It’s that time of year. The smell of sharpened pencils and anxiety pepper the air. People put on their game faces and psych themselves up to go head-to-head with their peers.
I’m not talking about school starting or the football season kicking off. I’m talking about annual strategic planning.
That’s right. At the beginning of each fiscal year, businesses often make an important decision about their go-to-market plan. Will they grow? Maintain their position? Or lose ground to competitors?
If you’re in the “let’s grow!�? camp, then annual planning is an opportunity. It gets your heart rate up. It’s not just about updating your business plan. It’s about identifying and prioritizing new initiatives. It’s about dreaming a little. Maybe a lot.
It’s a given that today’s businesses don’t ONLY depend on their annual strategic planning to provide company direction for the entire year. In order to keep up with the pace of change in a competitive market, strategic decisions need to be made quickly throughout the year.
However, many companies persist in having some sort of annual planning cycle that often corresponds with their budget cycle. One advantage of doing so is that it’s an opportunity to rejuvenate organizational strategy, refresh leadership perspectives, align team objectives, challenge the status quo, and redirect course if needed. It’s an opportunity to consider growth opportunities that are aligned with the organization’s mission and determine priorities for the foreseeable future.
What comes up during strategic planning? In the 2015 KPMG CEO Outlook Study, 54% of CEOs felt like they weren’t taking enough risk as it relates to their growth strategy. CEOs were reportedly most concerned with their products’/services’ relevance three years from now, keeping up with new technologies, and competitors’ ability to take business away from them.
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Over the next three years, top strategic priorities for these CEOs included greater speed to market (35% agree), developing new growth strategies (34%), reducing costs (34%), and developing a stronger customer focus (29%).
These aren’t simple challenges that will be addressed with incremental change. These represent fundamental paradigm shifts and changes to the foundation of an organization.
To tackle challenges such as these, leaders need data to make confident decisions about the growth of their business. To reduce risk and increase confidence, leaders need data. Without data, anecdotal evidence will rule the discussion, and no one wants to make decisions about the future of their business based on one-off examples and gut feelings.
Strategic planning requires data about the current state:
- Market and Competition: What’s going on in the market? What are competitors doing? How do we benchmark against others in our industry?
- Our performance: How did we perform to goal last year? What went well? What could have gone better? Look at a complete picture of financial, quality, and operational metrics.
- Value of our Offering: What pain points or problems do we solve for customers? Why do they choose us? What is our competitive advantage and how are we differentiated from competitors? What could we do better?
Strategic planning also requires insights about the future and opportunities:
- Market: Are there any industry trends that could impact business? Are there trends outside of the market that could impact business? New entrants or competitors? New regulations to prepare for?
- Opportunities: What unmet customer needs exist that could represent opportunities for innovation? Are there opportunities to neutralize or mitigate a competitor’s strength? Are there opportunities to further differentiate the value of our offering? Are there unique opportunities within certain customer segments?
Now, teams could sit in a room and try to answer these questions themselves, but growth-focused organizations gather customer insights and use them to drive decision-making. And growth-focused leaders come to strategic planning sessions with answers to these questions.
Then comes a growth strategy:
- Direction and Strategy: What are you opportunities for growth? What is your growth goal? How will you reach that goal? What will success look like?
- Organizational Readiness: What processes, systems, and talent do we have or need to drive growth? What resources do we have or need?
The challenges facing businesses are not something that can be solved in a 3-day strategic retreat. However, a well-run strategic planning summit can refresh a leadership and ensure the organization is confidently moving in the right direction.
Are you ready to grow?
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