Business leaders must continuously engage in strategic planning to steer their organizations toward growth and success, especially when facing a dynamic and unpredictable environment. In this episode of What’s Your Edge, we’ll explore 12 ways you can de-risk your strategic planning and execution. Strategic planning has both advocates and detractors, especially as to whether it positively impacts operational performance. Bert George, Richard Walker, and Joost Monster conducted an extensive analysis to determine whether strategic planning improves organizational performance. Their study found evidence of significant performance benefits related to strategic planning effectiveness.

We concur with their conclusion that “simply having a plan is not enough. Strategic planning must entail an informed process during which the internal and external environment is analyzed, clear strategies and outcomes are defined based on the analysis, and different courses of action are generated and considered before making final decisions.” To stay on course, it is paramount for leaders to think like a ship’s captain and undertake three essential steps as part of their strategic planning to ensure a superior foundation for growth and successfully navigate the ever-changing business seas:

1. Review and recalibrate performance.

2. Set realistic outcomes and objectives.

3. Select and implement winning strategies.

Here’s what we’ll cover in this episode:

1. What to Assemble Before Starting your Strategic Plan

1. Relevant Data
   
2. Past Performance
   
3. SWOT Analysis
   

2. Key Attributes of a Best-in-Class Strategic Plan

1. Specificity and Clarity
   
2. Actionable Milestones and Relevant Performance Targets
   
3. Operational Feasibility
   

3. Strategy Questions to Ask Yourself

1. Are We Positioned for Success?
   
2. Have We Fully Assessed Opportunities and Risks?
   
3. Do We Have a Culture of Innovation?
   

4. Execution Success Requirements

1. Aligning and Securing Resources
   
2. Monitoring Execution and KPIs
   
3. Creating Effective Communication Channels
   

It is paramount when setting a future course that you first review past performance and recalibrate performance targets.  This step provides valuable insights into what did and didn’t work and informs decision-making. Sailors keenly observe the position of the stars, wind direction, and the ship’s speed. So too must business leaders analyze key performance indicators and evaluate the effectiveness of their strategies.

By regularly reviewing performance, you can identify areas of strength, pinpoint potential weaknesses, and make informed course corrections to ensure your ship stays on course. These three elements are essential to conducting a comprehensive organizational performance review:

1. Data: Just as sailors use instruments and navigational tools to assess progress, business leaders need to collect relevant data. Valuable performance data sources include financial reports, sales figures, customer feedback, employee performance data, and market trends. Analyze this information to identify patterns, trends, and areas for improvement.

2. Performance Measurement: Key Performance Indicators (KPIs) act as the compass for every business, indicating whether the business is moving in the right direction. If you haven’t already done so, define and track measures, metrics, and KPIs that are aligned with your business outcomes. This could include metrics such as rate of growth compared to the competition/market, customer lifetime value, market share, and employee productivity. Regular tracking and evaluation of your KPIs will help you gauge progress, identify gaps, and make data-driven decisions.

3. SWOT Analysis: Captains constantly assess their vessel’s strengths and vulnerabilities. It’s no different for a business leader. Evaluate your organization’s internal strengths weaknesses, external opportunities, and threats, known as a SWOT analysis. This analysis helps identify competitive advantages, areas that need improvement, potential market opportunities, and external factors that may impact your business. Insight from the SWOT analysis enables you to adjust your strategies and allocate resources accordingly.

A successful strategic plan is market and customer-oriented with a focus on expanding market share, improving customer experience, accelerating customer acquisition, retaining more high value customers, and growing customer lifetime value. Your customer-centric, marketing-experienced board member can provide valuable growth, market, customer, and competitor insights as well as guidance throughout the planning process and beyond. The Darden School of Management Research Gate report “When and How Board Members with Marketing Experience Facilitate Firm Growth” found when analyzing 64,086 board member biographies that a company’s annual revenue increased by 6.7% if the board included at least one marketer and that not having one put companies at a competitive disadvantage.

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Like a sailor mapping their journey with defined waypoints, your business needs clear outcomes and objectives to guide your team’s efforts and gauge progress.  Matching your outcomes and objectives with your company’s mission and vision is essential. This is an effective way to align your teams, monitor progress, and ensure your organization stays on track. Superior outcomes and objectives incorporate these elements:

1. Specificity and clarity: Outcomes should be specific and well-defined, outlining the organization’s goals. Appropriate functional objectives should directly link to an outcome enabling you to form a logic and metrics chain. Each outcome and objective should be measurable, allowing progress to be tracked and evaluated. Ideally, they are customer-centric and market-oriented, reflecting your organization’s understanding of customer needs, market trends, and competitive dynamics. The prioritization of customer satisfaction, market growth, and innovation act as guiding stars, providing strategic direction and purpose to the organization’s journey.

2. Actionable milestones and relevant performance targets: Ship captains break down the journey into manageable legs and use navigational tools to measure progress. As the captain of your ship, establish actionable milestones, performance targets, and measures to track and measure the achievement of both outcomes and objectives. Break down objectives into smaller, achievable milestones, to ensure steady progress. Choose metrics that are aligned with the defined outcomes and objectives and quantify performance. Measures can be related to net new customer acquisition, customer retention, customer loyalty, referral rates, footprint expansion, share of wallet, market share, product adoption rates, etc. Setting relevant and meaningful measures enables leaders to monitor progress, measure performance, and make informed decisions.

3. Operational feasibility: While it’s important to set ambitious outcomes and objectives, leaders must also ensure that these can be effectively operationalized within the organization’s capabilities and resources. Skilled sailors maximize their vessel’s potential and teamwork to reach their destination. Stellar leaders know they must ensure operational viability and empower their organization to steer toward success. How? Just as sailors consider the capabilities of their vessel and crew and rely on collaboration among the crew, be sure your organization has the capacity to deliver on, and the collaboration skills to achieve, the established outcomes. This includes evaluating the availability of resources, expertise, technology, and infrastructure, promoting cross-functional teamwork, and encouraging knowledge-sharing. By understanding the organizational strengths and limitations and fostering a culture of collaboration and open communication, the probability of turning outcomes and objectives into reality improves.

Just as skilled sailors strategically adjust their sails to harness the wind and optimize their course, business leaders must select and implement winning strategies that position their organization for success and growth.  Ideally these strategies are customer-centric and encompass not only the direction of the organization but also the messaging and value propositions that differentiate it in the market. To select winning customer-centric growth strategies, leaders should be able to answer these three questions:

1. Are you positioned for success? Insights into market dynamics, customer needs and preferences, and competitive forces enable you to identify opportunities for differentiation, define clear value propositions that set your organization apart from competitors, showcase your strengths, and deliver customer value that enables you to create a compelling position in the market. Invest the time to craft effective messages that convey the value and differentiation of your organization. Effective messaging ensures that the organization’s strategic direction is clearly communicated, resonates with the target audience, and supports the overall strategy.

2. What are the opportunities and risks? Often there is more than one route to reach a destination. The direct route is not always ideal because it can result in the ship passing through the eye of a typhoon, a storm with high waves, or other unsafe places. But by bypassing these obstacles, your ship may arrive late or run out of fuel.  The captain and senior officers assess different routes and weather patterns with a focus on choosing the best route and knowing they may need to chart alternatives should something quickly change. This approach holds true for business leaders who need to choose strategies that will allow the business to capitalize on market and customer opportunities and potential growth areas, and leverage the organization’s strengths, resources, and capabilities while considering risk and uncertainty. Choose strategies that factor in risk and are aligned with your outcomes and objectives. Develop contingency plans. By performing scenario analysis, proactively addressing risks, and establishing mitigation strategies, leaders can navigate uncertainties with greater resilience and adaptability.

3. Do you have a culture of innovation? It takes the right culture to continuously adapt to changing conditions at sea. Encourage your teams to embrace innovation and learn from both successes and failures. Create an environment where ideas are welcomed, experimentation is encouraged, and continuous improvement is valued. Like a crew that collaborates and shares knowledge to optimize their voyage, fostering a culture of innovation empowers employees to explore new ideas, challenge the status quo, and navigate uncharted territories. A culture of innovation enables organizations to stay ahead of the competition, adapt to market shifts, and seize opportunities that arise along the strategic journey.

As Otto von Bismark has been known to say, “A bad plan that is well executed will yield much better results than a good plan that is poorly executed.”  Successful strategy implementation is crucial for achieving desired outcomes. Just as skilled sailors navigate their vessels with precision, business leaders must steer their organizations toward successful strategy execution.

Successful execution requires leaders to:

• Align resources, allocate budgets, secure necessary tools, and technology, and assign accountable individuals or teams to execute specific aspects of the strategy.
  
• Closely monitor the execution of their strategies. This involves establishing KPIs, tracking progress against milestones, and regular performance evaluations to make timely adjustments to maintain momentum and maximize the chances of success.
  
• Create communication channels for sharing information, encouraging feedback, and promoting cross-functional collaboration. By fostering effective communication and collaboration, leaders can ensure that everyone is aligned, challenges are addressed promptly, and the execution process is streamlined.
  

Ultimately, the success of a strategy depends not only on its formulation but also on its effective implementation. Just as skilled sailors navigate their vessels through rough seas, leaders who prioritize implementation can navigate their organizations through the complexities of the business world.

With a steadfast commitment to strategic planning, your organization can make its strategic vision a reality, achieve your organizational performance goals, and realize new horizons of growth.

Are you in the thick of your strategic planning and have some questions?  Tap into our Advisory Services for valuable answers.