“The Three Big Questions” is the second in a series of articles about building a high-impact roadmap for your company.
Strategic planning is a structured program of asking and answering critical questions about your business that fall into three broad categories:
- Where are you now?
- Where are you going?
- How will you get there?
As you find the answers to those questions, you will make a series of important decisions about the future of your business. You will articulate what actions you’ll take but importantly will also articulate what you won’t do as you build a roadmap for your business to thrive in a volatile and challenging marketplace.
“I grew up on a farm. We learned that there was a season to plant, a season to water, and season to harvest. The planting and watering could be laborious, but without those stages, there would never be a harvest.” ~ John Wooden
Many, including me, consider John Wooden the greatest college basketball coach of all time. His UCLA teams won 10 straight national championships, a feat that will almost certainly never be replicated. Coach Wooden was not only an exceptional recruiter and coach but also an exceptional teacher and leader. His wisdom is legendary. If you haven’t seen it, check out his TED talk to hear Coach Wooden at age 91 talk about success and finding the best within you (but not until you finish reading this article).
Building a dynamic strategic plan is like planting and watering the crops on the farm — it’s laborious, but without the groundwork, you can’t have long-term success. In fact, given today’s marketplace challenges and the rapid pace of change on seemingly endless fronts, not having a strategic plan guiding your decision making is tantamount to planning for irrelevance. Not having a plan to guide your decisions means reacting to inevitable shifts in the market instead of meeting them head on.
Say you recognize that you need a strategic plan for your business to thrive. Now what? Start by taking a look at what a strategic plan includes and why each part is important. In subsequent articles we will break down the various components and walk through each of the building blocks needed to put together a great plan.
Strategic planning is about asking and answering critical questions about your business, the market, and your direction. As those questions are asked and answered, you will make a series of concrete choices that will guide your decision making. As a leader, it’s tempting to keep all your options open and seek more data clarity before making choices. That’s understandable, and sometimes it’s the right course of action. But ultimately you need to pick your path.
At the highest level, there are the three big questions you need to answer:
Where are you now?
You need to have solid common understanding of the ground you stand on today in order to build for the future.
- What are you really good at? Can you use those things to build for the future?
- What gives you your competitive advantage?
- Where are you not so good, and what if anything do you need to do about it? (Not every weakness needs to be fixed. You don’t have to be perfect to succeed. Sometimes recognizing and working around weaknesses is good enough).
- What’s going on in the marketplace around you?
- Who are your competitors, and what are they doing? What challenges are out there, and how can they present opportunities for growth?
As you answer these questions in a structured and thoughtful way, a picture of your future will begin to emerge.
Where are you going?
You can survive and even thrive with your current business model, for now, but you can bet your customers have a different idea about the future (although they probably can’t articulate it well). The goods and services they want today and how they want to consume those things are not going to stay put — just ask Blockbuster, BlackBerry, AOL, or any of the countless businesses that ignored warning signs on their way to dramatic declines in market share or worse. It’s your job to anticipate the changes in customer preferences and be out ahead of them because if you aren’t driving your business for the future, someone else will step into that void.
If you don’t identify and plan for upcoming challenges and plot effective strategies to address them you are going to be stuck reacting as things change around you. It won’t be a question of if you find yourself in trouble but when. Strategic plans are used to change the trajectory of a business; better to spend time now proactively planning for how you will overcome the inevitable market shifts than forced to react later.
In this stage of planning, you will identify strategic options about products and services you will offer, where you will compete, and what customers you will target. You’ll build financial models based on lots of assumptions to make sure you’re making the right choices. This is the really fun part of the process as you work through the myriad opportunities before you and shape them into a coherent strategy.
How will you get there?
Once you’ve decided on where you are going, the final big question is “how are you going to get there?” This is where you align your decisions about capital, people, and systems to execute the answers you developed in the “where are you going?” stage. You need to build effective plans to implement your strategies and communicate them clearly to everyone involved. This is also the time to design and implement tests of the assumptions you made when charting your course to make sure that they were reasonable. In a later article, I’ll talk about testing the right things to make sure you are learning as quickly as possible about major roadblocks and how to overcome them.
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: