How To Create Strategic Plan – What’s a plan without a strategy? As economist and business strategy guru Michael Porter says, “The essence of strategy is choosing what not to do.” Through strategic planning, companies identify their strengths and weaknesses, choose what not to do, and determine what opportunities to pursue. A clearly defined strategy in sales operations will help your organization plan for the future, set long-term goals and achieve them. So how do you get started with strategic planning? You’ll start with strategic planning models and tools. Let’s take a look at nine of the brightest here. Models of Strategic Planning Strategic planning is used to determine the long-term goals and priorities of an organization. A strategic plan is a written document that outlines these goals. Do not confuse strategic planning with tactical planning. Strategic planning focuses on long-term goals, while tactical planning focuses on short-term goals. Free Resource Free Strategic Planning Template Fill out the form to access a strategic planning template for your business. Here are some strategic planning models you can use to get started. 1. Balanced Scorecard The Balanced Scorecard is one of the most prominent strategic planning models, adapted for managers to give a detailed overview of their companies’ performance within strict deadlines. It takes into account financial and operational metrics that provide valuable context about how a company has performed in the past, is performing currently, and is likely to perform in the future. The model is based on four dimensions: time, quality, performance and service, and cost. The sum of these components creates four specific reference points for setting goals and measuring performance: Customer – how customers view your business Internal Process – how you can improve your internal processes Organizational Capability – how you can grow, adapt and improve your financial potential profitability These four categories can help you identify more thoughtful, focused goals and the most appropriate metrics you can use to track them. However, the elements you choose to pursue and value are ultimately up to you. These will vary from organization to organization – there is no definitive list. This means that there is a universally applicable technique that you can use when using a model – creating a live scorecard. It’s a document that keeps track of your goals and how you apply them. Here’s an example of what it might look like: Image Source: IntraFocus The Balanced Scorecard is ideal for companies that want to break down higher-level goals into more specific, measurable goals. If you want to turn your broad ambitions into actionable projects, consider looking into this. Balanced Scorecard Example Let’s imagine a B2B SaaS company that sells a construction management solution. There were problems from almost all sides. It struggles with customer retention and in turn reduces revenue. The company’s sales reps are dealing with very few qualified leads, and the organization’s technology stack is limiting growth and innovation. A company decides to use the Balanced Scorecard method to solve various problems. In this case, the entire strategic plan prepared according to this model may look like this: The company sets a broad financial goal to increase revenue by 10% per year. To help achieve this, it aims to improve its customer retention rate by 5% annually by investing in a stronger customer service infrastructure. Internally, management aims to improve the company’s lead generation by 20% year over year by revamping the onboarding process for the pre-sales team. Finally, the business decides to move away from its legacy technology stack and use a virtualized operating system to deliver at least 50% faster software delivery to continuously improve the product. The elements listed above address key weaknesses in the company’s customer perception, internal processes, financial position and organizational capabilities. Each improvement the business is hoping for includes a specific goal with clearly defined metrics and bottom line numbers against which to measure the success of each. In general, the organizational plan follows the Balanced Scorecard model. 2. Objectives and Key Results As its name suggests, this model revolves around translating the broader goals of the organization into objectives and tracking their key results. The framework is based on identifying three to five achievable goals and three to five outcomes that should result from each one. Once you do, you plan initiatives around those outcomes. Once you figure out those reference points, you determine the most appropriate metrics to measure their success. And when you implement projects based on those ideal outcomes, you measure their success by assigning a score between 0 and 1, or 0-100%. For example, your goal might be to connect with 100 new targets or named accounts in a specific region. If you could only make 95, your score would be 0.95 or 95%. Here’s an example of what an OKR model might look like: Image Source: Perdoo It’s recommended that you structure your targets around 70% to reduce stress on employees and offer them an ideal end result. The OKR model is quite simple and almost universally applicable. If your business is interested in pursuing well-established, clearly visible standards, this model may work for you. Example of Objectives and Key Results Consider a hypothetical company that develops curricula and timetables for higher education institutions. The company decides it would like to expand its presence in the community college system in California, which is the goal. But what will it take to achieve this? And how will the company know if it is successful? Well, in this case, business leadership would achieve three to five outcomes that they would like to see. This could be: Generating qualified leads from 30 institutions; conducting demonstrations in 10 colleges; making transactions in 5 towns. These results will lead to initiatives such as setting qualification standards for managers and training top-of-the-funnel reps on how to properly leverage them to renew sales. sending messages to discovery calls and conducting research to better tailor the demonstration process to the needs of community colleges. Using this model typically means repeating the process two to four more times, eventually producing a substantial crop of thorough, actionable, ambitious, measurable, and realistic plans. 3. Theory of Change (TOC) The Theory of Change (TOC) model revolves around organizations setting long-term goals and essentially “working backwards” to achieve them. With a strategy, you start by setting a bigger, broad goal. Then you identify the interim adjustments and plans you need to make to achieve your desired outcome. Finally, you work below and plan the various short-term changes you need to make to implement the intermediates. Specifically, you need to take the following steps: Identify your long-term goals. Back up the assumptions needed to achieve your goal and explain why they are needed. Determine your basic assumptions about the situation. Identify the interventions your initiative will take to achieve your goals. Come up with metrics to measure the results of your initiative. Write an explanation of the logic behind your initiative. Here’s another visualization of what it looks like. Image Source: Wageningen University and Research This planning model is best suited for organizations interested in efforts such as team building, initiative planning, or action planning. It differs from other models in that it can help distinguish between desired and actual results. It also encourages stakeholders to be more actively involved in the planning process as they model exactly what they want from the project. It relies on sharper details than similar models. Stakeholders typically need to lay out a number of specifics, including information related to the company’s target population, how success will be determined, and a deadline for each planned action and intervention. Again, virtually any organization—public, corporate, nonprofit, or otherwise—can benefit greatly from this strategy model. Theory of Change Example In this example, imagine a company that makes HR payroll software—one that hasn’t been doing very well lately. Leadership in the company feels directionless. They think it’s time to get down and put some solid plans into action, but right now they have certain results in mind for the company without a sense of how they’re going to get there. In this case, the business may benefit from using the theory of change model. Let’s say its ultimate goal is to expand its market share. Management would then consider the assumptions that ultimately contribute to that goal and why they are important. For example, one of those assumptions might be to bring in a new customer base without alienating the current one. A company might assume, for example, “We currently serve almost exclusively mid-sized businesses and lack the resources to expand the market to enterprise-level perspectives.”
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