Sometimes running a business can be like walking down a dark alley alone. You aren’t quite sure what’s ahead or what you need to make it to the end of your journey. It might seem odd that a document can be the light you need to shine on your business. But it is and that document is a strategic plan.
A strategic plan is an important and, believe it or not, flexible document that defines three things for businesses:
- How an organization executes a deliberate strategy
- Where the organization is positioning itself to be over the next few years
- How it will get there
Overall, it provides a formal road map that allows you to steer into the future.
“He who fails to plan is planning to fail!” –Winston Churchill
Most leaders have a plan. However, it is likely the plan is in their head and rarely on paper. That might seem like an acceptable way to run your business, after all, you feel you know where you’re headed and you’re in charge, right?
But I suggest you stop and ask yourself a few questions:
- Are you confident that the plan in your head is getting you where you want to be in your business?
- Does every employee know the plan and the role that they play?
- Do you have well established strategies and key performance indicators?
- How do you know when you “get there?”
- Do you have a road map to get you from today to your envisioned tomorrow?
In my experience, I find that very few companies have the answers to these questions in some documented fashion. One sure-fire way to impact your company’s future is to develop a strategic plan and get it down on paper, because a good strategic plan achieves the following:
- Helps build your competitive advantage
- Inspires action to achieve a big future
- Clearly defines the criteria for defining success
- Guides everyone in daily decision making
Effective leaders don’t sit around waiting for things to happen, they anticipate what lies ahead. Great leaders create a culture of strategic thinking, so your strategic planning doesn’t become an annual retreat, but instead, a part of daily decision making.
There are some key stats regarding strategic planning that you, as a small business owner, should consider:
⇒ 95% of a typical workforce doesn’t understand its organization’s strategy
⇒ 90% of organizations fail to execute strategies successfully
⇒ 86% of executive teams spend less than 1 hour per month discussing strategy
⇒ 60% of organizations don’t link strategy to budgeting
The difference between a Strategic Plan and a Business Plan
Simply put, a strategic plan is a formalized road map that describes how your company executes its chosen strategy. Remember, strategic plans and business plans are not the same concepts.
A strategic plan is a management tool that leaders need to master and is for established businesses and business owners who are serious about growing their business.
Business plans are for start-ups that outlines your business concept, market research, financial projections and funding options.
Yes, many businesses begin with a business plan, mostly to explain to investors and banks what the business is and provide numbers and credibility for its viability. It does not outline how you’re going to get from where you are today to where you want to be in a year, five years, or longer. And, if you have been in business for any time at all, you know that many things change your business and vision – the economic environment, opportunities, and the marketplace.
Success is strong evidence that a company has had a sound and appropriate strategy. Note the past tense. There’s absolutely no guarantee that yesterday’s sound and appropriate strategy will continue to be successful in the future. Assuming so without adequate study poses great danger. Therefore, no matter what your past or current successes are, you need a strategic plan in order to continue to progress.
Do you want future success?
Studies indicate that roughly 90% of all companies lack a strategic plan. Of those that have a plan, only 10% actually implement the plan. So, if you are part of the 90%, ask yourself these questions:
- Can our company be more focused?
- Can we deliver more value?
- Can our employees be more efficient?
- Can our company be more successful?
I suspect the majority of you answered yes to the above. In the current environment, companies cannot afford not to have a set of guiding principles. Principles that constantly steer your company to new levels.
A strategic plan is a living document. It drives your business and must be integrated into every fiber of your organization so every employee helps move the company in the same direction. All the best missions and strategies in the world are a waste of time if they aren’t implemented and continuously monitored. To be successful, the plan can’t gather dust on the shelf.
Leadership must take responsibility for leading, developing, implementing and monitoring the strategic planning process. I encourage you to use a strategic planning facilitator to help guide the process. They will have the expertise and tools to bring value to the critical process.
Plans in your head usually stay in your head and get muddled about with all the minutiae of daily operations and needs of clients and vendors. Instead of groping in the dark, make real, solid progress in your business this year. Light your way with a strategic plan – thoughtfully considered and written down on paper.