Four Essentials to a Strategic Plan That Works

0:00the impositional feeling, that horrible feeling of this thing being imposing, right? that you have, like is transferred to all those good and important initiatives and goals that you've set.

0:14Hi, this is Megan Hyatt Miller, and this is Lead to Win, our weekly podcast to help you win at work and succeed at life. So this week, I'm so excited to be here. My dad will be back from sabbatical with us very soon. But in the meantime, I have a great show today all about four essentials to a strategic plan that works. And I'm joined by my husband and our chief product officer, Joel Miller, who is going to help unpack this topic with us. Because man, this is a pain point that people are thinking about right now. Isn't it, Joel? Oh, they definitely are. It's the time of year where if you're not already started, you're late and it's definitely a top of mind.

0:55Yeah. And I think we all probably have had a strategic planning horror story in our career. Oh, man. You know, sometime where you created this elaborate strategic plan, maybe with consultants, and then it was collecting dust on the bookshelf in your office after that month, right? Yeah. It's the dreaded binder that - The binder, yeah. It's produced with a great deal of effort with many different departments and teams and leaders and conversations and deadlines and on and on and on. It's like a full-time job to create the thing. And then it's finally finished and you feel total relief and you put it on the shelf behind you and you never look at it again.

1:40Right. Which is really unfortunate because as it turns out, a strategic plan is something that every business needs. This is a really critical part of charting a course to the future. So we've got to have a strategic plan, but we've got to have a strategic plan that works. And so we're going to dive into these four essential ingredients to create one so that you can avoid the common pitfalls that people find themselves in, especially during this season of the year, if you're on a fiscal calendar year and end up with something that will actually clear the path to the future you want to create in your business.

2:31so the binder behind you on the shelf the binder under the desk the file that is hidden away on a on a desktop on a on your laptop that you never look at again the final version of the strategic plan that was emailed to you January 4th, that is somewhere under 10 ,000 emails in your inbox. That is a problem that a lot of businesses face. And it's not inevitable. It doesn't have to be that way. It could be so much better. It could actually be that your strategic plan is guiding you throughout the entire year. And that strategic plan is actually helping you achieve your multi-year vision for your business.

3:15But there are four things that are essential in order to make that happen. Four ingredients. If you were imagining a successful strategic planning cocktail, these would be the four ingredients. And I really think that it'd be great if you could just walk us through those four ingredients. Well, first of all, I really like the idea of a strategic planning cocktail. I think probably a A lot of the strategic planning processes that we've been through probably need some cocktails to go along with them because they're so onerous and not fun that that would be a nice accompaniment to it. But this will be different.

3:50So the first ingredient in a strategic plan that really works is to connect it to your vision. And honestly, in our work with clients, this is the thing we see that is missing in most cases. We'll talk about this a little bit more later. People are so focused on the operational part that at best, they end up with some goals for the next year, right? But they're not thinking about a longer term vision. And they don't really have an overarching schematic for how to think about this process, what we call strategic design. And when we think about this, we're thinking about it beginning with vision.

4:26And vision is really, in most cases, a three to five year time horizon. And, you know, unless you have extenuating circumstances, what we recommend is a three-year time horizon. So you're answering the question of what does our business look like in terms of our products and our stakeholders, things like that, in three years. And once you have that figured out, and, you know, we have a whole proprietary process that we call the vision script. after we walk people through this, then you can start to answer the question in this strategic design process where you say, okay, how far can we get toward that vision in the next year?

5:02If we think about the three-year time horizon, it's going to be chunked down in years, right? That's kind of how you would chunk it down. Then how far can we get toward that vision? And so, for example, if you have a revenue target and a profit target for the end of three years, How far are you going to get in the next 12 months? And so the problem that most people experience is that they don't connect those goals back to anything bigger like their vision. Right. So they're just kind of operating in isolation. And they're kind of subject to the whims of the moment. They're not referencing back to what really we think of as a compass for your future, which is the vision of your company.

5:45So I think this is the first ingredient to a strategic plan that works is connecting your strategic plan, the annual plan, back to a three-year vision for your organization. I could be wrong here, but it seems like in a lot of businesses, certainly not all, but leaders are busy chasing business. They're busy chasing opportunities. And those are lower to the ground kind of concerns. and they struggle to step back and think long-term. They struggle to step back and even imagine what they want the future to look like. When they do have a vision for the future, it's often just like, I'd like more of what I have right now.

6:25There's not a lot of clarity around it. Well, yeah, because how do you decide what opportunities you're gonna pursue in the next year? I mean, what's the basis for that? If you haven't taken the time to articulate what this business looks like in the future, then how can you even begin to think about goals? And that's really where we see this kind of drop off for people is that, you know, whatever was big in the last quarter might be the thing that they're top of mind, you know, that's top of mind for them or a consultant they met with or something instead of something that's more enduring, that you've really taken the time to dig into.

7:00And you've envisioned the future around the specific products that you have or that you want to create in your business and the kind of team you want to build. And I think that's really, really critical. It would be like trying to build one room in a house without a larger blueprint for the entire entity of the home, right? You wouldn't really understand the context or you wouldn't really understand how that room relates to other rooms. And that's what trying to create a strategic plan without a larger vision as a reference point ends up looking like for folks. Yeah. The vision ends up being the larger scope into which actions have meaning, into which tasks, projects, goals have a direction.

7:44That's right.

7:54So in terms of the ingredients, Megan, you know, we've got the first one that's connected to your vision. The second is keep it simple. And I can just tell you that one of the death knells of a strategic plan is if people feel like they're reading Tolstoy when they pick up the binder. If it feels like you are entering into a work of words and a jungle of words that you will never get out of again, it's over. And a lot of strategic plans are just overdone. They're overdialed. Well, that's absolutely true. And, you know, if you could drop that binder on your toe and break it, that's how you know.

8:38It's too much. And I think that's true in so many cases. I think this happens for a couple of reasons. First of all, we confuse the operational plan, our budget, our staffing plan, the company calendar, things like that, benefits and policy updates, all that kind of stuff. We confuse that with the strategic plan. And that is part of an operational plan, which is really important. And all of us have to do some degree of that or another, depending on the size of your business. But when we're talking about, and we're going to get more into this in a second, aligning your team around something. Your whole team doesn't need to be aligned around the budget, right?

9:14Individual departments manage individual budgets. They don't need to be aligned around a staffing plan or policies or updates to your benefits. I mean, those are just things that get rolled out and there's a whole operational kind of process for managing those things. What they need to be aligned around is what's the vision for the organization and what are the goals or the initiatives that we're going to be pursuing for the next year that relate to all of us, right? And so when we think about this, there's usually a process that you go through in strategic planning where you're looking at historical information, all this context stuff, the things that end up filling up this binder.

9:50But we have conflated the binder with all this context in the strategic plan. And there are two different things. A strategic plan ought to be something that ultimately drives performance, that we can align people around and drives performance. So in our methodology, after we have the vision, the three-year vision, the next part of that is really developing an annual plan, which consists of four initiatives and not more. And this is really what you're going to align the team around. What are the big thing that you're going to be pursuing in the year? And usually, you know, those are going to be things like a revenue or profit goal, maybe a major initiative around your key stakeholders, your team, and or some things around products.

10:36You know, they're going to be very straightforward. They're going to be very memorable and pithy. This is not like a paragraph. This is like a short statement. And this is the kind of stuff that you're going to communicate and align people around. And then again, in our methodology, we would have each executive or each leader on your team responsible for goals that their department owns. on an annual basis. But the whole team doesn't need to be aligned around those because they don't pertain to everybody. Each individual department needs to be aligned around the goals they're responsible for. But what everybody needs to be aligned around are these four initiatives, the big things that are going to drive us toward our vision and answer the question, how far toward our vision are we going to get in the next year?

11:17And they should be things that anybody could rattle off at any point if you ask them in your company and really focus our efforts and our attention and our resources toward making measurable progress toward that three-year vision in the next 12 months. So I think keeping it simple is critically important. The strategic plan, from our perspective, are these annual initiatives and then the goals that are owned by the executives or the senior leaders on your team. And that's it. The operational plan is separate from that, budgets, et cetera. Again, important, but not necessary to align the entire company around.

11:55And all of a sudden, instead of this being a binder, this is like a couple of pages at most. And this is the thing that's going to guide our decision making. It's going to serve as a point of accountability and really inform our performance all year long as we're considering opportunities and how we're tracking all those kinds of things. So it just gets incredibly simple instead of being some kind of overwhelming thing that you can never hope to remember, refer back to throughout the year. Yeah. And separating that helps, right? Because if it's bound up in one thing, the impositional feeling, that horrible feeling of this thing being imposing that you have, like is transferred to all those good and important initiatives and goals that you've set.

12:41So all of that dread that you feel of this massive, unwieldy, complicated document is now that's carried over into the work that you're talking about doing. And it's now it's just really easy to put it on the shelf. It's really easy to like stick it on a, on a, you know, in a corner of your desktop on your, on your, uh, on your laptop and never look at it again. What you're saying is we're going to separate those things. I'm going to focus on, I'm going to know about these four initiatives. I'm going to have these few goals. That's going to be something that I'm not like mashing all that together.

13:17It's one big, horrible, imposing, large thing. It's like very narrowly defined and I'm going to have it in front of me all the time. Absolutely. Right. It could be framed and put next to your desk and you could look at it all year long. Yeah, I think this radically simplifies the process. I think where we probably got off course, if we kind of look back at the history of this, is there is an important step where you bring people in, especially if this is primarily done at an executive level and then there are other leadership levels in your organization, and you bring people into this process and you have to kind of explain to them how you got to, here's what we're pursuing for this year, right?

13:54And usually that includes all that context, maybe historical information, survey results from your employees, whatever you do. And we sometimes put that in a binder so it's easy to present to people. And that's just not the same thing as the strategic plan. That's just all the things that go along with ultimately creating it and the process of getting to the outcome of these four initiatives that are going to drive the organization forward and then the goals that each department is going to contribute toward accomplishing those initiatives. So it makes sense to me how we got there. But man, it is so freeing when you separate those things.

14:30And so you have the operational plan separate, the context separate, and you can really just focus on these initiatives and the departmental contribution toward those initiatives each year in the form of goals. And, you know, you're off to the races.

14:54okay so we've got these of these four ingredients now we've got two uh under our belt so far we've got connected to your vision we've got keep it simple number three align your team yeah well Well, you know, we have an overarching methodology called the full focus system that consists of three parts. And this is really what we're getting at. We'll do a later podcast with my dad to talk about this in depth. But it really consists of vision, alignment, and execution. We've been talking about the vision part, looking into the future. But now we have to get the people who are responsible for sketching out the future, which usually includes some version of the CEO and an executive team or a leadership team.

15:36Now we have to get that to the rest of the organization. We have to create alignment so we all understand why we're doing what we're doing and where we're going so we can all make our unique contribution to that. So we've got to align the team around the vision and the annual plan so we can move toward that vision, realizing that vision in this one-year time horizon. So that happens in a couple ways. First of all, the annual team meeting is the foundational part of that. It's so critical. You've got to have a time where you present the updated vision. You know, we're assuming when you're creating this three-year vision for your company, I mean, every year you move a year closer to it.

16:15So you've got to extend it another year out, right? And reimagine a little bit. You've got to reinvigorate your team with the three-year vision for where the company's going and their contribution in it. But you also have to tell them, hey, this is the hill we're going to take this year. These are the initiatives and these are the goals that we're going to be driving towards all year long. And we've got to get everybody on the same page. So when January 1st rolls around, if you're on a fiscal calendar year, we can hit the ground running and take this ground for the future. And so I love the process of planning for our annual team meeting.

16:50What I find is that people are so excited to have the explicit clarity about where we're going in the future. It creates a lot of certainty for people. And one of the things that's happening right now in kind of the larger macro environment of talent and just sort of company culture and how people are processing the last 18 months is there's a lot of uncertainty. You know, there's a lot of movement. People are leaving. People are coming into companies. It's kind of unstable. And I think part of what people want is the certainty that comes from being able to align themselves as individuals. Here are my values.

17:29Here's what matters to me with a company that they really feel congruent with. And they don't know whether or not their personal values are congruent with the company's values and a company's vision, unless that gets stated explicitly in some kind of a forum for alignment, which is what the annual team meeting is designed to do. Yeah. It also helps explain the meaning of their work in such a way that you can take a lot of significance from. It's really easy. In fact, I was thinking about this earlier, talking about vision. It's a great place to talk about it here also. But vision is what prevents work from becoming an end unto itself.

18:12And when work becomes an end unto itself, that's when you get pointless bureaucracy. That's when you get like meetings that don't need to exist. It's when you get all kinds of sideways energy and work and things become unproductive and just drag to a less than productive end. The way you solve that is vision. And when you are taking that vision and aligning your team to it, now you're creating for your team, like a sense of, ah, this work is valuable because it connects to the vision. And then this other work over here, that's not as valuable because it doesn't connect to the vision. In fact, maybe you can empower them to say, hey, should we even be doing this?

18:51This is not connecting to the vision. So you're enabling, you're empowering your people to help like create that vision by this alignment step. Yeah. And ultimately what we want to do is we want to have a through line all the way from the three-year vision for the organization to the task level of every individual contributor. So when we have a three-year vision for the organization in our process of strategic design, we have a step where each department outlines what will their contribution over a three-year period look like to that vision over three years, right? If we think about here's where the company is going to be in three years, well, then what has to be true of my department's, if I'm the executive, what has to be true of my department's contribution to get us there?

19:37Well, that's really powerful because then when we get to the next step, now we're looking at the annual time horizon. We're going to create this annual plan, and we're going to have these four initiatives that are going to drive us toward our vision in this one-year horizon. We're asking the question after that is, okay, what is the departmental contribution on an annual basis to those initiatives? What are the goals going to be at a departmental level that will drive those initiatives forward? Well, what's amazing is, of course, once those goals are defined, then they get broken up into projects and tasks and all kinds of stuff.

20:09And that's where the individual contributors come in. And now they're taking action on things that they can directly trace back to the goals, which can be directly traced back to their department's contribution to the vision. And so what that means is that everybody understands how their work is meaningful and they also understand, you know, why it matters and why they need to be engaged. I think engagement is kind of one of those like black box problems that every organization is trying to figure out. You know, how do we drive engagement? Because we know that engagement is an essential ingredient for performance.

20:42Well, one of the best ways that you could do that is connect people's individual work back to something bigger. You know, they're a part of a bigger story. That's what people want. And that's exactly what this process of vision, alignment and execution we're thinking about, strategic design and strategic planning enable us to do.

21:11so we've covered three of the four essential ingredients connected to your vision keep it simple align your team now the fourth establish a cadence of visibility what do you mean by that okay this is probably the biggest area i may have already said that before but i take it back and i would say, no, this one is really the biggest reason that most strategic plans fail and really that most companies are not able to accomplish their goals and they're not able to make progress on a longer range vision. That is that they don't have a cadence of visibility. So, you know, if you imagine the binder, the binder, there's all this work for months that goes into it, then you stick it on the shelf, and then you never look at it again.

21:52And so then you get off track, you know, it's just like our own personal New Year's resolutions, we make those resolutions, we don't have a process for turning them to goals and then reviewing them, then we forget about them by February. And that happens in companies, too. It doesn't matter if you're a very small business or a very large corporation. This is a problem in both of those cases, right? And so what we need is a way to automate achievement of our goals and ultimately our progress toward our vision so that we're not having to remember to do it. As my dad often says, what gets scheduled gets done.

22:26So how do we schedule this kind of cadence so that we don't forget? And what we recommend in our full focus system as kind of under this column of alignment is that there are cadence of three different meetings. So the first one is a quarterly review process. So in this quarterly review process, you're going through an after action review. You're going through a process of looking at, you know, what worked, what didn't work, What we need to start doing? What do we need to stop doing? That is happening through the lens of our goals and initiatives, right? So we're really asking, okay, are we on track?

23:05Are we off track? What adjustments do we need to make so that we can get back on track if we're a little off track? We need to make sure we're reviewing these things constantly, or not constantly, but at a regular rhythm so we don't lose track of them. Now, in our methodology, that would happen with the CEO and the executive or senior leadership. team. We want to get back together so we can realign ourselves and then ultimately realign our teams back with what we said are going to be the priorities for the year in the form of these initiatives and departmental goals. So that's the quarterly review process.

23:40Then there's a monthly review. And that's where we are looking at our financial performance and our progress on our goals based on some key performance indicators. Are we making progress? We want to know before we get to that quarterly review, how are we tracking? Are we off track or on track? And this is just kind of like a smaller check-in, but this enables us to make those micro adjustments that keep us on track without doing a full deep dive analysis. But in other words, on a quarterly basis, you're potentially updating your goals or revising your goals. On a monthly basis, you're reviewing them so you don't lose track of those things.

24:15You want to make sure that they are top of mind for both you and your team. And then the last part of that is a weekly review process. And that's where you're aligning your team around here are the priorities that we are pursuing as a team this week, our weekly big three at a team level. And of course, this can be done at an individual level too. But we want to make sure that our teams are the things that we're working on are not disconnected from the goals that we're pursuing. And this is one of the reasons that ultimately execution fails. We sometimes spend a lot of time and energy trying to solve problems of performance or execution when really they're upstream problems.