What is strategic planning?
Scaling Up Coach Phil Rose conducting a strategic planning session with a client.
We all hear a lot of origin stories for companies. The stories are fascinating and seem very different. But when you look at the patterns, most fall into two buckets.
Someone had a great idea for something new. The founder jumped in with both feet, and the business grew because nothing like it had existed.
Someone found an intriguing gap in the market, built a business plan, and developed a strategy for how to fill that gap.
If we know the origin story, the odds are that the businesses were successful no matter which bucket they fell in. But a common thread you will hear repeatedly is that those with a business strategy early on scaled faster. Those that did not have one hit a wall where they had to go back and put a strategy in place to scale beyond their initial launch.
Companies that successfully scale today approach strategic planning as a live process in the business rather than the one-and-done exercises of the past. When you marry your strategic plan to strategic execution rhythms, you create that living process to keep your strategy relevant through growth and changing times.
Many founders are so focused on the day-to-day of launching and then running a company that they have not put a strategy in place. The answers for "Why Not?" vary, but common ones include:
Lack of time
It feels too intimidating
Not knowing how to build one
The objections or delays are understandable. Time is a precious commodity when running a business.
Looking into the future for your business means accepting a level of uncertainty. Building strategy is intimidating to almost everyone. It forces you to make decisions that feel limiting or risky when you do not have all the facts. Also, it can be hard to know where to start if you haven't worked on a strategic plan in a former job.
We asked business coaches Phil Rose and Ross Shott to join us for a conversation in the Scaling Up Coaches Club on Clubhouse to share some insights into strategic planning and how to use it as the secret weapon to scale your business.
You can also listen to “Strategic Planning: The Key To Scaling A Business” a conversation we hosted recently in The Scaling Up Coaches Club on Clubhouse.
Listen to Scaling Up Coaches Ross Shott and Phil Rose answer questions on Strategic Planning and share how they work with clients.What is the primary purpose of creating a strategic plan?
Sixty years ago when process improvement and strategic planning became a corporate movement, we did things on paper. The pace of business was not as fast. A strategic plan would live in a big binder, and it stayed there forever.
The world is moving at a very different pace for technological and societal change. Those strategic plans that live in binders rarely keep up with the pace of modern business.
Scaling Up Coach Ross Shott points out, "Even 20 years ago when Jim Collins studied the great companies, he looked at companies who were 100 years old. The speed that a business has to keep up with today is insane. If you think you can put a plan on paper, in a binder, set it away for a year, and not revisit it, you're just fooling yourself. You really need a modern methodology that you constantly review to make minor adjustments to your business."
Scaling Up Coach Phil Rose explains, "We urge our clients to work on daily, weekly, and monthly huddles to get a communication rhythm inside their business. This rhythm enables them to understand the cadence across a whole year and further. That cadence helps your key stakeholders and team understand that your business revolves around a plan. They also will recognize the plan is not set in stone, but one that requires monitoring and course-correcting regularly."
"Strategy you can think of as the big picture," Ross explains. "It's the why and the how. Why are we doing this? How are we going to do it? And tactics would be more of the day-to-day. What are we going to do? When are we going to do it? Who's going to do it?"
Most entrepreneurs have some parts of a business strategy in their heads. But for many business owners, strategic planning stops there.
When you take the time to put those thoughts on paper, you turn strategy into a strategic plan. You take a little more time to put thought into it, refine it, and look for new opportunities and ways to overcome roadblocks.
Ross says, "I think the key thing here is, you're going to have a strategy, whether you mean it or not, again, it's going to be by default or one that is thought through."
Ross explains that most businesses do not have a formal strategy. It may be a default strategy where everyone has their own why they're doing it and how they're doing it. It may be just off the cuff. It may not be formalized across the organization. It may not be a written roadmap, thought through, or revisited quarterly or annually."
When you have a strategic plan in place and revisit it consistently, you redirect your efforts a little here and there to find more success. If you are struggling with figuring out where to go with your business, chances are it's because you don't have a very deep understanding of your strategy. Or you are not getting feedback on whether that strategy is working.
"Most of the companies I run into, the CEO is so enmeshed in the business that they're not working on the business." Ross explains, "At some point, the CEO must transition from wearing all the hats in a startup to leading the organization by being outward-facing. "
One of the top benefits of strategic planning is that it frees up time and energy for a CEO. They can use that extra time on growth activities - focus on the market or business environment, look at the trends, make partnerships, build alliances, and find exceptional talent.
Phil shared, "You can't afford not to make time for growth. Many business owners get stuck in what I call blue and red time. Blue time is about making money - building revenue, selling, and client servicing. Red time is about the back office, accounting, IT, and infrastructure. So many business owners I see get stuck in that time. They need to elevate to what I call the black zone. The black zone concerns vision, product offerings, positioning, and channels. That is what builds equity in the long term. You need to get into the black more often."
What goes into a strategic plan?
Getting the strategy out of your head and onto paper is the first part of creating a strategic plan. After that comes strategic thinking.
Spending some time figuring out your why and how and then revisiting what it is you're doing until you are more sure about it.
Ross explains, "We use the word strategic thinking because strategy is more about the thinking part, revisiting what it is you're doing and being sure about it."
For effective strategic planning, you need to dig into the big picture in terms of figuring out:
What is your end business goal?
What is the go-to-market strategy?
How are you competing?
How are we approaching the market or external environment, and why?"
The tactics you need to achieve the organizational goals in your strategic plan are a separate part: execution. That is where you get down to the nuts and bolts.
Who's going to do what
When are they going to have it done?
The One-Page Strategic Plan template helps you organize your strategic thinking into a simple-to-understand document. This simplified presentation of your strategic plan gives you an overview of the critical elements that help you stay on track to grow your business. The One-Page Strategic Plan includes:
Core Values/Beliefs
Purpose (similar to Mission Statement )
Actions - what helps you live your purpose and values
Brand Promise
BHAG - Big-Hairy-Audacious Goal (similar to Vision Statement)
3-5 year targets/goals & key thrusts that will help you achieve them
1-year targets/goals & key initiatives
Quarterly Objectives or Priorities/Organization’s Goals & KPIs
Strengths/Core-Competencies & Weaknesses (similar to a SWOT analysis)
Critical Numbers
Quarterly Theme, Celebration & Rewards
Trends that impact your business
The format is simple, but the strategic thinking required to complete the document is more complex. For that, Scaling Up offers a suite of worksheets called the Growth Tools to help you do the work to figure out each of the elements of the One-Page Strategic Plan.
Get all of The Scaling Up Growth Tools including the
One-Page Strategic Plan.
When should strategic planning in a company be done?
"To paraphrase Benjamin Franklin, 'The best time to plant a tree was 20 years ago. The second best time is today.' If you haven't done strategic thinking before, if you haven't written out your vision, if you haven't written out a strategic plan, start today. It's even easier to think through once it's written down.
He recommends that starting with an informal process is sometimes helpful. Use whatever helps best fits your style - a whiteboard, a collage, photos of handwritten notes, or a memo on your phone.
Then get them on paper so they can be organized and shared with others. You're not going to get there alone. You will need your team, particularly your senior leadership team, to help you make better decisions.
Most business owners think of a plan as something that helps them get from point A to point B without thinking of the bigger picture. The One-Page Strategic Plan used in Scaling Up allows you to capture that bigger picture, filter it down to operational planning, and see clearly what you need to do in the next year to get you on the journey to achieve your BHAG and other strategic goals.
What are the benefits of the strategic planning process?
Many entrepreneurs assume people understand what they mean when they say these things to their team. But the reality is that without a strategic plan, most teams are not on the same page about what the company should be working toward at any time. Stakeholders may not be on the same page if your strategy is not written.
The next step in formulating a solid strategic plan is sharing your strategy with your team to create alignment. Once you have a plan document, you need to:
Share the draft with key team members
Discuss the plan as a team
Get feedback from your discussion
Incorporate the feedback to iterate and refine your strategic plan
Your strategic objectives should be visible, including your major initiatives. Your top priorities should be clearly outlined, with metrics or key performance indicators (KPIs) being tracked. That way, your team can always see where the business stands and track progress on where it is going.
Ross explains how this transparency helps your team. "There's some science behind why people or companies should have a set of values and an overarching purpose or business goal. It has to do with how people make subconscious decisions every day."
Research shows that the average person makes between 3,000-5,000 subconscious decisions a day. If you do the math using 3,000, on the conservative end and assume that only 10% of those are work-related. That means every employee in your company makes at least 300 subconscious decisions about your business daily.
Ross explains, "It's hard to get all of those daily decisions from every team member in alignment if you don't have a clear vision, mission, purpose, and values. Those key strategic elements are what guide those subconscious decisions."
What are the benefits of the strategic planning process?
Many entrepreneurs assume people understand what they mean when they say these things to their team. But the reality is that without a strategic plan, most teams are not on the same page about what the company should be working toward at any time. Stakeholders may not be on the same page if your strategy is not written.
The next step in formulating a solid strategic plan is sharing your strategy with your team to create alignment. Once you have a plan document, you need to:
Share the draft with key team members
Discuss the plan as a team
Get feedback from your discussion
Incorporate the feedback to iterate and refine your strategic plan
Your strategic objectives should be visible, including your major initiatives. Your top priorities should be clearly outlined, with metrics or key performance indicators (KPIs) being tracked. That way, your team can always see where the business stands and track progress on where it is going.
Ross explains how this transparency helps your team. "There's some science behind why people or companies should have a set of values and an overarching purpose or business goal. It has to do with how people make subconscious decisions every day."
Research shows that the average person makes between 3,000-5,000 subconscious decisions a day. If you do the math using 3,000, on the conservative end and assume that only 10% of those are work-related. That means every employee in your company makes at least 300 subconscious decisions about your business daily.
Ross explains, "It's hard to get all of those daily decisions from every team member in alignment if you don't have a clear vision, mission, purpose, and values. Those key strategic elements are what guide those subconscious decisions."
Here is an example to understand how sharing strategy can create alignment:
Let's say we manufacture pens. As the CEO, your strategy is to make the best pens ever. As part of that strategy, you must brand the company as high-quality to communicate that you are the best.
Now, imagine Joe, a frontline worker on the production line. Every day, Joe hears from their supervisor about being over budget and cost overruns and asks for the production line to speed things up.
Joe is on the line one day, and one of the blue pens comes out with a purplish color. The pen works. But it's not the blue ink our pens should be.
So what decision would you, as the CEO, want Joe as a frontline worker to make? Should he think about what you, the CEO, said about quality? Or should he think about what his supervisor has been saying about cutting costs?
If he took this pen off the line, we wasted all that time and money. Or does he let it go and hope no one cares about the ink color?
Many times, that frontline worker lets it go. Suppose no one else down the line catches it. In that case, it is shipped out to a customer. Maybe the customer even calls back and complains to somebody. Still, that complaint never gets back to that person who let the pen stay on the line.
The importance of quality never gets shared back with that department. If no one ever calls attention to it, the next time the pen comes down, the same thing will happen again.
The default (now subconscious) decision for that frontline worker becomes - to let it go. They will no longer even think about those wonky blue pens. Those wonky pens will always go out.
Setting a very clear strategy and articulated set of values and vision that sets the correct rules of thumb to the default you want, solves this problem.
As the CEO, you must hone in on the importance of quality to your strategy and brand. You must ensure that this message gets to everyone and that they understand it is an overarching goal. That will help you align those hundreds of daily subconscious decisions to the singular vision.
Sharing the plan is one step, but rallying your team around the business goals in the strategic plan is also needed.
You can break all the things you need to deliver on this long-term plan into short-term strategy maps or 90-day action plans with a dashboard and cascade them down to individual goals. It's where the strategic execution connects to the strategic plan.
You can use themes for different periods to help everyone identify what is essential right now, so they will work together to help you reach those long-term goals in shorter sprints.
Phil explains, "I think the theme piece of the One Page Strategic Plan is critical. It helps you set a culture where people want to help you achieve your goals. We encourage our clients to develop a theme for the goals or parts of their strategic plan they plan to tackle each period. We also encourage them to celebrate when the team achieves those smaller goals. It is equally important to share how you will celebrate success in advance. That makes everybody get on the bus willingly. They can see accountability across the board. They know where the bus is going and understand how their role fits into the jigsaw puzzle."
"Building a business is a team sport." Ross explains, "Being able to drill down in every role with a consistent methodology and bring all those pieces together is the real power of using Scaling Up."
Phil agrees, "I think too many business owners, especially small business owners, try to do it themselves. If you want to go big, you've got to go team. You can't do it on your own."
How can a Scaling Up Coach help you with your strategic plan?
There are many strategic planning model options an entrepreneur could choose from when forming a strategic plan.
Companies often become more complex and more difficult as they try to scale. More problems evolve because the right systems haven't been established as people and processes are added along the way.
Scaling Up and the One-Page Strategic helps you find a path forward from being stuck. You benefit from going through the strategic thinking exercises that accompany the One Page Strategic Plan. You can easily share your plan with a simplified presentation. When you tie it to your strategic execution, it gives you guideposts for decision-making throughout the year.
Ross shares why Scaling Up is such a good fit for most companies. "Stating the obvious. It's called Scaling Up for a reason. If you're not interested in growing your company, this is probably not the correct methodology. It might not be best for you if you're a legacy company and you're happy where you are. Or, if you're a solopreneur and you're satisfied with more of a lifestyle business, then Scaling Up is not really for you. But if you're seriously trying to grow your company and get unstuck or manage the chaos of an already successful growing pattern, then Scaling Up is the place to be."
Over 70,000 companies have used Scaling Up, and many have been able to implement the strategic management methodology on their own. But thousands of companies have chosen to use a Scaling Up coach to help them.
A coach is more than just a planner or facilitator who makes sure you check all of the boxes. Phil says, "When you talk about strategic planning, the best way to create that plan is by asking some great questions. As a coach, I sit on the outside of the field. I can see the stuff happening on the field. I ask you questions that you might not have noticed about yourself or your company. I think that's how strategic planning from a Scaling Up Coach perspective works. We can see stuff you can't see, but we're not going to solve it for you. We're going to ask questions from the outside. And I think that's the key differentiator."
Ross agrees, "The difference between fishing for someone and teaching them how to fish is that once they go through this process, they learn it, and they own it. They own it from the beginning, not just down the road. They own it the whole time, and they learn the methodology themselves. It's really powerful that way."
Ross shared that he has learned that the brains of CEOs work at a speed very different from the rest of us, especially if they started the company or founded the company. He says they are constantly thinking up one idea after another, and they're managing lots of different thoughts at the same time.
"If you're a company leader, your most important task is to make good decisions. And we break those down into four areas: people strategy, execution, and cash. We're currently talking about strategy. So as you put together the other tools and the other parts of the framework, it all kind of plays together nicely. A Scaling Up Coach helps you combine those decision-making tools on people, strategy, execution, and cash. So that they all work in harmony, and you can get that alignment." says Ross.
A Scaling Up Coach can help you work through the Four Decisions every company must get right (people, strategy, execution, and cash) and wherever you personally are stuck. A coach can help you form your strategic plan, connect it to strategic execution, ensure you have the right people and processes to support your plan, and help you stay cash-flow positive while you grow.
One of the top outcomes of successful strategic planning and working with a coach is getting you to the point where you don't have to sweat about your business. Once your strategy development and implementation is in place and connected to the other vital areas, you can focus on the external factors or the creative side to enjoy your business while growing.
