Sometimes the thought of approaching strategic planning can be intimidating. After all, there are constant pressing issues that call for our attention. That being said, there is never a better time than the present to put a plan in place. Let’s look at three simple steps to put a plan in place. This is a simple way to develop an effective strategic plan and drive it down into effective tactical actions.
What are these three steps? They are: understand where you are; envision your (year) end-game; and connect the dots. Let’s talk about this in more detail:
Understand where you are
To begin, management should ask some basic questions about the business today. Some examples:
n What drives your revenue? Is it Internet marketing, specific sales channel, particular advertising or through ongoing business relationships? And which levers in each of those drive revenue?
n What’s your average unit price? How sensitive is your market to pricing? Can you position your service or product to more positively reflect the value added? Does your pricing reflect the value offered? Does it contemplate every cost involved – even things like overhead or other sales, and administrative costs. If your average price seems appropriate, how can you drive unit volumes?
n Have you defined, and are you monitoring, your key performance indicators (KPIs)?
Envision your (year) end-game
Where do you want to be at the end of this year? Set stretch goals for: revenue; number of customers (you want more granularity to reduce risk); cash flow; and other relevant metrics or KPIs.
The intent of management is to clearly define very specific goals to be achieved within a clearly defined timeframe.
Connect the dots to deliver
If you know where you are now and where you want to be, how do you bridge the gap between the two? The answer is to set intermediate goals with accountabilities. For example, if you’ve identified your revenue drivers and have set a revenue growth goal for the year, you can define the intermediate steps management needs to take to achieve the growth goal. Such steps might be: putting in place a goal of a minimum number of outbound calls per salesperson; hiring new sales personnel to support revenue growth, with specific sales goals for these new hires; and developing a specific number new contacts within local business community.
Your intermediate goals will obviously be specific to your situation.
To finish connecting the dots, you will need to put together all of the intermediate goals that get the company where it needs to be. I would suggest that you set these goals by quarter. Finally, you will need to put in place accountabilities: which tasks must be completed to achieve these goals; who will do them; and by when. I would suggest at monthly follow-up meetings – or more often, if desired. With this in place, management will be well on its way to achieving the goals of the company.
Recognize that identifying the goals, and the tasks to get there, is the easy part of this. Putting in place the structured discipline to execute the goals is the challenge that management must meet. These three steps can assist management to put in place such a structure. By defining where the company is and where it needs to be, management can connect the dots by defining tasks and accountabilities to get the company to the next level.