Benjamin Franklin has been credited with the famous quote, “If you fail to plan, you are planning to fail.” Planning your strategy in business affects 80% of the profits and, in some cases, is the difference between survival and bankruptcy.
It’s hard to find another facet of the human experience that this quote fits better than business. Planning your strategy is crucial. But where to start?
The strategic planning process is the method an organization follows to determine its goals, needs and actions. If done correctly, it reveals insights on lucrative opportunities or fatal weaknesses. It’s a tool that structures and contextualizes information leading to important decisions.
In this article, we’ll highlight the importance of solid research on your business environment and the untapped potential of an irresistible vision statement paired with clearly articulated values.
By the end of it, you’ll be able to set a clear destination for your organization and plan a feasible route to get to it. Finally, we’ll propel you to go beyond planning and start executing your strategy.
Understand where you stand
Research your industry, your competitors and yourself
Your research should include these actions that we discuss in this chapter:
- Analyze threats and opportunities in the market and industry
- Ground your plan in reality
- Profile your competitors
- Discover what makes you different
Reliable industry research is the foundation of every great strategic plan.
Before any serious attempts towards the future, you need a thorough and detailed analysis regarding the current state of your industry and market, as well as their trends.
Analyzing your industry’s trends and historic performance helps you ground your strategic planning process in reality. An honest analysis of the industry’s capabilities and the market’s behavior will protect you from baseless assumptions and dreamlike notions. You’ll appreciate the full potential of your growth and learn from your competitors’ mistakes.
A lot of your research will include studying your competitors. Start by figuring out who those are.
Take a good look at their products and strategies. Figure out their value proposition and discover the unique point of view that they bring to the market. Pinpoint the strengths and weaknesses of each one.
Study their marketing campaigns to determine the audience they are targeting. Find out how much of it overlaps with your target audience. Determine their market share and whether you’re going to claim any of it.
Your analysis should also reveal gaps in the market that you can fill and early opportunities you can ride. Discover potential threats that are present.
Once you have a clear view of your environment, you’ll have to take another good look at your own organization. Make an inventory of your assets and most significant strengths.
Determine what makes you different from every other competitor. Decide on your value proposition and unique take on the product or service, or your unique place on the market.
State the problem you are solving for your customers concisely and how your solution improves or is different from the other solutions in the market.
Discover the best way to leverage your strengths and advantages and to mitigate against your weaknesses and disadvantages.
Your strategic plan should be built around your strengths and the opportunities of the market. At the same time, though, it should account for your weaknesses and your competitors’ strengths.
In other words, what we are suggesting is you make an honest SWOT analysis.
💡Analyze not only your environment and competitors but also yourself.
Customize your strategy
Many other tools can help you in this process, each having its advantages and disadvantages. We mentioned SWOT analysis because it’s general enough to fit most organizations. However, other models might serve you better, like:
- Gap Analysis
- Value disciplines
- McKinsey’s Strategic Horizons
- The Stakeholder Theory
- The Balanced Scorecard
- The Ansoff Matrix
- VRIO Analysis
Choose whichever fits best for your organization or choose a combination of these. To guide your decisions, consider the maturity of your organization and whether you want to focus on the execution of your plan or its formulation.
Strategy is highly customizable, so don’t be afraid to mix ideas and models to answer the questions you want to answer.
Researching your industry and market is a never-ending project. You could go on forever and still have many uncertainties that you cannot solve.
But that’s alright. This analysis’ goal is not to map the industry 100%. That’s impossible, thus pointless to try.
What you want to achieve is a more-than-decent understanding of your competitors and the current state of the market so you can better position your organization to utilize the opportunities you observed.
💡Tailor your strategic model to your organization’s specific needs.
Flipkart’s origin story is an excellent example of a company that took advantage of an enormous market opportunity in India. In 2007 the retail giant Amazon faced significant barriers to enter the market. Regulations were increasing the costs of orders to very unhealthy levels.
The founders of Flipkart knew about the trouble Amazon was going through with its expansion in India and at the same time, they found a solution tailored to the Indian market.
With their market insight, they went and developed a company that reached a multiple billion-dollar evaluation.
They did what Amazon did not. They studied their market and exploited the weakness of their competitors to their advantage.
That is the power of key insights from skillful research.
One of the first benefits of our platform that our customers love is its customization options. No matter which tool you choose, you can customize the structure and the fields according to your preferred model and your individual approach to strategy.
Lead with vision and values
Vision & values: your most underestimated assets
The vision of your company is part of the identity of the organization and a potentially powerful tool. Companies of any size can utilize it, but they usually don’t. They don’t believe that people care about the big picture or that it affects the organization's daily operations.
In other words, they underestimate it gravely. In truth, the vision statement can inspire people and attract not only the right customers but also the right employees.
It’s a unique communication tool that can form the basis of an internal language for the people inside the organization.
Treat it seriously and spend as much time as needed to make it clear and inspiring.
People need to feel like they belong somewhere and they contribute to its progress and success. A well-crafted vision statement is aspirational and makes people feel like working for something greater than themselves.
The values of an organization have the same potential when it comes to communication and motivation. They also shape cultures.
Your strategic planning process should take into account the culture and the values of your organization—both the current values and the desired ones.
In the case there is a gap between those two, you’ll have to put much work and effort into closing it. Otherwise, your organization will never adopt your strategy and it will fall flat soon after its “launch.”
Executing your plan is rarely an easy task, so you need to connect it with your organization’s vision and values.
💡Your vision and values are major assets for your organization, so take advantage of them.
Five key traits of a compelling vision statement
Since your vision statement is so valuable, you should be able to write one with confidence. Here are five key traits:
- Be bold in your aspirations. Make your vision big and hard or impossible to achieve.
- Include anyone who wants to be a part of and contribute to it. Don’t create unnecessary barriers.
- Make the language optimistic and empowering. Leave out its opposing forces. Instead of making it AGAINST something negative, make it FOR something positive.
- Crafting a vision statement with servitude as its primary focus highlights its social impact and inspires people to offer their honest effort.
- Make it untouchable by environmental changes like unforeseen technological advances or significant cultural shifts.
We would suggest including at least three or four of these traits, if not all of them.
Johnson & Johnson’s vision statement is:
“for every person to use their unique experiences and backgrounds, together – to spark solutions that create a better, healthier world.”
It is accompanied by The Credo, a one-page document that goes deep into their values and the duty they believe they have to every stakeholder. You don’t have to be so meticulous in crafting your vision statement, but such an approach will have a lasting impact on your organization.
In the Cascade platform, you can insert your organization’s vision and values and have them highly visible to anyone who views the overall strategic plan.
That way, your people are constantly reminded of them and get a daily inspiration boost.
Begin with the end in mind
Build your route looking forward
The most effective way to approach your strategy is by deciding on your destination and working backward. After all, you don’t want to end up with a clear destination and the realization that your plan can’t take you there fast enough or close enough.
Decide where you want the organization to be in one, three or five years ahead in the future and work your way back to the present.
Try to be as specific as possible. Get into the details of what it will look like. Imagine the customers you’re going to be serving and the state of your organization. Determine the number of employees and the level of awareness of your brand or your monthly revenue.
Again, it’s imperative that you are as specific as possible in your description to better design your route, else it’ll fail.
Including quantifiers in your description, like the values of some important metrics, will give you a concrete set of outcomes to pursue. For example, “we will have a $15 million ARR” or “we will employ over 500 people”.
Be bold and ambitious. The bigger your organization is, the more aggressive your five years into the future destination should be. The goal is to push your people to their limits and not let them rest on their laurels.
Once you have a concise picture of the state of your organization in the future, break the timeline down into incremental intervals. Choose whichever makes more sense, but don’t go over 6-month increments.
The sweet spot for every business is different, but 3-month long intervals are a reliable initial baseline.
💡Be specific on your destination and determine the milestones you have to hit along the way.
Concentrate your efforts on key Focus Areas
While building your roadmap, find the most important areas you’ll need to focus your efforts on. These focus areas shouldn’t be more than a handful.
Focus areas represent the big categories that most of your organization’s people and resources will be dedicated to.
They should be clear outcomes that are easily understood and remembered. Don’t get into too much detail here. You are mostly deciding what is not important for the organization rather than finding out every single action and project you’ll have to work on.
It’s tempting to skip that step of the process. It’s tempting to start building your route from where you stand right now instead of determining your bold future and creating it backward.
It’s tempting and also a mistake.
When you start planning out your route and your next steps with no clear end in mind, you are likely to fall into two pitfalls.
The first danger you’ll have to face refers to the execution of your plan. You might build an ambitious plan with a bold objective, but the chances are that your organization will struggle to execute it.
Building your route backward forces you, when you reach the present, to actually connect it with past performance and make a necessary distinction. A miraculous boost in performance is entirely different from a set of significantly fresh actions that your people need to take.
That’s a distinction that when you are planning with no clear end in mind, it becomes a pitfall.
The second pitfall is the scattering of your efforts. When you plan your actions and moves with a vague notion of where you want to arrive, you end up with poor results.
Your efforts and resources will be spread too thin and with no focus, you’ll probably end up confused and with an inferior outcome. Performance might be excellent, but there will be no progress on your strategy.
Unfortunately, it’s not unheard of to fall into both of these pitfalls.
However, there is one serious downside to this approach. It creates a lot of information that can quickly spiral out of control. You lose the ability to keep track of all your goals and objectives, defeating the purpose of that method.
💡Organize your plan and make it easy to look through it.
When Bob Iger became CEO of The Walt Disney Company in 2005, he decided to focus the company’s strategy on three key areas:
- High-quality branded content
- Exploit the latest technological advancements in his industry
- International growth
Every effort, decision and acquisition since then were serving these clear priorities. That clarity and focus in strategy more than doubled the company’s revenue from $31 billion in 2005 to $65 billion in 2020.
The single most powerful benefit of Cascade’s planner is the clear overview of the overall plan and the intuitive way it organizes the information. Customers get excited whenever they use it and it helps them keep the big picture in mind.
Make the first step
Start by tracking honest effort
Part of your planning process is the preparation of the first move. Direct a lot of your focus to the first actions for the execution of the plan.
At the beginning of the execution process, until the plan gains some traction, you should focus and incentivize honest effort at implementing the plan.
Don’t let underachieved goals and mediocre results kill the motivation and the traction of your strategy. Inevitably, the initial attempts won’t be highly fruitful. After all, you are introducing changes and ask your people to change their behaviors.
Set up the right metrics at the beginning to track the progress and the traction of your new strategic plan.
💡At the start of the execution, build momentum by rewarding honest effort.
Executing improves your plan
What’s tricky about the strategic planning process is that it must be relatively short. It shouldn’t be protracted more than necessary.
Business bears an inescapable risk. You can never be entirely certain of the outcome of your plan nor of the state of your environment.
Your plan will always involve a fair amount of unpredictable variables, assumptions and projections. It’s inescapable.
Thus, instead of trying to reach “certainty of success” before starting executing your plan, you should aim at reaching “reasonable confidence of success” and start executing.
The only thing you can be certain of is that you’ll have to make changes to your plan along the way.
Executing your plan will create friction and reveal its weak areas. That’s the point. Now you have the opportunity to correct your course. That’s how your attitude should be.
💡Treat execution as a learning process.
Spotify built impressive anticipation until its release in 2008. It released a beta version of its product to music bloggers, who got on to advertise their amazement of it.
Spotify’s main value proposition was summarized in its message: “a frictionless music experience.” And that’s what it tried to create with its platform..”
However, when it was released, it was far from perfect. It was offering, though, the new and almost frictionless experience it promised. Daniel Ek, Spotify’s CEO, knew that a lot of improvement was needed but went with it anyway.
Had Spotify delayed its release to make the product “perfect,” it would have lost on a great opportunity and later on customer knowledge.
When you insert your plan to the Cascade platform, you can quickly create the first KPIs to track initial progress. Every project has its own KPI and you can easily track and align them to the overall plan.
A quick summary
Your strategic planning process doesn’t have to be complicated or too long. Below, we have collected our guidelines to create a concise and successful strategic plan:
- Research your environment and analyze your organization
- Utilize your vision and values to lead your people effectively
- Build your strategy backward. Start from your future destination and work your way back to the present
- Focus on your first step and build momentum to execute your plan
In our next article, we’ll discuss, among other things, how to build alignment in the execution of your plan.
If you want to improve your strategic planning process, book a demo with us.