Second in a 6-part blog series from Steve Lantz, MD MEP Strategic Business Advisor
In our first conversation with Steve Lantz, we introduced five fundamental principles to help any small- or medium-sized manufacturer overcome roadblocks and achieve long-term growth. Today, we are taking a deeper dive into an essential tool too many business leaders underestimate – a solid strategic plan.
A strategic plan is an asset to any company.
Whether you are a one-person shop or a global, multibillion dollar operation, strategic planning is a fit for every business. At its core, a strategic plan is the navigational chart that establishes your company’s destination and plots the course for the journey.
In my experience, too many companies don’t place much value in a strategic plan because they’ve been successful without one. Small businesses especially may think they don’t need a plan because their team works so closely together. But just because your team talks to each other every day, it does not mean you are all on the same page. Establishing a universal plan for your company brings focus to your work, ensuring everyone is steering the ship in the same direction.
Strategic planning guides you in making important choices.
Your company may have unlimited potential, but you do not have unlimited resources. No brand can effectively develop every possible product to sell to every potential customer. That is why you need to make clear choices about your business objectives, and your best opportunities to achieve them. A strategic plan affirms both what your company is going to do and, as importantly, what your company is not going to do. Making these choices and documenting your reasoning ensures all your resources, energy, and spending aligns with your high-level goals – and helps to prevent you from getting distracted by new, shiny opportunities that may seem tempting but don’t fit within your focus.
In my work, I meet a lot of companies who are successful despite not having a strategy. A company selling a quality product or service can achieve early growth through word of mouth – fulfilling orders as they come in with no real plan for what comes next. But the difference between being a $2-5 million company and a $10+ million company usually comes in having a clear vision, sophisticated organization, and a tangible growth plan.
People respond well to the guidance a strategic plan provides.
Some leaders tend to favor a more loosely formed framework for their business. They worry their employees won’t respond well to implementing a new strategic plan. They see it as constraining. But when I interview middle managers, I find they feel frustrated when there’s no clear direction for the company, or when the direction changes too often. Your department managers are on the front lines of your business, and they know the value of a focused workforce. Most managers value knowing what’s expected of them and expect to be given guidance. Without it, they are forced to focus their department’s energy and resources on the efforts they feel are best, but the company may not gain real traction until all departments are aligned. Strategic plans get everyone pulling in the same directions and chasing the same objectives.
Successful strategic plans must be communicated effectively and broadly across an entire organization. Every employee in the company should know what the company is working to achieve and understand the role they play in the effort. A proper strategic plan provides a framework but allows your team to determine the best tactics to achieve the objectives – ensuring they apply their time, talent, and effort in the most effective ways to keep your business moving in the right direction. We call this “freedom within a framework”.
Don’t be intimidated by the strategic planning process.
While it won’t be easy to achieve your company’s aspirations, establishing them is a straightforward process. You can think of it in three steps. The first step is to assemble a committee of your subject-matter experts to lead the strategic planning effort. This is your steering committee. The second step involves brainstorming and asking questions about where you see the company in the future and all the ways you might possibly get there. And step three is to dig in and research each idea to determine which are most feasible given your available resources. The planning process may take a few months, but it isn’t as complicated as you may think.
Companies that succeed in strategic planning make it part of their organizational culture. The plan isn’t a document that hides in a drawer – it is a living, breathing document that should be referenced when making any decision for your company.
Strategic plans aren’t written in stone but don’t expect quick changes.
A strategic plan establishes your company’s long-term plan and vision, but that doesn’t mean it isn’t flexible. You will need to make adjustments along the way, but those changes shouldn’t happen quickly or without deliberation. Every new decision should be brought back to your steering committee and walked through the same process you used to build the initial plan. Review your plan regularly with your team and measure the success of your objectives at least quarterly – but know it will take time for your plan to gain traction. Sticking to a strategic plan requires real leadership, and the willingness to say “no” quite often. We’ll talk more about how to assess and evaluate your strategic plan in a future article in this series.
If you think your business would benefit from a strategic plan, but haven’t yet been able to implement one, MD MEP can help walk you through the process. To get started, send us a message.
In part three of our growth series, Steve will explain why it’s important to identify segments of your business and manage your business as the sum of its parts.