revisit them frequently. Having a mix across time horizons will help secure sound performance in the short run, as well as sustain longevity.
- Your short-term plans are the most immediate. They illustrate how your organization has fared in recent history and reflect its present business performance and for the next six months. It pinpoints issues and opportunities, then identifies prompt improvement plans that can be implemented and accomplished quickly.
- Medium-term strategic plans extend the look into the future and examine your potential and prospects over the next year. But you can also develop medium-term plans that extend two or three years out. Such plans focus on maintaining and improving the organization’s growth rate and creating ways to measure company performance and health.
- Finally, your long-term strategic plans are centered around your mission and your purpose. They help analyze potential new products, services, markets, and processes as part of a future plan.
2. Engage stakeholders across the organization
The key to establishing a successful planning team and to arriving at a successful strategy is diversity. Don’t be afraid to create teams consisting both of new hires who have the ability to think outside the box, along with candid, tell-it-like-it-is employees.
Also look for other change-makers across your organization, remembering that leaders come in all shapes and sizes; not all of them are in executive positions. Consider, too, including customers and vendors on your planning teams or at least, in your discovery process.
By inviting a broad range of people to the strategy table, you’ll gain new and invaluable perspectives that lead to creative opportunities for your organization’s future.
3. Execute with engagement, alignment, and communication
A brilliant strategy is worthless without good execution. In fact, execution is so important to strategy that researchers believe 90 percent of organizations fail to reach their strategic goals all because of poor execution.*
If you’ve adopted the best practice of engaging a diverse team of stakeholders in planning, congratulations; you’ve already created a good foundation for ensuring strong execution. That diversity helps to establish accountability and secure early organizational buy-in. Without buy-in, implementation can sink fast.
You can further fuel success by assigning the execution of initiatives to your various planning teams and to other small teams of employees. In any case, wherever those initiatives land, ensure each is allocated adequate resources and is accompanied by timelines, goals, and clear expectations. Then back that up with ongoing dialogue, strong communication, and progress reviews which are all essential elements of good execution.
4. Monitor your key performance indicators
And of course, your strategic plan initiatives must come with metrics—key performance indicators (KPIs) that are connected to action then diligently tracked. Monitoring your KPIs gives your organization the ability to measure its progress, manage risk, and make critical adjustments along the way.
Your KPIs can reflect any number of objectives as part of your strategic plan. There are always metrics for finances, however, several others can be just as vital to your strategy such as operational quality and consistency, organizational and people goals (like employee retention), or the quality of customer relationships, for example. Tools for monitoring your KPIs are just as varied, from balanced scorecards to simple dashboards. Find the framework that works best for you and use it.
Better success through best practices
Applying these four best practices can take the fear and trepidation out of strategic planning. It simplifies the process and allows you to create a relevant strategy, one that’s focused on healthy, viable success, now and into the future.
*Harvard Business Review.