Last month we looked at finding your business purpose, establishing your values, and defining your vision and mission. As we enter the final quarter, this is the time when we should be setting our strategic compass for the years ahead.
By Guy Whitcroft
An effective strategic plan provides the roadmap to guide an organisation towards its vision for the future. It sets the direction and coordinates teams towards shared goals through a series of prioritised, time-bound objectives and execution plans across key focus areas.
The SWOT analysis – Understanding where you are
The first step is understanding where your business stands today. Conduct a thorough SWOT analysis examining your internal strengths and weaknesses alongside external opportunities and threats. What are your core capabilities and resources? What pain points or bottlenecks impede performance?
Understanding these is key to helping you plot your route to success, so involve your team in this analysis – different points of view will add depth to your findings.
Analysing your competitors – How are they doing?
Perform a competitor analysis too. Study their offerings, positioning, and strategies. Identify their strengths to defend against and weaknesses to capitalise on. Look for gaps in the market and underserved segments. These insights allow you to carve out a unique positioning.
And don’t forget to include those “left field” competitors that could emerge with changes to the market and technology – think about how taxis have been impacted by Uber and apply those lessons to your business. Where could your next competitors come from?
Your three-year strategic plan – The central pillar
With clarity on your current position, craft a three-year strategic plan. This timeframe for your strategic plan provides a balance between short-term agility and long-term vision. It allows you to set ambitious yet achievable goals and provides a roadmap for growth and successfully achieving these goals.
Having done the background work and having clarity on who and why you are, where you are, and what your competitors are doing, think about your BHAG – your Big Hairy Audacious Goal. This is the focus point and rallying call for the next few years that will move you strongly towards your ambitious vision.
Break your BHAG down into more manageable chunks – OMGs, or Overarching Medium-Term Goals – by taking your BHAG and looking at the big annual goals that you’ll need to reach to achieve the BHAG. Think of them as the main way points on the route to your overall goal.
Then break it down further, setting up a series of OKRs – your Objectives and Key Results. OKRs act as the bridge between your BHAG/OMGs and the practical steps needed to achieve your audacious goal, and are typically for the year ahead, rather than longer term.
The “O” – Objectives – are qualitative, high-level goals that outline what you intend to accomplish. The “KR” portion – Key Results – are the quantitative, measurable metrics that enable you to track your progress toward those objectives.
Ensure your OKRs are SMART – Specific, Measurable, Achievable, Relevant and Time-bound – setting clear deadlines and metrics for gauging success. Cascade top-level OKRs down through business units and teams. This alignment will ensure everyone understands how their work ladders up to the big-picture vision.
Once you’ve determined your OKRs, translate these into KPIs – Key Performance Indicators. These realtime metrics offer granular visibility into what’s working versus what’s not. Monitor your KPIs frequently to course correct as needed. They provide the pulse of your strategy execution.
Getting everyone aligned – The path to success
A key component of a successful strategic planning process is committed buy-in across the organisation. It’s key to involve your team and the board throughout the process. Your team should be working with you at every step to provide input, different viewpoints and help formulate the strategy and its components from a practical perspective, while you’ll involve your board to ensure your overall goals are aligned with their thinking and that of the shareholders.
Towards the end of November, have a formal strategy review with the board and executive team. Discuss how market trends and competitive forces shaped your choices and look for possible gaps or oversights. By early December you should have the strategy approved.
Once approved, share highlights of the three-year plan and coming year’s OKRs with your staff. Contextualise how their day-to-day work maps back to big-picture goals. Frequent communication maintains ongoing alignment.
By mid-December your OKRs and KPIs should be finalised in tracking systems, ready for rollout in January so employees start the new year focused and informed on delivering against top priorities from day one.
Yet a strategy is only effective if properly executed. Avoid analysis paralysis and commit to decisive action on your plans. Empower teams by providing skills training and resources to achieve their OKRs. Continually monitor KPIs and adapt as needed while maintaining focus on your final goal.
The time for planning is now. Hopefully you already have your SWOT and competitor analysis well under way, if not completed. Define your BHAG and hold leadership and board meetings to align around your three-year strategy. During the next month ensure your OKRs and KPIs are defined for the year ahead and set up the appropriate leadership and board meetings to discuss and agree these. Rally your staff around the vision before year-end. The future success of your business depends on the strategic choices you make today. With a focused game plan and commitment to execution, you will be positioned to thrive in the year ahead.