If you don’t know where you’re going, any road will take you there.

How important is it to have a Strategic Plan?

In the hyper-competitive startup world where 90% of companies fail, there’s a constant pressure to execute.

Startups are racing to achieve the next milestone, the next customer, the next round of funding. They’re focused on the current state of their business, and what it takes to meet the needs of today. In this environment of “get it done”, it’s easy to overlook one of the key important but not urgent activities that is necessary in order to sustain long term growth: the creation and maintenance of a strategic plan.

Plan Components

At the highest level, a strategic plan consists of:

• Mission / Vision / Values – defines the company’s reason for existence, its aspirational view of the future, and the standards by which it operates.
• Goal / Gap Analysis –  an evaluation of the company’s strategic goals, and what the current gaps that need to be bridged in order to achieve those goals. In order to determine the gaps, companies  can use a variety analytic tools such as SWOT, PEST, etc.,  to provide an accurate an honest assessment of the company’s strengths and weaknesses, and a view of the environment that it operates in.
• Tactical / Operating Plan – the set of specific activities to be undertaken to meet the organization’s objectives, typically broken down by function.
• Governance Process – the ongoing process for evaluating progress against the plan, to assess areas that need adjustment. This is typically tied into the organization’s performance management process.

Benefits of a Strategic Plan

Although the payoffs are typically realized in the longer term, there are many benefits that come from having a strategic plan:

Transparency

If communicated properly, a strategic plan lets everyone in your organization what your goals are, and what each individual in the organization can do to further those goals. By cascading top level objectives to team and individual metrics, everyone in the organization feels a part of driving the strategy.

Collaboration

If done inclusively, input into the strategic plan is gathered at all levels of the organization and provides for a feeling of contribution by every team member. This provides for a feeling of “shared ownership” for the company’s strategy, and better employee engagement in executing it.

Accountability

By establishing what’s important for your organization and creating the associated metrics to measure progress against goals, evaluation of individual and team success becomes much more clear and objective.

Decision Making

Although an important role of the leadership team is decision making, it’s critical that the entire organization is empowered to execute their functional strategies, and aligned in their decision making processes. A strategic plan can help guide autonomous decision making by providing clarity as to the organization’s goals, objectives, and values.

Strategic Planning Process

A good strategic plan should set the direction for the company over the next 3+ years, and should be cascaded to operational plans that span the upcoming year. A governance process for evaluating progress against operational plans should happen at least quarterly, to ensure that you can make the fine tuning adjustments necessary as your business evolves.

At TurnPage Consulting, we use a 5 step process to help our clients develop and implement their strategic plans. Although there are a variety of alternatives that can be used to create a strategic plan, the first and most important step is an organizational commitment to having one.

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