I attended my daughter’s sixth grade graduation ceremony last week, where one of the teachers told a nice story that drew parallels between the lessons the kids had learned during a popsicle stick bridge competition and the journey they had completed through elementary school.
She talked about how the students had needed to collaborate in teams to solve a problem and come up with a plan for the design and construction of a bridge that would hold the heaviest possible load, using only 100 popsicle sticks and some white all-purpose glue.
The students were encouraged to share their ideas, test out various strategies and forecast how much weight their bridge might hold. The process required careful planning, accurate measurements, and a lot of trial and error along the way. She reminded them how those experiences would serve them well throughout their lives.
It got me thinking about how building a bridge out of popsicle sticks requires the same sort of high-involvement planning as building a strategy to grow a company. Below are a few helpful tips for establishing your own strategic vision, along with this strategic planning playbook template from the folks at The Great Game of Business.
Companies often think they have a strategy, but usually all they have done is set financial goals for what they hope to achieve. Many neglect to make the tough choices about what actions they are going to take to reach those goals, and more importantly, which activities they will say no to.
Developing strategy is about coming up with insightful answers to external (market, competitive) and internal (resources, financial) realities to achieve a desired goal. It’s about getting very clear on the key moves your company needs to make to position itself for future success. As a result, good strategies should have broad participation from everyone in your organization to provide the best possible understanding of those realities.
A good place to start your planning process is by mapping out your long-term (3 to 5 year) financial objectives and then working your way through shorter-term annual financial goals and quarterly targets. These could include things like revenue, gross margin, profit or return on investment.
Strategic Objectives (3-5 Year Focus)
Next, you’ll want to select and rank your longer-term strategic objectives; those which represent where you want to go or what you want to achieve. Think of these as the core directional choices that will uniquely position your business to create a sustainable competitive advantage and superior financial results.
S.W.O.T Analysis (Assess Your Current Reality)
It’s important to continually reassess and frame your objectives within your current reality. Your Objectives define where you want to go (point B), so involving everyone in the planning process will help you define where you are today (point A), and what internal strengths and external opportunities will be helpful in reaching your chosen Objectives and Goals? It will also help you to pinpoint what internal weaknesses and external threats exist and the relative impact of each (high or low)?
By first identifying the obstacles you must overcome to reach your Objectives and Goals, you can then begin to develop strategies or directional choices that will help you navigate through them.
Focus on your Critical Number (Annual Focus)
Your Critical Number is the one thing that defines winning for your business in the coming year. This is often a weakness that needs to be driven out of the company. What you’re looking for is that number, that at any given time, will have the greatest impact on your business. But it can’t be a number your management team comes up with in the ‘ivory tower’. Your people need to have a hand in creating it or they won’t support it. It’s something the whole team needs to agree on.
Top 5 Goals (Annual Focus)
It’s now time to select your short-term (1-year) strategic Goals; in other words what you want to achieve in the next 12 months. These should be quantifiable targets of progress towards achieving your long-term Objectives. For example, if your long-term Objective is to be fit enough to run a marathon in 3 years, your annual Goals might be to decrease your weight from 220 lbs. to 180 lbs. or to complete a half-marathon by the end of the year.
Top 5 Strategies (Quarterly Focus)
Once you’ve defined your Critical Number and selected your Goals it’s time to choose the right drivers that will directly impact the Critical Number. Short-term (6-12 months) strategic priorities are the core directional choices that are most likely to move you towards your Objectives and Goals. Your S.W.O.T analysis will help you decide what those top 5 priorities should be so that you don’t end up losing focus and “chasing squirrels”.
Top 5 Measures (Weekly Focus)
Having the right strategy is only the first step. To execute on those strategies you need alignment between your day-to-day activities and your longer-term priorities. The key to doing this effectively is to identify quantifiable targets or key performance indicators (KPIs) and to then measure them on a daily or weekly basis. These predictive measures will be reflected in your monthly financial statements and will let you know how well you’re progressing towards achieving your Goals.
Again, using the weight loss objective as an example, your strategies to reach your goals might be to watch your caloric and carbohydrate intake, exercise frequently and focus on running, while your measurable targets might be to consume less than 2000 calories per day, average 1 hour of exercise daily and run 20 miles a week.
Planning for Growth
Implementing a consistent planning process will help you build a strong foundation for sustainable growth. If you would like to find out how valuable your business is today and learn more about what you can do to increase it, watch this Explainer Video and then take this Free 13-min Value Builder Assessment to get your Value Builder Score. It’s the first step in a simple and proven methodology for building value and unlocking new levels of freedom in your life.