How to develop a successful business plan for 2022?
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2021 is over and, as every year, it is time to make a closing in our companies to understand what worked, what did not and so we can begin the strategic planning of 2022. The challenge is to design a powerful but clear and simple strategic plan that helps us to chart the route of what we must achieve in the short, medium and long term.
To design a great plan we must understand what strategy is: strategy is not about “how are we going to do it”, instead it is about “What do we want to achieve?” Planning is often confused with execution.
Verne Harnish, author of the bestseller Scaling Up: How Some Companies Do It … And Why The Others Don’t Divide Strategy Into “Strategic Thinking,” Which Is Defining Everything That Is wants to achieve with objectives, goals and indicators; and the “execution planning” which is how it will be achieved. Planning is complex, and these are the most common mistakes I’ve found business leaders make:
Mistake 1. Waiting for the beginning of the year to plan: it is best to anticipate up to a quarter before and make adjustments during the execution of the plan. Hopefully, you could be very late and be exposed to the conditions to define what you want to achieve.
Mistake 2. Design complex and elaborate plans: leaders have been taught that strategy is something complex that requires large Power Point presentations when, in fact, it is something that must be communicated in a simple way so that any member of the team can understand and execute it.
Mistake 3. Having different ideas about where you want to go: just like not knowing where to go, having different ideas about a goal causes you to lose focus and both managers and employees are not clear about where to direct their efforts.
Before beginning your strategic planning, I recommend asking these key strategic questions:
- What is the most important thing to improve your business in 2022?
- How are you going to grow this year (sales, margins, products, quality)?
- What is important to climb? (fix systems, acquire customers)
- What are the challenges you could face in your market or industry?
Once you are clear, now is the time to develop your Strategic Plan. Use specialized tools, my favorite is the One Page Strategic Plan of the Scaling Up methodology as it allows you to define and land, in just one page, your entire plan with your purpose, objectives, goals, indicators (KPIs), meters and managers.
Let’s now look at the elements that a good business plan should contain:
1. Purpose or why of your organization: growing companies know where they want to be for the next 10 or 20 years. It may seem crazy to think long-term today, but this is crucial because it serves as a compass for everyone in the organization and, although chaos prevails and the route constantly changes, your company will stay towards its great goal.
A purpose also helps keep your entire team motivated and aligned, since everyone knows what to do to move their company in that direction. Brands that have a clear purpose experience 400% more profitability than those that don’t.
2. Objectives of 3 to 6 years: once you have established your long-term purpose, you can define medium and short-term objectives to get closer to that great objective, with quantifiable brand promises for your clients (what you want to be recognized for) and with the main capabilities and key approaches that your company must follow in that period of time.
3. Goals or results to be achieved in the next 12 months with “responsibilities by function”: that is, define who is responsible for what priority in your organization in the year so that they can be aligned and focused on results.
As Verne Harnish states: “If more than one person is responsible, then no one is responsible.” Obtaining clear responsibilities is crucial, there must be a responsible person assigned to each cell within the organization.
4. Indicators and measurement instruments: “what is not measured cannot be improved”, therefore, having the correct data in a timely manner with precise metrics allows you to predict, make better decisions, rectify and solve specific problems. Having the correct data will allow you to know the progress of each area and adjust the course of what works and what does not.
5. Consider global trends: We are not just talking about trends specific to your industry or region. The emergence of certain technologies and various social or political trends, such as the one we went through this year in the US versus China trade war, are the types of global events that can affect your business; it is important to be aware of them.
Don’t wait to have a perfect plan that you could implement too late, start with a good plan and systematically improve it so that it becomes that great plan you need to scale in 2022.
Download your One Page Strategic Plan to start planning a successful 2022 on the Growth Institute portal, get it here .