What do you consider best practice when it comes to the Strategic Plan? What are some of the tools used to create it? How often is it reviewed / revised?
So far, in reviewing typical business structures from the Top Down, we have discussed the Vision Statement, the Mission Statement, and Core Values. One of the last major “strategic” elements is the Strategic Plan. In each step that we have discussed so far we have gone from the broadest, biggest, and most ethereal ideas to things that are more measureable and actionable. In my own view the Strategic Plan begins to really bring it all into focus. Although it is still far ranging (a five or ten year horizon) it’s typically the point where a business will implement metrics and timing. It is likely to also be the point where the business seriously considers the competition and what is going on around them. I once again, however, caution management teams to “define” the problem not “fix” it.
There are numerous techniques used by companies as they reach this stage of definition and direction. One of the most effective is SWOT analysis where a company defines their Strengths, Weaknesses, Opportunities, and Threats, but new tools such as Voice of the Customer and Six Sigma analysis are adding to the options that are available in collecting and analyzing data. Regardless of the technique used, the objective is to define where the company is today as well as where it needs to be in the future to keep from falling behind. If the Strategic Plan is done well the goals will tie directly to achieving the Mission and Vision of the business. And the goals need to be SMART objectives (Specific, Measureable, Achievable, Relevant, and Time Bound) without being overly directive. The exception to this rule may be in situations where the business is failing or in a turn around situation and rapid direct intervention is necessary to “stop the bleeding” and get the organization back on track.
An example of a SMART objective in a Strategic Plan might be: To move from the number four spot in the industry segment to the number three spot in 3 years. This sets a target for the organization without telling the staff HOW to get it done. It will require an understanding of the industry segment’s metrics in defining market position, but it ties directly back to our very first discussion around The Role of Employees in setting objectives and encouraging involvement.
I recommend that the business only have one Strategic Objective at a time. Although I have seen companies work with as many as three, unless they are prioritized, you are forcing employees to make choices concerning which one they work on. The loss of Focus can spell disaster and torpedo actual execution. I also recommend that the Strategic Objective be reviewed annually including all the data and tools used to create it. This allows for adjustments for movements in the competition and/or acceleration of unanticipated successes in the Strengths area by your team.
What is your experience with Strategic Plans?