How Do I Develop A Strategy Plan?

The process starts with the executive team understanding that having a nimble plan is essential to having a successful company.

Developing a plan is a multi step process, which I have found benefits greatly by going on a two or three day retreat. Using tools like brainstorming and mind mapping, facilitates conversation and helps develop ideas. Retreats enable the team to immerse themselves in the work with no outside distractions.

If the team cannot afford the time for a retreat, another strategy is to conduct a series of three to four hour meetings covering one piece of the processes at a time. Extended, concentrated meetings enable the team to fully develop ideas and not lose the collective thought of the group. To keep everyone thinking strategically there should be no interruptions to the team while developing strategy.

The strategic planning process starts with defining your core values, the rules that define professional and ethical behavior within your business. Developing your core values set the tone for the people in your organization. When developing your core values, using terms like passion, respect, honesty, Integrity, etc., are all great starts and if used correctly can provide a values structure for the business.

However, these words can be interpreted differently by each individual so you have to be sure to clearly explain your meaning. I prefer to see statements which don’t have a dictionary definition. For example, values like Respect for the Individual, Have Fun, and Committed for Greatness work well.

How many core values should the organization have? A good rule of thumb is from three to six but I’ve seen teams develop eight or nine, too. Keep in mind, each member of the executive team needs to live the core values; if they don’t, you’ll never have a team that believes in the organization’s values. Core values are rules your team cannot compromise on—they are a must.

Once the core values are developed, define why the company exists beyond the goal of making money. Usually, the company’s founder has a lot of input defining why the business exists. Have them start by relating how they created the company; what thoughts and feelings drove them to take on the challenge of starting the organization. Knowing why the company exists allows the team to develop the purpose of the organization, which in turn helps the team develop the rest of their strategy. Once they know what makes the organization tick, the executive team should write it out in a short story that can be shared over and over again. Use that story to write a one to three paragraphs that capture the essence of what the company does for its customers. We’ll call this the purpose or mission statement of the organization.

After determining the purpose, the team should focus its attention on one to five (three is optimal) things the company considers its main competencies. In other words: What are we really good at? It’s best to brainstorm by allowing each member of the team to throw out ideas of what they think the competencies are. Once the ideas are developed, the team should narrow them down by voting which ones best define the company’s expertise. When defining purpose and competencies remember to keep it real; otherwise your strategy execution may not work the way you would like it to.

Now it’s time to consider the company’s Strengths, Weaknesses, Opportunities, and Threats (SWOT). The team needs to think of the internal strengths and weaknesses as well as the external opportunities and threats. Again, brainstorming is a great way to develop your list. Just remember: the purpose of brainstorming isn’t to judge ideas; it’s to develop ideas.

With strengths and weaknesses, think of technical skills, leading brands, distribution channels, management, scalability, quality, and whatever else best fits your company. For opportunities and threats consider customer preferences, technological advances, changing laws, population age, taxes, geography, etc. Now eliminate redundancies within each list. Once these four analyses are complete the team will have an important tool for understanding the business and developing future goals.

After working through SWOT, the team can think about the company’s long term objective—in other words, its vision; a short, overriding statement of what the company is striving to become. The vision is a bit challenging to develop because it involves the overlapping points of what you’re passionate about, what you’re the best at—as opposed to what you’d like to be best at—and what makes you the most return on your investment. The challenge lies in two tasks. First, being honest when answering the three questions; second, developing the point where the three questions come together. The vision keeps you focused on what you are striving to achieve and gives the people in your organization a clear focus of where resources should be directed.

The vision also allows you to see where your team wants the company to be. But before setting a course for the next three to five years, you need to know your market. To understand your market, ask three simple questions.

What are you selling? This should define what products you have and the products you’re considering for the future.

Who will you sell the products to? Clearly define what the customer looks like so your target demo is easily recognizable to people in, and outside, your organization or company.

Where will you sell these products or services? Identify the geographic location where you’ll be making your offering.

While the questions are simple, sometimes the answers are challenging if you respond honestly. If you get stuck, the strategy developed up to the market should help the team stay focused.

With the vision established, the team can set a direction for the company that enables it to start realizing that vision over the next three years. Using all the information created up to now, the team should brainstorm ideas to create the long-term view. Don’t worry about how right the accomplishments are when brainstorming; just get them written down to capturing the essence of the objectives. Once the team is done you need to build a consensus of three to five things you want to accomplish. Why only three? Because it’s been proven by many companies that focusing on only a few things improves the likelihood the objectives will become realities.

I like to tell the story of Ivy Lee to emphasize the value of focus. There are several versions of this story but I choose to tell this one.

Ivy Lee was a consultant who in the early 1900’s went to Charles Schwab at Bethlehem Steel and requested to spend 10 minutes with Schwab and each of his executives. In return, Lee promised he could change Schwab’s business.

When Schwab asked what the advice would cost, Lee told him to pay what he thought the advice was worth. Schwab agreed and Lee conducted his meetings. When he finished, Lee told Schwab to write down, in order of importance, six priorities each day and to work on number one first and move down the list each day. There was one condition: he had to work on number one until it was finished; the team could not start number two until number one was done.

Three months later Charles Schwab sent Ivy Lee a check for $35,000—at the time when the average worker earned $2 per day. Schwab considered Lee’s advice so valuable because the executive was now getting more done in less time. As strategic execution has been studied over the years, we’ve learned the teams with only three to five priorities accomplish more because they are better able to focus.

Now that your team has some clarity about the business, the challenging part begins—focusing the necessary energy and time to the company’s strategy. In my next white paper, I’ll provide some insight on how to most effectively execute a strategy.

Why Do I Need Strategy?

“Why do I need strategy?” is a question many business owners and their executive teams ask. I know my team and I did when I owned my company. To understand strategy and what it can do for your company, let’s start by explaining what exactly strategy is. My next two white papers will then address how to develop a strategic plan and how to execute that plan.

So, what is strategy? Strategy is a nimble plan for achieving what the business deems is success. The plan defines the executive team’s priorities on where the business will be in three to five years and breaks down long term objectives to manageable quarterly goals, which involves knowing the products or services your business offers, the customers you serve, and how the business focuses its attention to achieve the objectives.

To understand what strategy means in practical terms, let’s break down the definition. Nimble means growing your business cleverly. From what I have seen over the years, the more in love you are with your own plan the greater your opportunity for loss because if you are not nimble, you cannot adapt to a changing market. If you have not been nimble you’re probably having cash flow issues because your market has changed but your approach has remained the same. In today’s new economy I see this behavior over and over again: the business owners and the executive team members don’t want to admit their market has changed. Usually, the team realizes they have an issue when they are on the verge of going under. At that point, egos are no longer guiding decisions so the team members can look at themselves as they are instead of with the unrealistic and overconfident impressions they may have previously had of themselves. In short, being nimble means changing your plan as the market changes.

Next let’s evaluate the word plan. A plan is a roadmap for the future that is developed in advance. I have watched many businesses during my career and the most successful always have a sound strategic plan. The companies that fail don’t. They don’t objectively evaluate their failures and they have little or no humility. They complain about not succeeding but have no plan for changing their course of action except to cut, cut, and cut cost. If a business wants sustainable change, the team has to know the direction of the change, how to change, and what the change looks like when it happens.

To achieve means to bring about an intended result. So in order to achieve anything we have to have a plan; a nimble plan. In order to achieve a long term objective one has to develop a series of short term goals with intended results. The example I like to use is eating an apple in one bite. If your objective is to eat the apple, would you stick it all in your mouth at one time? No; you’d take bites all around the apple until you reached the core. With each bit you can see yourself coming closer to the objective; you’re doing it one bit at a time instead of all at one time. When you take small bits you’re able to chew. If you stick the whole apple in your mouth you’re not able to chew at all. If you’ve recently developed a plan, are you sticking the apple in your mouth all at one time? If so, you’ll never achieve your desired outcome. Instead, try taking small bits that lead to eating the whole apple.

The final part of defining strategy is for the team to decide what success means to them. Everyone and every business have different definitions for success. One definition is not better than another. The definition has to be what feels right to your organization in line with your beliefs. Your beliefs are your Core Ideologies which include core values (your rules) and a core purpose (your passion) for the business. If you and your executive team are not succeeding then I would bet good money your team has many competing definitions of success. When we have multiple definitions the team moves in many directions. The cost of chasing all these different definitions cost time and money.

You now know a strategy is a nimble plan for achieving what the business decides is success. Do you need a strategic plan? In my next white paper I’ll provide some insight on how to develop a strategy.

If you would like to learn more about strategy you can contact me via email dchavez@asnevada.com or by phone 702-421-3212. You can also learn more about Assured Strategies at www.asnevada.com

How Do I Execute My Strategy?

In my last paper, I covered how Ivy Lee helped Charles Schwab. It’s important to remember that keeping it simple and focused when developing priorities with your team simplifies executing your goals over the next quarter and year.

If you followed the steps outlined in the last White Paper, your team now has a vision and a three year outlook of ideally three objectives they want to accomplish. Let’s use those objectives to develop our goals for this year. Take the number one objective and create a list of obstacles to accomplishing it. Refine the list and then place the obstacles in their order of importance. Use these obstacles to develop three to five goals; things you need to do to overcome the barriers. Keep in mind these are annual goals may have some complexity so you shouldn’t be able to accomplish them in one day.

There are many methods for determining goals. I find the acronym SMART (Specific, Measurable, Attainable, Realistic, & Time Bound) works well when consulting with clients who have minimal goal setting experience. There are many definitions for each letter on the Internet but regardless which version is used, just make sure you understand the components of SMART. If you’re setting a one year goal, it’s important to make it as Specific as possible and to keep it focused on what you’re trying to accomplish. Have leading and lagging Measurements (Metrics) which are challenging but not impossible to achieve. Remember to consider your SWOT and assess whether you have the ability to Attain the goal. Be Realistic and make sure the goal will challenge your team. If the goal is annual, set a date one year out as the Time (Bound) frame to accomplish it. If you’d like my White Paper on SMART goals and the tools I use to create them, just contact my office and I will be happy to send it to you.

When you get to this point the team will have good energy and they will have developed a clear picture of the company and what they want to accomplish with its resources and talents. The next step is for the team to identify the obstacles to accomplishing the annual goals, which will be used to identify the quarterly goals. The team wants to make sure they’re getting to the root of the obstacle, not just the symptom, so when ideas are generated, ask Why? a few times. Again, once the list is refined place each obstacle in its order of importance and use them to develop goals, things needed to overcome the barriers. Once more develop three to five and keep in mind these are quarterly goals.

The team needs to assign each obstacle to one of its members for accountability. Each executive will take the obstacle they’re responsible for and break it further down into personal goals. They will also go back to the departments they lead in the organization and break down the barriers to create specific goals for each individual. Breaking down the goals should be done over and over until every person in the company has a goal that is part of the overall goal, enabling each to make a contribution to the organization’s growth. When you get everyone participating, the change that’s taking place is easier to accept. They’ll bite the apple in small bits to accomplish the goal of eating the entire apple.

One critical element of all the goals—for both individuals and the company— is measurement; a way to make sure there is accountability for accomplishing the goal. When you figure out the measurements they need to be monitored, which shows when goals are not being met, giving leaders the opportunity to help when a teammate is stuck. You don’t want to get to the end of the quarter and realize the priorities were not accomplished. I suggest a series of focused meetings to make sure all the team members stay accountable to accomplishing their priorities.

We want every team in the organization to attend a daily meeting to discuss where we are focusing our energy that day and how we fared the day before with what we committed to accomplish. Every week the executives will come together for a meeting that focuses on reporting metrics. We also want the collective intelligence of the team to drill down on any big issue prevent the quarterly goals from being accomplished. Each month the executive team will get together and look at the measurements for each of the quarterly goals and cover in depth a challenge or two the team is having. The meetings are to keep accountability high and communication effective. Based on my experience, if the daily, weekly, and monthly meetings don’t take place there is no sense in even developing a strategic plan. If there is no accountability the goals will be lost in ambiguity and the organization will lose interest.

Of course, we’re merely scratching the surface on developing and executing a strategic plan but this series of white papers should give you a solid foundation to start building and executing your strategic plan. As with anything, there may be many other challenges in the organization that prevents you and the executive team from implementing the strategy successfully. Some of those things may include poor leadership by the executive team; resistance to changing the accountability structure; the mindset of employees; or the organization not living the core values. This is where having an experienced strategic coach can help.

A strategic coach focuses on midsize organizations and the barriers to growth. They serve or have served as a CEO or board member for a midsized growth organization. They’ve lived through some of the challenges of strategic planning and execution. Their primary focus is to discern the strengths and weaknesses of the executive team. They also facilitate building strategy and developing the team’s execution skills.

This is the final White Paper in a series of three. If you would like a copy of the first two papers—Why Do I Need Strategy? and How Do I Develop a Strategy Plan?—please contact us.