“Strategic plan” sounds very grand and long-term, doesn’t it? But let’s strip away the mystery. A strategic plan is basically a roadmap that takes your business from where it is now to where you want it to be. Accordingly, the timeline for this plan can vary. It all depends on your business’s current state, its size, and how far ahead you can realistically plan without getting lost in daydreams.
A strategic plan naturally “grows” from two main roots: 1) Vision and 2) SWOT analysis. We’ve already covered Vision. SWOT analysis is a rather well-known tool that examines your internal strengths and weaknesses, along with external threats and opportunities. Let me just add a couple of pointers here.
- Internal vs. External Factors:
- Internal factors (strengths and weaknesses) are within your control. You can tweak them with your actions. Sidenote: Just starting out? You’ll probably have more weaknesses than strengths.
- External factors (threats and opportunities) are beyond your control. You can only brace yourself and minimize their impact.
- Opportunities Are Key:
- While it’s crucial to use your strengths to the max, be aware of external threats, and eliminate weaknesses, the real magic lies in seizing opportunities. They’re the lifeblood of your business, giving it a chance to thrive even amidst weaknesses and threats. Miss out on these, and not even the most perfect company with a dream team can grab that “golden key.”
So, creating a strategic plan is straightforward if you’ve done your homework. Each project in the plan answers one of these five questions:
- What can we do NOW to realize our Vision?
- How can we maximize the benefits of our strengths?
- How can we eradicate our weaknesses?
- How can we capitalize on our opportunities?
- How can we minimize the impact of external threats?
Answer these methodically, and voilà – your strategic plan is ready. Remember, it’s a living document that evolves with you and your environment. Review and update it at least annually, starting with last year’s results and ending with a fresh plan for the year ahead.
Now, let me share some questions from my strategic management training sessions, and my take on them:
Who should be on the Strategic Planning Team? All second-level managers?
Not necessarily. While hierarchy matters, you also need people who get the ideology of regular management, believe in strategic sessions, and are willing to invest their time. Choose those who’ll be useful – either with necessary information, expertise, or a unique perspective. Sometimes, a fresh face with an outsider’s view can be invaluable. Other times, it’s the seasoned veteran who knows the business inside out.
Miss these criteria, and you’re just wasting time.
How often should you do a SWOT analysis?
Typically, it’s part of an annual strategy session. But feel free to do it more often.
Don’t new weaknesses pop up as the company evolves?
Sure, things change. But strategic planning isn’t a one-off event. It’s an ongoing process that helps improve your corporate culture. Over time – as regular management becomes the norm, and terms like “strengths” and “weaknesses” become part of everyday language – you should see weaknesses dwindle, and strengths multiply. New weaknesses become fewer and farther between, thanks to improved management quality. If not, you’re doing something wrong.
Can we involve staff in discussing strengths and weaknesses?
Sure, but carefully. Different groups (middle managers vs. rank-and-file) will give you different insights. Just be clear: requesting staff feedback isn’t a promise that management will immediately “fix” everything they mention. “Maybe your input will make it into the final plan – maybe not.” No guarantees.
Are strengths in SWOT the same as competitive advantages?
Nope. Competitive advantages are what make you stand out from competitors. Strengths in a SWOT analysis are just things you’re good at – without comparing to others. They’re about you, not your rivals.
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