Is Your Annual Strategic Planning Process Done?
Strategic planning is not just for Fortune 2000 companies; it is essential for any company with more than a dozen people. As the company grows, the time invested in strategic planning will increase, but the benefits will be significant. A recent leadership seminar revealed that only about 20% of managers in a company understood the corporation’s goals for the coming year, highlighting the importance of effective leadership and management.
“As Jim Rohn famously said, ‘Time is more valuable than money. You can get more money, but you cannot get more time.'” – Jim Rohn
The CEO and senior executives play a critical role in the strategic planning process. They must form the plan, communicate it clearly to all levels of the organization, find the right people to execute it, and provide oversight, training, and coaching to develop the staff. Without these elements, a company may struggle to move forward effectively.
The annual planning process should begin with a clear vision of what the company will look like by the year’s end. This includes revenue targets, department sizes, new customers, products, services, and the necessary processes and systems for smooth growth. The CEO and senior managers must crystallize this vision into a comprehensive and congruent strategic plan that aligns all departments toward shared annual objectives.
Consistent and clear answers to key questions are essential for effective strategic planning:
1. Define the long-term purpose and goals of the company, including market position, size, market share, and competitive position.
2. Determine the number of new employees needed to handle projected growth and the gating factors for hiring.
3. Identify key initiatives to support the company’s 2-3 year vision, which may involve product development, sales, and distribution strategies.
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4. Set specific targets and goals for the year to move closer to the long-term objectives.
5. Establish quarterly priorities and measurable goals for each department to track progress throughout the year.
6. Implement incentives in the culture, systems, and compensation plan to drive specific goals.
7. Unify department objectives under an overall theme, such as improved quality or lower costs.
8. Ensure each department has a dashboard of key metrics to measure success against goals, both trends and ratios over time.
Companies that consistently address these questions demonstrate top-tier strategic planning and internal communication. For those falling short, a strategic planning process that involves the entire team can align priorities and goals for the year effectively. The result of a well-executed strategic plan will pay off many times over, ensuring decisions are in line with known priorities and positioning the company for successful growth.
“In the world of business, the people who are most successful are those who are doing what they love.” – Warren Buffett
Bob Norton is a long-time Serial Entrepreneur, CEO and investor who founded six companies with four exits that returned over $1 billion to investors for a 25X ROI. Two others are still in development. He has trained, consulted and advised thousands of Entrepreneurs, CEOs and boards since 2002. Mr. Norton works with companies to 2X to 10X growth rates and valuation using AirTight Management™, the world’s most comprehensive Leadership Operating System. He also helps companies raise capital to fund growth. He is also the Founder of The CEO Boot Camp™ and Entrepreneurship University™ for early-stage companies that have not reached product-market fit and $1M ARR.
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