The vital aspect of the plan is to have a strategic discussion and set the overall direction for the company. It is not to have a pretty bound binder full of spreadsheets. Depending on your industry, companies should set aside time either at the beginning of the year or every two years. Some companies that are in very competitive industries, such as app development, can probably benefit from annual strategic discussions if not two times a year since things change so quickly with this type of technology. Heavy manufacturing, such as companies that build planes, can probably do a strategic plan with a much longer time horizon.
When it comes to financing projects, the common thing to do is to extrapolate figures out 3 to 5 years. My view is that unless there is some intelligence behind these types of extrapolations, they are meaningless. Having expenses grow 3% to 5% a year is a reasonable baseline assumption, but it doesn’t help the decision-maker to evaluate the business out more than the first year unless there are some specific assumptions.
Ability to adapt to change
If the plan calls for significant changes in the way your company does business today, do you have a solid strategy to move the organization into a new process or a new way to do business? Change management is all about motivating people and less about having the CEO pound his/her desk and saying, “We must change.”
Communicate, Communicate
Pretty binders that sit in the corner are a waste of money, a plan that has been communicated and embraced across all levels of the organization is better than any printed material. How successfully do you think a project would be if 100% of the employees can describe the top 3 initiatives of the company!
Sticking to ideas until completed
In other words, don’t come up with the flavor of the month type of managerial approach. Too many CEO set up the annual agenda, but by June, those initiatives remain incomplete because all of a sudden, there are new ideas on the table.
