Strategy is critical to business survival. But with the speed of business accelerating and constant market disruptions, is a five or 10-year business plan viable anymore? Perhaps for companies that are resourced strong enough to stay abreast of elements as they occur, but for the vast majority of small to medium businesses these long-term strategies end up dead on arrival and are also too complex. Strategic planning is vital but it needs to be faster and more flexible. A good roadmap creates the right direction but the traditional business plan needs to change.
For many companies, the goal is to secure funding so the focus is solely on that one objective. Once the funding is in place, the business planning needs to evolve to keep moving forward. But no one rushes to do more strategic planning exercises or write business plans. However, it needs to become a more regular part of the business.
At Aercoustics, we have invested regularly in business planning and we have benefitted from having an updated direction and goals. We have also created a process to make it more manageable and ultimately more effective.
Throw Out Traditional Strategic Planning
The traditional strategic plan is dead. A big and beautiful document that depicts a fixed cycle budget and is overly complicated and not useful. This document was designed for a stable and predictable environment. Nothing is stable or predictable particularly post-pandemic where companies need to be agile and nimble.
Here is how to develop a business plan that works:
Our original plan was a Word document with a fixed three-year plan. When we reviewed in the second year, we found that we had completed some of it but not all. So, we developed the concept of a rolling plan to be more flexible. Today, we use a three-year rolling plan where we review the past year, plan the current year and try to forecast the year ahead. This helps us to remain agile and nimble. The problem with fixed planning is that nothing is static. Game changing new technology could impact our bottom line tremendously. We never could have predicted the pandemic five years ago. Our planning allowed us to pivot quickly to work remotely and still drive the business forward.
- Involve everyone
We build our plan in several pieces. We start in December with an anonymous employee survey to get honest feedback and if we have accomplished what we set out to do. The key is we must collect the input and act on it or the process loses its value. In January, we run a strategic planning retreat with a cross-section of team members to get multiple perspectives. We do a business review, discuss focus points and determine objectives. The team does personal reviews and goal setting as well. All of this data is compiled into a simple visual plan and the budget is built in tandem. The final compilation is presented to the Board of Directors and introduced with our new fiscal year.
- Keep it simple
Make each objective and initiative easily understood and executable. Much like baking muffins, keep it simple the first time and then build on the recipe as you go as you become more comfortable with the process. With more experience, you can add to it and make it more complex.
- Celebrate the wins
Have regular check-ins throughout the year. Find ways to measure the plan and results. When you achieve a goal, celebrate. You may also have to course correct if you’re not seeing the results you wanted. The plan should never be static so even during a quarterly review, don’t be afraid to make changes if needed.
- Be transparent
We share copies and numbers with the entire team, because we fundamentally believe that unless we share, we can’t drive the same success. The more involved your team is with the plan, the better your odds of attaining those goals.
- Establish a measurement method
What gets measured gets done. Setting up clear measurements or KPI’s, will make it happen. You will need a regular checkpoint throughout the year to measure against these metrics. Don’t be afraid to dream big but you need to be able to walk before you can run. Set realistic expectations and set the right metrics. If not, you may need to hastily change the plan because you’re not hitting your results, but you might not be measuring the results accurately.
Find Success with Your Strategic Planning
The biggest mistake companies make is overthinking the plan and producing a document that no one looks at again. Strategic planning should be done annually as part of the rhythm of the business. It doesn’t need to be a big deal or involve management consultants. Many firms avoid it altogether because they deem it to be too complicated.
Keep it simple, find the process that works for your team. Make it workable so you can check in regularly to ensure you are on track or if you need to redirect. With Aercoustics, our process has been refined along the way and continues to evolve. As we found success with our strategic planning process, our company’s success also followed.