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You Need a Strategic Plan! Part Two: How

In my prior blog post on strategic planning, I delved into why your organization should have a strategic plan. In this post, I’ll outline how to do it in five steps. When you meet to develop your plan, set aside at least three or four hours, if not a whole day. You’ll need to involve your top managers, or for a smaller group, include the whole team. And, if you need help, contact us!

Step 1: Review Mission and Vision

Even organization needs a mission statement. This statement is one or two sentences and answers the questions: Why do we exist? What do we do? Who do we serve? It’s worth revisiting your mission once a year to be sure it still describes your organization. If it does, great! If not, tweak it. If there’s no change, then this is a great way to start the planning process by focusing everyone on the overall mission.

Not all organizations need a vision statement, but for some, it can help guide planning. A vision statement answers the question: Where are we going? Perhaps your organization isn’t that big, doesn’t offer many products or services, or is just starting out. Your mission may be accurate, but your ultimate goal of development, growth, or change, isn’t captured by it. That’s when a 1-2 sentence vision statement can help.

Step 2: Do a SWOT Analysis

Before you can plan for the future, you need a clear look at where the organization is right now in terms of its strengths, weaknesses, opportunities, and threats (thus, the acronym SWOT). This requires you to look both internally and externally and consider things that are currently helping the organization and those that harm it.

  • Strengths are internal to the organization and things that it does well

  • Weakness are internal to the organization and things that it does not do well or could improve upon

  • Opportunities are external to the organization and chances for growth or positive change

  • Threats are external to the organization and could harm the organization

By making an honest assessment of your SWOT, gaps between what you intend and what you truly do can start to be known. The SWOT also helps you with your competitive intelligence, or knowing what your competitors are doing and how you can compete against them more successfully.

Step 3: Formulate Your Strategy

Chances are, your organization already has an overall strategy, whether it’s well known or not. A strategy is a long-term plan of action designed to achieve a particular goal. Your organizational strategy typically describes a future state, as well as the process of getting to that place, and it should be used to make problems easier to understand and solve.

At a minimum, you should be able to determine which of these three basic strategies describes how you do business: overall cost leadership, differentiation, or focus. Companies that follow overall cost leadership keep their costs low and thus have lower prices, and they get earnings from getting more customers at smaller profit margins. Wal Mart is a great example of this; they’re known not just for low prices, but for negotiating lower costs on good from suppliers and spending less in general than other firms. Firms that pursue differentiation aim to create the perception that their goods or services are unique. Luxury goods (e.g., Rolex, Mercedes) follow this strategy, and they make profits by charging more for each good or service, but they are also likely to deliver more value as well. Finally, with focus, a firm targets only a niche market (rather than all consumers) and then pursues either cost leadership of differentiation. Specialized hunting or sports products are a great example—in many of these markets, you can find a low-priced, no frills retailer, or you can invest in more expensive, but higher value and service goods, but in all cases, their target market is pretty narrow.

If you haven’t named which of these your organization follows, your SWOT analysis should help determine which one it is. But, it’s worth investigating whether or not this strategy has been embraced consistently by your organization. You can’t do both cost leadership and differentiation successfully, so use your SWOT to determine if you’ve been trying to do that and if it’s time to refocus on the strategy your organization should follow.

If you’ve never developed a strategy or if your company has changed enough to revamp it, this is when it may be time to backtrack and look again at your mission or vision. Perhaps after the SWOT and the strategy formulation, you realize that your mission statement isn’t really capturing what it is you do. That’s okay! Go back and change that now before moving on to step 4.

Step 4: Set Strategic Objectives

After all of the foundation work of revisiting your mission, analyzing your SWOT, and formulating your strategy, now you can develop four or five 3-year strategic objectives. The priority here is on making decisions, not having discussions. Actual operations (i.e., how we actually meet these objectives) will be decided later. However, in this process, you will also need to determine how you will measure success in meeting these objectives, by developing key performance indicators.

Your strategic objectives may be clear and easy to develop, and you may have a lot of agreement on what they are. However, there may be confusion or disagreement about them. If there isn’t a clear idea, you may want to start by brainstorming to list all of the ideas. Be sure, though, to only identify a minimum of overarching objectives, since setting too many goals will strain resources and divide efforts. And, if you meet all of your goals before the 3-year time period, you can set some new ones.

A good objective will be both specific and appropriately difficult. Although you don’t want to get into detailed operational plans right now, a specific goal is a good thing. So, you might want to set a goal to increase sales by 10%, to increase your client base by 25, or to get 5,000 followers on Instagram. But, this goal has to have the right level of difficulty, which is just a little bit harder than what you’ve done successfully in the past. So, a sales increase of 10% is very reasonable, but if you have 15 Instagram followers, increasing that to 5,000 in one year may be too out of reach. Research indicates that goals that are too challenging are the ones people give up when they hit their first roadblock.

Once your objectives have been agreed upon, you’ll want to note how you will measure their success. The examples above are pretty easy, but goals that are less tangible (e.g., increasing your business’s profile in the community, improving customer relations) are a little harder. But having a way to measure what constitutes meeting these successfully is the only way to know if you’ve met your objectives.

Step 5: Share Your Results

Keeping everyone in the company apprised of the strategic plan was part of my last blog post, and it bears repeating here. Once you’ve finished developing your strategic plan, be sure to document the results. Those who helped develop it will need a written summary to use as a guide for the future, and employees who weren’t a part of the planning session will need to know where the organization is going. You may also want to share some of this information with your customers. If your mission isn’t on your company website, now is a good time to post it. If your goal is to get more customers, sharing this with your current customers may generate referrals. And, as the year goes on, don’t forget to compare your progress with your objectives and use this to either celebrate successes or encourage continued progress.

Are you ready to set your plan for the future success of your organization? Feeling overwhelmed by making it all work? Call us today for a free consultation to learn more about our strategic planning services. And, ask about our nonprofit special pricing!


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