 In my experience, most small businesses do not have a strategic plan to outline the future direction of their business. It appears most entrepreneurs get sucked into their day to day operations and find it very difficult to pull themselves from the clutches of mundane and often meaningless work to dedicate the effort and resources to chart their future. It’s surprising how most people are OK with “ending up somewhere else” by not taking control of their future with a well thought out written plan.
The strategic planning process should create an environment where entrepreneurs and their team members live the strategic plan every day. It sends the importance of the mission and vision down to each job at every level of the business and reminds each team member that they, too, can make a contribution to the success of the business.
A strong strategic plan will do the following for a small business:
- bring people together in the research and development of the business’ mission, vision and goals and its responses to potential threats and opportunities
 A truly living strategic plan must engage team members at all levels in the process of accomplishing the objectives through development of personal goals that are directly related to the vision of the business.
Unfortunately, most small business owners have limited resources within the number of team members in their business. Entrepreneurs and their team members often wear many hats for the business thus spreading the multiple steps of creating and implementing a strategic plan over very few people. The small business owner could very well end up as committee chair for every department. This is all the better reason to employ the use of a strategic plan, especially when small businesses are leveraging a lean work force to drive results.
Here are seven key considerations to remember when undergoing the strategic planning process:
1. Involve the leadership of the business in the development of your strategic plan.
Department heads, the office manager, accounting, sales reps and the staff should all be included in creating the strategic plan. Many businesses simply hire a facilitator, and the small business owner with a few key leadership members attends a session that resembles a lecture. There is very little productive involvement and very little buy-in to this kind of approach. The strategic planning process should involve every team leadership position and team member in the business.
 Typically the first phase of the strategic planning process will involve an assessment of the current business atmosphere, which can include a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats). For example the team can be divided into four groups: strengths, weaknesses, opportunities, and threats. Each team will be assigned to perform research on its topic, and will prepare a presentation of the team's findings at an upcoming strategic planning meeting. Each team will become experts in their assigned areas and truly bring substance and participation to the SWOT session.
2. Communicate the excitement of creating and implementing a strategic plan.
You can’t underestimate the effect of attitude on your team when creating and executing your plan. Does your business embrace your strategic plan? Do all team members know the mission and vision of the business and feel as though they are making contributions towards the accomplishment of the big picture goals? How leadership conducts and communicate the strategic planning process will trickle down directly to the team members below them. Without a positive attitude by leadership, buy in from team members will be minimal. Make sure each tier of your business creates the excitement and motivation necessary to empower all team members at all levels.
3. Break down large goals into smaller annual objectives.
General goals can be intimidating to team members who may not understand the roles outside of their own. However, general goals are attainable by breaking them down into smaller goals for each department and team member.
Goals that are too far reaching tend to de-motivate team members, who feel leadership expects miracles, so they can find it easy to just give up or disengage. By breaking down large goals into smaller ones, team members may change their attitude towards working with the strategic plan knowing the plan specifically addresses how each department and team member support the overall goals of the business.
The smaller goals will help move the organization toward perfection a little at a time. There should be at least one small goal from each department and team member for each big picture goal. For example: to reach the general goal of 99 percent of market share in the local market, an annual objective would be created to move the needle from 40 percent currently to 50 percent by the end of the year.
4. Develop and focus on Process Goals – the activities that drive results.
Along with statistical goals, process goals should be integrated into the strategic plan. For instance in the above example, you could identify three key activities each department or team member should focus on to do their part in increasing the market share by ten percentage points. After all, the statistical goals are a bi-product of the activities and behavior driving them.
5. Develop a compensation plan that includes a bonus component directly correlated to the annual objectives in the strategic plan.
 Most small businesses struggle financially finding it hard to change their mindset about additional revenue not collected. “Why should I reward my staff when I haven’t rewarded myself enough yet?” is a common question I receive. Integrating a financial reward system on money waiting to be generated will help small business owners connect the strategic plan to their team member’s pocket books, while allowing the team members to share in the success of the growth of the company.
Consider this simple concept. In addition to a standard base pay, each employee is given the opportunity to earn bonuses upon the accomplishment of pre-defined goals. Many businesses plan for a standard increase annually, then dole out the increase evenly to team members, regardless of performance level. This creates a culture of entitlement. Keep the base pay fairly stagnant and create a healthy bonus pool as a fixed percentage of total salary. The bonus pool percentage should be considered in the budgeting process and factored in when performing projection calculations. The beauty of bonus systems is small business owners are rewarding their high performers, not just spreading the annual set pay increase evenly to each team member regardless of performance level. Eventually, team members will catch on that they are not entitled to increases every year, but will need to perform to earn more money. Redesigning your team member’s compensation will further tie them into the business objectives and goals.
6. Communicate the objectives and how team members' jobs contribute to the goals of the organization.
After completion of the strategic plan, leadership and team members typically come together to set attainable goals for the upcoming year with defined bonuses from the bonus pool and target dates for completion. Each goal should be assigned a percentage of that team member's bonus pool (totaling 100 percent). It is important to assign goals that are beyond the normal job description, but within the scope of the employee's capability. Once again, setting goals that are unattainable will backfire and de-motivate the team members. This isn't an easy process. It's very easy for a receptionist to say, "I can't do anything to increase market share. I just answer the phone!" Team members will have to learn that what they do does make a difference.
7. Give the team feedback on their progress.
Once the plan is in place, let the team members and leadership know how they are doing. Quarterly and/or monthly reports to leadership and the team members giving status on the progress of each big picture goal will keep leadership informed and hold team members accountable. It is important to develop a measurement system that can give feedback on each objective. This might be done through the accounting system (sales) or through customer surveys (ratings). As goals are finalized, ask the accounting department to design a system that will track the numbers you need to measure the annual objectives and the human resource department to design a system to track the process goals.
Small business owners will find it is very rewarding to watch leadership and team members work together through the combination of research, planning, tracking, and motivation to create, execute and monitor a strategic plan. Who knows, small businesses may end up somewhere other than “somewhere else."
Travis Ray Chaney is a co-creator and Transformation Guide with Dynamic Directions. For more information on Dynamic Directions, please contact Travis Ray Chaney at tchaney@dynamicdirection-d2.com
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