We’ve built many, many strategic plans over the last 20+ years. We’ve benchmarked companies across multiple industries and partnered with leading consulting firms on strategy. Here’s what we’ve learned:
A good strategic plan takes time, a lot of work and commitment, but all good plans have four basic components:
1. Clear Objective
The objective should focus on how the organization creates value. Are you a start-up looking to exit to a strategic buyer at some multiple of sales? Then growth is your core objective. Are you a stable, high cash flow manufacturing company? Then maybe marketing-beating TSR is your objective. Whatever your situation, the objective should be clearly articulated, matched to your circumstance and broadly communicated to all stakeholders. An unclear or unrealistic goal is a leading failure mode for any strategic plan.
2. Summary Framework
This document captures why the organization exists (Purpose), what it is trying to accomplish (Goal), the high-level priorities (Strategies), and the cultural norms and expectations (Values). The structure, nomenclature, and sub-genres for these topics are organizationally unique, but the document itself is always visual, usually captured on one page and broadly distributed to employees and shared in the public domain with all stakeholders
3. Plan Narrative
This is a written document detailing the analysis, thinking and choice-making behind the plan. It will discuss the company’s markets, customer trends, growth exposure, competitive environment and capabilities. It will outline detailed priorities and financial expectations. It contains confidential and sensitive information and is for a leadership audience only. The narrative is the framework reduced to practice but surprisingly, many organizations don’t take this follow-through step. They incorrectly assume the Summary Framework is directive enough for organizational execution – it rarely is.
4. Plan Tracker
This document is the key link between strategy and execution. While the strategic plan is a multi-year undertaking, it proceeds according to individual projects and initiatives that unfold in the near term to drive the strategy forward. The Plan Tracker measures progress on the specific near-term projects and initiatives. The time horizon is typically the current fiscal year and the Tracker is revised with each succeeding year as projects are completed and new initiatives unfold.
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