Strategic planning has long been a part of many companies’ annual business processes. We were honored recently to work with a well established B2B focused company to create their five-year strategic plan. Through that engagement, we were able to establish a few principles that may help make your strategic planning exercise more effective in today’s world of constant change and uncertainty.
While we believe in the power of traditional elements of strategic planning, like SWOT analysis and financial goals, we’ve found that following these five startup-inspired principles, outlined below, will not only ensure a strong strategy, but equip your team along the way to be able to pivot as needed when there are market shifts during the term of your plan.
1. Involve the Team
Engaging a broader team in strategy projects might feel like it will create additional work, but in our experience, it’s definitely worthwhile! Traditionally, executive teams approached strategy in relative isolation. Instead, consider broadening your team to include folks from across functions and roles, and from up and down the organization. Their engagement can range from conducting customer research or desk research, to generating new ideas. This type of engagement strengthens buy-in, but also increases the relevance of the strategies you create due to a broader and more front line-focused understanding of the challenges and opportunities in your business and industry.
We worked with our client to engage a group of senior managers from multiple regions and business units. These senior managers provided relevant market focused insights and important advocacy as the strategic plan was rolled out to the broader organization.
2. Look at the Market Broadly
If your goal is to grow, or even to maintain your market position, it’s important to consider trends and opportunities beyond your current market. For B2B companies, we suggest considering three tiers of exploration: your current industry, your customers’ industries, and adjacent industries. As you explore each of these spaces, take note of any activity in the following areas:
For consumer focused companies, consider your current category, adjacent categories, and industries or categories that impact your industry (for example, if you’re a retail food manufacturer, consider eCommerce or restaurant trends).
We worked with our B2B client to dig into multiple verticals, including those where they had an active business, as well as those that were growing, but that weren’t part of our client’s portfolio, to gain a stronger understanding of the current trends and opportunity areas in their customers’ industries. Team members were also provided with tools to assist their exploration, including a discussion guide, note taking template, and master document to capture learnings.
3. Talk to Your Customers
In addition to exploring the broader market, turning to your own customers for insight is key. In the B2B world, beginning with your most loyal customers, determine who the right stakeholders are for thought partnership, including financial decision makers, project owners, and individuals in leadership positions. It’s important to remember the goal of these conversations is to learn — not to sell. Our client was not only able to gain direct input and valuable feedback, but also foster an ethos of partnership and strengthen loyalty with their customers. In a consumer focused business, qualitative connection with loyal users, as well as those who have left your brand or company and/or are using a competitive brand or product can be incredibly insightful.
4. Define Where You Want to Play and How You Will Win
Great strategy always includes clear choices around where you will play (verticals, channels, or customer/target groups where you have a right to win, and can establish a sustainable advantage and superior value), as well as clear enablers around how you will win (business models, sales, marketing, or people strategies).
We worked with our client to consider which segments, regions, customers/consumers, and parts of the customer journey they could focus on to achieve this advantage.
After defining key “Where to Play” choices, determining an unmet need — a “Problem to Solve” — is the next step in the process. It’s important to view the problem through the point of view of the chosen playing field. Our client was able to identify and then prioritize specific needs within each of their “Where to Play” choices to focus their strategic choices.
5. Let the Financials Follow
Finally, while most traditional strategy setting begins with financial goals, we suggest aligning on the right strategies to win in market and then conducting market sizing to determine whether those choices are sufficient to hit your ideal goals. If not, consider ways you can deliver more value or add adjacent customers.
In our work with our client, we allowed their strategy to drive financials by asking the following questions, in this order, at the end of the planning process:
Applying these principles will lead to stronger strategies, a well aligned team, and a plan you can execute. From our client’s perspective:
“We entered the process thinking we knew the strategies we should choose to execute. Some of these were validated, but new creative ideas surfaced, and ultimately our strategic plan was a mix of our initial ideas, and new ideas generated from the TGG process. TGG drove the right level of discomfort to create a well-balanced strategic plan.” – President & CEO
What’s one actionable next step you can take to apply these principles?
If you have questions or want to learn more about The Garage Group’s startup-inspired approaches to tackling strategy and innovation challenges, get in touch with Erin Faulk.