Do you know where your business is going and how it’s going to get there? As much as that sounds like a ridiculous question, what’s more ridiculous is how many business owners don’t know the answer.
Would you go on a wilderness canoe trip without looking at a map, knowing your destination, drawing your route and sketching out a timeline for getting from A to B? No way. Yet, all the time, I meet entrepreneurs who operate without a strategic plan. They’re bound to get lost in the woods. But when they do, no one’s going to send out a rescue party.
In fact, the only strategy for most of these leaders is to sell more! They’re too busy putting out fires to look ahead; they’re being reactive, not proactive. This approach will limit your ability to grow. Instead, you have to pull yourself away from the day-to-day, delegating it to your people so that you can be a leader.
The most important part of leading is knowing where you are going and how you’ll take your people there. In other words, strategic planning.
I like to think of strategic planning as a company-wide process that determines your objectives and lays out the steps and resources required to achieve them. Some strategic plans map out the next five years, but I suggest you start with a one-year plan — it’s not only helpful, but achievable as well.
In my experience, you need to have at least four strategic-planning sessions a year with your leadership team. One of them is an annual session that lays out the next 12 months, including a more detailed plan for the first quarter, followed by three quarterly sessions. These sessions should take place a minimum of 30 days prior to the start of the next quarter. Set aside at least a full day at an off-site location where your team will not be interrupted by staff or the telephone. Limit BlackBerry usage to periodic “bio-breaks.”
At your first session, if you have not already done so, go through the Hedgehog exercise described by Jim Collins in his management bible, Good to Great. Collins explains that defining a company’s Hedgehog Concept — the one big thing your company should do with unwavering focus — comes from a deep understanding of these three things:
1. What you can be the best in the world at (and what you cannot be the best at);
2. What you are deeply passionate about;
3. What drives your economic engine.
As part of this process, you might consider taking your team through a SWOT analysis. By identifying your company’s Strengths, Weaknesses, Opportunities and Threats, you can hone in on your Hedgehog. This can be a difficult task, because members of your team will be anchored in your existing paradigm. Imagine how hard it is, for instance, for a manager who currently leads a direct sales force to align his thinking with a strategy centred on an online self-serve model.
Once you’ve determined your Hedgehog, you can devise the strategy to achieve it. From there, you develop the tactical steps to implement your goal.
We’ve implemented this process at I Love Rewards Inc., the Toronto-based company whose advisory board I chair. Until about 18 months ago, I Love Rewards didn’t know its Hedgehog. What it did have was a loyalty rewards and employee incentives division on the one hand, and a promotional products division on the other. After a lot of soul-searching, the senior leadership decided that the company’s Hedgehog was in the loyalty and incentives space. They sold off the promotional products division, and used the proceeds to fund expansion of the remaining business. Sales have soared ever since.
But I Love Rewards didn’t stop there. Once the team figured out what business they should be in, they developed their vision of the company five years down the road. Then, they reverse-engineered the core components of the strategic plan that would realize the vision, determining not only their annual revenue targets but also the head count for each department that will be required to hit them.
And the process continues. Senior management gathers one month before the beginning of every quarter for a two-day quarterly planning session called the 90 Strategic Sprint (90 SS). One goal is to determine the “theme” of the company as a whole for the next 90 days. Another goal is to determine the top five objectives of each of the firm’s nine departments for the next quarter. These goals must be SMART: specific, measurable, action-oriented, realistic and time-bound.
At I Love Rewards, the boardroom walls are covered with whiteboards listing the 45 objectives of the combined departments. As each is achieved, it’s checked off in front of the entire staff during their daily nine-minute “huddle.” This ensures that all employees are aligned with the 90 SS and each accomplishment is celebrated company-wide. It’s a beautiful thing to see, because each of those check marks translates into revenue growth, increased profitability or both.
Sure beats being an employee of a stagnant business — or being lost in the woods.