Strategic planning often becomes the annual break that a firm takes in an effort to define their future. While some strategy takes the form of annual business planning, other firms embark upon the insurmountable task of charting the next decade. Strategic planning can be exhausting, but most agree that it provides an excellent platform to make important course corrections. However, not all strategy is good strategy. There are plenty of key practices to apply and pitfalls to avoid when crafting a firm's overarching strategic plan.
Vision, Mission and Values
Firms will dedicate enormous amounts of time to interview their people, survey their customers, craft their strengths, identify weaknesses, opportunities, threats and ultimately draft a vision, mission and core values that will serve as the guiding light for the firm. Then it's back to work to catch up on lost time, especially after a three-day retreat. The vision, mission and core values are the foundation of what the firm should be striving to become. One quick test to ensure you have the right idea is to ask someone in your firm to recite the vision, mission and core values. If it doesn't roll off their tongue with fluidity, or if they grimace when they cobble some words together, you aren't living that vision, mission and set of core values.
Vision Requires Action
One of the biggest failures associated with the strategic planning process is forgetting that in order to achieve the vision, there must be continued action. Fluffy words that lack substance only serve to undermine an organization. What action plans have been established within the firm to make the vision come alive? Action planning can be exhausting, but this is where the rubber meets the road. A vision without an action plan is empty.
Urgent Vs. Important
It's easy to kick the can down the road when it comes to strategy. When pressed with urgent tasks and the inevitable firefighting that accompanies the business of construction, participants can easily get sidetracked. Important tasks such as training, development and succession planning require attention. By action planning, the firm can at least identify critical timeframes in which decisions or tactical items must be dealt with and completed.
Divvy The Load
So often, a sole proprietor or group of partners put together a plan, but fail to get the traction the plan requires because they didn't involve other members of the firm. While the vision, mission and values could be left to the ownership team, the action items that stem from that plan should be divvied among stakeholders within the firm. By not spreading the load, the ownership team only increases the probability that the plan will ultimately fail. By spreading the activities among key members of the firm and assigning due dates to aid in accountability, the firm helps ensure buy-in and also helps future up-and-comers take ownership in helping work on the business, rather than simply in the business.
Fact-Based Analysis
In this data-driven world, there is no shortage of resources to help a firm make the right decisions. While leading with one's gut may have served the leader in starting their entrepreneurial enterprise, sustaining a business in this frenetic marketplace will require more than a just hunch. Some of the considerations a firm should make during its planning process include the following:
- Customers—What do they like? How are they buying now? How will they buy in the future? What new markets are the current customers in? Who are the new customers?
- Competitors—Who are they? How are they structured? Why do our customers select them? What makes them special? What is their market share? What is our market share?
- Climate—What regulations will influence our business? Is the current market likely to continue? How will labor conditions affect my business?
- Company—What makes us special? Why do people like (or dislike) working here? What is our succession plan at all levels? Do we have a clear direction?
Keep Calm
During the recession, many firms abandoned their strategic plan. It was as if the vision, mission and core values were only viable if the market conditions were positive. These should stand the test of the mightiest storm, though. The action plan simply gets adjusted. Decisions about the vision, mission and values shouldn't be made hastily or viewed as some grouping of "adjectives that make the company look cool," but really have no substance.
Know When To Pull the Rip Cord
Firms want to maintain the vision, mission and core values, but sometimes fear they might lose credibility by changing the action items. While the vision remains static and constant, the action plans are always dynamic and ever-changing. Just because there were some action items that did not come to pass doesn't mean the plan was a failure. It simply means the firm must make course corrections. Even the best laid plans require adjustment. Consider Super Bowl winning teams, armies storming a beach head or businesses that failed to capitalize on an idea. The best examples of each are those who stayed the course of a strategy, but altered the tactics. They may have even been losing the battle, but they took the appropriate steps to achieve the win long term.
Many firms have a strategic plan, but no strategy. The best plans allow for fluidity and a certain level of flexibility. However, firms without a vision are simply ships without a destination. How would you recruit people to come aboard your ship without a true destination? Why would customers choose you if you don't truly know who you are? The greatest strategy is exhibited through day-to-day operations and through the passion of its team.
