How Do I Develop My Strategy Plan? By David Chavez
Developing a plan is a multi step process, which I have found benefits greatly by going on a two or three day retreat. Using tools like brainstorming and mind mapping, facilitates conversation and helps develop ideas. Retreats enable the team to immerse themselves in the work with no outside distractions.
If the team cannot afford the time for a retreat, another strategy is to conduct a series of three to four hour meetings covering one piece of the processes at a time. Extended, concentrated meetings enable the team to fully develop ideas and not lose the collective thought of the group. To keep everyone thinking strategically there should be no interruptions to the team while developing strategy.
The strategic planning process starts with defining your core values, the rules that define professional and ethical behavior within your business. Developing your core values set the tone for the people in your organization. When developing your core values, using terms like passion, respect, honesty, Integrity, etc., are all great starts and if used correctly can provide a values structure for the business.
However, these words can be interpreted differently by each individual so you have to be sure to clearly explain your meaning. I prefer to see statements which don’t have a dictionary definition. For example, values like Respect for the Individual, Have Fun, and Committed for Greatness work well.
How many core values should the organization have? A good rule of thumb is from three to six but I’ve seen teams develop eight or nine, too. Keep in mind, each member of the executive team needs to live the core values; if they don’t, you’ll never have a team that believes in the organization’s values. Core values are rules your team cannot compromise on—they are a must.
Once the core values are developed, define why the company exists beyond the goal of making money. Usually, the company’s founder has a lot of input defining why the business exists. Have them start by relating how they created the company; what thoughts and feelings drove them to take on the challenge of starting the organization. Knowing why the company exists allows the team to develop the purpose of the organization, which in turn helps the team develop the rest of their strategy. Once they know what makes the organization tick, the executive team should write it out in a short story that can be shared over and over again. Use that story to write a one to three paragraphs that capture the essence of what the company does for its customers. We’ll call this the purpose or mission statement of the organization.
After determining the purpose, the team should focus its attention on one to five (three is optimal) things the company considers its main competencies. In other words: What are we really good at? It’s best to brainstorm by allowing each member of the team to throw out ideas of what they think the competencies are. Once the ideas are developed, the team should narrow them down by voting which ones best define the company’s expertise. When defining purpose and competencies remember to keep it real; otherwise your strategy execution may not work the way you would like it to.
Now it’s time to consider the company’s Strengths, Weaknesses, Opportunities, and Threats (SWOT). The team needs to think of the internal strengths and weaknesses as well as the external opportunities and threats. Again, brainstorming is a great way to develop your list. Just remember: the purpose of brainstorming isn’t to judge ideas; it’s to develop ideas.
With strengths and weaknesses, think of technical skills, leading brands, distribution channels, management, scalability, quality, and whatever else best fits your company. For opportunities and threats consider customer preferences, technological advances, changing laws, population age, taxes, geography, etc. Now eliminate redundancies within each list. Once these four analyses are complete the team will have an important tool for understanding the business and developing future goals.
After working through SWOT, the team can think about the company’s long term objective—in other words, itsvision; a short, overriding statement of what the company is striving to become. The vision is a bit challenging to develop because it involves the overlapping points of what you’re passionate about, what you’re the best at—as opposed to what you’d like to be best at—and what makes you the most return on your investment. The challenge lies in two tasks. First, being honest when answering the three questions; second, developing the point where the three questions come together. The vision keeps you focused on what you are striving to achieve and gives the people in your organization a clear focus of where resources should be directed.
The vision also allows you to see where your team wants the company to be. But before setting a course for the next three to five years, you need to know your market. To understand your market, ask three simple questions.
What are you selling? This should define what products you have and the products you’re considering for the future.
Who will you sell the products to? Clearly define what the customer looks like so your target demo is easily recognizable to people in, and outside, your organization or company.
Where will you sell these products or services? Identify the geographic location where you’ll be making your offering.
While the questions are simple, sometimes the answers are challenging if you respond honestly. If you get stuck, the strategy developed up to the market should help the team stay focused.
With the vision established, the team can set a direction for the company that enables it to start realizing that vision over the next three years. Using all the information created up to now, the team should brainstorm ideas to create the long-term view. Don’t worry about how right the accomplishments are when brainstorming; just get them written down to capturing the essence of the objectives. Once the team is done you need to build a consensus of three to five things you want to accomplish. Why only three? Because it’s been proven by many companies that focusing on only a few things improves the likelihood the objectives will become realities.
I like to tell the story of Ivy Lee to emphasize the value of focus. There are several versions of this story but I choose to tell this one.
Ivy Lee was a consultant who in the early 1900’s went to Charles Schwab at Bethlehem Steel and requested to spend 10 minutes with Schwab and each of his executives. In return, Lee promised he could change Schwab’s business.
When Schwab asked what the advice would cost, Lee told him to pay what he thought the advice was worth. Schwab agreed and Lee conducted his meetings. When he finished, Lee told Schwab to write down, in order of importance, six priorities each day and to work on number one first and move down the list each day. There was one condition: he had to work on number one until it was finished; the team could not start number two until number one was done.
Three months later Charles Schwab sent Ivy Lee a check for $35,000—at the time when the average worker earned $2 per day. Schwab considered Lee’s advice so valuable because the executive was now getting more done in less time. As strategic execution has been studied over the years, we’ve learned the teams with only three to five priorities accomplish more because they are better able to focus.
Now that your team has some clarity about the business, the challenging part begins—focusing the necessary energy and time to the company’s strategy. In my next white paper, I’ll provide some insight on how to most effectively execute a strategy.