If you’re at a place as a business owner or leader where you could benefit from setting goals, defining priorities and re-focusing your organization’s energy, it may be time to formulate a strategic plan. Usually taking the form of a document with multiple parts, a strategic plan will help establish the direction of your organization or business endeavor. And as a manager, these plans can be especially useful in helping your team members to pause, understand where they are currently, and craft a tighter idea of where they want to go, as well as define how precisely success will be measured once you as a company get there.
What is strategic planning?
Though it may at first glance seem like just another example of over-hyped business jargon, strategic planning can bring real, measurable benefits to an organization. After all, it can be too easy to slip into the day-to-day operational tasks of our work, focusing on production instead of on longer-term strategy. Strategic planning aims to address this by cutting through the noise of daily tasks and offering an actionable, systematic course of direction for an organization’s growth. When the operational elements of one’s work become hectic, strategic planning serves as a guidepost to ensure a business is still heading in the right direction.
What’s a strategic plan?
A strategic plan, in the form of a document, spells out precisely what an organization’s long-term goals are, the actions needed to attain those goals, and how success around those goals will be measured. Your plan will serve as a regular reference point for maintaining clarity and laying out the actionable steps needed in order to reach a vision. What’s important is to make sure your strategic plan is actually founded upon something real and measurable; too often, the “strategic” component of a strategic plan becomes lost or diluted, as pointed out Graham Kenny, managing director of Strategic Factors, for Harvard Business Review. Such plans, Kenny wrote, take on the appearance of “a dog chasing its tail” more so than a truly executable plan. So, how do you ensure your plan is rooted in legitimate strategy as opposed to fluff? We’ll get into that below.
What is strategic management and execution?
More than 60% of business strategies are not successfully implemented, according to the American Management Association. Strategic management and execution is designed to ensure your plan doesn’t fall within that percentage. There are multiple approaches you can take to this, but one that’s become popular in recent years originates from “The Execution Premium: Linking Strategy to Operations for Competitive Advantage,” written by Harvard Business School professor Robert Kaplan and David Norton, his colleague at Palladium International. In “The Execution Premium,” Kaplan and Norton define strategy execution as a system comprised of six stages: developing a strategy; planning a strategy; aligning the organization; planning operations; monitoring and learning; and testing and adapting. Essentially, your strategic plan isn’t likely to go far if you don’t also have a plan in place for how management will oversee and execute it. But we’re getting ahead of ourselves — first, the plan itself needs to be formulated.
7 key elements of a strategic plan
1. A mission statement
Kicking off a strategic plan is your mission statement, which is a thesis of what your organizational purpose is. The mission statement deals with the present, describing in clear terms what your organization does currently.
The mission statement of Netflix, for example, is:
“We promise our customers stellar service, our suppliers a valuable partner, our investors the prospects of sustained profitable growth, and our employees the allure of huge impact.”
2. A vision statement
Unlike your mission statement, a vision statement illustrates not where your company is currently, but where it wants to go. It’s often more concise than a mission statement, as the intent is to summarize a big, nebulous goal and make it a concrete mantra of sorts. By broadcasting your vision statement across your organization, you’re helping to ensure alignment and clarity from the top-down, so that workers at all levels have an awareness of what a company’s leadership envisions its future potential as.
At Netflix, the vision statement is simple: “Becoming the best global entertainment distribution service.” In October 2011, Netflix Co-founder and CEO Reed Hastings offered a slightly more built-out version of that statement, saying his vision for the company involved:
Becoming the best global entertainment distribution service,
Licensing entertainment content around the world,
Creating markets that are accessible to film makers,
And helping content creators around the world to find a global audience.
3. Core values
Your organization’s core values are a summary of what behaviors and beliefs are written into the company’s culture. It’s important to base these not simply on what the top C-Suite leaders view a company’s culture as being, but to take a lateral approach in defining what matters most to an organization holistically.
Netflix published their nine core values as part of a SlideShare culture document that’s since been viewed over 14 million times. Those values include:
3. A SWOT Analysis
A SWOT analysis — meaning, the strengths, weaknesses, opportunities and threats your organization is faced with — is a crucial means of taking your company’s temperature. It’s about projecting what your future obstacles and pain points may be, as well as cultivating a realistic understanding of the current ones. Too often, when forming plans and setting goals, we tend to look at things in from an if-everything-goes-right point of view. A SWOT analysis ensures that leaders understand and are able to communicate to all connected parties not only where advantageous growth opportunities lie, but where the Achilles heel (or heels) of the company can be found, too, now and in the future.
To make a SWOT analysis, create a grid, with one square per letter in the acronym. As a group brainstorm, ask questions that will assist you in filling each square. For example: what is your organization’s competitive advantage (S)? Are there gaps in your staffing or resources (W)? Is the market growing (O)? How about technology — are there any future advancements coming that could hinder or disrupt your business (T)?
For Netflix, a simplified version of a SWOT analysis may look something like:
S: Growing reputation as destination for original, streamable content
W: The number of original shows that don't land
O: Movies that are joint-released in theaters and on Netflix
T: So much disparate content that brand//voice could weaken in comparison to competitors like HBO
These are your measurable, quantifiable targets that take your strategic plan from “list of ideas” to “course of action.” Each long-term goal should have an accompanying yearly objective designed to help actualize that goal, and those department-level objectives should take the form of SMART goals (Specific, Measurable, Achievable, Realistic and Time-Based) as much possible. Yearly objectives can then be broken down into smaller quarterly or even monthly ones. Whatever keeps you most connected to the ultimate vision.
An objective connected to Netflix's SWOT opportunity above could read, as a simplified example:
Objective: Partnering with production studios to release X number of new movies in Q4 that will stream on Netflix and be shown in theaters simultaneously, resulting in X new revenue.
Here’s where your strategic plan really starts to earn its name. Each of your objectives above must have its own defined strategy, falling into a semi-broad bucket spelling out the type of action that will make your objectives possible. Another term for this is formulating an “action plan” for your objective. In this step, your vision starts to incorporate more specificity.
As an example of a strategy that could fall within Netflix's above (hypothetical) objective:
Strategy 1: Scout out new content and talent from foreign markets that can be positioned as an incentive for production studios to partner with Netflix and affirm Netflix's brand as an identifier of new stories that broadly resonate with viewers.
Here’s where the granular “how, what, when” of your strategies (and, therefore, your objectives) is defined. While the above section, strategies, may straddle the line between nebulous vision and concrete deliverable, tactics are all action, and are listed out as a series of tasks that can be completed by individual workers. The more finite, the better!
Tactic 1: Hire X number of "international talent/story scouts" to identify and build relationships with content creators in X foreign markets.
7. Budget and staffing needs
Now that the starry-eyed vision of your company’s growth has a concrete plan behind it, it’s time to ensure you have the resources in place that are necessary to executing that plan. How does the plan to relate to your organizational structure and budget? If a disconnect is discovered between what your objectives are and what your resources are capable of amounting to, you may need to either set more accessible targets or raise the additional money.
Accomplish Tactic 1 with X amount of capital with an expected return of Y amount of revenue by Z date.
So, what are you waiting for? Get to planning!