Strategy is a plan to reach your vision. Strategic planning is the process of documenting your plan to reach your vision. A vision is your preferred future stated with enough detail that we all know when we have reached it. Starting with the end in mind is the beginning of vision. A business develops a strategic plan. A project team declares their business outcomes (vision.) In a 1:1, the parties agree on a great outcome for the session by starting with the end in mind.
The Strategic Planning Process Is About Answering a Series of Questions –
What is our preferred future?(Vision)
How will we work together? (Values)
Why do we show up? (Purpose / Mission)
How will we measure success? (Key Performance Indicators)
Who is our customer? Who will we serve or who will we not serve? (Marketing)
As you answer these questions for your company, you are also making choices. Each choice you make in business generates cost or tradeoffs. In other words, if you choose to differentiate yourself on price, you will miss out on the market that will pay high dollar, which you will need to make up in volume or cost savings.
The key is that you do indeed have a strategy. I hear form my clients frequently, that they do not have a strategy or they will just sell more this year and that will be their strategy. This is not necessarily wrong as long as you are clear on your target.
Companies Exist To Generate Value –
Companies are collections of discrete activities, in which a competitive advantage arises. (Porter 1985) These activities can appear both externally and internally. An internal activity is hiring, culture, financial leadership, HR and technology. An external activity includes marketing, sales, and public relationships among other areas.
How are you as a business creating value? For example, Southwest Airlines creates value through less expensive fares with a fun customer service experience. The people that work at Southwest seem to love their job.
Action Items –
How have you clarified and documented your strategy for 2021 and beyond? Additionally, how clearly have you communicated this plan to your team?