First off, let’s be clear on what a strategic plan is and isn’t.
Strategy is more than a mission statement or the expression of a goal. Those are important parts of the whole picture, but they are not strategy by themselves because they do not define what resources are going to be marshalled to achieve the goal, nor the actions that will leverage those resources.
And they are not a plan, because they do not communicate how, when, where and by whom the strategy will be implemented.
A well-communicated strategy contains a guiding principle or intent, a description of the actions that will be taken to bring it to life and the resources allocated to those actions. It can be tied to the achievement of the organisation’s goals and its mission, or reason for existence.
When that alignment is achieved, it is a good strategy.
So, how do you make a strategic plan?
First, you need to gather intelligence. Your organisation may have been in business for many years, and performed quite successfully, but the market and competitors do not stand still. There is always more than can be learned by engaging in market and competitive intelligence-gathering.
We have lost count of the number of decades-old businesses that have been able to find new success and fresh growth because they engaged in a formal intelligence effort that highlighted new opportunities, rather than relying on gut feel about their market.
It is not enough to focus all your attention outside your business. Your greatest opportunity for developing and implementing strategy may come from inside.
In an example company, running at 30% gross profit and 10% net profit before tax, a reduction in the cost of sales by just 3.5% makes a whopping 25% difference to net profit. In such a business, that’s the same impact as increasing sales by 8%! Strategic plans are not always outward-facing initiatives.
You can gain intelligence in a nearly limitless number of ways. Surveys, observations, competitions, Google maps and Streetview, interviews, opinion pieces, industry reports and government programmes are just a handful of the ways in which you can gather objective evidence on what your market and your competitors, clients, suppliers and substitutes are thinking and doing, and the pressures they are under.
Research design is a topic unto itself, but defining who your target market, competitors and substitutes are will provide a guide as to how intelligence should be gathered in your particular situation.
The intelligence-gathering effort can take between 4 and 12-weeks, full-time, to be considered thorough enough to be effective.
Once you have the intel, what do you do with it?
You have to interrogate it for insights into the opportunities to develop and exploit competitive advantage. That means a lot of (re)reading and sometimes painstaking efforts to develop both a micro- and macroeconomic focus on what is happening in your industry and related sectors.
Developing such insights is not always as easy as joining the observable dots. This is the art of strategy – interrogating credible, hopefully objective, data to see opportunities that your competitors do not and positioning your organisation to profit from them.
What happens next?
Strategic insights need to become planned actions, with attached resources. Decisions on which opportunities to pursue are made and resources are apportioned in measurable increments. Dollars, time, full-time equivalent positions and the dedication of all or part of company plant and machinery are measurements of value that can be attached to a strategy, enabling a return on investment to be calculated at a suitable point in time after execution.
Next, the plan is committed to a digital file. We prefer a version is translated to a “Plan on a Page” so that the plan becomes a living document, referred-to on a regular basis as it is implemented. Bible-thick strategic plans are likely to become expensive paperweights if they are difficult to use in the everyday context.
The one-page plan finds a home in the offices of the leadership team whose job it is to bring execute the plan and hold each other accountable for its success.
At this point, the strategic plan is complete. Then, it is time for execution.
Corporate Momentum has a proven methodology for identifying opportunities in your competitive environment and creating structured, realistic and timebound plans to take advantage of them. If you would like to talk about new strategy in your business, please call us on 1300 36 20 27 or fill in this form.