The Garrison Report #2010-5

Why a One-Page Strategic Plan

Listen to the audio version of this report here

A one-page strategic plan? Yes, absolutely.

For the skeptics, the author requests that you maintain an open mind to the possibility because you might be pleasantly surprised. There are three major problems with strategic plans. First, people tend to make them too complicated and don't use them. Second, because people think they are too complicated, they don't do them. Third, they are done poorly and are, as a result, useless.

Clemson University Professor Dennis Bausman conducted a study of more than 600 general contractors with an annual volume of at least $50 million. His study found that only 75 to 80 percent of the surveyed contractors had a strategic plan. It's often anticipated that a small company may not have a strategic plan, but he was surprised to learn that so many large contractors don't have one. Bausman also learned those contractors with a strategic plan are on average 35 percent more profitable. (Bausman's entire interview is available at www.Jackstreet.com/Jackstreet/WCON.Bausman.cfm or go New Construction Strategies Radio at www.NCS30.com.)

Can you afford to give away 35 percent? don't worry; you don't have to. Regardless of the size of your company, you can create a strategic plan that isn't complicated. Also, the less complicated the plan, the easier it will be to use and the more likely it will be used.

Plans often don't work because too many companies skip over the critical step -- strategic thinking. Without strategic thinking, you find it's garbage in and garbage out. This occurs because too often the process merely consists of long-term budget and income projections based not on facts, but on wishful thinking.

Unfortunately some companies just focus on the process without investing in strategic thinking. They immediately launch into their mission and vision statements, their objectives and the strategies to achieve the objectives. Obviously these four aspects of the strategic plan require thought and significant effort, but their major role is to establish guide posts or direction, not describe the plan in detail. The action plan is responsible for detailing the specifics for the next 90 days, but more on that later.

Strategic thinking's role is to determine the rules of the game then develop the best strategy to take advantage of those rules. This is no different than a coach determining how his team should best use its talent within the rules of the game. For many this process may seem daunting, but it doesn't have to be. Norm Levy, author of The Seven Questions of Business Strategy, provides a simple way to stimulate your strategic thinking. He recommends that you ask seven critical questions, namely which, why, where, who, what, how and when? These questions address the following:

  • Which niche or niches should you be in?
  • Why are you in that niche, and which values do you bring to that niche that differentiate your company and give it a competitive advantage?
  • Where is your company (geographical areas and position in the marketplace)?
  • Who are your people? What is your company's culture?
  • What are the results or goals you want to achieve?
  • How will you achieve the desired results? What are your processes and methods?
  • When do you expect to see results from your efforts?


These seven questions don't fit directly into your strategic plan, but unless you take the time and effort to answer them, you really aren't in a position to create the various elements of your strategic plan. These questions provide the foundation.

The one-page strategic plan

What goes into a one-page strategic plan?

The mission and vision statements are each one- or two-sentence statements. The mission statement represents what you deliver to the client, and the vision statement is what the company gains in return and when those goals are achieved.

The objectives are a little more complicated because to create a sustainable strategic plan, it must be a balanced plan that takes care of not only the company, but also the clients and the employees. If any of these three critical segments is ignored then it will cause the plan to fail. Therefore, a strategic plan should have eight to 11 objectives with the following breakdown.

  • One on revenue
  • One on profitability
  • Two or three on marketing
  • Four to six on operations, client loyalty, employee satisfaction or any other important issues


The first two objectives on revenue and profitability are the basis of the vision statement. The two or three marketing goals address which niches you are in. Identifying the correct niches is the only way to achieve the company's best performance. The other four to six address the issues to provide critical measurements on issues important to clients, employees and the company. While strategies describe how to achieve the goals, they should offer a big-picture perspective.

For example, a company may decide it should develop a particular niche by expanding the region in which it offers its services. The strategies would identify the geographical areas it would move into. The one-page strategic plan would not go into the details of moving into those regions. Instead, the details would be in the 90-day action plans. This makes sense because each new region may require a different approach.

The action plan is critical for success. First, it is where the action is. Second, the person who must carry out the action plan should develop it. Of course, the action plan must meet the requirements of the objective it is working on. For example, to meet a five-year objective, the action plan must have timeline that is consistent with meeting that goal.

When a plan is only 90 days long, it by necessity has a limited scope, which is an asset. The greatest strategists, such as Michael Porter, do a tremendous job of explaining why things happen, but they struggle to predict the future. They make long lists of factors to consider, which are all valid, but unfortunately no one has been able to create model that will accurately predict the outcome. Different experts interpret the data in different ways and make different conclusions.

Therefore, instead of making a large investment without any assurance of success, the 90-day approach allows a company to experiment or innovate. In essence, try different ideas to see what works and what doesn't. This process allows the contractor to keep tweaking his approach until it's fine-tuned.

Also, when someone spends months developing a detailed plan then the feedback is not what was hoped for, there is strong resistance to adapting the plan. In other words, the smaller the investment in time and money, the easier it is to accept that modifications are needed.

Any study on innovation talks about the idea of small and quick failures. Since no one knows what will work or not, the idea is to fail quickly and cheaply. Strategic planning is no different. No one has a crystal ball; therefore, a process is needed to sort the good ideas from the bad. Also, the strategic plan must be flexible so it can easily adapt to the changing business landscape.

It's not that the main fundamentals of your strategic plan will be in constant flux because they shouldn't be. However, the details must constantly be adapted to the changing environment, just as a project must deal with the weather. The 90-day action plan provides this flexibility.

Therefore, the one-page strategic plan describes the mission and vision statements and lists the objectives and the strategies to be used to achieve them and the key elements of the action plan -- namely, who is to do what and when over the next 90 days. The details are the responsibility of the person doing the work. Since several objectives are probably being worked on at the same time, various people will have different action plans, but only those people working on a particular action plan need to worry about those details. Everyone else involved in the strategic planning process should simply monitor the milestones, not micromanage the details.

So if you don't have a strategic plan, what are you waiting for? If you need help getting started, give us a call.

 

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