When you're planning your company's future, it can be exciting to grasp onto new opportunities as they appear, shifting your plans this way and that as new goals make themselves known.
But when you're busy chasing the next best thing, your company's long-term business goals start to suffer. If you want to lead your business to success, it's crucial to direct your attention towards your main objectives and not be swayed by short-term distractions.
So how do you keep your company focused on and moving towards your long-term business goals?
Simple: by using strategic business planning. Strategic business planning combines strategy and tactics to accelerate progress towards long-term goals and help minimize distraction.
Learn how to use it effectively and watch every aspect of your business improve as a result.
Most business owners have heard of strategic business planning, but far too few understand how it actually works. Complicating the matter is the large number of people who confuse strategy with tactics, often using them interchangeably.
Tactics are a vital part of any strategic plan, but they serve a completely different purpose than strategy. Put simply, strategy defines "what" you want to do, and tactics handle "how" you're going to do it.
This guide will tell you everything you need to know about how to tell strategy from tactics and how to use both to reach your business goals. Before we get further into how to use them, let's dive a little into what they are.
Strategic planning involves high-level planning that takes into account a business's core values. Strategic goals tend to be more overarching than tactical goals and have deadlines of three to five years' time (although timelines can and do vary).
A strategic plan usually doesn't change much over time unless the business sees a drastic overhaul, such as in the case of a takeover. Because they remain relatively constant, strategic goals don't have to be evaluated too often.
You can evaluate them as often as monthly or as seldom as once a year. A quarterly evaluation is usually a good compromise, as you can factor your strategy into your quarterly business plan.
When making a strategic plan for your business, it's a good idea to consult the head of each department for feedback to make sure that your business strategy aligns with the goals and needs of your entire company.
Tactical planning centers around short-term goals that will take your company closer to its strategic goals. Tactical plans:
● Are actionable
● Have deadlines
● Directly support the strategic goal
Many times, tactical plans are made by department heads of managers, who break down the strategy given to them by the C-Level team into manageable, concrete tasks. They then dole these tasks out to staff.
Tactical plans are generally reevaluated much more frequently than strategic ones, sometimes as frequently as daily or weekly.
Sometimes it can be hard to get a clear picture of where strategy and tactics differ.
These examples should give you a better idea. We've included both business and non-business examples to show that strategy and tactics can be used to reach any long-term goal.
As you can probably imagine, trying to skip strategic planning and heading straight for tactical planning can spell disaster for your business goals.
It's hard to reach a goal if you don't have a clear one laid out, so if you stick to a tactics-only approach, you'll have plenty of small short-term successes at the expense of the bigger picture.
Tactical plans should always serve more extensive, well-thought-out strategic plans that keep the whole company in mind.
Always start with strategy first, even if it takes some time to get clear on what your company's overarching goals are. The more work you do in the beginning to paint a clear picture of where you want your business to go, the easier it will be to formulate tactical plans that will get you there.
If the idea of laying out your business's long-term goals is a bit overwhelming, you're not alone. That's why many business decision-makers handle these business planning steps as part of a group or in the company of trusted advisors.
Strategic business planning doesn't have to be complicated, though. Take a look at how easy it is to use and measure strategic and tactical planning below.
Now that you have the fundamentals down, let's see how to go about actually using strategy and tactics and measuring them to determine whether they're successful.
Remember that part of any good strategy involves periodic reevaluation to make sure that the goal is still sound and that the tactics set out to reach it are working. It's not uncommon to make adjustments to tactical plans every so often, but make sure to give it some thought before aborting or altering a strategic plan too much.
After all, if your strategic goal is well-thought-out and supports your business's core values, it's usually a good idea to see it through to fruition rather than tossing it aside for a brilliant idea you had in the middle of the night.
A successful business is flexible enough to change direction when needed while staying the course overall.
So how do you actually put strategic planning into practice?
When you're first sitting down to lay out your strategic plans, it's helpful to use SMART goals. SMART goals are:
● Specific: the clearer, the better
● Measurable: we'll get into how to measure in a bit
● Actionable: this is where tactics come in
● Relevant: aligning with your mission and values
● Time-Based: have a realistic time-frame in mind
Once you have your goals and strategy all set, it's time to share them with your team so they can start working on them.
KPIs, or key performance indicators, measure progress towards a goal. Most KPIs use quantifiable data, such as sales figures or client retention rates, to measure progress.
Strategic KPIs are usually measured monthly, quarterly, or annually, with the tactical plans that support them being measured more frequently.
Strategic planning is much more focused than strategic planning. It involves:
● Breaking down your strategic goals into actionable steps
● Assigning realistic deadlines
● Assigning each action item to a person or team
Because of the short-term nature of tactical planning, more frequent check-ins are usually appropriate.
Since KPIs are usually more suited to measuring long-term strategic goals, they're not ideal for measuring tactics. Measuring tactics is as simple as:
● Setting deadlines and milestones
● Allocating resources appropriately
Tactical action items are usually pretty straightforward - they're either done or they aren't. Do make sure that they're always serving the larger strategic goal, though.
Hopefully, you have a pretty good idea of the difference between strategic and tactical planning by now, how each affects your business, and how to use and measure them.
But just in case you're still trying to wrap your head around it all, let's take a look at how strategic business planning works across different areas of business. The C-Suite often has strategic company-wide goals, but each department can also have its own strategic plans.
● Operations Department
● Strategy: Reduce customer returns by 40% over the next three years by improving our hardware offerings.
● Tactic: Create a shortlist of reputable hardware manufacturers.
● Marketing Department
● Strategy: Increase customer base by 500 in the next five years.
● Tactic: Hire a content writer to create articles that will drive traffic to our site.
● Sales Department
● Strategy: Increase sales by 5% every year for the next four years.
● Tactic: Put out a job ad for an experienced salesperson.
As you can see, strategic business planning that includes both strategy and tactics can be used across all facets of your business as long as every department's goals are aligned with each other and the overall company mission.
Making the most of both strategy and tactics can help guide your business planning, breaking down a larger goal into manageable chunks and keeping you from getting distracted with other projects or new goals.
Staying focused on one general goal rather than bouncing from one thing to another will allow you to make progress more quickly, as well as to help you allot resources where they're needed without overextending them.
Now that you have a clear understanding of how strategic and tactical planning can help your company take some time to sit down and think about the long-term goals you have for your business. Once you have a clear strategic goal in mind, you're ready to start moving towards it using tactics.
You'll be surprised at how far your business can go as a result of utilizing these fundamental business planning principles.
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