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This question seems to always come up with discussing strategic plans.
As already stated, a strategic plan is a document that defines a long-range plan. It typically covers a planning period of 10 -15 years and communicates the high-level plan to achieve a comprehensive set of goals by the end of this period. A business plan is a detailed planning document that defines, in specific terms, how to achieve a specific milestone or objective within the strategic planning period. The business plan covers specifics about product/program development, marketing tactics as well as revenue/growth targets and the plans to achieve these goals.
A strategic plan has directional numbers that tell a very high-level story of how the business model will evolve as the strategic plan is executed. A business plan has more specific and detailed financial projections that guide investments needs, resource allocations/re-allocations, and annual budgeting. A business plan documents what needs to happen in the near-term to align the organization to the strategic plan goals.
A strategic plan creates a unified understanding of where an entity is going, what it hopes to achieve and how it believes is the best way to achieve its goals. It is a powerful leadership tool to engage stakeholders and align resources needed to achieve its goals. When done really well, it creates the basis for the organizational mythology that unites stakeholders in a common quest.
The real value in dedicating the time and effort in strategic planning is the thinking that is stimulated that will ultimately spill over into every management conversations, formal and informal.
A strategic plan can also be created to resolve a specific set of questions facing an organization when making a high stakes decision.
Your planning assumptions
Your leadership team
Your market, the economy or customer preferences
You have experienced a significant negative event such as a fraud, an unfavorable legal action, or a regulatory change that destabilizes your company.
For entrepreneurs or small business owners, the best time to start is now - today!
For smaller businesses that have an annual planning cycle, we recommend starting in the 3rd quarter of the current fiscal year so that you can use your insights to set new goals for the next fiscal year.
For larger corporations, the strategic planning process will take longer and you still want your thinking to impact plans as soon as possible. If you are part of a corporate group, start your assessment in the 2nd quarter of the current fiscal year. If you so do, you will have new thinking formulated in time to impact the following year’s operating plans.
Once you have your strategic plan, keep it alive by reexamining your assumptions every three years and using the two interim years to identify, evaluate and integrate responses to emerging issues, so you stay vision driven AND market responsive. A complete strategic plan should be created every six to eight years or when there is a leadership change.
Strategic Planning requires a different thinking mindset than the mindset required for managing. We call the thinking needed for strategy development Strategic Thinking. To facilitate this mindset shift, the strategic planning process is designed to disrupt the typical linear process often use in problem-solving.1. Start with a comprehensive analysis of WHERE YOU ARE NOW: Your Strategic Assessment.
By designing a non-linear (disrupted) process, you work to open up new thinking. This then mitigates against incremental planning that sets many organizations to fall behind their market.
The strategic planning process should result in greater alignment and deeper common understanding of your priorities.
Strategy development is the exploration of ideas and strategies in service to long-range planning. Planning is iterative and almost never linear. Meaning only in rare instances is an idea is discussed, and immediately the decision-makers say, “Yes, that is the right thing for us to do. Implement that now!”
More common is for an idea to come up in discussion with other ideas and then after exploration, the ideas will be ranked for their respective value to strategic direction. When an idea is highly ranked, it is developed from an idea into a strategy and then a plan. Other ideas maybe valuable, put for a later time. The process of taking an idea to an actionable plan is strategy development. Because it takes time to explore and develop thinking and time waits for no one, at times ideas deemed for later move ahead in the timeline or merge with other ideas. The strategic planning process embraces the fluid nature of strategy development in all shapes and forms.
What makes leading a strategic planning process especially challenging is keeping track of, monitoring and leveraging all strategy development activities efficiently and effectively so that a new, truly brilliant strategic direction is created.
Strategic planning can take just a few weeks for a small business, or many months for a large company with many product lines or markets.
For example, at Focused Momentum®, our most in-depth customized strategic planning engagements are completed within nine months. However, we have seen large scale strategic planning projects that require engagement of many stakeholder groups take up to 18 months.
This is one of those questions that only has one answer: it depends.
Strategic planning is an investment and the costs can vary widely based on the size of the organization and the scope of the engagement with basic costs starting around $15,000 just to host a planning meeting. However, the best way to determine the costs for your organization is to request a no-obligation consultation with our staff at Focused Momentum.
In addition to consulting costs, there are also other costs to consider related to strategic planning:1. Your Staff’s Time: This includes members of the executive planning committee dedicated to the effort rather than other management priorities. When you start your first comprehensive strategic planning effort, you need to give it the same senior management attention you would give to any other high priority project. The time commitment can range from a few hours a week to a full week depending on the stage in the planning process.
We encourage a high-level of participation in our planning projects. Many times, executive teams try to conduct strategic planning efforts quickly and with just the involvement of those that have decision-making authority. The resulting strategic plans that are not very strategic.
READ MORE on this topic: 3 Indications Your Strategic Plan is NOT Strategic.
Also, to make the most from your investment in strategic planning, we encourage the involvement of as many stakeholders as possible. This does not mean they need to participate in strategy sessions, but using surveys and interviews, you can engage all key stakeholder groups in your planning process.2. Offsite Meeting Costs: Meeting offsite is important to the success of a strategic planning effort for two reasons.
First, Strategic Planning needs a different mindset from day-to-day operations. Setting the meeting location away from the office where participants can effectively disengage in the day-to-day helps them make this shift in their thinking.
Even more important is the confidential nature of the strategy discussions. Each member should feel they can discuss openly the issues facing the business without fear of setting off a rumor. The creative nature of strategy development means many topics are discussed, yet only during the final stage of the strategic planning process are decisions made. You want to be offsite to allow the flow of these exploratory conversations to happen free of the fear that they will be overheard by someone and misrepresented before you can finish your strategy development.
For example, using the Focused Momentum approach, you will have only two large group meetings that will need an offsite location. The Strategy Creation Session, typically 3 days in length and the Strategy Integration Session, 2 – 3 days in length.3. Travel Costs: This is specifically to bring participants to the meeting locations and for other travel required for research or strategy development.
We highly recommend including as many brilliant minds available to you. The process thrives on strategy discussions where everyone wears “the strategist hat”. You never can tell from where the spark of brilliance will come.
We do recommend a subset of the stakeholder group act as process designers for large strategic planning projects; we call this group the Design Team. A Design Team has five or six people, the sponsor or CEO, and four or five others from the executive team or management roster.
For a non-profit: strategic direction is best-developed hand in hand with the Board of Directors. In the nonprofit sector, sponsorship is shared by the senior staff person (CEO, President or Executive Director) and the President or Chair of the Board of Trustees. Participants in the process include all senior staff, all voting members of the Board of Trustees and other significant individual contributors on staff or at a volunteer level. Typically, donors not holding board seats are not involved in strategy development other than during the assessment phase.
A Design Team of six to eight people is recommended for nonprofit clients also. The Design Team should be comprised of the CEO/President/ED, a few senior staff, and a few highly-involved board members – typically members of the governing or executive committee.
A great strength of today’s organizations is the ability to solve very complex problems. However, every great strength can also be a weakness. If all your brilliant minds are focused on resolving today's issues, their focus could be too narrow to see future issues. Then soon enough they are right in front of you and you are struggling in response mode. Strategic planning will not completely solve competitive market pressures, but it can go a long way toward anticipating them. This is why group problem solving is NOT the method for strategic planning.
Make sure you use the right approach to designing your planning meetings so you foster the best thinking for your future .
As the leading authority on strategic thinking, Cecilia Lynch is the founder and chief strategist at Focused Momentum® and creator of Strategy Class®. Her first book, “Strategic Focus: The Art of Strategic Thinking” a groundbreaking work that demystifies the overwhelming task of beginning strategy development. READ MORE...