When the end of the year approaches, business leaders everywhere think about strategic planning—looking back at this year’s performance and determining how to make the next year just as (and hopefully more) successful. For many, a new year signifies not only a fresh start financially, but an opportunity to implement new policies, make necessary changes in staff, embrace fresh ideas and set a new direction.
Whether you have already put a plan in place for next year or are in the process of developing one, use these tips to help ensure a productive and focused planning process.
1. Is your plan for 2021 complete?
If not, finish it now. And I mean right now.
2020 will soon be a memory. 2021 is just a few team meetings and customer calls away. Of course you’ve thought about how you envision the business over the next few years, but are you truly ready to implement what it will take to deliver on your expectations? Every successful business that achieves targeted objectives and growth has some form of a strategic plan. Regardless of the format of your plan, make sure everyone knows their financial goals and priorities starting January 1st. Many times, we lose the first couple months as budgets are built, reporting catches up, etc., so do your best to avoid this lag.
Why else do you have to do it now? There’s something about this time of year that calls for reflecting on the past and looking towards the year to come with hopes of improvement and growth. Use this energy to motivate the planning process and gain buy-in from the organization. Regardless of whether your performance was good or bad in 2020, setting a direction for the future will give people a renewed sense of energy around the business.
2. Have you set dates for follow-up planning activities?
If you are only thinking about strategic planning once a year, you’re missing the point.
Successful leaders don’t consider strategic planning an annual event. Set monthly or quarterly reviews to check the status and progress. No plan can completely anticipate unknowns like economic changes or compensate for new product opportunities that might develop over the course of a year. You need to allow an opportunity to adjust any mistakes, miscalculations or oversights and re-strategize.
Don’t be afraid to shift. Have the fortitude to know when you need to head back to the starting block, veer in a different direction, or blast forward.
“I have a client that does this well,” says ArchPoint CEO, Jesse Edelman. “In July, they do a 6+6 re-forecast for the year.” Analyzing the past six months and course correcting if necessary for the next six ensures you’re keeping a close eye on what’s actually happening in the organization so you end up where you need to be at year-end.
3. How realistic are your expectations for next year?
Ask yourself that one again—how really realistic are your expectations for 2021?
The best place to begin when setting goals for next year’s plan is to take an honest look at what happened this year. Where did you win? Where did you lose? Were your objectives grounded in reality or did you have unrealistic expectations? Stretch goals are important, but be sure that your objectives are attainable. Think about your team who will actually be doing the work to deliver the objectives. Stretch goals can be motivating, but can just as easily have a detrimental effect on teams if they don’t think they have a chance at achieving them. Remember that your teams have to do their job and deliver on the strategic objectives of the company, so it’s best to keep them motivated.
Furthermore, it’s okay to postpone items you won’t have time to do until 2022 or 2023, or sequence initiatives by quarter so the work seems easier to handle. Many business strategists are in favor of seeking out small wins rather than jumping to the moon, so if you can, take large initiatives and break them into chunks with deliverables and dates throughout the year. Taking smaller bits of a large project allows for a sense of accomplishment by meeting goals more frequently. It can also more easily uncover bottlenecks or resource gaps that might inhibit an objective from being completed successfully.
4. Do you know where your growth is coming from?
Follow the three As. Analyze. Ask. Align.
Analyze and predict where your biggest growth sources are. Not just products, but demographic audiences, niche markets and geographies.
Ask which key programs you are counting on to deliver the growth, and make sure they are adequately resourced, especially those that may be in development mode.
Align metrics across the functions to deliver desired goals. In strategy development, most metrics are for the whole business. However there are typically metrics within a function that actually compete with metrics in another function—or sometimes the same thing may be measured differently by different divisions or functions. Make sure all relevant metrics are aligned.
5. How will you communicate the plan (and its progress) to the organization?
Once your strategic plan is created, a critical part of the process is how you communicate the plan.
“Senior management needs to communicate: Why these numbers? Why these strategies? What is it that makes the group believe it’s possible,” says ArchPoint’s Executive Director for the Middle East and Africa, Alexander Van’t Riet.
Senior leaders should present the main objectives, including how resources will be allocated and setting timelines. The most progressive organizations push plans into the organization. This ensures that everyone knows what is expected, has a good vision for the future and understand what role they play. People need to see how the work they do every day connects to the overall goal to be engaged in the process.
Review and share the results—both the metrics and the activities against key priorities. “At a minimum, this review should be monthly,” says ArchPoint Partner Amy Ritchie. “However, my belief is it should be more often, especially at the beginning of the year when you have to build momentum.”
Strategic planning is never an easy process, but as 2020 comes to a close, now is the time to reflect and refresh. Keep your objectives attainable and take the time to make sure the organization understands the objectives and how they play a part in making 2022 a success.