The Dos and Don'ts of Strategic Planning

It's difficult to get to the top of your industry without preparation. It takes strategic thinking and planning. To get ahead of everyone in your industry, if they're pushing 10% growth, you have to figure out exactly what you're going to do to push 20%. 

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If you wanted to get to the top of a mountain, my guess is you'd plan ahead. You'd make sure to look at the weather, pack the right supplies and wear the appropriate gear.

It's the same concept when you compete in business. It's difficult to get to the top of your industry without preparation. It takes strategic thinking and planning. To get ahead of everyone in your industry, if they're pushing 10% growth, you have to figure out exactly what you're going to do to push 20%.

Failing to strategically plan should be the exception under this mindset, especially since having a business plan can increase your odds of success. Unfortunately, it's the norm. Research from HLB Mann Judd found that even though 98% of surveyed businesses said they have opportunities for growth and ideas about how to achieve it, just 20% of business owners have a formal plan. They may not know how to put truly workable and meaningful steps together. Awareness of a few dos and don'ts should help get you past this roadblock and ensure you don't fall behind.

Dos

1. Develop a methodology.

Whatever steps and strategies end up in your plan, you need a method for evaluating their desirability and effectiveness and building on them.

This ties to your core values and visions. At my company, our vision has always been to enable the movement of people, goods and services freely. Now, the automotive industry is moving to electric vehicles, and we want to be part of the environmental, social and governance movement. So we took that goal and compared it to our vision. We added "and responsibly" to the end of that vision to reflect the new commitment to the EV and ESG areas.

This assessment is something we can do on repeat. We analyze our goals and beliefs at regular intervals, and if something's not working or no longer rings true, we have opportunities to hold ourselves accountable or pivot. Whatever methodology you set up should move your values from mere cat-poster mantras into real actions in the same way.

2. Consider how you can expand your capabilities.

Part of your methodology should be routinely asking, "What else can I bring to the table?" These new ideas don't have to lead to huge shifts, and they can tap into skills or resources you already have. If you're running a gas station, expanding could be as simple as offering new snacks or a car wash. Extra capabilities add value, which can keep existing customers loyal and differentiate you in the minds of new buyers.

3. Start your strategic planning process early.

I've seen many companies wait until November to figure out what they're going to do for the following year. This approach generally means people don't have time to really get all the facts and analyze them well. They also may not have time to send questions back and forth between departments or teams, calmly move through different iterations or refine the plan. So get ahead and start around August instead.

Don'ts

1. Don't change your strategic planning process every year.

You'll likely have some elements of your old plan that are solid but just need some tweaking. It's also pretty rare that projects or trends are going to die right on the nose as soon as the year ends. Starting from scratch every year with strategic planning is throwing the shovel out with the snow. Aim to identify what you can build on and fill the gaps that are showing up rather than starting over.

2. Don't build your financial plan before your business and strategic plans.

Elements like revenue and profit are the outcomeof whatever business and strategic plans you create. Let's say you offer three new products with the goal of gaining 10 new clients. If you follow that plan, and if you know from your metrics that each client can yield $1,000 a year for the business, then the 10 new clients should bring in an additional $10,000. You can point employees and investors to that $10,000 as a target, but it's not random or based just on a gut feeling. It's based on specific actions you're going to take.

Now let's say you flip this. You tell your team they have to come up with another $10,000. They have no idea how they're going to bring in that extra $10,000 with the existing clients and products you have. They'll likely become demotivated and not put in much effort because they don't see a clear path to what you want from them. Give people clear goals and the processes they need to meet those goals first. If everyone follows the business strategy you've outlined, the money can follow naturally.

3. Don't forget to involve your team.

I once had a senior VP present a business plan to me. I could immediately tell he'd done all the work himself, so I had him go back and get insights from the teams he had underneath him. He came back to me with a way better plan, simply because his people had the chance to give their thoughts and input. Involving your team can ensure you consider lots of angles and arm yourself with more facts, and it pulls double duty by building deeper trust-based relationships.

Strong strategic planning will help your performance soar.

Failure to plan well in business has a range of individual negative consequences, and overall, it's like the proverbial woodsman who doesn't take the time to sharpen his ax. You might chop down the tree, but it's going to be a hard job, and the woodsman next to you with the sharper tool is going to finish first.

By contrast, the advantages of having a plan, such as improved decision-making and better alignment among teams, can prevent underperformance. To ensure you can keep up with your competitors — or ideally, pull ahead of them — take advantage of the steps outlined above and get your strategic planning right.

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