The world around us is changing at light speed, and the long-term viability of your business demands that you have a well-thought-out plan to guide your actions and decision making. A strategic plan will help with goal setting and investment decisions. It’s used to communicate to all your stakeholders and deliver a consistent, future-focused message. It increases your chances for success and sets the stage for you to build a thriving business.
“It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.”
Whoever actually said that (it wasn’t Charles Darwin) was talking about evolution in the animal kingdom but could have been talking about business today. Unlike the animal kingdom, where change comes over generations, today’s marketplace is evolving at breakneck speed:
- In 2010, Amazon was the 26th-largest retailer in the U.S.; by 2015 it was the eighth-largest and, according to the National Retail Federation, the only retailer in the top 10 that showed double-digit revenue growth in 2015.
- In 2010, music streaming represented about 11 percent of the U.S. market; five years later streaming represented over one-third of the market and was the industry’s largest revenue source, generating more revenue than digital downloads for the first time.
- Snapchat launched in 2011; by the end of 2016 they had over 300 million monthly users and an average of 2.5 billion snaps per day.
You’re probably saying something like “So what? I don’t sell my services on Amazon, and my customers are too old for Snapchat.” But look around: How has your customer base changed over the past five years? (Hint: They’re shopping at Amazon, streaming all kinds of content, and using Snapchat more than ever.) If you aren’t constantly thinking and planning for the next five-plus years, you aren’t doing what you need to do to survive long term. Not having a vibrant strategic plan to guide decision making is in fact a different type of plan — a plan for irrelevance.
You’ve no doubt read countless times how important it is to have a solid strategic plan for your business. Most small to medium-size business operators don’t really have one. Sure, you might have added a few out years’ worth of numbers to your latest budget, but that’s a financial forecast, not a plan. A strategic plan is a concrete roadmap for building your business for long-term viability, and you need one to survive.
So why follow the often unheeded advice this time? Because of these statistics and the hundreds of other stats like them. If you aren’t anticipating the next wave of change and proactively planning to respond to it, you are leaving far too much to chance.
A solid strategic plan is no guarantee you will succeed, but it will certainly improve your odds by forcing you to take a structured look at your business; your strengths and weaknesses; and where you should focus your time, attention, and investment dollars to thrive in tomorrow’s marketplace. Importantly, it also tells you where you should not spend your time, attention, and investment dollars because the best opportunities lie in other directions. Ultimately a good strategic plan guides all your decisions and actions from short-term goal setting to long-term investment strategies.
A well-built strategic plan is also a communication tool to get everyone on your staff working together toward the same goals. It enables you as a leader to confidently describe where you are going and how you will get there. It builds buy-in and empowers employees by giving them better clarity.
Building a solid strategic plan is hard work. It can feel it’s taking too much time toward an unknowable future when you have pressing operational issues to address right now! To do it right, you need to bring people in from around your organization to contribute different perspectives, which means they aren’t fighting today’s fires, either. Heaven forbid you may need to ask customers what you do well and not so well, opening the door to criticism from the very people you need to deliver your revenue stream.
A strategic plan doesn’t always provide immediate rewards; there’s a lot of groundwork that can feel unproductive along the way but is critical to the overall plan. Ultimately your reward comes as you respond effectively to marketplace changes before they become crises while tapping the new products and markets that you identified. As a bonus, you’ll get that warm, fuzzy feeling as you wave to your competitors in the rearview mirror while they struggle to respond to the market disruptions you’re meeting head on — as planned.
Capture Your Future is a series of articles bringing you practical insights gleaned from over 20 years’ building strategic plans for divisions of big public companies, medium-size privately held companies, and nonprofit organizations. Along the way I’ll share some of the lessons I’ve learned from doing the right things and sometimes the wrong things in building good strategic plans.
Other posts in the Capture Your Future series: