I used to do strategic planning year-by-year looking at the previous year and then thinking of an incremental improvement over the previous year. This worked, but we missed many opportunities because we didn’t start with a vision of the future.
High growth companies look out at least 3-5 years into the future. They decide when they will double their growth and what markets they will dominate. Starting with the end in mind, you work backwards from your end goal to determine what has to be done this year and then this quarter.
Plan to Speed Up
If a normal company grows at 5% top line revenue growth a year and you are growing at 25% or more, the speed of everything you do is at least five times faster than a slower growing company. While it may seem counterintuitive, planning cycles need to be more often if you and your team are going to keep up. What a normal company does in a year, you need to do in a quarter.
To cope with this speed, the CEO and the senior leadership team must meet off site at least once a quarter. If you are truly committed to your 3-5 year goals, put the next 18 months of strategic planning in everyone’s calendars. At least one planning day a quarter and two days for annual planning. Then make sure that you stick to the meeting schedule.
Drive to Annual and Quarter Goals
When you do your strategic planning start with your 3-5 year goals and then work your plan back to what needs to happen in the next year. Pick the #1 measurable number that has to change, choose your goal for that number, and then work back to the current quarter to decide on what must happen to make your annual goal come true. If you want one million line items ordered in the next year, where do you need to focus your energy? Everyone says sales, but it may be impossible for sales to reach this number if you don’t adjust your product offering and systems to make it easy for prospects to purchase multiple line items at once. Or to cut out the sales person by making your offering be available online.
Course Adjust Every Week
With your annual and quarterly measure decided, you need to measure and report progress against the goal. High performing companies do this every day. At a minimum you need to be reporting against your goal weekly at your management meeting. Use the weekly meeting to quickly (less than 20 minutes) report in on the successes and numbers. Then debate what needs to happen in the next week. You have the smartest people in the company together—make sure that you are using their talent to move the business ahead.
Hire For Culture First
Intentionally or otherwise, every organization has a culture. Top performing people work for organizations where the purpose, values, and culture of the organization match their personal belief system. To lead individuals and companies to top performance, culture has to be actively defined, communicated, and developed. This is not something you want to leave to chance. If you hire for culture first and skills second, you create an environment where people thrive and much less management oversight is needed. People are aligned because they share the culture. If you are unsure about your culture, look at Chris Edmonds’ The Culture Engine or Verne Harnish’s Scaling Up for the tools and reasons why culture is critical to your success.
CEOs Set the Tone
Quarterly planning, driving to your measurable goals, weekly meetings, and hiring for culture are not enough. You, the CEO, set the tone. If you are having a bad day, employees will assume that the company is in trouble. Find and define your own rhythms so that you can show up every day with peak performance for you, your team, and your company. Choose to run the company strategically rather than responding to the next five star fire alarm. Your choices will lead everyone else in the company to think and act strategically, driving the company to the growth that you and your management team have set.
Choose today where you want to go and how you show up.