What is a strategic plan? Here are five steps to develop one

A strategic plan gives you the opportunity to define and act on your vision, mission, and values

WeWork Antonio Miroquesada 360 in Lima. Photograph by WeWork

What is strategic planning?

As the leader in your organization, you are tasked with casting a vision, setting your strategy, and defining how you’ll execute it. The first step is realizing how important strategy is in regard to the success of your business and developing a winning strategic plan to support it.

Strategic plans are comprehensive business documents that outline what you would like to achieve and how you plan to get there. This document makes the connection between wider organizational goals and the day-to-day actions teams and individuals will take to achieve them. It’s similar to a business plan, but with a few key differences. Business plans are must-haves for new ventures to evaluate market opportunities, describe products and services, and convey how your first few years in business will be successful. A strategic plan is better suited for the growth company—an emerging enterprise that has gotten over the five-year hump.

Five steps to developing a competitive strategy

Strategic plans not only give you the opportunity to define your vision, mission, and values, but they also articulate your competitive strategy and your growth strategy. Here are some tips that will help you develop an actionable strategic plan that will get results.

1. Develop a competitive strategy

Michael Porter, widely considered the most-cited author on competitive strategy, defines strategy as “an attempt to achieve a sustainable competitive advantage by preserving what is distinctive about a company.” It’s all about performing different activities from rivals, or performing similar activities in different ways.

2. Establish a position

Strategy is the creation of a unique and valuable position, involving a different set of activities. Strategic positioning emerges from three distinct sources: serving the few needs of many customers, serving the broad needs of a few customers, or serving the broad needs of many customers in a narrow geographic market.

For example, Voices.com‘s positioning is to serve the few needs (providing voice-overs and audio production, extending into language translation) of many customers (there is a global need for voice-overs).

3. Make strategic trade-offs

Strategy requires business leaders to make trade-offs and choose what not to do. These trade-offs are equivalent to the proverbial forks in the road, where a choice is required in order to advance the company. Note that some competitive activities are incompatible with each other: where gains in one area can be achieved only at the expense of another area.

Case in point: I have made several strategic choices, starting with not building physical recording studios and not requiring voice actors to audition in person. By not having talent audition in person, we’ve been able to break down geographic barriers, eliminate time zone issues, and often overcome language challenges.

Like other content-based companies, we’ve also made some choices related to content, specifically our intention to offer a family-friendly online environment. Our job posting guidelines at Voices.com have evolved into content guidelines and now brand guidelines. Content that is unacceptable would be adult content, mature themes, extreme violence, and hate speech, as well as any other unsavory material.

4. Create fit among activities

Lastly, strategy involves creating “fit” among your remaining activities, which has to do with the ways in which your business activities interact and reinforce one another. To illustrate this, think about how marketing works with sales. When do your sales representatives hand off a deal to your finance people to ensure that payment is processed correctly? What’s the relationship between operations and customer service? This is all part of a unique process, and one that adds value.

5. Put it on paper

In a day when so many businesses have gone paperless, it takes a special reason to print a hard copy. Your strategic plan is such an occasion. Getting all your ideas down on paper into a comprehensive, yet concise, document will be a guide for years to come.

Here’s exactly what you should include in this plan:

1.   Your competitive strategy

State your unique position within the broader market, what trade-offs you’ve made, and how you’re creating fit among your remaining activities.

2.  Your marketing strategy

Define how you’re going to acquire, activate, and retain customers.  For your most engaged customers, explain your intentions surrounding generating revenue by simply stating your revenue streams (be they products, services, software-as-a-service, e-commerce transactions, or advertising revenue) and the most sought-after of all, obtaining referrals, to close the loop on your marketing system.

3.  Strategic initiatives

Each year, you may consider focusing your energy on a trend by elevating the effort into a strategic initiative. An example would be “Going Global,” an in-house initiative to localize your current products and services into new geographic markets. You’ve already developed a product and a process for selling; now you can take what you’ve learned and apply it in a new geographic market. However, be forewarned that you should pick your export countries thoughtfully.

4.  Measuring success

For each strategic initiative, you’ll need to define the action items, what your key performance indicators (KPI) are, and any milestones along the way. Breaking down annual goals into manageable quarterly, monthly, and even daily measurements helps make big dreams achievable.

Presenting to your team

Your team is looking to you, the entrepreneur, the founder, the CEO, or the managing partner to provide direction. Once you’ve defined your strategy, take this opportunity to relay your strategic roadmap into a 20- to 30-minute presentation to your team.

For example, reinforce what’s working and why you’ll continue on a given path. If you need to pivot, explain why and provide some optimism for your future prospects. In addition, give the highlights, assign action items, and communicate how you’ll be measuring success in the coming months and years.

Similar to house renovations, developing a winning strategy is often a longer-than-anticipated process. It’s involved yet the payoff is huge. Imagine your team working toward the realization of your organization’s vision, knowing your strategy and executing on required action items to be successful. Finally, having a goal is tremendously motivating and something that everyone in your organization can celebrate once it’s achieved.

David Ciccarelli is the founder and chief executive officer of Voices.com. His writing has appeared in numerous publications, including the Wall Street Journal, Entrepreneur magazine, and Forbes.

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