What is Strategic Planning?

Strategic Planning Process

Ever been in a meeting and someone starts talking about needing to be more strategic? Sounds big and bold and probably important, but do you know what they mean? Do they even know?

Business leaders will set aside whole days to “do” strategic planning. But how does strategic planning work?

From time to time, business leaders need to take a step away from the daily grind of leading a business to work on the business. And they need to have an effective and efficient process. They have to “strategize” and then get back to work.

According to Harvard Business Review, 85% of leadership teams dedicate less than one hour per month to discussing their business strategy, and 50% spend no time at all. Additionally, the research found that 95% of employees don’t understand a company’s business strategy. Avoid missing your targets with an effective strategic plan that is flexible and realistic.

What is Strategic Planning?

Strategic planning creates a roadmap for your company and identifies measurable results needed to get you there. Finding the shortest route to your results means prioritizing short- and long-term goals to get you there. After that, you can allocate time and resources toward achieving results.

Strategic plans usually include goals for revenue, operational processes, headcount, marketing, sales, and customer retention. How a company captures these measurables varies according to different strategic planning models.

But moving forward can only happen with clear direction on where to go, on paper. Not just in a leader’s head because most employees — okay… all! — can’t read minds.

The Strategic Planning Process

Strategic planning involves four steps: determining the current position of the business, outlining the desired direction, setting and implementing goals, and revising based on results.

EOS® uses something called the Vision/Traction Organizer™ (V/TO™). This simple, two-page document shows where a company is going and how it will get there.

1. Position

To determine your current business framework — or its position — begin by conducting a SWOT analysis. This fun quadrant identifies your business’s current Strengths, Weaknesses, Opportunities, and Threats (SWOT). The SWOT analysis helps identify potential areas for future growth and can also crystalize a company’s core values and focus.

Clear core values ensure every action aligns with how a company wants to do business and build its reputation. While having a clear core focus keeps leaders from chasing distracting “shiny stuff” that doesn’t align well with the business.

Evaluate Your Business from All Angles

2. Plan

After defining your current position, you plan out ways to reach identified business goals. Of course, you can’t do #allthethings at once, so prioritization will help you plan those short- and long-term goals to get you there.

Long-Term Goals

Think about where you want your business to be a decade from now. By identifying specific long-term goals, you give your company permission to aspire to incredible growth. But a long-term goal without a plan is just a wish.

To get there from here, you have to break down those lofty expectations into more manageable steps. For example, in three years, identify SMART goals (Specific, Measurable, Achievable, Relevant and Time-based) to demonstrate real progress. These could include goals for the number of employees or customers, revenue and profit margins, or the number of locations. And if you don’t currently track these measurables, start! How else will you track your progress?

Short-Term Goals

To get to those three-year goals, break them down into even smaller short-term goals. These should include the top three to five priorities (but no more than seven) for your next year. Starting to feel like you can do this? (ANSWER: Yes, you can!)

3. Execute

To execute on the strategic plan you created, you’ll need to break those short-term goals into even smaller goals. This means breaking those annual goals into quarterly goals with one person assigned accountability to make sure it happens. This way each person sees how their contribution impacts the overall growth of the company.

By checking in regularly on these quarterly goals you can verify they stay on track by measuring and analyzing results. You can also identify and address problems early before they become bigger issues.

4. Revise

Situations change and so should your strategic plan. Leadership teams should meet annually to review and revise their strategic plan to ensure everyone is on the same page.

For example, the V/TO asks leaders to answer questions related to the company Vision: Core Values, Core Focus, 10-Year Target™, Marketing Strategy, and 3-Year Picture™. On the first page, they review their niche, target market, 3 Uniques™, guarantee, and measurables. Then leaders flip the page over and complete sections on Traction, including their 1-Year Plan, Rocks, and Issues List. (Check out this blog post on how to fill out a V/TO.)

They can only consider the draft done when all the leaders agree to everything on the pages. Especially the parts they’re responsible for. Then they refer back to that V/TO often. At least every 90 days for quarterly check-ins, but ideally at their weekly leadership meetings. Something we call a Level 10 Meeting™.

Vision/Traction Organizer

When Should You Do Strategic Planning?

Many business owners will tell you they do strategic planning annually or quarterly. Some only begin the process when their business fails to get the results they want. But building in time for more regular planning sessions means your company stays on target. Ideally, strategic planning sessions should follow the ebb and flow of human enthusiasm.

For example, the EOS Model® understands that people operate in 90-day worlds. A fired-up leadership team will hit the ground running after an annual planning day. By the three-month mark, focus wanes and once more, teams find themselves getting caught up in the day-to-day grind.

EOS builds in structured quarterly check-ins to get those leaders fired up again with renewed passion. And it holds leaders accountable at weekly leadership meetings. This catches issues and slips before they become major problems.

So when should strategic planning be done? Ideally, a little bit every week!

How to Implement A Business Strategic Plan

First, align your leadership team around your company vision and goals, then block time on your calendar to get aligned. Follow the strategic planning process to get started.

Truly implementing a strategic plan takes more than fancy campaign logos and posters scattered in break rooms. A successful rollout will only go so far without involving employees at every level of the company.

That starts with an aligned leadership team who then take the message down to their direct reports. And then those managers take the message to their teams. And then… you get the idea. Every single employee has to see how their role contributes to the organization’s success.

People sometimes need to hear things up to seven times before they actually hear the message. That means Visionaries become CCOs (Chief Cheerleading Officers) by sharing stories about the company’s why. At All Hands Meetings. In the hallway. And in emails, videos, voicemails, and skywriting. Then they repeat as necessary.

How Companies Benefit from Strategic Planning

Small businesses benefit from strategic planning because they get their teams working towards the same goals. With a clear understanding of their target market and increased efficiency and productivity, they see almost immediate results.

Even the most spontaneous leader knows they cannot take their entire business on Mr. Toad’s Wild Ride. Sometimes they just can’t help from blurting out 10 wild ideas (some brilliant, some not so much). When companies have a clear strategic plan, leaders can temper all those shiny Visionary ideas. By remaining focused on what best serves the company, they get more of the right stuff done.

Does branching out into a sexy new technology serve the core values and Core Focus of the business? Consult the V/TO! That act alone has literally saved small businesses MILLIONS of dollars in wasted resources and productivity.

That said, even big, hairy, audacious goals (BHAG) will feel doable based on that same clear strategic plan. By outlining specific milestones, clear accountability, and timelines, those goals are in the bag.

What Causes Many Strategic Plans to Fail?

Strategic plans often fail due to a lack of accountability, resources, and processes to stay on track. With proper planning and easy-to-use tools and processes, your leadership team can overcome these obstacles. You’ll come away from a strategic planning session knowing the responsible person for each step necessary to reach your outlined goals. You’ll also identify any issues that can prevent you from getting there.

 business management tools

Traditional strategic plans often fail because they lack teeth. During standard planning sessions, leaders make all sorts of plans and goals. They agonize over crafting elaborate taglines for growth that almost certainly ring hollow with their employees. But they never answer one question: why.

Far more than buzzwords in a LinkedIn article or professional workshop, strategic planning should also outline a company’s “why.” As in why do they exist? Why do they do things a certain way? Why did business leaders choose these goals for this year? Oh, and they involve all the leaders of the organization in crafting their plan. Nothing kills a strategic plan faster than dissension in the leadership team.

Many templates for strategic plans assume a business owner working in solitude on their plan for only the coming year. The owner writes a plan and shares it with the leadership team — maybe even the entire company — and then puts the document in a drawer until next Jan 1.

The trouble here is that most businesses don’t operate in a vacuum starting from scratch each year. Any business that employs actual humans knows that you have to win the hearts and minds to gain traction. And you build year over year on accomplishments, referring to those goals often.

EOS has helped thousands of businesses create successful models for growth. Are you ready to take your business strategic planning from buzzwords to real results?

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