Most of us are well into our planning for 2025 at this point in the year. This is a good opportunity to talk a bit about the strategic planning process.
Set a Long Range Vision
At the highest level of strategic planning, is the long-range vision for the company. I talked a bit about vision a few weeks ago (read here), and for planning purposes you want to apply that vision specifically to where the company should be in five years. Your company does not operate in a vacuum so remember to ground your vision in reality – envision what the world will be like and where your company will fit into that world.
Establish Your Strategic Objectives
The next step is to identify your strategic objectives for the coming year. Is there something you wish to bring to fruition, like opening in a new market? Or is the strategy simply to grow your profit? Whatever your strategic objective, it should be more concrete than the vision, and if achieved will move the organization closer to the vision.
Identify the Goals that Get You There
Your goals for the year will flow from here. These are goals that if you hit them, you will achieve your strategic objectives.
Not long ago, I explored the balanced scorecard. The value of the balanced scorecard approach is that it forces you to understand the tradeoffs that are made between different goals. Increasing your bottom line is easy – just cut everything. But no sales and marketing means you won’t have enough pipeline to replace churn, and your business declines. Cutting service teams hurts your customer service standards, leading to more churn. Letting your accounting team go will probably result in uncomfortable conversations with the taxman. The balanced scorecard allows you to think more strategically than a myopic focus on a single type of measure.
Drill Down Goals for Departments, Teams and Individuals
A lot of organizations stop at the high level. That’s a mistake. Effective planning requires that each person within the organization is clear as to how their work contributes to the success of the overall organization. From the organizational top-level goals, the next step is to challenge each department head to set goals that will help the organization achieve its strategic objectives for the year.
The same process can be repeated at each level of the organization, until you get to the individual contributors. For them, this is the scorecards against which their performance is evaluated. Each individual scorecard should be comprised of SMART goals and should cascade upwards into the team level goals. Team scorecards should cascade up to the department level goals, and so on.
Document Everything and Review Regularly
A plan developed this way, especially when reported on in Team GPS, will provide meaning to everyone. They will know how their work contributes to their team, department, and the organization. The leaders throughout the organization will also be better able to align individuals with roles to ensure maximization of their contribution.
The use of scorecards also performs a second critical function – it keeps the 2025 plan top of mind all year. Too many organizations make plans at the beginning of the year and then just sort of set them aside. Plans work best when they are executed consistently throughout the year. By drilling down the organization’s vision and strategic objectives to the individual contributor’s scorecards, it is much easier to create and maintain alignment throughout the year, with a combination of having a written record and routinely reviewing it.
May you have a fantastic holiday season and we’ll see you in 2025 with more Teaching Tuesday!
