My last post, Why Mission Statements Suck, spurred a healthy discourse on the process and the result. Seems past experience with missions/vision left many ricochet commenters unimpressed. This post concerns itself with an equally controversial business document, the mid-term strategic plan. I've seen a heap of useless ones over the years, but I remain a proponent of the concept – provided the plan can fit onto a single page. I've encountered so many leaders who are flabbergasted by the concept. They think their businesses are too complex for 1 page. They're wrong.
Short or long, a strategic plan better begin with deep strategic thought and the right conviction. Plans put together by leaders with a ‘do-more-of-the-same but better’ attitude are destined for mediocrity. The strategic plan is not the annual budget. This should be a break from day-to-day operations; it is the organization’s future. The senior folks charged with preparing the plan must enter the process with a mindset that is analytical, intuitive and creative. By its very nature, the 1-pager doesn’t offer much real estate to work with, even with a small font. One page forces folks to think about the content that really matters –the well-defined strategies, the initiatives and the projects that will make the difference in taking the organization to the next level. Crafting strategic change is all about leading the race to the future. Here’s your basic content checklist.
1. On a landscape page layout, establish your Mission and/or Vision at the top. If your company has both a mission and a vision, a sentence for each is all you need. This becomes your guide for defining the strategies necessary to achieving the goals.
2. Now divide the page in two. On the left is your Financial History and Outlook. Quantify two years of history, your best estimate for the current fiscal and your 3-Year outlook. For these 6 years, enter sales, costs, margins, income and key financial ratios such as return on investment, return on assets, and return on sales.
3. On the right side of the page under the same 6 years, include other Key Business Indicators. KBI’s are those factors that determine performance against the vision and/or mission – measurements of the things that make your business tick. A company with differentiated branded consumables might measure market share, brand awareness, brand image, and margin development. A service business will likely target measurables such as customer service, on-time delivery, stock-outs and customer satisfaction levels. Low-cost producers watch costs, productivity, sales/profit per employee and overall employment. Some firms track new product launches, some measure employee engagement. No matter the company type, the CEO is responsible for increasing shareholder value. Measure it. If your company is not public, look at the industry multiples and decide on a ratio in conjunction with your Board of Directors. Set your objectives annually and check your progress over the term of the plan.
4. Culture and Credo can be stated below the vision or after the quantitative section. Limit this to 4 or 5 existing traits and/or articulate the cultural values that will inspire and engage the company’s human resource. For example, you may say, “Become more focused on fewer, bigger ideas so that we are quick and nimble, proactive rather than reactive. ‘Simplify and Go’ is the modus operandi.”
5. Finish with the Key Strategic Initiatives. This is where the rubber hits the road – the stuff that drives the business forward. I liked to limit the initiatives to no more than six, and I tred to represent each department. However, this is not always prudent, depending on the situation and the needs of the organization.
Once you’ve crafted your medium term plan, share it with your employees. Explain what you want to do, why it is important that it be achieved and why you can’t make it happen without them. Keep the plan handy. That's the easy part; after all, it is only 1 piece of paper. Monitor your progress. Enjoy the results.