From the small machine shop owner on his drive home, thinking “I need an ID/OD Grinder this year” to the giant conglomerate spending millions for strategy consulting with weeklong planning sessions at a resort.

Every business does strategic planning whether they know it or not.

The larger and more complex your business becomes the more formalized your strategic planning will be. As you formalize your process, it’s easy to get lost in the mechanics of the process and not focus on the actual business needs. Here are 3 mistakes to avoid as you start this process.

 

1. Mistaking targets for a strategic plan.

Setting targets is an essential component of strategic planning, but it’s just one piece of the puzzle. A strategic plan involves much more than just stating ambitious goals. For example,

Grow sales 100% in the next 3 years is not a plan… it is a target.

 

Once you set the targets you need to ask the question HOW do we get there? This exercise should be the bulk of your strategic planning process. Here are some examples of action statements associated with a sales growth target.

Explore the potential of selling Product A to the Oil & Gas Industry in our area.

        Complete development of Product B.

        Begin market research on Product C.

All these plan statements represent actions. Strategic planning involves creating long-term plans that can be segmented into smaller, achievable tasks to be completed in the near term.

Beware of trying to write the improvement of a metric as an action such as,

Increase on time delivery to 98%

This feels like an action because it might be a driver metric to another target, but it is just another target. We need to ask how it will be achieved.

Create Sales and Operations Process.

Meet with key suppliers to reduce lead time.

Buy a new machine to increase capacity.

These are actions that can be added to the strategic plan.

 

2. Trying to do too much.

“Grand plans often meet with grand disappointments.”

 

Strategic planning sessions often identify a copious number of opportunities for improvement but be careful not to overload the business with activity. Even just a handful of initiatives can paralyze a business, and employees will start to question what they should be working on.

 

One methodology I use is to categorize actions into three buckets: product development, sales& marketing, and operations. I believe these three areas always need active projects.

 

In businesses with less than 100 employees, only have one project plan going in each category at the same time.  One operations project, one product development project, and one sales& marketing project. As you finish one project start the next one. If you have downtime in one project, start the next one, but never try to work on two projects at the same time.

Your team may be able to handle more but proceed with caution.

 

3. Ignoring maintenance of existing advantages.

 

Strategic planning session tend to be focused on new things and forward-looking plans, but there needs to be a portion of time reserved for reflection. Reflect on what your existing advantages are, and why you’ve succeeded in your existing markets. You should also be asking the question;

 

“If I were my competitor, what would I do to win business from me?”

 

Failing to maintain a competitive business advantage can pose significant risks to the long-term viability and success of a company. Competitors are constantly striving to innovate and improve their offerings. Do not underestimate their ability to catch up. It is imperative for businesses to continually assess and adapt their strategies to preserve and enhance their competitive advantage.

 

 

If you would like to discuss how your small business should prepare a strategic plan send me a message.

derek@preciseprocess.co