Erica Olsen

Cheat Sheet / Updated 01-11-2023

A strategic plan is essential for a successful business, and creating a strategic plan that you can actually use is key. Your plan should include certain elements, like mission, values, and vision statements. It should also avoid common pitfalls, like neglecting the specific needs of your organization, so it becomes your road map for success.

Article / Updated 08-16-2022

In strategic planning, benchmarks are surveys and assessments that help determine how well your company performs compared to other companies in your industry or business size. Following are just a handful of benchmarking tools available: BizStats: Visit the BizStats website for instant access to useful financial ratios, business statistics, and benchmarks. BizStats has effective and understandable analysis of businesses and industries. You can benchmark a business in five seconds for free. BizMiner: Check out BizMiner to produce a granular industry statistical report for your industry. The site offers industry financial analysis benchmarks for more than 5,000 lines of business and industry market trends on thousands more. Report access requires an affordable subscription fee. Fintel: This organization has both free and paid access to a financial benchmarking database of privately-held companies. Two products to help your benchmarking include an industry metric report and a business scorecard. For more information, check it out their website.

Article / Updated 03-26-2016

Strategic plans can come in many different shapes and sizes, but they all have the following components. The list below describes each piece of a strategic plan in the order that they’re typically developed. Mission statement: The mission statement is an overarching, timeless expression of your purpose and aspiration, addressing both what you seek to accomplish and the manner in which the organization seeks to accomplish it. It’s a declaration of why you exist as an organization. Vision statement: This short, concise statement of the organization’s future answers the question of what the company will look like in five or more years. Values statement or guiding principles: These statements are enduring, passionate, and distinctive core beliefs. They’re guiding principles that never change and are part of your strategic foundation. SWOT: A SWOT is a summarized view of your current position, specifically your strengths, weaknesses, opportunities, and threats. Competitive advantage: Your competitive advantage includes what you’re best at compared to the competition. Long-term strategic objectives: These long-term strategic focus areas span a three-year (or more) time horizon. They answer the question of what you must focus on to achieve your vision. Strategies: Strategies are the general, umbrella methods you intend to use to reach your vision. Short-term goals/priorities/initiatives: These items convert the strategic objectives into specific performance targets that fall within the one- to two-year time horizon. They state what, when, and who and are measurable. Action items/plans: These specific statements explain how a goal will be accomplished. They’re the areas that move the strategy to operations and are generally executed by teams or individuals within one to two years. Scorecard: You use a scorecard to report the data of your key performance indicators (KPIs) and track your performance against the monthly targets. Financial assessment: Based on historical record and future projections, this assessment helps plan and predict the future, allowing you to gain much better control over your organization’s financial performance.

Article / Updated 03-26-2016

Strategic planning can yield less than desirable results if you end up in one of the possible planning pitfalls. To prevent that from happening, here’s a list of the most common traps to avoid: Not having a burning platform: Fundamentally, organizations don’t have to have a strategic plan. Really, they don’t. Yes, you’ll run a better operation and, yes, a strategic plan is an outstanding management tool. But you and everyone on your team needs to agree on why this effort is important. What’s your burning platform that’s causing you to invest in this effort now? Relying on bad info or no info: A plan is only as good as the information it’s based on. Too often, teams rely on untested assumptions or hunches, erecting their plans on an unsteady foundation. Ignoring what your planning process reveals: Planning isn’t magic: You can’t always get what you want. The planning process includes research and investigation. Your investigation may yield results that tell you not to go in a certain direction. Don’t ignore that information! Being unrealistic about your ability to plan: Put planning in its place. It takes time and effort to plan well. Some companies want the results but aren’t willing or able to make the investment. Be realistic about what you can invest. Find a way to plan that suits your available resources, which include your time, energy, and money. Planning for planning’s sake: Planning can become a substitute for action. Don’t plan so much that you ignore the execution. Well-laid plans take time to implement, and results take time to yield an outcome. Not having your house in order first: Planning can reveal that your house isn’t in order. When an organization pauses to plan, issues that have been buried or put on the back burner come to the forefront and can easily derail its planning efforts. Make sure your company is in order and no major conflicts exist before you embark on strategic planning. Copying and pasting: Falling in to the trap of copying the best practices of a company similar to yours is easy. Although employing best practices from your industry is important, other organizations’ experiences aren’t relevant to your own. Organizations are unique, complex, and diverse. You need to find your own path instead of following a cookie-cutter approach. Ignoring your culture and organizational readiness: Strategy and culture are intimately intertwined. Ignore this fact at your peril. Culture eats strategy for lunch (and dinner if you’re not careful). With that in mind, adapt your planning to fit what you know works for your organizational rhythm, ethos, and needs right now. A big pitfall — the biggest actually — is not fitting the process to your organizational needs. Consider a simpler process or one that’s more robust.

Article / Updated 03-26-2016

Before you get too far into your strategic planning process, check out the following tips — your quick guide to getting the most out of your strategic planning process: Pull together a diverse, yet appropriate group of people to make up your planning team. Diversity leads to a better strategy. Bring together a small core team — between six and ten people — of leaders and managers who represent every area of the company. Allow time for big-picture, strategic thinking. People tend to try to squeeze strategic planning discussions in between putting out fires and going on much needed vacations. But to create a strategic plan, your team needs time to think big. Do whatever it takes to allow that time for big-picture thinking (including taking your team off-site). Get full commitment from key people in your organization. You can’t do it alone. If your team doesn’t buy in to the planning process and the resulting strategic plan, you’re dead in the water. Encourage the key people to interact with your customers about their perception of your future and bring those views to the table. Allow for open and free discussion regardless of each person’s position within the organization. (This tip includes you.) Don’t lead the planning sessions. Hire an outside facilitator, someone who doesn’t have any stake in your success, which can free up the conversation. Encourage active participation, but don’t let any one person dominate the session. Think about execution before you start. It doesn’t matter how good the plan is if it isn’t executed. Implementation is the phase that turns strategies and plans into actions in order to accomplish strategic objectives and goals. The critical actions move a strategic plan from a document that sits on the shelf to actions that drive business growth. Use a facilitator, if your budget allows. Hire a trained professional who has no emotional investment in the outcome of the plan. An impartial third party can concentrate on the process instead of the end result and can ask the tough questions that others may fear to ask. Make your plan actionable. To have any chance at implementation, the plan must clearly articulate goals, action steps, responsibilities, accountabilities, and specific deadlines. And everyone must understand the plan and his individual role in it. Don’t write your plan in stone. Good strategic plans are fluid, not rigid and unbending. They allow you to adapt to changes in the marketplace. Don’t be afraid to change your plan as necessary. Clearly articulate next steps after every session. Before closing the strategic planning session, clearly explain what comes next and who’s responsible for what. When you walk out of the room, everyone must fully understand what he’s responsible for and when to meet deadlines. Make strategy a habit, not just a retreat. Review the strategic plan for performance achievement no less than quarterly and as often as monthly or weekly. Focus on accountability for results and have clear and compelling consequences for unapproved missed deadlines. Check out examples. Although you can’t borrow someone else’s strategy, you can find inspiration and ideas from the examples of others. Here is one website with a catalog of example strategic plans by industry: OnStrategy. Check it out for quick access to ideas.

Article / Updated 03-26-2016

Strategic planning has a basic overall framework. Not to oversimplify the strategic planning process, but by placing all the parts of a plan into the following three areas, you can clearly see how the pieces of your plan fit together: Where are we now? Review your current strategic position and clarify your mission, vision, and values. Where are we going? Establish your competitive advantage and your vision. Clearly see the direction your organization is headed. How will we get there? Lay out the road to connect where you are now to where you’re going. Set your strategic objectives, goals, and action items and how you’ll execute your plan.

Article / Updated 03-26-2016

The difference between strategic planning and strategic management can be profound to an organization when understood. Strategic planning usually refers to the development of a plan. Strategic management refers to both strategy development and execution. Strategic management is a business process. Strategic planning is an event. Although referred to as strategic planning, understand that it also means developing and executing because every executive wants to drive results. And you do that by instilling a business cycle from developing to implementing to adapting and then repeating. Several different frameworks can help you develop your strategic plan. Think of the frameworks as different lenses through which to view the strategic planning process. You don’t always look through two or three lenses at once. Normally, you use one at a time, and often you may not know that you’re using certain frameworks embedded in your process. If you’re trying to explain to your planning team how pieces of the puzzle fit together, first you must understand the following components of the strategic plan: Strategy and culture: Your organization’s culture is made up of people, processes, experiences, ideas, and attitudes. Your strategy is where your organization is headed, what path it takes, and how it gets there. You can’t have strategy without culture or vice versa. Your culture is like your house, and if it’s not in order, the best strategy in the world can’t take your company anywhere. Internal and external: Similar to the strategy and culture framework, you have an internal and external framework. The strategy is external because you gather information from your customers, competitors, industry, and environment to identify your opportunities and threats. Through employee surveys, board assessments, and financial statements, you identify your company’s strengths and weaknesses, which are internal. The Balanced Scorecard perspectives: Businesses use the Balanced Scorecard framework to develop goals and objectives in four areas (instead of departments): financial, customers, internal business processes, and people. The financial, internal business processes, and people areas are internal. The customer area is external. Market focus: Growth comes from focusing on your customers and delivering superior value to them consistently year after year. Built in to your strategic plan is a market-focus framework because of how critical this aspect is to your organizational growth. Where are we now? Where are we going? How will we get there? Because it’s easy to confuse how all the elements of a plan come together and where they go, this framework is a simple yet clear way of looking at the whole plan.

Article / Updated 03-26-2016

Strategic planning can create a ton of questions. If you already have a long list of questions, you’re not alone. Here are some answers to the most commonly asked questions. Who uses strategic plans? Everyone uses strategic plans — or at least every company and organization that wants to be successful. Companies in every industry, in every part of the world, and in most of the Fortune 500 use strategic plans. Organizations within the nonprofit, government, and small to big business sectors also have strategic plans. Does every strategic plan include the same elements? A strategic plan usually consists of the following elements: A mission statement and a vision statement A description of the company’s long-term goals and objectives Strategies the company plans to use to achieve general goals and objectives Action plans to implement the goals and objectives The strategic plan may also identify external factors that can affect achievement of long-term goals. Plans may vary in detail and scope (depending on how big the organization is), but for the most part, a strategic plan includes these basic elements. Just exactly what is strategic planning? The term strategic planning refers to a coordinated and systematic process for developing a plan for the overall direction of your endeavor for the purpose of optimizing future potential. For a profit-making business, this process involves many questions: What’s the mission and purpose of the business? Where do we want to take the business? What do we sell currently? What can we sell in the future? Who shall we sell to? What do we do that’s unique? How shall we beat or avoid competition? The central purpose of this process is to ensure that the course and direction is well thought out, sound, and appropriate. In addition, the process provides reassurance that the limited resources of the enterprise (time and capital) are sharply focused in support of that course and direction. The process encompasses both strategy formulation and implementation. What’s the difference between strategic planning and long-range planning? The major difference between strategic planning and long-range planning is emphasis. Long-range planning generally means the development of a plan of action to accomplish a goal or set of goals over a period of several years. The major assumption in long-range planning is that current knowledge about future conditions is sufficiently reliable to enable the development of these plans. Because people assume the environment is predictable, the emphasis is on the articulation of internally focused plans to accomplish agreed-on goals. The major assumption in strategic planning, however, is that an organization must be responsive to a dynamic, changing environment. Therefore, the emphasis in strategic planning is on understanding how the environment is changing — and will change — and on developing organizational decisions that are responsive to these changes. What is strategic thinking? Strategic thinking means asking yourself, “Are we doing the right thing?” It requires three major components: Purpose or end vision Understanding the environment, particularly of the competition affecting and/or blocking achievement of these ends Creativity in developing effective responses to the competitive forces

Article / Updated 03-26-2016

A company’s strategic plan is the game plan that management uses for positioning the company in its chosen market arena, competing successfully, satisfying customers, and achieving good business performance. Most business owners and executives have countless excuses for not having a formal strategic plan. I’ve heard everything from “We’re too new” to “We’re not big enough” to “We’ve never had one; why start now?” If these excuses sound familiar, check this out: Studies indicate that roughly 90 percent of all businesses lack a strategic plan. Of those that have a plan, only 10 percent actually implements it. So if you’re part of the 90 percent, ask yourself these questions: Can our company be more focused? Can we deliver more value? Can our employees be more efficient? Can our company be more successful? Strategic vision: Bringing things into focus You get results from what you focus on. Everyone knows this fact, but most companies are busy tending to the urgent problems of the day and not focusing on key long-term issues. Unless your staff can focus on a common vision, the company can’t go anywhere. A strategic plan helps direct energy and guide staff toward a shared goal in an ever-changing world. Orit Gadiesh, chairman of Bain & Company, says, “In the current environment, companies can’t afford not to have a set of guiding principles — a vision that communicates true north to the entire organization.” Strategy: Explaining the value you deliver A strategy provides the vehicle and answers the question, “How do we provide value to our customers better than our competitors?” A good strategy focuses on efficiency through the following: Achieving performance targets Outperforming your competition Achieving sustainable competitive advantage Growing your revenue and maintaining or shrinking your expenses Satisfying customers Responding to changing market conditions Basically, strategies keep your whole company acting together while strengthening the company’s long-term competitive position in the marketplace. Strategic plan goals and objectives: Empowering employees Goals and objectives make up the road map that empowers your employees to be more effective (and you, too, for that matter). Don’t let these elements be just a paragraph on the break room wall or bullet points in a memo; let them shine as primary guidelines for leading the organization to higher levels of performance. Goals and objectives provide the framework for independent decisions and actions initiated by departments, managers, and employees into a coordinated, company-wide game plan. Strategic plan execution and evaluation: Ensuring success A strategic plan is a living, dynamic document. It drives your business and must be integrated into every fiber of your organization so every employee helps move the company in the same direction. All the best missions and strategies in the world are a waste of time if they aren’t implemented. To be truly successful, the plan can’t gather dust on the bookshelf. You know what shelf I’m talking about. If you ran a white glove over the shelf, you’d find layer upon layer of dust. You really should clean more often. Okay, so, no, strategic planning success isn’t about cleaning; it’s about keeping the plan active so it doesn’t gather that proverbial dust. Know what your end result looks like and where your milestones should be. Plan your near term actions and evaluate your progress each quarter. Are you where you thought you’d be if you’d been on target? Or, if you’re off target, how far are you off? The course correction to put you back on track becomes your next action plan. When your company has a clear plan and acts accordingly to the plan, you’re going to go from where you are to where you want to go, ensuring your success.

Article / Updated 03-26-2016

If organizations fail to anticipate or prepare for fundamental changes, they may lose valuable lead time and momentum to combat them when they do occur. These fundamental elements of business are customer expectations, employee morale, regulatory requirements, competitive pressures, and economic changes, and they’re always in flux. Often businesses achieve a level of success and then stall. Strategic planning helps you avoid the stall and get off the plateau you find yourself on. Accidental success is dangerous. Succeeding without a plan is possible, and plenty of examples exist of businesses that have achieved financial success without a plan. If you’re one of them, consider yourself lucky, but ask this question: “Could we have grown and become even more successful if we’d organized a little better?” I’m willing to bet your answer is yes. Another danger is that the lack of a strategic plan negatively impacts the attitude of an organization’s team. Employees who see aimlessness within an organization have no sense of a greater purpose. People need a reason to come to work every day (besides the paycheck). Lack of direction results in morale problems because, as far as your employees are concerned, the future is uncertain, unpredictable, and out of control. These depressing conclusions can only be seen as a threat to employment, which negatively impacts productivity. To avoid these dangers, you need to get rid of the naysayers (including possibly yourself). Questioning the value of strategic planning is normal because planning can be intense and costly, but if the attitude that planning isn’t necessary becomes part of your corporate culture, it can prove deadly. So look out for the warning signs of indifference: Leadership indifference Confusion among the employees Complacency of stakeholders Short-term thinking Lack of unity Deeply entrenched traditional perspectives