In an earlier article I wrote about the difference between a strategic plan and a business plan, and I discussed the different timeframes for each.
Kath wrote to me and asked how far ahead she should look in her strategic plan.
I have seen strategic plans as short as 5 years, I have also seen others that encompass 20 years’ strategic direction. The most practical is probably a timeframe over 10 years.
Firstly let’s remember what a strategic plan is for. It is a document that provides the overall (hence strategic) direction for an organisation, that is based on working towards that organisation’s vision. As such it is necessarily short on detail, generally because it takes a number of years to achieve a vision, particularly if it is intently aspirational and a bit of a reach. If the real timeframe for the achievement of the vision is 10 to 20 years, you cannot possibly predict any detail of what the world and therefore your response will be over that time. The strategic plan provides strategy, not detailed operational action plans, which come from implementing the strategy over a shorter period.
What I usually say to people is that your vision needs to be at least a 20 year vision. If you set a vision, a description of the business in that future state, at the end of 5 years (and you are realistic) then that vision cannot possibly be inspirational enough or stretch you enough to do what a successful business must do – strive. So, vision big, then start the first step.
If you follow me on that suggestion, then the clarification, definition and quantification of your organisation’s vision statement must be written into the strategic plan with a clear idea that it will need striving for and will take 20 years to get there.
However the timeframe for the strategic planning itself can be for a shorter timeframe as long as you also define the shorter milestones you want to get to while working towards the longer term vision. The example I give is a “strategic plan” about a grand round-the-world holiday you want to take your family on in 5 years’ time. What you need to do is state where you will be at the end of year 1, 2, 3 and so on.
Some people say that the long term strategic plan over 10 or 20 years is gone. In today’s world, everything changes so fast that you need to plan over 1 year or less!
My reply to these people is that they don’t understand the difference between a strategic plan and a business plan (go read my earlier article at my website teikoh.com). Your strategic plan should be about sticking a pin on a map of where you want to go, not which road you will take to get there. Where you want to go should not change in a short time or you have a pretty short-sighted vision! Yes, the road or roads you ultimately take may need to change from time to time depending on weather conditions and the like, but if your vision is to go east I hope you don’t decide to go west in a year’s time!
In terms of strategy, these can be for an even shorter period. You can formulate strategy to get you to your 20 year vision over a 5 to 10 year timeframe. Strategies may change from time to time but if they are “strategies” they should be capable of remaining valid for that time. It is the formulation of actions in your shorter term business plans where in the implementation of strategy you may need to change tack from time to time. For example a strategy may be to “expand into international markets”. Unless something drastic happens that is unlikely to change. However the timing and speed of that expansion may change, and so in the shorter time frame of the business plan you can have action plans that change according to circumstances.
Finally I always like to have a section in my strategic plans that outline in more detail, specific actions to implement the strategies over the first year. You can be detailed here (you should be able to predict the circumstances a year ahead with more accuracy) or you can merely provide suggested actions. This section is useful for the team that might take over the process to prepare the first business plan to implement the strategies.
So in summary my suggestion is to prepare along the following timeframes:-
- Construct a 20 year vision
- Prepare the strategic plan looking ahead towards 5 to 10 year goals that work towards the achievement of the 20 year vision
- Formulate strategies in the strategic plan capable of being valid for 5 years of the 5 to 10 year goals
- Develop actions for the first year
Your strategic plan should also build in a monitoring and evaluation process. In this process I like to plan to review the strategic plan at the end of year 3 (or 5 if the plan looks ahead 10 years) so that you are able to adjust over a 3 to 5 year cycle.
While this may sound complicated, it’s quite logical – plant your flag at where you want to go as far ahead as will make it aspirational and make you you stretch; strategise over the mid-term, allow details to be built up every year or two (when actions and outcomes are more predictable), and review every 3 to 5 years to see if you are still going towards that flag in the distance.
Let me know what you think. Go to https://teikoh.com and subscribe to our mailing list so that you can get answers and other tools and resources sent directly to your inbox.