Are you getting ready to develop a strategic plan for your business? Great. It can have a tremendous, positive impact on the success of your business and on the bottom line.
Before you start spending time and money to develop a plan, you should have the following:
- Commitment from the leader and management team of the organization to being accountable for the successful execution of the plan.
- Selection of a facilitator to guide the meetings to develop the plan. This can be someone internal who has been trained, or, more likely, an external facilitator who does this for a living.
The resulting strategic plan document must be conducive to execution. If you end up with a voluminous document that sits in a binder, it will feel good when you are done, but you will have generated a dust collector that will do little to drive change throughout the organization.
A plan that is conducive to execution should be focused, brief, and dripping with accountability. It should be comfortable to reference daily, or at least weekly, to guide decisionmaking and track progress. Our strategic plans are a mere three pages long – and they get executed.
Components of a Three Page Strategic Plan
Page 1: Strategy
There are three main components to this page: Value Proposition, Modified Value Chain, and Trade-offs. This page describes how you will compete for profits.
The value proposition answers the following questions for your top markets:
- Who are your customers and where are they located?
- Which needs are being filled?
- What is your pricing relative to the competition?
- Which needs are not being filled?
- What makes us unique?
The modified value chain describes the key activities you perform to create value. Ideally, you will do some activities differently from your competition, and some different activities than your competition.
Trade-offs describe what you won’t do. Typically, this is the business you are no longer going to chase.
Page 2: Long Term plan
This page deals with where you want to go. This is the roadmap to long term achievement of the strategy from Page 1. Components of the long term plan include the following:
- Long Term Goal – Typically, a challenging 5-year goal that will motivate everyone in the organization and drive change.
- Key Success Factors – The 2-3 activities that you must perform better than your competition to be successful. These usually are industry specific.
- 3-Year Quantitative Goals – Measurable targets such as revenue, profits, cash generated, number of new/active customers, etc.
- Target Market to Dominate – A well-defined niche market including customer description, location, and your specific offer.
- 3-Year Priorities – Priorities to be achieved in support of the quantitative financial goals.
- Unique Selling Proposition (USP) – The three ways you matter most to your customers that differentiate you from your competition.
- USP Metrics – How you will measure that you are living up to your USP.
- 1-Year Quantitative Goals – Same as 3-Year Quantitative Goals.
- Key Objectives – List of activities in SMART format (Specific, Measurable, Achievable, Relevant, Time-Bound) that must be achieved to meet the 1-year quantitative targets.
- Key Metrics – Three key daily/weekly/monthly metrics to be tracked to make sure you are on course to achieving the plan.
Page 3: Where the Rubber Meets the Road
This is the page that you should look at most frequently.
The top of this page is dependent on whether we do a SWOT Analysis or a Five Forces Analysis. The majority of this page lists, by quarter, quantitative targets, key objectives, and key metrics. Every item has a set of initials to designate who is accountable.
If you develop a plan that thoughtfully completes all of the sections of this template, and most importantly, you manage the execution of quarterly objectives, your company will move forward, and your bottom line will improve.
Although our strategic plan template contains proprietary components, you are welcome to download an outline that can be used to build your plan. Better yet, contact us, and we can facilitate the development of a strategic plan for your business and help you get the execution of the plan off on the right foot. You can learn more about our strategic planning practice on our site.
Bonus content: you can see me give a presentation on our strategic planning process here.