Everyone who owns or works in a business wants something out of it. And everyone has some sort of a plan in mind to get it, whether it’s consciously chosen or not. The question is whether the conscious and unconscious plans of all employees work toward meeting a common goal.
The First Strategy Challenge
What, exactly, is a strategy? Richard P. Rumelt, in his book, Good Strategy/Bad Strategy: The Difference and Why It Matters says the core content of a strategy has three parts:
- A diagnosis of the situation at hand.
- The creation or identification of a guiding policy for dealing with the critical difficulties.
- A set of coherent actions.
There are many outlines for strategic plans. The key is to make sure whatever format you use, the plan contains the three parts listed above.
The Second Business Strategy Challenge
This challenge is about meshing the individual goals and plans of employees and management to synchronize the work of implementing the strategy. If there isn’t a strategy and plan, then a lack of alignment across the organization wastes time, money, and effort.
Different Types of Business Plans
It can be confusing to figure out which kinds of plans should be used in your specific situation. The plan you start with is secondary to the fact that you, your team, and your company need a plan.
It may feel like more work than it’s worth to take a plan out of your head and put it on paper, especially if you are a company of one or just a few people. However, you significantly increase your chance of success with a written business plan. The thinking required to create the plan is the most valuable outcome of creating one.
The Strategic Plan
At its most basic level, strategic planning determines where an organization is going, how it will get there, and how it will know when it has arrived. The focus is usually the whole organization. Its greatest value is telling everyone in your company (and key outsiders) why the chosen path is important, both for the company and for them.
If you are a CEO or business owner, deciding on a strategy, then developing and overseeing its execution, can occupy a great deal of your time as you keep people on track towards the vision you’ve set for the business. That’s where we come in.
(Read more about how we can help you establish vision and strategy.)
The Business Plan
A business plan is driven by the strategy. Its focus is usually on a product, service, or program. This plan is more detailed, often with one or more sets of specific, measurable SMART goals with action plans.
If yours is a large organization, a written business plan is essential, not an option. Its most critical function is as a communication tool used by everyone working toward the desired outcome. This plan helps people figure out—or at least gets them talking about—the answers to the six questions everyone wants to know: Who, What, When, Where, How, and What’s Next. Then, when a team encounters obstacles, the plan is the key tool that helps drive the solutions they need.
This plan is also where it’s good to define what won’t be done. There are always more ideas than the time and money to implement. If you or your team wants to do something outside the business plan, you need to either change your mind or change the plan. If you do the latter, you must also change related plans, like the marketing plan.
(Read more on how we can help you establish a business plan with goals and actions.)
The Marketing Plan
If there is one plan that’s usually written, it’s this one. Marketing almost always costs money, so a plan is necessary to choose the most effective ways to find, connect with, educate, and communicate with suspects, prospects, and current and prior clients.
For many years, the 4 P’s of Marketing were the focus: Product, Place (Distribution), Price and Promotion. Invented in 1960 by Jerome McCarthy, they were made leading-edge by Philip Kotler in his book Principles of Marketing in 1967.
In today’s world, the 4 Ps have evolved into the 4 Es, as explained by Ogilvy & Mather. Their view of this transformation is:
- from Product to Experience
- from Place to Everyplace
- from Price to Exchange
- from Promotion to Evangelism
Your marketing plan gives you the opportunity to sort through a vastly different world of consumerism, social media, relationship marketing, and much more.
(Read more on how we help you create and implement plans to strengthen and grow your company.)
Nonprofit Versus For-Profit Strategic Planning
Let’s look at why nonprofits need strategic planning even though their goal isn’t profits.
As explained by the Free Management Library web site:
- Major differences in how organizations carry out the various steps and associated activities in the strategic planning process are more of a matter of the size of the organization — than its for-profit/nonprofit status.
- Small nonprofits and small for-profits tend to conduct somewhat similar planning activities that are different from those conducted in large organizations.
- On the other hand, large nonprofits and large for-profits tend to conduct somewhat similar planning activities that are different from those conducted in small organizations.
- The focus of the planning activities is often different between for-profits and nonprofits. Nonprofits tend to focus more on matters of board development, fundraising and volunteer management. For-profits tend to focus more on activities to maximize profit.
(Read more on how we can help your nonprofit develop and use the plans it needs to strengthen its mission and serve its constituents.)
So, What Is The Next Step for YOU?
Contact us today for a free initial consultation. We help companies and nonprofits tackle strategy and planning to significantly improve their results.