Strategic Planning In a Time of Rapid Change
March 13, 2020 •Oak Street Funding
When businesses and the financial markets are changing at breakneck speed, the idea of creating a strategic planning process sounds daunting and arduous. But having a solid strategic framework is more important than ever in this era of rapid change as evidenced by the current coronavirus outbreak and all of its economic and social implications.
Business plan vs. Strategic plan
Strategic plans look at internal and external features of the business. It takes into consideration the fundamental vision of the business, how the company is run, and measures success of the plan through data.
Forget traditional strategic plans
Part of the reason business owners may be reluctant to use strategic planning in this era of great volatility is the traditional image of a strategic business plan. Mention the need to have a plan, and business owners immediately envision a document packed with hundreds of pages of analyses, goals, objectives and tactics.
Anyone who has been involved with the development of that type of business level strategy knows it can take months to prepare and be obsolete the day it’s finished.
New approach to strategic planning
What businesses need in this era of disruption and uncertainty is an entirely new approach to strategic planning. Instead of setting out a long list of objectives and tactics for the future, the purpose of a strategic plan shifts to creating a shared understanding of your business so everyone has a clear picture of how to proceed when presented with a new opportunity or challenge.
By creating that shared understanding, you ensure everyone at all levels of the business fully grasps how you want to serve your market, create the greatest value for your customers and increase the bottom line. If the entire team has a crystalized understanding, they’ll be better able to make the hundreds of small decisions that crop up every day and be far more likely to make the choices you’ll support.
Five key components of strategic planning?
1. Clear direction, 2. Determine who is responsible for which elements, 3. Transparency,
4. Use data to inform, 5. Review regularly
Five effective strategic plan elements
1. Think lean.
Rather than overwhelm everyone with a lengthy document, make your strategy lean. It should provide a clear sense of inspiration and direction without giving team members limitations. Explain how you want your customers to see and engage with you, and then give your team the freedom to make that possible.
2. Who is responsible?
Your business level strategy should explain who is capable of making which decisions. How much decision-making authority rests with customer-facing employees? At what point should decisions be forced up the organization chart?
Just as important as identifying levels of responsibility is determining accountability for the process. How will the organization verify the right things are being done and the right people are doing them?
3. Become transparent.
If team members are to become responsible and accountable, they need to know what’s going on. Socializing information and key metrics across the entire organization will allow staff at all levels to sense what’s important and take the right actions at the right time.
A lack of transparency breeds distrust. Employees must have a clear understanding of the value of particular products and services to customers as well as how those products and services are priced and why.
4. Use data to inform, not punish.
People are inherently wary of goals and objectives, particularly when they lack authority over all the factors impacting success or failure. When reviewing performance data, think collaboratively instead of individually.
Rather than calling out one team member for below-average performance, present the overall performance for the entire team. The poor performers will be able to see they’re not keeping pace with their peers and will either decide to work harder, or possibly work elsewhere.
5. Review regularly.
Your business can’t survive in an era of rapid change without pivoting to meet the demands of the marketplace. Reviewing your plan quarterly, if not monthly, is essential. Gone are the days of creating a strategic plan and leaving it on the shelf.
In today’s business environment metrics are as close as the click of a mouse, allowing you to understand what is going on and change course quickly whenever necessary.
We live in an era of business disruption and uncertainty. A new approach to strategic planning, built on shared understanding, empowerment, accountability, timely performance measurement and continuous improvement, can propel your business forward even during the most difficult of times.
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