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Strategic Planning – Many Companies Do It Wrong

acting first and analyzing after?

Quite often, when people put together their strategic plan for the upcoming year or years, they make a fundamental mistake – they jump right into the tactics they will employ before really developing a strategy. Strategy is the "what" part of the equation that helps you answer the question, "What are we trying to accomplish?" Tactics is the "how" part of the equation. Tactics help you answer the question, "How are we going to accomplish our goal?" Many business owners, CEOs, and sales leaders jump to tactics right away before analyzing their business. For example, hiring more salespeople is a tactic for achieving some broader strategy, not the strategy itself.

What Is Typical

A common issue we see is that companies don't stop to analyze their current business before determining their go-forward strategy. When it comes to analyzing your growth, it is beneficial to look at a few different things, such as where is the current growth coming from? Is it new clients? Existing clients? Coming from specific geography? Etc. When you take into account all those different things, it can better inform you of what direction to go in the future.

Analyze Your Current State

If you analyze your current sales and see one market that has been declining, you probably don't want to invest more effort there. If you notice a trend that another market has been seeing more opportunity, then you may want to focus more efforts there. The same thing is said for the retention of your current clients. If your analysis tells you that your retention rate is declining or that your volume from current clients is down, you may want to dig in and see why this is happening before you start taking action.

Leaky Bucket

We recently worked with one client to analyze their business. We found that they were gaining over 100 new clients a year. But we also noticed that there were 100 clients a year that brought in nothing after spending a significant amount in the prior year. Their "tactic" before we did this analysis was to hire more salespeople to chase new clients. But, after we analyzed their business, we opened their eyes to this revolving door problem they had. We were able to show them that their team was so focused on new clients, it was coming at the expense of following-up with their current clients consistently. One strategy we developed was to drive retention and focus on growing and expanding current clients. Some of the tactics included re-assigning accounts to people who had more time to spend with them and also setting goals around retention and growth within those accounts.

Desired State

Analyzing starts by looking at the current state of your company. You see what is working well and what's not. You also see what you should be doing and what you should stop doing. After you feel you have a good understanding of the current state, move onto the desired state. Determine what markets to go after, how you can attack those markets, what goals to establish for your team, etc.

THEN you can look into what tactics to pursue. Do you need to hire more people? Do you need to revise your sales process, fix something, come up with new products, etc.? These tactics will reveal themselves after your current state and your desired state analysis.

Revise Later in the Year

Say you've done all the analysis, created your plan, and are working your way through a list of actionable items. Great! But you're not done. A significant percentage of companies won't go back and revisit this actionable list or desired state goals until the following year when they do "strategic planning" again.  In other words, the strategic plan dies. The way to fix that is to create an actionable plan with measurable goals.

A solid plan is one that is specific to the things your sales leader should focus on. Some of which may address particular problems or opportunities that are uncovered in your analysis. The plan needs to be measurable, with clear-cut goals, definitive steps, and everyone on the sales team needs to know their role in achieving those actions.

To keep your plan alive and keep people focused, we recommend revisiting it once a month (or once a quarter at a minimum) to be able to see if you're hitting your goals or not and to determine if the team is executing on the actions they committed to. If they are not, then you can analyze why and make adjustments to get back on track.

In the End

Having a detailed strategic plan allows for precise and aligned strategic intent, prioritization, and goals. As well as an understanding of staffing and resource needs, individualized programs and needs, and a method for follow-up and accountability. Don't make the mistake of putting the cart ahead of the horse and jumping right to tactics.

About Gary Braun

Gary is a founder and co-owner of Pivotal Advisors. He has worked for 20+ years as a salesperson and sales leader. Gary has been a guest speaker for many groups such as Vistage, Allied Executives, CEO Roundtable, Sales Management Association, and more. If you want to find out more about Gary check out his profile here.
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