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.


Free e-Book: Five Keys for Strategic Planning Success
The Five Keys for Strategic Planning Success
Discover the Five Keys to creating rapid progress through Strategic Planning using our step-by-step guide.

Strategic Action – From Horror to High-Performance

High PerformanceIf management consultants made horror films, most would somehow feature the theme of strategic planning gone lame.  Let me pitch an example flick and see if you’ll green-light me.

After years of neglect, Acme Widgetry finally does it – they “get serious” and build a strategic plan.  It is a good plan full of good information and well-intentioned statements about priorities and what is important.  At great expense, the plan is copied, bound, and distributed to key personnel who each dutifully “install” the plan… on a bookshelf.

Our film isn’t a slasher flick but more of a haunting.  Gone but not forgotten, the plan keeps re-emerging from month to month in various meetings as challenges arise and someone asks, “Didn’t we solve this issue during planning?” or, “What did we put in the plan that we were going to do?”  Acme’s plan is neither alive and guiding operations nor fully dead and buried.  It’s stuck in limbo accomplishing nothing other than dissuading everyone from ever bothering to invest the effort in planning ever again.

With just a few simple techniques, every team can achieve high performance results through sensible strategic planning turned strategic action.  I can show you how.

Know Your Goal
Prove me wrong on the following statement: “Our goal is simply to get the plan done.”

No? Then what is your goal?  We’re clear it should never be static, simply sitting on a bookshelf.  But it should be much more than a list of priorities, or grandiose statements about things to be accomplished in the year ahead.

When I help clients, I always stress that the goal should be monthly accountability (minimum) toward achieving high performance – not the plan itself.  So our goal in planning is a very tangible, very measurable plan that anyone can read and understand whether we’re on target for performance or not as well as what the next step should be.

Gather The Facts
Before you meet to plan, get all the information you need to do a complete job.  This varies depending on the issues you face, but generally it means revisiting the vision and mission for the organization.  It means gathering accurate financials and operational measures as these will be used to forecast the future.

It also means getting input from employees and key stakeholders as to what would make the organization better, as well as key clients, former clients, and business partners.  This step not only provides valuable information, but it provides these important people with the knowledge that they are valued and generates buy-in to any changes the organization may make.  It can also prove to be an important business development tool with your clients.

Write a NEW Adventure
Remember, our goal is high performance through action and accountability. So to begin with, establish at least two things: a compelling vision, and a way to always know whether or not you’re getting to your goal.

Most of the groups I work with intuitively understand that having a vision is important yet they don’t take it seriously as a planning tool.  When I say “establish a compelling vision,” I mean “and plan to it.”  The vision is what you as leaders have charged yourselves with becoming.  So as planning progresses, ask yourself, “If we accomplish everything we’ve laid out, will we have achieved our vision?”  If not, try again – you’re not done.  You must strive to become something, and know what you’re becoming.

Critically, after planning, you must also know whether you’re on track.  Great organizations constantly monitor their progress through performance measures.  Take the time now to establish how you would measure successful progress toward your vision.  Would it be in fiscal terms, like revenue and profit?  In terms of quality?  Or productivity, or business development? How can you measure and know your progress and define success?

Establish the Plan
The key difference between plans that sit on the shelf and plans that get used is measurability. Measurable equals actionable.  That prior step of taking the vision (and anything else that needs accomplishing) and expressing it in measurable terms makes all the difference because now two key things can happen more readily: the creation of goals, and action plans.

Take the example of a small professional services firm needing more work.  Before planning their goal was simply, “Find more customers.”  With the introduction of the business development measure “Number of contracts closed per month,” their new goal was restated during planning to “Increase the number of contracts closed per month to 4 by June 30, resulting in $80,000 NET being added each month.” See the difference? A much clearer goal that everyone can come to agreement on is instantly available.

Now the question is how to do it.  The goal is to build an action plan that breaks the goal down into achievable steps, assigning responsibility and timelines.  Don’t know how to get the goal accomplished, or don’t have all the needed information during planning?  No problem: assign a small task force or point person to take up the cause after the planning session.

Take it All the Way
Strategic planning is done and it’s time to put things into action.  This time around, though, the path is much clearer.  There are exceptionally clear goals, action plans for what to do, things to get started with.  There are just two things to take care of in order to get started: performance budgeting, and distributing accountabilities.

Remember the example of the professional services firm that wanted to get to four new contracts per month?  What if that’s you and you’re at zero right now?  Performance budgeting is just like financial budgeting: it’s setting monthly performance goals for all the goals established during planning. The goal might be one for this month, two next, and so on.

Additionally, each of those action plans had action items on them assigned to different members of the team – perhaps even to people who weren’t at the planning session.  This is the time to organize and distribute those accountabilities so that they actually get done.

It’s also the time to schedule monthly performance management meetings for the next year.  Yes, the entire year.  You just planned a year’s strategy, so plan to get together at least once a month to check progress and take proactive action to correct course and shift direction.  This is the key to making this work.

Bringing it Together
Admittedly, we’ve left many possible steps and variations out.  But even so, look how actionable our strategic planning has become!  Far from horror, this is glorious!  We’ve got a clear vision, a future defined in measurable terms, concrete goals, and action plans with individual accountabilities.

Many organizations have great ideas but never make it past strategy, but it doesn’t have to be that way.  With a simple shift in the way you do your planning, any team can achieve high-performance results.


Free e-Book: Strategic Plans Made Easy
Strategic Plans Made Easy
Gather the right plan the first time and cut your Strategic Planning work down to size using our step-by-step guide and template.