Don’t Start Driving Without A Road Map
I don’t get in my car without turning on Waze and having the app create a roadmap for my planned trip. Yet, every day I speak with business owners who really have no idea where they are going and never took any time to really figure out where they want to go. They have no long-range planning and no performance measures in place to see how their business is doing. Many of these companies don’t even have a mission statement to guide them.
As their business strategist, I also become their strategic planning facilitator. I’ve spent over four decades working with non-profit and for-profit businesses helping them with the creation of their five-year strategic plan and then breaking that plan down into a one year plan, a quarterly plan and even a monthly plan with their short-term goals clearly laid out. This lack of long-term planning is one major reason businesses fail in any sector. It doesn’t matter if they are private companies or those in the federal sector. Without a five-year plan and a clear strategic plan with performance measures in place, these companies or even federal agencies are headed for disaster.
Imagine these companies have no plan. They have not started with the end in mind, as Stephen Covey suggested in his book 7 Habits of Highly Effective People. Basically, they have gotten in the car and are ready to drive without having a clue where they want to go. Now, that doesn’t make sense, yet it is common with business owners and even with a federal agency.
Some smaller companies, organizations or agencies may not have a strategic planning committee and that is ok if they are smaller. They still need a strategic plan. Even larger corporations often miss the boat on strategic planning, though. So, they are all driving around with no idea where they are going and no plan to get there.
Every business or organization must have a strategic planning process in place to decide where they are going and how they plan to get there and must also have a way to make sure they are actually on track.
I recommend that you begin with a five-year strategic plan and I like to use a very simple one-page plan so that it can be referred to often. My experience has shown me that the simpler the plan, the easier the drive. When we do a strategic plan we can determine the actual purpose of our business or company. For example, The Equal Employment Opportunity Commission (EEOC) purpose states they are an agency of the federal government, created by the Civil Rights Act of 1964 (Title VII). The purpose of the EEOC is to interpret and enforce federal laws prohibiting employment discrimination and unlawful employment.
This is very clear. Here is another sample of a strategic purpose. The Alzheimer’s Association says that their mission is to eliminate Alzheimer’s disease through the advancement of research; to provide and enhance care and support for all affected, and to reduce the risk of dementia through the promotion of brain health.
In both examples, you can see the organizations have their purpose and mission clearly stated. Their strategic plans would then establish their realistic goals that are aligned with their purpose. Then, the plan would be broken down into actual actions that will be taken to achieve their goals. I believe that when a company or organization (no matter the size), knows their key priorities they can achieve their vision.
All of my clients do a five-year and a one-year strategic plan that is one-page. We look at where they are going and any roadblocks along the way that might keep them from hitting their goals. We also create short-term strategies and action plans to achieve their targets. My clients set quarterly goals as well that drive them to their true purpose – where they really want to go. We break down their quarterly goals into actions they will take monthly and even weekly and daily to drive them to their goals. Every goal has an expected time-frame and outcome as well as a person responsible for the plan. We also establish check-ins weekly with established key performance indicators (KPI’s) to make certain they are progressing on all of their goals.
I have found a one-page strategic plan that I like to use with my clients. It was created by Verne Harnish. I will take you through the process. It works. Non-profit, for-profit, solopreneur or fortune 100 company. I like this tool because it is very simple, actionable and has proven effective in growing the businesses I am a strategist for.
To begin with, the one-page plan is broken into decisions. I’ll introduce and explain them.
The first one is strategic priorities. These are the actions that the business must be taking to achieve their quarterly priorities. To discern what these activities are you must first decide on the company’s core values and beliefs as well as the clarity of the purpose of your company or organizations. Verne calls these “Rocks”. Think of them as objectives that are firm and locked in place. You are limited to only having five of these per quarter. Why? So that you actually can achieve what will drive the company forward. Each “Rock” has target dates as well as who the person is who is accountable for that “Rock” being achieved.
I find that this section of the decision really allows the client family members I serve to move their business forward in a way that they typically have never done.
The second driver is resource allocation. These section helps define who is needed within a company or organization to actually achieve the “Rocks” and make sure there is accountability in executing the goals and priority action items. I often see a business that has priorities and they have no one who is responsible for achieving these items. If you have employees or independent contractors and even if you are a solopreneur you must make sure that the high priority objectives are not only clear, also that you have a person or people who are responsible and committed to achieving them.
The third driver is the financial driver. So many businesses and organizations have not spent time with their expected financial outcomes. Many don’t have a profit and loss statement or balance and income sheet. Often, I speak to businesses owners who don’t have revenue targets, don’t know their profit margins on the products and services they sell and very often have no idea of the cash on hand or accounts receivable. This actually is scary to me and is the first sign that business or organization is about to crash and they don’t even know it.
As I said at the start of this article, I also make sure my client family members have a five-year plan so they see the big picture. The one-page plan allows me to get them focused on their year, their quarter and even their weeks and their months as we move the targets each day toward their five-year goals.
When we look at the five-year plan I use the same one-page planning tool because it asks questions about the core mission and vision and also the big hairy audacious goal – BHAG (a term coined by author Jim Collins). Built into the one-page plan are three to five-year questions to answer about opportunities and threats in the marketplace, priorities over the years, financial targets for the years as well as how to measure key performance indicators for this time frame.
How This Information Applies to YOU
As you read this article, do you really know what your most critical priorities are for this year to achieve your five-year goals? Do you know what your most critical financial numbers are for this year? What about your key performance indicators and how are you measuring them?
I believe if you are unable to answer any of these questions, you are not going to be making the best decisions for your company or organization.
Sharing A Client Story
I often find that by telling you a true case history of a client family member helps give clarity and so I will share an example here.
This client owns a hair salon. They have a small team. I asked the owner what the overall objectives were for the business during the next five years. The owner told me they didn’t know and just wanted to make enough money to keep the salon opened, retain their staff, and pay their own bills and feed their family.
I had the owner shift her thinking and get clear on very specific five-year goals.
I also asked the owner if the other folks working in her business had any goals or objectives or day to day accountability No surprise here. The answer was “no”. Everyone was doing their own thing and had no idea that there were financial goals or any business priorities and the owner had never had this conversation with any of them as she wasn’t clear herself.
We met as a team and created a five-year and one-year plan as well as a quarterly plan, and monthly plan. With a clear roadmap and priorities, we began moving the business forward. We created a very clear vision of what this successful salon was to look like and had a clear business strategy for marketing the salon and operating the business as a team. We were focused on “Rocks” that involved her brand image that would most appeal to the types of customers they wanted to attract. Modifications needed to be made during the year to the interior design so that the salon would really appeal to more upscale customers and a during the first quarter one of their big “Rocks” was to educate their customers better, another was to provide much higher levels of customer service and a final one was to increase pricing.
I helped them create a Core Unique Positioning Statement that clearly had their brand stand out from all other salons in their market. They were going to specialize in curly cuts for hair and began offering a guarantee that if you weren’t satisfied with your haircut or color they would do whatever it took to have you happy. No one in the market was a curly cutting specialty salon and no one had any type of a guarantee. This was easy to create as her staff had all taken courses in cutting curly hair and this had never been marketed to the public. With this uniqueness now stated plan and clear we created a very simple seven sentence Guerrilla Marketing plan to bring more customers to the salon by building awareness.
Her entire team began to embrace their skills and passions cutting curly hair. They still had other customers yet were really well suited for those with curly hair. They weren’t striving to be the best salon in their town anymore. They were now being seen as the ONLY logical choice in town if you had curly hair. By focusing only on their target market and not trying to be a general hair salon, they leveraged their point of differentiation and created great results, wow reviews and a lot of word of mouth business.
The salon owner and her team were implementing their strategic plan, reviewing KPI’s and we also shifted to a team-based pay model so that everyone could win as the salon made more money.
By having a business strategy in place and a marketing plan in place this salon owner went from scraping by and hoping she would be able to stay in business and pay her team and her bills and be able to feed her family to have a thriving business with great reviews and great results. She also has a happy and well-paid team who are aligned with her goals and working with her to achieve them. At the end of the first quarter of the year, she had raised her prices, improved her salon image, and become a specialized salon. She also made 22% more revenues and had 7% more profits. One quarter, great results and more to come.
What will you actually implement from this article? I write articles to help business owners and organizations make transformations and not just for education.
Here is a webinar I put together Discover How Everyday Business Owners Are Doubling Their Incomes, Halving Their Hours and Running Their Businesses on Autopilot (and how you can too!) that will help you.