Most successful businesspeople agree with Benjamin Franklin’s famous quote when it comes to strategic planning, “By failing to prepare, you are preparing to fail.” A leader’s approach to strategic planning can vary greatly in length of time, measurement of progress, commitment and ultimately in the results.
I would argue that a detailed, strategic plan spanning longer than three years is too long to be relevant. Tactics identified too far in advance cannot keep up with the fast pace of changing technology, new information and changes in the economy to make the plan meaningful.
Here are my three essential elements to the strategic planning process:
Range of specifics
Leading an organization with an established three-year plan creates an environment where your internal team understands where you are going and what you must do to get there. In a franchise organization, this level of planning helps the franchisor foster confidence in franchisees that your plan is to drive revenue and profit — theirs and yours.
All three years of the strategic plan are not created equal. Here’s how plans are structured in my organization:
- Current year: Have a one-year very detailed plan where everything is accounted for. Each objective must be specific and outline tactics, deadlines, human and financial resources involved and the method of measurement.
- Year two: This plan has objectives with projected tactics and resources. The specifics will be incorporated during the annual planning process, where previous performance can be factored and available resources are clear.
- Year three: Proposed objectives are the only details required for a three-year outlook. The annual objectives outlined help determine your course of action toward the previously stated five-year overall goal.
Second to the importance of planning is tracking progress toward what you set out to accomplish. Quarterly, the board of directors assembles to receive updates from the divisions responsible for driving the collective success. The company’s leadership team has bi-weekly updates and each month, the entire organization gathers to understand the current status and how they can make an impact.
By building in regularly scheduled reviews, you are building the ability to be flexible into your business.
I’ve written about serendipity before as it relates to purchasing Mr. Handyman and being approached by an owner of PuroClean to join forces. Had our set plans been too rigid, we may have steered clear of these acquisitions due to imperfect timing and missed out on the chance to build our company’s holdings of in-demand professional home service franchises. There are times when it makes sense to adjust.
Teams must be completely committed to the annual strategic plan. It is the easy way out to simply change the plan when you don’t think you will make it. Finalize the plan, hold your people accountable to it and find ways to achieve what you set out to do.
Create incentives for your team to benefit when the shared goals are achieved. Years ago, we established a quarterly bonus program which has unified my team to work toward our revenue and store-count goals. Team members know what the company is trying to achieve, and they can also earn additional rewards for setting and meeting personal objectives in their area of influence.
As the assembly line inventor Henry Ford said, “If you think you can do a thing or think you can't do a thing, you're right.” Commit to your strategic plans and celebrate the successes of achieving them.
David McKinnon is the co-founder and chairman of Ann Arbor, Mich.-based Service Brands International, an umbrella organization that oversees home services brands, including Molly Maid, Mr. Handyman and ProTect Painters. To contact McKinnon, send him an email at email@example.com