Effective strategic leadership requires three things:
The first two steps – long and short term planning – don’t have to be extensive and time-consuming, but you do have to set aside time to answer three critical questions if you want to be a strategic leader: Where is my business today? Where do I want it to go? And, how will we achieve it?
It sounds simple enough, so why can it be so darn hard?
Many new business owners don’t start with a long-term vision. They get started quickly and never look back or slow down enough to plan. And, that’s how bad habits are formed.
That may work for a while, but after a few years, that’s like flying a plane with no guidance system. How will you know if you’re getting closer or drifting farther away from your final destination? Without a clear picture of your personal and business success goals, you may wake up one day, years from now, and wonder why you aren’t living the life you had hoped for.
According to the successful owners we interviewed for The Success Code, having a clear vision and knowing how to create a plan to reach that vision are two of the most important drivers of success. When you don’t know how to set goals or identify the actions needed to move your business forward, planning may seem like a waste of time. Sometime the plan doesn’t align with your overall vision or may be too vague. And, if you can’t see a clear path – with milestones – to your goals, you may never reach them.
And, since planning can be a bit challenging, owners get stuck in the daily flurry of activity, putting out fires and never thinking about the long-term impact of their decisions. In fact, a typical entrepreneur’s trap is to continually be so busy working in the business that they convince themselves they don’t have time for planning or working on the business, but that’s a dangerous game.
The motivation should be compelling: you plan for your business so you end up where you want to be in your life. And, it doesn’t have to be painful! There’s no need for a 100-page binder or ten-step analysis. A simple process that you’ll actually use is more valuable than any Harvard Business School-approved planning strategy.
Whether sketched on the back of an invoice or created in planning software complete with color charts, you need to know where you aim to be in the next three to five years then use a planning process to get you there that includes short-term (typically every 90-100 days) action plans.
Wondering what should go into your short-term action plan?
You’ll start with specific monthly financial goals, such as revenue and profit numbers. Then, outline the priorities and projects you’ll execute to reach those goals. Once you’ve determined the projects (no more than 10), it’s time to add a SMART goal/end result that you expect to achieve as a result of that project. Those give your project a measurable business result.
The second step in the process is to break each project into smaller steps, with dates for milestones to be completed. This keeps the project on track. While you’re determining the steps of your project, include who is responsible for each task to encourage teamwork and make it easier to manage each project.
The final step is, of course, to execute by continuing to review the plan on a weekly or even daily basis and holding everyone on the project accountable for their portion of the plan.
My study of successful business owners confirmed what I knew instinctively from my work with hundreds of businesses –sustainable, growth-oriented businesses are the result of thoughtful planning, consistently executed.
How do you know if you are effectively using planning as a tool?