What is a Strategic Plan
A strategic plan is the go-forward plan for your business. A strategic plan is made up of goals that you want to achieve that support your mission and vision statement for your business. Goals need to be S.M.A.R.T., meaning (specific, measurable, achievable, realistic, and time-bound).
Example of a Goal: We want to increase our revenue by 10% each month for the following year.
You need to determine the gap between what you are doing today and what you need to do to meet the goal.
Many times, businesses confuse goals with objectives. Objectives are how you plan to achieve the goals or what you plan to put in place to make sure you can reach the goal.
Examples of Objectives for the above goal:
We will add 2 more salespeople to our staff in the next 2 months
We will increase our marketing spend this year by 30% over last year and start advertising online
It would be best if you then determined what resources are needed to carry out the objectives and measure the success of meeting them.
Key Obstacles Businesses Face
Creating the Strategic Plan in Isolation
Owners often develop a strategic plan without input from key stakeholders or employees, which is a mistake. At times, owners have tunnel vision on what they think their strengths, weaknesses, opportunities, and threats are, which usually help drive the goals forward. Hearing from employees in different areas of the business and listening to other stakeholders can help provide profound insight. Other stakeholders can include shareholders, customers and suppliers.
Not Setting Realistic Goals and Objectives
One of the biggest problems businesses sometimes face with a strategic plan is not setting realistic goals and objectives. If you are currently growing at a rate of 2% and you create a goal of growing at 10% without a clear path of how you plan to achieve this, your strategic plan is set up for failure from the start. If one of the objectives to meet the goal is to increase staff, but you do not have the funding to do this, there is no way you will meet the objective, much less the goal.
Updating Plans
Strategic plans cannot be static as businesses are not static. There is no greater of this than the pandemic, which was unforeseen by most of us. As changes occur in your business, you have to modify your plan to reflect those changes, and they do not have to be as great as a pandemic. If you have set a goal of growing your revenue by 10% but lose 2 of your salespeople, that will no longer be achievable, and you need to reset your plan.
Not Measuring and Monitoring Implementation
You need to set lead and lag indicators for each of your objectives. Lead indicators predict future conditions, while lag indicators assess the current state.
Example for Hiring 2 Sales Personnel in next 2 months.
Lead Indicators – # of resumes, # of interviews
Lag Indicator – Sales Personnel, are hired
If you aren't monitoring the objectives and measuring success, this is where many businesses fail to implement their plan. The objectives are just a list of items under the goal, but no one ensures they are moving along and getting implemented.
The same issue arises when goals and objectives are not time-bound. If you set goals and objectives, you need to know when they are not met. If one objective needs to be accomplished by March and is required to complete before another objective starts, you need to know that if that date is not met, your plan needs to be modified as the current goal and plan are now out of date.
Not Setting Employee's Objectives In Line With Strategic Plan
The business owner cannot implement a strategic plan on their own. It requires the help of everyone involved in the business. In most cases, it is the employees in the business that are responsible for the actual implementation of the strategic plan. For this reason, the objectives set for employees each year should include items which will help in achieving the goals and objectives of the overall Strategic Plan.
Not Budgeting Each Year For Strategic Plan
Strategic plans take money to implement, so it is important that businesses budget each year to include the cost of the objectives that need to be implemented that year to reach the goals of the plan. If you do not have the funds available to implement what is required to get accomplished, the strategic plan will fail.
Summary
The obstacles outlined above are just a few reasons strategic plans fail within businesses, and they give up on them. In many cases, it is not understood what steps need to be in place to create and implement a strategic plan which can be an onerous task.
Strategic plans only need to be developed every 3 to 5 years, but they cannot remain stagnate as the business will not. Everyone needs to be bought into the plan to make sure that there is success in implementation.
If you want to look at developing a strategic plan for your business but are not sure where to start, we provide several ways to help. We can provide business coaching to guide you in implementing a strategic plan for yourself, or we can provide facilitation online or onsite to help you in the complete development of your strategic plan.