Five Stages of Strategic Planning

By October 16, 2017 February 4th, 2019 General

Develop and execute a strategic plan in stages:

1. Analyze your environment — inside and outside the business. Your external environmental analysis need not be focused on specific customers. It can be as simple as a traditional SWOT (strengths, weaknesses, opportunities, and threats) analysis, or it can be a thorough, forensic-based autopsy of your company, competitors, the markets you serve, and the economy. Regardless of the amount of detail, the purpose of this step is to understand as objectively as possible the reality of what is happening inside and outside of your company.

2. Examine your business. Ask, “Why does our business exist? What is our purpose? Who is our ideal customer?” Determine whether, or to what extent, what’s going on inside or outside your business aligns with your answers to those questions. The less alignment, the more likely you’ll need to alter some aspect of what you’re currently doing to make the business more successful.

3. Set objectives. Come up with a few strategic targets that are going to advance you over the next few months from where you are toward where you want to be as an organization. You might decide, for instance, to start pursuing business with specific kinds of accounts. Or, you might say, “We want to market ourselves in a way that’s going to let us profitably grow the business.” Or, “We will not increase production, but we will make more money for what we produce.” Or, “We will increase by 20 percent the ratio of our customers who fit into our ideal-customer category.”

Some organizations will find that it’s easier to say whom they won’t do business with than whom they will. Instead of saying, “We’re going to focus on serving clients that have between 500 and 5,000 employees,” they say, “We won’t do business with anyone bigger than 5,000 employees.” Either target gets you closer to your goal.

4. Take action. Translate those objectives into actionable efforts for which someone can be held accountable. If you’re going to increase your share of ideal customers, for instance, there are things people on your team should be doing to make that happen. You help them identify two or three activities they will perform that will lead the organization to winning those customers, and you hold them accountable for that every month. Building those actionable efforts that your people need to take makes it more likely your strategic targets will be met.

5. Measure your progress. Most companies struggle with measuring their key strategic initiatives, but it’s important to periodically review how well you are following your strategy. Good intentions collide with reality or old habits, or companies struggle because they have too many targets. I’ve yet to see a company achieve more than five strategic targets, and most can only deal with 1-3. The more complex your business model, the harder it is to stay focused. Individuals and companies that can stay focused can outperform people and companies that won’t.

Are you ready to take your leadership to the next level? Take this free assessment and find out how you measure up.