Strategic Plan vs Operating Plan

Planning is everything

Everyone thinks they need a Strategic Plan. And sometimes they do. But not always. Often what an organization really needs is an Operating Plan to effectively drive their work. This article will share when a Strategic Plan is appropriate, when an Operating Plan is a better option, and what a solid Operating Plan looks like. Let’s dig in. 

Strategic Planning

Strategic planning is an organization’s process of defining its overriding direction for achieving its mission or purpose. A business uses this process to make decisions on how it will allocate its resources to pursue their strategies. 

The general outcome of a strategic planning process is a Strategic Plan. This can be anything from a one-page visual to a binder full of documents, information, and goals. The trap many businesses fall into is believing that the point of strategic planning is to get to the Strategic Plan. In reality, the most important part of the process is engaging stakeholders, volunteers, constituents and staff in the activity of examining the organization. 

Gathering information and input from multiple sources ensures a business or organization is staying relevant and on track for fulfilling its purpose. Through this process leaders learn what is important to the community, their customers, and those people closest to the products or services of the business. In order for a strategic planning session to be effective, leaders must be open to change and willing to let go of the past. Otherwise, there is no reason to go through the work of strategic planning. 

Another pitfall of strategic planning is to create a beautiful plan, then leave it sitting on a shelf or in a drawer. Again, if you are going to go to all the work of strategic planning and then you don’t use it to guide the work of your business, you have just wasted a bunch of time and energy. This can also serve to disengage your most loyal allies. 

When Not to do a Strategic Plan

While the strategic planning process can be a very valuable tool for guiding your work, there are several reasons NOT to do it. 

  1. First and foremost, if done right, the strategic planning process takes a significant amount of time, energy, and money. If you do not have the time, determination, or funds to do it right, you are better off not doing it halfway. 
  2. A business that falls under the guidance of a parent organization probably does not need to go through a strategic planning process. Usually the parent organization sets the strategy. In that case, your operation is responsible for figuring out how you will execute those strategies for your service area. 
  3. A business that already has effective and relevant strategies in place does not need to go through the process. There’s no right or wrong answer to how often you should go through the strategic planning process. A general rule of thumb is every 3 to 5 years. If you are actively using your strategic plan and reviewing, the need for a new planning process will organically reveal itself. 
  4. When a business uses Strategy Screens (you can read more about this concept here), they go through the process of examining their strategies every time they are faced with an opportunity or challenge. Similarly to number 3, by using this system you will know when it’s time to go through a strategic planning process. It won’t be dictated by the cycle of the calendar. 
  5. As stated above, if leadership is not ready for the potential to make significant changes, then its probably not a good time to embark on a strategic planning process. This can happen because of egos, protecting turf, and special interests. In these cases, it doesn’t matter how fantastic a plan is, it’s unlikely to result in any real change. 
  6. Other reasons for not engaging in strategic planning include a lack of understanding of the purpose, lack of flexibility, lack of ability to follow-up and a lack of engaged stakeholders. 

Due to the significant investment it takes to do effective strategic planning, you want to be sure it’s the right option at the right time. If you decide that a strategic planning process isn’t right for you, it doesn’t mean you shouldn’t do some sort of planning. That brings us to the value of Operating Plans.

Operating Plans

Strategic planning focuses on how things have changed for your business over the past few years, what’s changing now and what might change in the future. On the other hand, Operations Planning looks at the way you will conduct business over the next year. If you have a Strategic Plan in place, your Operating Plan should be directly tied to it. For businesses that do not have a Strategic Plan, it might be even more important to develop an Operating Plan. 

I recommend some level of Operations Planning every year. The best time to do this is leading up to your budgeting process. A budget is simply a plan for your year, broken down into numbers. In order to put together your numbers plan for the year, you need to know what you will be doing. 

Since most people cannot predict the future, the best we can do is make assumptions about what will happen over the coming year. Then we make plans around those assumptions. Based on your expertise in your industry, you may predict growth, stagnation, or the need to add a new product or service. Taking the time to think through what will happen over the next year, you are able to put together realistic plans. Sometimes it’s appropriate to map out multiple plans. If XXX happens we will plan for YYY. If XXX doesn’t happen, we will plan for ZZZ. 

The next step in your Operating Plan is to develop the budget. With clear assumptions in place you can create the money story to support those plans. Whether you’re predicting growth, staying the same or changing products or services, you put your numbers in place in order to carry out the plans. This is an oversimplification of the budget process. If done right, that process involves a great deal of research, comparison, and give-and-take. That’s a topic for a whole separate article. 

Once you have your budget plan mapped out you can write your goals for the year. Done right, your operating goals for the year will keep you on track to meet your budget. And when tied to your Strategic Plan, they will keep you moving towards your mission or purpose. 

In addition to being tied to your Strategic Plan, annual assumptions, and budget, a well constructed Operating Plan will include the following:

  • Goals for the year – Spell out what you want to achieve over the next year. Define how your operations will be different at the end of the year. 
  • Action steps – Break down the goals into the steps it will take to get you there. Be specific and thorough. 
  • Accountabilities – Assign each step to one person who will be responsible for carrying it out. 
  • Due dates/Checkpoints – Set a due date for each of the action steps. A good practice is to set aside time at the end of each quarter to examine your goals, action steps and accountabilities. By checking in every 90-days you stay on-track and are able to refocus. 

As you develop your Operating Plans, you will want to run it by your stakeholders. This serves as a “reality check”. While you don’t want to turn this into a pseudo Strategic Planning process, you also don’t want to do your planning in a vacuum. Check the logic of your assumptions, goals and action plans. Not only will this ensure that your plans are solid, it will also garner confidence from your stakeholders, and make it easier to get budget approval. 

I really love the quote by Yogi Berra: “You’ve got to be very careful if you don’t know where you’re going, because you might not get there.” Whether you’re ready for a Strategic Plan, or an Operating Plan makes more sense for you, it’s best to know where you’re going.  

Need help with your Strategic Planning, Operational Planning or figuring out which is best for your business? Email me at kim@athena-coco.com to schedule a free 30-minute discovery call to get started creating the best plans for your business! 

Kim Stewart

Kim is a mom, wife, lover of being active and the outdoors,
and helper of small businesses and nonprofits.
kim@athena-coco.com

Avoid the Shiny Bunnies

Squirrels, shiny bunnies, kitten bombs, Facebook – whatever you want to call it, distractions are everywhere. There are the day-to-day distractions that get in the way of your tasks and responsibilities. Social media, a new show on Hulu, and mundane chores all distract you from the things you know you should be doing in order to effectively manage your life or meet your goals. 

While this type of distraction can be a serious issue for some of us, today’s article is going to focus on the larger version of this problem. Individuals getting distracted is one thing. Entire organizations that get distracted is a completely different problem. 

When an individual is distracted it leads to anything from messy houses to jeopardizing their job. However, it can be much more devastating when a business or organization becomes distracted. It can lead to profit loss, bankruptcy or even total failure of the business/organization. 

For a business or organization, this happens when the leadership loses focus on the mission, vision or purpose. Leaders become distracted in many ways. It could be a flattering offer that comes their way, pressure from partners or other community leaders, or a need to prove something. This article will look at:

  1. How to identify organizational distractions
  2. Strategies for keeping your business on track

Identifying Organizational Distractions

As a leader, you might not even realize when a shiny bunny is headed right for you. You’re going along, doing what you believe is best for your business. By being on the lookout for these distractions, you can save your organization money, time and heartache. 

  • Too Good to Be True: We all know that if something sounds too good to be true – it probably is. As leaders, whose focus is on growing revenue or impact, it can be tempting to chase after this squirrel. A new project, partnership, or endeavor might sound like a fast track to growth. 
  • You Need to Justify: If you find yourself justifying why something is a good idea, it is an indicator that you need to look more closely at your decision. Anytime it’s not completely obvious how a decision connects to your mission/vision/purpose, you might be pursuing a distraction.
  • Secrets or Hiding Things: Keeping secrets or telling different “stories” to different groups of people should be cause for reflection. This is an indicator that you are hiding something, or that you are moving in a direction that is not consistent with your core focus. 
  • Outside Pressure: Leaders from other businesses, agencies, or entities will always have an ulterior reason for wanting to partner with you. Even if they give you 100 reasons why they believe it would be a good move for your business, they still are pursuing the partnership for their own gain. 

To be clear, there are definitely times when new business opportunities make sense. This article is not meant to prevent growth and innovation. Rather, it’s meant to keep you from losing your focus on what is most important to your organization. Being aware of what these distractions look like is the first step. Next we’ll look at how to deal with and minimize distractions.

Maintaining Your Focus

  • Know Your Vision

The first step in maintaining your focus and minimizing distractions is to know your vision. This article goes into detail about the importance of having a crystal clear vision. Without it, you are much more susceptible to distractions. When your mission/vision/purpose are foggy, leaders grasp at straws. When we don’t know where we are going, we welcome (and sometimes even look for) distractions. 

  • Communication & Trust

In tandem with your vision comes building up your communication and trust. This involves sharing your mission/vision/purpose over and over, solidifying the importance and ensuring all staff, volunteers and stakeholders understand. In addition, creating open and honest communication systems builds up trust. 

  • Ask Questions

Building trust among your team members is key to this next step, which is to ask questions. Big decisions should not be made in a vacuum. Get input from those you trust, and who also trust you enough to be honest. Brutally honest if necessary. Ask tough questions about who has the most to gain, what is the downside, and how the opportunity might change the focus, culture, and direction of your business. 

  • Be Completely Honest

In order to make the best possible decisions for your company, you must be 100% honest with yourself about your motivation. Otherwise, ego can easily get in the way of taking action in the best interest of the organization. Making decisions that make you look good is obviously a goal, but it shouldn’t be the only goal. If your own self advancement is the primary factor behind a new endeavor, you need to be able to step back and objectively look at how it will impact the business. 

  • Strategy Screens

Creating strategy screens can be very effective in keeping your business on track. A strategy screen is a list of questions or criteria against which you can test potential new opportunities. By working with your board, stakeholders or leadership team to create a list of 5 to 8 criteria, you can proactively protect yourself from distractions. 

  • Operational Plans

Solid operational plans will keep you moving in the right direction. This includes annual goals, quarterly action steps, accountability, and regular measurements. By establishing goals designed to move you towards your mission or vision, breaking them down, assigning accountability and regularly measuring your progress, you stay on track. This structure can serve as an insurance policy protecting you from distractions. 

As leaders, you are constantly faced with opportunities and decisions to make. You absolutely do not want to be risk adverse or your business may become stagnant. However, at the same time, you want to focus your energy on opportunities that will help you meet your business goals. By being able to quickly identify organizational distractions you will be able keep the shiny bunnies at bay. 

Need help creating your vision, communication system, strategy screens or organizational plans? Email me at kim@athena-coco.com to schedule a free 30-minute discovery call to find out how to lock out the squirrels! 

Kim Stewart

Kim is a mom, wife, lover of being active and the outdoors,
and helper of nonprofits, small businesses and leaders.
kim@athena-coco.com 

 

Are you Too Close to the Problem?

Remember that boyfriend (or girlfriend) who was really awful for you? All your friends knew it, but you couldn’t see it. Remember tuck rolling your acid washed jeans? It was cool at the time, but looking back it seems pretty ridiculous. And do we even need to talk about perms?

My point is, when you’re close to something it’s difficult to see the full picture. You get caught up in emotions or trends or the very small piece of the picture that is right in front of you. It’s not until you have the luxury of time or distance that you are able to see the full story.

The same goes for leading your business. When you are completely consumed with working IN the business every day, you are likely facing problems. These present themselves as feeling overwhelmed, having difficulty making decisions, and frustrations from things not going as planned. Sometimes you don’t even see the problems. If you’re knee deep in the hoopla, you might not even recognize that you have opportunities to make better decisions, simplify, or realign.

Working ON the Business

You may have heard this phrase before: working IN the business vs working ON the business. When you are working IN your business, you are doing any of the many tasks or management activities that make it possible for your business to run today. In our fast-paced world where there never seems to be enough time in the day, you may feel overwhelmed by the sheer number of tasks and management activities on your plate. This fact may make it seem impossible to ever step away, for even two hours, to spend time working ON your business.

Because breaking away from the day-to-day can be so challenging, I’m going to share four tactics for ways to pull yourself away and give yourself, and your business, the much needed time spent working ON the business. Before I get into these ideas, let’s address the frame of mind you need in order to successfully work ON your business.

When you work ON your business, you are focusing on strategy for tomorrow’s success. The first step is to understand and believe in the importance of taking time to think strategically about where you want your company to go. If you see spending time thinking strategically as a waste of your precious time, then don’t do it. You need to be committed for this to be valuable. Otherwise, it is a waste of time. It’s also crucial to be open to new ideas. If you have no plans of changing how things are done, then there’s not much benefit to stepping away to focus on strategy.

Tactic #1 = Communicate

Okay, so you’re excited about thinking strategically and you’re open to exploring new ways of doing things. The next question is: How? I’m sure that running your business could easily consume 24 hours of your day, 7 days a week if you let it. Obviously, you don’t let it do that. You sleep, you eat, and hopefully you make time for your family and friends; as well as recreation, wellness, and hobbies. These activities fit into your life for a couple of reasons:

  1. Because they are important to you, and

  2. Because you have created a culture where the people in your business understand that you sleep, eat, spend time with family/friends and have some sort of  personal life.

Similarly, you can make working ON your business fit in if it’s important to you and you create a culture where the business understands it’s a priority. We already talked about your mindset around working on strategy, so clearly it’s important to you. The next step is to communicate with your team about why it’s important and how it’s going to look. Share your vision for your company and your belief that to achieve your vision you will need to think differently. Then tell them what it will look like.

Tactic #2 = Get Out

Set aside a specific time on your calendar. The best plan would include about 2-hours a week at the same time each week. If this seems impossible, shoot for 2-hours every other week. Still too much of a challenge? At the very least I would recommend 4-hours, once a month. Pick a time of the day or the week that would be considered your “slow time,” if there is such a thing. Whatever you land on that works well for you, stick to it like glue. Put it in your calendar. Schedule other things around it. Make it a priority.

Then leave. Get out of your office, your store, or your facility. Don’t tell your team where you are going. Take nothing but a pad of paper and a pen. That’s right, leave your cell phone behind if at all possible. Go to a coffee shop or a park or the library. Find a place that allows you to relax and your mind to explore new ideas.

As stated in Tactic #1 – communicate this plan and the purpose of it to your team on a regular basis. By communicating and following through with your plan, it will become part of the culture.

Tactic #3 = Create Accountability 

Does this all sound great, but you know yourself well enough to know that this might last for two weeks before you will find excuses for why it’s more important for you to stay IN the business? If so, consider finding an Accountability Partner to support you. This could be a partner, a spouse, a team member, a friend, a mentor, or another business leader. Explain to the person what you want to do and ask them to help hold you accountable. You may even find someone who wants to do this with you, kind of like a workout buddy.

Tactic #4 = Outside Help

There are times when engaging outside help is the best option. A coach, a mastermind group, or any other peer group are all things to consider if you feel like an outside set of eyes would be helpful. These resources can help give you a new perspective, consider new ideas, or hold you accountable for the things you want to do to reach your business vision. An outside set of eyes will challenge you in ways that you may have never considered, and will push you to do things you might not commit to on your own. Most coaches and peer groups provide a free discovery call or visit so you can explore the different options available to you.

Next Steps

Once you have your time-away plan, either on your own, with a partner, or with a professional, use your time effectively. These steps can help:

  1. Stay laser-focused on where you want to take your business. If you don’t have a vision yet, this is a great first step.

  2. List out all the challenges you face that are preventing you from reaching your goals. Prioritize. Peel back the layers. Often the first thing that comes to mind is a side effect of the real problem.

  3. Once you get to the heart of an issue, explore strategies for working through it. Come up with as many strategies as you possibly can. Determine which best match your brand, your culture, your values, and which will best solve your problem.

  4. Decide.

  5. Plan your communications. If you have regular staff meetings (which I hope you do), add the decisions made to your meeting agenda. Communicate your thoughts and develop any action steps required to roll out the strategy.

  6. Tackle as many issues as you can in your allotted time. Save others for your next Strategy Session.

Put Your Mask on First

There is a strong pull to convince ourselves that business cannot possibly continue to operate if we are not there. Are you really needed all the time? Or does it make you feel good to be needed all of the time? If your business cannot run without you in it for every hour that you are open, I might suggest this as one of the first issues you tackle.

“In case of a drop in cabin pressure, put your own mask on first so you can assist others.” Same goes for your business. Thinking short-term: I have to help my child or my seat mate, is similar to focusing only on the daily tasks. You’re only going to be able to help for a finite period of time. Thinking long term: If I put my mask on first, I’ll be able to help many others, is the equivalent of taking the time to think strategically about your business. You have to think long term in order to take care of your business.

Some lessons can only be learned through experience (like that awful perm), others (like the health of your business) you want to proactive work to solve.

If you would like to explore how coaching or consulting can help you work ON your business, email me at kim@athena-coco.com to schedule a free 30-minute consultation. Calm the Chaos by working ON your business so you can find time to focus on what’s important to YOU.

Rethinking Strategic Planning

Any business or nonprofit with a strategic plan developed prior to February 2020 now likely realizes the limitations that come with a traditional 3 to 5 year plan. I doubt there were many strategies in place to help your business deal with a global pandemic. And yet, that is exactly what hit us and continues to challenge many businesses and organizations.

Thinking strategically about where you want to take your business is a key component in making sure you get there. After all, having a great vision for the future of your business is only half the battle. You also need plans and steps to get you there; as well as, communication with and buy-in from your team. If you are still in the process of crafting your vision you might want to go back and read this and maybe this to work on that piece of your business leadership. Once you are crystal clear on your vision, you need to mobilize every member of your team towards reaching that vision. That’s where strategy comes in.

Strategy is defined as:

A plan of action or policy designed to achieve a major or overall aim.

This is a pretty simple definition for something that is so important to the success of your business. This article is going to share some of my ideas on how best to create strategy for your business, along with some of my key take-aways from a book called “The Nonprofit Strategy Revolution” by David La Piana. While the book is focused on strategic planning for the nonprofit sector, the points I will share are applicable for both for profit and nonprofit businesses.

Traditional Strategic Planning

The first point I want to share is around the timing of strategic planning. Traditionally, every 3 to 5 years organizations spend exorbitant amounts of time and energy on creating a beautiful strategic plan. It would involve input from stakeholders and volunteers, customers and staff. Every word would be crafted to be just right. In larger organizations they would often hire a graphic designer add in images and charts and graphs to make it really beautiful for sharing and showing off. There are several problems with this traditional method of strategic planning.

  1. First and foremost is that society and business move too quickly these days for a plan to be relevant for more than a year or so. Businesses need to be much more responsive to the ever changing world.

  2. Building on the first point, your business is likely also changing quickly. As you continue to work towards your vision you will need to continuously recalibrate to ensure you’re still on target.

  3. When a business commits significant time and resources to a strategic planning process, they are often burnt out on the whole thing and they don’t want to even think about strategy for a while. Big mistake since your strategies should be driving your goals, actions and decision making.

  4. Those shiny impressive documents often end up in a drawer or on a shelf, never to be looked at again, until the calendar says it’s time for another planning process. A plan that is not actively referenced and measured is of little value.

Real-Time Strategic Planning

The concept that is laid out in David La Piana’s book provides a method of creating strategy that is much more responsive and relevant than the traditional process. With the need to adapt quickly to new information and dynamics, any business can benefit from implementing the Real-Time Strategic Planning Cycle. Three key components that really differentiate this process from the traditional include:

  • Strategy Screens

  • Big Questions

  • Ongoing Implementation

Strategy Screens

In a traditional planning process the business usually takes time to clarify their mission and/or vision, who they are as a company, and their organizational identity. That part is similar in the Real-Time process. The next step is what really looks different as the business uses that information to create “Strategy Screens”. These are criteria the organization will use to analyze potential strategies they might implement when faced with challenges and opportunities. The Strategy Screens helps the company determine if the potential strategy is consistent with their organizational identity.

Every company’s Strategy Screens will be unique to their organization and will likely evolve over time and as needs change. Screens are written in the form of a statement that each potential strategy is compared against. For example, La Piana’s suggests that most companies will have something similar to these two screens:

  • The strategy is consistent with our mission/purpose.

  • The strategy builds on our current competitive advantage(s).

Each business will have between 5 and 8 screens. Other topics that are important to compare the potential strategies to are things like breaking-even or surplusing, sustainability, human capacity, consistency with brand, and honoring key relationships. By developing Strategy Screens thoughtfully and intentionally AND before a crisis or opportunity presents itself, will simplify your decision making. This process helps you focus on what is important as an organization and avoid being reactionary or losing sight of who you are when the pressure is on.

Big Questions

When a challenge or opportunity presents itself, rather than jump to the potential strategies, the Real-Time process involves determining the “Big Question”. The Big Question frames the challenge/opportunity and can drive the potential strategies. For example, when the pandemic hit, restaurants struggled significantly. Options for the Big Questions for businesses that particular industry may have been things like:

  • How will we stay in business?

  • How can we change our business to meet new needs?

  • How will the restaurant industry survive?

  • What can we do to support our community in new ways?

This is a short-list, I’m sure there are many more that came up. Notice that the questions will drive different strategies. It’s good to ask the question in several different ways to determine what will be best for your business. In the end you may decide that you need to combine several of the questions in order to develop the right potential strategies.

After determining your Big Question for a given issue and coming up with all the potential strategies, you go back and measure them against your Strategy Screens. Make a simple graph with the different strategies along the top and the screens along the left side. Test each strategy against each screen to see how they measure up. This tool should make it easy to see which strategies measure up best with the screens you have committed to.

Ongoing Implementation

In order to make strategic planning valuable, it needs to produce results, right? Strategies in and of themselves do not lead to action. Once you use the Strategy Screens and Big Questions to determine the strategy or strategies you will implement moving forward, you need to develop goals, action steps and accountability. In the restaurant example, if you decide your strategy is going to involve shifting your servers to meal deliverers, that alone will not get you there. You need to break it down.

I think this is where the Real-Time process really shines and produces results you just don’t see from the traditional process. By looking so far down the road, even when the traditional system sets clear goals, actions and accountability, they are usually so far reaching that the company loses sight of them and they become irrelevant before they are completed. Real-Time strategies are addressing immediate challenges or opportunities; therefore, the goals and actions that are developed in this process are crucial to moving the organization forward. Simple tracking tools that are reviewed weekly will keep everyone on track and accountable.

This is a very simplified explanation of what I believe to be key differentiators between these two strategic planning processes. It’s not meant to cover everything, rather to help you understand the value of looking at strategy creation in a new and innovative way. I utilize many of these concepts when working with businesses to help them become thoughtfully responsive, while forging ahead.

If you would like to explore Real-Time Strategic Planning for your business or organization, email me at kim@athena-coco.com to schedule a free 30-minute consultation. Calm the Chaos by streamlining your strategy development, and find time to focus on what’s important to YOU.