7 common Strategic Planning mistakes
In last week’s blog, I looked at the benefits of strategic planning for businesses and highlighted some of the key elements that a good plan should include. Of course, all good intentions can be get a little lost along the way when best planning practices are unknown or ignored.
To follow are some of the common mistakes businesses can trip up on when devising a new plan.
Ideas Vs Objectives
Sometimes the development of a strategy is oversimplified and misunderstood and translates in practice as the search for and development of a ‘big new idea’. You may latch onto a new concept you’ve seen in another country, or something your competitors have recently developed. However, I’d suggest, this is a case of ‘putting the cart before the horse’. Before any strategic move is selected, you first need to be clear on what your objectives are for your business.
This is the core premise of strategic planning – matching a plan or method to achieve a particular goal or objective. So first define what you want to achieve. All objectives should also be SMART - specific, measurable, actionable, realistic and timed. Are you looking to grow for example, and if so, by how much and over what time period? Do you want to grow organically or do you have particularly ambitious growth targets. Is this strategic idea appropriately matched to your objectives or not? Imagine, if previously you had decided you were risk averse and looking for organic growth, and then someone comes in promising you the world with a new idea. A clear objective will help keep you on the track and stop you being distracted by an attractive but potentially inappropriate route.
Lack of further evaluation
On first view, a strategy might appear to be aligned to your overall objectives. However, if it is not put up for further evaluation and critical scrutiny, you may commit to a route that has a sting in its tail further down the line. Before you make a decision, it’s important to outline more detailed statements or criteria that you want to evaluate against any strategic move. For example, will this approach help differentiate you from your competitors? Does it help you with your Export ambitions? Do you have the resources to make this strategy happen? Or can you access the resources to make it happen? Running your initiative against some of these and other key questions will help you get further clarity on its suitability.
Ignoring your strengths
Great strategies will play to your strengths. These may include your skills, your resources, your location, your existing customers or your brand, for example. Trying to develop a strategy that appears innovative and new, but that doesn’t connect in with any of your key advantages will most likely give you a poor return on your investment.
Too many ideas, too much complexity
A plan, which includes long lists of ideas, all described at great length may seem brimming with opportunity. However, an abundance of complex or ill-explained ideas can sometimes be worse than no new ideas at all. It can be hard to know where to focus and even harder to communicate what needs doing to your team. A shorter, simpler list of clear strategies will always have an advantage, as they will be easier to assimilate and deliver.
Too big or small a stretch
When resources and skills are not considered as part of the plan, then there can be a tendency to think big on paper, but perform small in reality. This can lead to team and leadership frustration when targets are missed and a backing off from ambitious ideas in the future. On the other hand, if you think too small with your plan, opportunities can be lost and team morale can also fail as other more ambitious competitors better meet your customer’s needs or wants. A good plan will help you to outline the new resources you need, and will give you the confidence and the arguments you need to win that financial growth loan or to help get the team to dig deeper for a while. So always be prepared to stretch yourself sufficiently whilst managing your risks with good projection planning.
Planning for today and not tomorrow
When you’ve done well with something, the tendency is always there to plough more money and time into that successful endeavor. To an extent, that is good business practice. However, the marketplace is continuously changing, as are your capabilities over time. A good rule of thumb is to invest 70% in what is already working, 20% on initiatives that are showing good signs for development and 10% on brand new initiatives that could help shape the success of your business in the future. Additionally, developing your teams L&D requirements in this way can help to further future-proof your business. The bottom line is to plan both for the present ‘cash cows’ and the future ‘rising stars’ across your offer and capabilities.
A great plan is all well and good. But if it doesn’t outline the activities in terms of priority and their desired impact then your good ideas might quickly come to naught. Growth and profit always need to be kept in balance. If you focus purely on growth and forget about profit, then you can run out of steam if you’re not careful. I also recommend running activities in two tiers. On one track you have your ‘Quick Wins’, activities that help build momentum and get you up and running faster. On the second track are your important big plans that require a longer time frame. Those initial quick wins can be setup to help you win support from your team for the initiatives that will need more significant effort. You could do a test tasting event for example, for a new product. Some early customer feedback could help you assess customer interest and rally everyone for the longer product development cycle if early signs are good. Or you may focus initially on your ‘cash cows’ to help keep your cashflow in balance whilst developing the bigger ideas over the longer period. Getting the right balance is key and that can always be evaluated by implementing good planning procedures.
If you are looking for support with the development of a new Sales & Marketing Plan or a Business Funding Plan, please get in touch.
I can support you by producing a Sales & Marketing Plan or coaching you through the process of developing your own Plan. I also collaborate on a regular basis with my network of trusted advisors to produce or advise on the development of Business Funding Plans for growing SMEs.