As a certified Scaling Up coach, I meet a lot of executives who most might consider born leaders. They dream big, think outside the box, and inspire others with their vision. That is a wonderful gift, but unfortunately, it is only part of what a CEO needs to do to scale a business.
In my experience, what most CEOs struggle with is building executable strategic plans—not just inspiring their teams to reach common goals, but giving them a roadmap to get there with accountability built in. Because planning ability isn’t intuitive for the vast majority of CEOs or their teams, it’s an aspect of scaling businesses that I coach about continually, reliably resulting in big epiphanies for the executives and measurable growth for their businesses. Strategic execution planning is part of becoming a great leader that is an acquired but vital skill, and it is a shame that most of us entered the business world without it. (Think about it. Where in school did you learn to plan, much less build a strategic plan?) The good news is, you can learn it now.
Building the kind of strategic plan that the best executives use at elite companies is a discipline that can be honed with practice. In this article, I’ll show you the anatomy of a good plan and how you can apply it every day in your business to drive growth. But first, let’s pause to take a look at something that will be all too familiar to you—a bad plan!
The Peanut Butter Problem
Even seasoned CEOs of high-growth companies often build bad “peanut butter spread” plans. A bad plan is easy to spot because it boils down to a broad goal, thinly spread, with few to no prescriptive actions behind it. For example, a CEO might say, “Let’s dominate digital.” Making a statement like that might sound impressive, but it’s really just bravado, not a plan.
A peanut butter plan gives your team a lofty goal without a methodology for reaching it. Two problems arrive from that. First, you haven’t told your team what “digital dominance” means. How will they know when they get there? It’s aimless. Second, it isn’t a SMART (Specific, Measurable, Attainable, Relevant, and Timebound) goal. It’s not measurable.
If I went to my doctor and he felt I needed to make some changes to be healthier, I would hope that he wouldn’t say, “Rick, I want you to go out there and be as healthy as you can be! Be the healthiest guy on your block.” Pep talks are great, but what I would need is a prescription—a recipe for success that I can implement on a planned, step-by-step basis. Something like, “I want you to exercise 90 minutes more per week and eliminate red meat from your diet so we can lower your LDL by 30 mg/dL by the time of your check-up in three months.” Otherwise, my results will not change and it would be time to find a new doctor.
To bring that back to our peanut butter plan example, a CEO who actually does want to dominate digital would have to apply a rigorous strategy to get there, and then he would have to communicate to his team exactly what they need to achieve and by when. And here’s a spoiler alert: He’s not going to get there with Skippy tactics.
Building a Recipe-Level Plan
Elite executives at elite Scaling Up companies build specific, recipe-level plans that have measurable goals aimed at building real capabilities in their business. When I say recipe-level, I’m talking about the kind of recipe a Michelin chef would use to prepare a five-course meal. A recipe-level plan begins with a multi-pronged approach. Like in sports, business strategy is derived from military strategy. Just as most successful military strategies involve outflanking and conquering the enemy with a diverse, multi-pronged approach—with armored units coming at the enemy one way, the cavalry attacking supply lines in the rear, and another unit attacking by air—these executives understand that significant business wins involve outmaneuvering the competition with a multi-faceted plan. Simply charging up the middle at the enemy (with a peanut butter plan in hand) is a recipe for disaster.
What your strategic prongs will be will depend on your business and what you intend to achieve in the next quarter or year. To relate a simple example to that, let’s say your business is about to move offices. You will need a multi-pronged approach to successfully execute this move. Consider what specific prongs you will need:
- Logistics prong: Secure a moving company with the resources to handle your move.
- Coordination prong: Assign team members to liaise with movers and installers to make sure the transition is seamless for workers.
- Purchasing prong: Secure, purchase, and coordinate delivery of new office furniture so desks and offices set up and ready to go on day one.
- Administrative prong: Change utilities and any other vital contracts; make sure communications go out to all your customers about the move.
- Communications prong: Choose a new business internet provider and make sure all employees have functioning workstations on day one.
As you can imagine, each one of these prongs will need detailed actions and timing to go against them. A move is timebound, and screwing up any of these steps could cost money. When crafting the prongs of your elite plan, each one should have a similar urgency attached to it. Sadly, most strategic plans for businesses are not as well thought out as their office moves!
Think about developing plans that build the exceptional capabilities your business needs to grow revenue. Do you need more leads? More appointments? Less downtime? More candidates? Fewer call-offs? More gross margin? Once you have your prongs in place, you can begin designing corresponding metrics to track your progress.
The Scaling Up One Page Strategic Plan (OPSP) Plan: Articulating a Winning Strategy
As a certified Scaling Up coach, I’m a devotee of the One Page Strategic Plan outlined in Verne Harnish’s book on mastering the Rockefeller Habits 2.0, Scaling Up: Why a Few Companies Make It…and the Rest Don’t. The beauty of the One Page Strategic Plan (OPSP) is that it encapsulates your strategy in one place, and it is something you can easily communicate to your whole team. It literally keeps everyone on the same (solitary) page. Plans that are longer than one page are harder to articulate and adhere to, making it harder for you as CEO to hold everyone accountable to it. If you can’t describe your plan and the process to achieve your plan, you should probably rethink it.
The Famous Scaling Up One Page Strategic Plan (OPSP):
The One Page Strategic Plan is like a sudoku puzzle with elements of strategy supporting each other in both vertical and horizontal directions. During strategy sessions with CEOs and their teams, I will ask them, “What is the OPSP telling you?” That question inevitably generates both excellent strategic and execution-related insights. The OPSP literally gets everyone aligned on the same page!
You’ll notice the OPSP has 7 columns, with the long-range strategic plans contained in columns 1 through 3. The annual goals and plans are in column 4 and the quarterly deployments (in 13-week sprints) of the annual plan are housed in columns 5 through 7.
One area where I see executive teams struggle is building up a strategic plan where the strategic priorities or prongs do not sum up to the annual goal. In this case, it’s almost like there are unwritten assumptions in the ether that will materialize to close the gap. Of course, the achievement of the annual goal is too important to leave to chance. To counter this, I highly recommend that several of your annual priorities tie directly to your revenue or profit achievement with SMART, quantifiable metrics and plans. This is shown in the image of the strategic plan summary below that I will discuss in a moment.
The other planning problem I commonly see are lists of non-strategic “things and stuff.” These are often big infrastructure projects like a new ERP implementation, an updated website, or a lean project. Or they can be compliance projects like OSHA audits that are needed to simply keep the lights on. In and of themselves, they are not strategic unless you can monetize them in either dollars or hours. When you look at some of your executives’ “plans” you will swear they work for their own amusement! As I like to say, on its own, a new website and $2.99 buys you a Starbucks coffee. Make these initiatives more strategic by tying them with hard dollar metrics to either revenue, variable cost reductions, fixed cost reductions, or quality improvements. If you apply this level of rigor to your thinking, you can save yourself a lot of money on non-essential pet projects or at least make the compliance projects sharper and more strategic.
As you might imagine, executives and executive teams often struggle mightily with the planning problems I just described. To help CEOs and their teams build better strategic plans that actually sum up and achieve their goals, I developed a streamlined version of column 4 of the OPSP. It has been very effective at keeping executives and their teams tightly focused on building a strategic plan that actually delivers the results of the annual goal. Because it is visual and simple, it makes it easier to develop a multi-pronged strategy that adds up to meet your annual goal and cascade to your larger team. Again, these are the exact same priorities that you will populate in column 4 of the OPSP, just in a format that may make it easier for your team to visualize as you develop the specific priorities to support your annual goal.
Below is an example of this streamlined approach based on a $20M revenue business with an annual goal to earn a $3M net profit, which represents 15% earnings before tax:
As you can see, there are five prongs to this strategy with corresponding sub-strategies, or tactics, if you will. I usually recommend having three to five prongs to achieve a goal in a One Page Strategic Plan. Fewer wouldn’t give you enough to achieve your goal (you need multiple areas of your business contributing to become a profit multiplier), and too many overcomplicates things. As an analogy, overly complex recipes don’t tend to get made. A strategy streamlined into three to five simple prongs is something you can communicate clearly and align the whole team around.
In this case, Company X is going to increase its net profit by:
- Finding $3M of new demand from Company X’s three biggest customers
- Taking 5% pure pricing for $1M bottom-line profit
- Reducing COGS by $500K (half in labor, half in material and waste reduction)
- Reducing reliance on sourcing from China by 50% on top 5 parts (in this case to mitigate risk)
- Introducing a new BLX product at 60% margin for $2M gross margin
Those are five crystal-clear objectives for going from Point A to Point B, or as I like to say, going from Point B (a lesser place) to Point A (a better place).
Once your 3-5 prongs or priorities are established, it’s time to transfer them to column 4 of the OPSP:
Now, the next step is to break this five-pronged strategy into actionable tactics.
Tactics: The Devil Is in the Details
Actionable tactics give you the ability to prove your plan with corresponding metrics, which is central to great strategic execution. For each prong, how can you prove that this plan has achieved the results needed to bring you closer to your goal? And how can your executives and managers prove that they did the actions when they said they would? A great coaching question to ask your leaders is, “Can you prove to me that your plan will work? Sadly, B and C Players may leave you backing up a step and asking, “Can you prove to me that your plan exists?”
In the example above, you’ll see two to five actions and corresponding timelines that were built out from the five prongs. They are not vague, and they are not merely “things and stuff” activities. Each subtask should have a real tactical purpose and a date by which it will be achieved.
I find that the best way for CEOs and their teams to stay aligned around the tactics that branch out from the three to five strategic prongs is an application like Scaling Up Scoreboard or Metronome. Both of these online strategic planning platforms do a great job of keeping track of deadlines and flagging overdue tasks, so everyone knows how fully the plan is being executed and who is responsible for executing it. The days of trying to keep up with your executives’ execution on paper alone are long gone! The pace of business is too fast and you’d waste an entire meeting negotiating if a priority was green, yellow, or red. (Trust me, I’ve been there.) Whereas the prongs might correspond to the ingredients list in your recipe-level plan, these tasks might correspond to the directions: how you stir, mix, or bake at a set temperature and for how long. Here is an example of how Company X’s tactics would look in one of these online systems:
This granular detail gives you excellent visibility into what has been accomplished and to what degree, as well as what is missed or overdue so your team can pivot to remedy it. Having a plan like this helps you protect your days so Lilliputian tasks don’t take you down. Instead, you can spend your time ascending to higher strategic ground and your BHAG. It also will clearly flag for you if you have a problem with meeting your goals ahead of time so you can build recovery plans before it gets too late. This problem is usually indicative that you don’t have enough A Players on your team. You will be able to see B and C Players who are missing the mark and how often, and you can then decide whether you need to train them up to A Players—or start recruiting to find better team members.
Be Among the Elite Few Executives Who Plan Spectacularly
General George S. Patton Jr. once said that “a good plan, violently executed now, is better than a perfect plan next week.” Perhaps the “violent” part doesn’t always apply to business strategy, but the point is that even OK plans well executed tend to achieve progress in place of none. The question I am currently asking the executives I coach is, “Why not find out what happens when you execute a beautifully crafted strategic plan?” If I can give you just one resolution to follow through this year, that would be my recommendation.
Any successful battle is won before it begins, and creating a plan of attack, while identifying all the gaps and obstacles in your path, is your job as an executive. Sure, you may have team members who can brainstorm with you and give you their feedback and ideas, but ultimately, the responsibility for creating the one-page plan lies at the top, with you. Your team’s job becomes supporting you with intel and facts and data and fleshing out the tactical elements of the strategic execution.
Executives who already know how to build out plans at this recipe level are rare and it is one of the key skills that separates them from the pack. A concise, easy-to-communicate, One Page Strategic Plan is your ticket to gaining a competitive edge in your market—and generating growth and cash quickly.