As a business owner, you’ll do several different types of planning throughout the life of your business. Although all planning methods are important, one type of planning stands apart from the rest. When you’re trying to increase the intrinsic value of your company, strategic planning is vital to accomplishing your goals. Therefore, I’m going to give you a strategic planning framework to follow when you’re planning to grow the value of your business.
00:34 – The Strategic Planning Outline: Longterm Planning for Increased Business Value
01:51 – The Vision: Test & Execution
03:09 – Different types of Planning
03:31 – Strategic Planning
05:39 – The Strategic Planning Process
07:02 – VMOSTA
07:28 – Vision & Mission
08:41 – Values & SWOT
09:32 – Objectives & Strategies
10:22 – Tactics
10:37 – Actions
11:40 – The Who
16:29 – The When
19:08 – The Where
20:12 – Summary
In 2003, author Michael Lewis introduced sabermetrics, the empirical analysis of baseball and baseball statistics, to the world. In the book Moneyball: The Art of Winning an Unfair Game, Lewis highlights the strategic planning methods Oakland Athletics’ manager, Billy Beane, used to build a powerhouse professional baseball team on a low-cost budget for the 2002 season.
First, Beane cast a vision. He wanted to build a well-rounded, moderately paid baseball team that could compete against richer teams in Major League Baseball. Then, he tested the viability of his vision. He and his managerial team recruited players based on objective statistics rather than on subjective impressions of players’ skill sets. Next, the recruited players executed and proved the validity of Beane’s vision, working together to become competitive against larger, more affluent teams like the New York Yankees.
“Strategic planning is making long-term plans for what you want your business to accomplish and taking logical, short-term actions that will help you achieve your long-term goals.” – Justin Goodbread, CFP®, CEPA®, CVGA®Click to tweet
According to Wikipedia, strategic planning is “an organization’s process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy.” To me, strategic planning is making long-term plans for what you want your business to accomplish and taking logical, short-term actions that will help you achieve your long-term goals.
Think about strategic planning this way. When you get in your vehicle each day, you have a destination in mind… you have a long-term travel goal. You know where you want to go, and you’ve mapped out directions to get you to your ultimate destination. Those directions are your short-term strategies to get you to your goal. Many times, though, while you’re driving, you get so focused on the road in front of you or the view around you that you forget where you’re actually going.
That’s where business owners get stuck, too. You get so focused on the next steps needed during day-to-day operations that you forget where you’re trying to go as a business. Yet, as the old saying goes, “if you aim at nothing, you’ll hit it every time.” That’s why strategic planning is so important for business owners. You must know where you’re going AND how to get there. You must make long-term plans and take short-term actions. That’s where the Strategic Planning Framework comes in. It’s all about staying focused.
So in this article, I’m going to give you a strategic planning framework to follow to keep you focused on your business so you don’t feel so stuck in your business. If you’re focused on growing your business, the value of your company will increase. By increasing the value of your business, you make it worth more in the eyes of customers, investors, and buyers.
When I’m planning the growth of my company, I follow the commands found in the acronym VMVSOSTA:
If you follow all of the steps in the strategic planning framework above, you’ll definitely have your hands full. Thus, even if you are the only person working in your company, don’t plan alone. Everybody in the organization should be involved in your strategic planning at some point.
Ultimately, as a business owner, you want to cast the vision and determine your company’s mission based on your own core values. You should be involved in all 8 aspects of strategic planning. However, getting your whole team involved and hearing insights from your managers and team members (or a business coach if you run the business alone) is vital to accomplishing your strategic planning goals. But why?
Well, if you can get your whole team involved in the strategies, tactics, and actions that must be taken to accomplish your objectives, then you’ll have more buy-in and commitment. If your team members understand your vision and mission, they can help you set objectives. Then, since they are the ones running the day-in and day-out operations of your business, they’ll be able to help you determine what actions are realistic to take.
So if everyone on your team is involved in some aspects of strategic planning, when should you meet? Well, this is where I follow a 1-4-12-52 model.
First, I meet with my team annually to carry out the steps in the strategic planning framework. I set aside a day or two in July because that’s our slow period. Just pick a time that you can stick to once a year. In this meeting, you’ll share your long-term vision, mission, and values with your team members. You’ll get buy-in. Then, as a group, you’ll analyze your company’s strengths, weaknesses, opportunities, and threats to set your 3-year and 1-year objectives. You forecast out what you want to accomplish. Finally, you’ll determine the short-term strategies, tactics, and actions necessary to take to accomplish your long-term objectives.
Next, I like to meet with my team to follow-up on my strategic planning objectives quarterly. If you hold similar meetings, you’ll analyze how much you’ve accomplished over the past 3 months. Break your 1-year goal into strategic quarterly pieces. Then, determine whether or not you accomplished what you set out to do within that time frame. Are your strategies working? Are you closer to achieving your goals? If not, revise your strategies and set forth again.
Not only do I like to meet yearly and quarterly, I also meet with my team members monthly. If you imitate my meetings, you’ll break your goals into quarterly strategies and into monthly action steps. In these monthly meetings, you’ll hold your team members accountable, and they’ll hold you accountable. Are you following the strategies that will help you meet your objectives? Do your actions fall in line with your vision, mission, and values? Are they getting you where you want to be? By having your team members hold you accountable, I find that they feel empowered, and their morale goes up. High company morale leads to vision buy-in which leads to a higher chance of reaching your company’s objectives.
Finally, I like to meet with my team weekly. If you hold weekly meetings, you can determine what each member must accomplish that week to meet your quarterly and yearly company goals. With these weekly meetings, you can keep everyone engaged and reminded of the long-term objectives. Essentially, how do you eat an elephant? One bite at a time…
Executing your strategic plans matters. By meeting yearly, quarterly, monthly, and weekly, you can keep your entire team on track to meet your long-term goals.
For an in-depth discussion about the Timing Methodology of Strategic Planning Meetings, listen to:
Strategic planning is tough, friends. It can be frustrating and tedious. Yet, if you want to increase the intrinsic value of your company, you must make strategic plans. Sure, you can increase your top-line revenue without planning. You can decrease expenses on your own. However, if you want to increase the qualitative parts of your business, you will most likely fail without making plans. You don’t want to be flying along in a speedboat. You want to be towing other boats with a slow and steady tugboat.
The process of planning, creating action steps and executing them, will prepare your company to meet its goals and objectives. It will determine your company’s destination and the steps you must take to reach that destination. Ultimately, strategic planning will help you increase the value of your company because it helps you cast a vision and take the steps necessary to make that vision happen.
Be sure to join me for my next article where I’ll start deep-diving into the VMVSOSTA steps within your strategic planning efforts. We’ll start with your Vision and Mission!