The Difference Between Business Plans and Strategic Plans

Track and FieldQuestion:

What’s the difference between a business plan and strategic planning?

Answer:

To some, there’s no difference, and both play a critical role.  But to me, it’s a difference in focus between planning  and action and strategic plans are the better choice when the goal is to get out of the starting gate and win the race.

A full, formal business plan is great if you’re a start-up at square one, you’re going for funding or it’s a contractual mandate, or you’re at a major turning point. The process forces you to document more about your relationships, your market, and your operations than most of your competitors ever will.  But for most, making the plan ends up being the goal.

Consider strategic planning.  For most going concerns, what is incredibly helpful is to agree on what must be accomplished and to create a concrete action plan for doing so.  That process – of focusing in on top issues, opportunities, and action-oriented solutions – is why good strategic planning produces results here and now.  Here, the focus is action.

The new year is an excellent time to create strategic action but any time is great. For the simplest start, review each department or area of your business and identify no more than 3-4 issues to fix or things to capitalize on – items that, when accomplished, would definitely make this year measurably better than the prior year.

For each, create a plan and assign an owner and due date to literally every task.  Here’s the kicker: make a commitment to get it
done, and keep your promise.

Follow this simple to say but magical method and you’ll have accomplished more in a more purposeful fashion and gotten better results before the ink on your competitor’s formal business plan is dry.


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Making Business Resolutions Happen

BalloonsWe are at an interesting time.  A struggling economy is forcing many businesses into creative action to improve their position right at the turn of the year, a time when many naturally resolve to improve and do better any way.

While this double whammy of introspection still hasn’t inspired everyone to new levels of action and success, in my own practice, I have definitely noticed an uptick in leaders pulling out all stops and resolving to make 2009 a growth year despite conventional wisdom.

So what are your peers doing to get ahead?  And how do they plan to make their 2009 business resolutions stick?  This is the approach I see proactive leaders following.

Focus on a Few, Critical Issues

Years ago, I was trying to organize my “top few priorities” and to do so, wrote each on a separate sticky note and placed it on my cabinet door.  Before I knew it, my “little list” had grown beyond the cabinet door to the wall.  Just then one of my employees walked in, saw what I was doing, and began laughing.  I didn’t think she was going to stop.

It was indeed a ridiculous sight. Many of us have done something like it, whether on sticky notes, notepads, or Outlook tasks. The challenge is when the list gets too long, it’s not effective.

In my practice, I find that there are generally around one or two truly “log jam” issues – things that are absolutely holding the organization back, or killing it, and then a few more that are truly important.  Find the few issues that are truly critical to the success of your organization, focus on these, and use the old 80/20 rule to allocate your effort.

Define Performance Factors

I confess, I’m a numbers person.  I find it very hard to change something unless I can define that something clearly, and measure it.  Let me give an example that flows from a couple different organizations I work with.

Imagine you’ve identified that the quality of your service isn’t what it should be. That’s not good!  “Quality needs to be better!” you say, and you’re right, but that’s not very helpful.  How do you measure “better,” how do you report on it in meetings, and how do you set goals and know they’re achieved?

It’s better to start with Performance Factors – measurable indicators of performance from which we can set goals.  In this example, quality is measured by factors like: client satisfaction ratings, number of complaints per month, etc.  In this way, now we can measure where quality is, and set clear goals to make it change.  And that’s next.

Set Clear Goals

I always enjoy meeting clients for the first time because I never know what new adventure I’m getting myself into.  Everyone’s ideas are unique, and their goals are unique, and the most exciting part of my job is to pull out each person’s passion and help make their goals as clear and doable as possible by breaking them down into seemingly simple steps.

Part of that process, for me, is to get extremely clear on what needs to change.  Let’s go back to our very simple client example of improving quality.  One of the Critical Factors identified was “client satisfaction ratings.”  It’s very easy, now, to create a crystal clear goal like, “Improve client satisfaction ratings by five percentage points in the next 180 days.”

We’ve just gone from “Quality needs to be better,” to “Ratings need to be five points better,” in just a few steps.  That should even begin to feel more clear, positive and action-oriented to you.  The question that remains is how?

Create Clear Plans of Action

The key to a good plan of action is to quickly draft all the required action items you can think of and then ask yourself whether the objective would be accomplished if you only did the things on your list. Nine times out of ten, clients in my planning sessions quickly say, “Well no, we’d also need to…” Write it down!

Assign individuals to tasks, and due dates as well.  Get a well formed plan.  For our quality improvement example, I’d expect to see tasks like: a pre-survey of clients, a meeting to determine forward action, items about a few key things that are known that must change, monthly spot-checks of client attitude, a post-survey at six months, and a post-planning meeting to discuss results and next steps.

Establish Accountability

I could write many words on accountability, but let me just mention four key points to remember. It’s about: 1) celebrating success, 2) correcting course when needed, 3) problem solving, and 4) it is not easy for many people to do.

The action plan provides the groundwork and serves as one tool in creating accountability, but accountability is a regular, ongoing process that must be carried out and is the mark of leadership.  While you do not have to provide all the accountability throughout your organization, it is a core part of your leadership duty to ensure that it happens (if you are the owner, who will hold you accountable, after all?).

Do it, learn it, or seek help.  Find your business consultant/coach, CPA, or other professional advisor for guidance.

Wrapping Up

Resolutions can be kept.  Goals can be achieved.  You can make things happen.  Even in challenging economies, there is business to be had.  This formula is what I see successful organizations using to get ahead.


Dustin Walling is Principal of Dustin Walling Associates, a Seattle-based management consulting firm providing strategy and operational consulting.  For article topics, questions, or comments, Dustin can be reached at http://www.DustinWalling.com.


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