Strategic Planning is one of the most popular and effective methodods of yearly planning for a compnay. However, hardly any compnies do it correctly.
How to properly use strategic Planning:
1. Proper Goal Setting
2. Action Steps
3. Accountability Planning
4. Plan for when things go wrong
Strategic planning typically starts with goal setting, a SWOT or TOWS analysis, mission statements, vision statements, etc.
The leadership team gets together and discusses:
“Where are we now?”
“Where do we want to be in 10 years, 5 years, 1 year?”
After a few rounds of meetings, they develop goals on profit, margin, production, sales, and more. Then they send an email to the entire company—and boom, you have a strategic plan.
However, there is nothing strategic about that type of plan.
Strategic planning actually started in ancient times when the Greeks were planning their war strategies. Now, unfortunately, companies do it just to check a box.
Real strategic planning needs to start with goal setting at three different levels:
1. The first level is the organization as a whole.
2. The second level is your process goals—you can’t reach organizational goals if your processes are broken.
3. The third level is the performer level—the employees who run those processes. What are their goals?
Not only do you need goals—you need proper goals!
"Stretch goals" and "Do your best goals" have basicall zero research proving their effectiveness. In fact, there are plenty of studies showing they actually hurt performance.
Why?
What happens to employee performance the moment they realize they aren’t going to hit a goal?
Their performance plummets.“Well, we aren’t going to hit the goal anyway, so why even try?”
This is the exact same reason New Year’s resolutions almost always fail. People set their goals way too high, and the moment they realize they’re not going to reach them—they give up.
The second problem is that goals are set too far away.
Having long-term goals are fine—but you also need short-term targets that act as indicators to make sure you’re on track.
So what’s the best method for goal setting?
It’s a hybrid between SMART goals and what I call “The Staircase.”
Most people know SMART goals—they’re an acronym:
Specific, Measurable, Attainable, Realistic, and Time-bound.
That defines what a good goal is.But here’s where SMART goals fall short:You set a SMART goal… then what? You put it 5 years out and forget about it.
No.
SMART goals should sit at the top of the staircase.
And the 10–12 steps leading up to it should be smaller, successive SMART goals that move you toward that bigger goal—just like a staircase.
The last step in the goal-setting process is to ensure that your organizational, process, and performer-level goals are all aligned to support one another—and this is the hard part.
Here’s an example: you set a goal like, “We want to increase production by 30% by 2028.” On the surface, that sounds like a strong goal. But your logistics team doesn’t have the capacity to handle that much additional product. Orders start going out late, and customer satisfaction begins to drop—all because one department is being measured against a goal that isn’t aligned with the overall system.
This type of misalignment is one of the first steps toward departments fighting for resources and competing against each other. And that’s the problem—departments within a company shouldn’t be competing internally. They should be aligned and working together to compete against your actual competitors.
Once you have your organizational, process, and performer-level goals aligned, now you need to define the actionable steps to reach them.
- What are your employees actually going to do?
- What are your processes going to look like?
- What are your departments responsible for on a daily basis?
Before I tell you what to do, let me tell you what not to do.
Don’t just expect your employees to “try” and hit the goal.
Why?
Because… why should they? What’s in it for them? A pat on the back in an all-staff meeting? Followed by:
“Congratulations… now we’re going to make the goal even harder.”
That doesn’t drive performance—it kills it.
The next problem: goal setting alone does nothing if there’s no plan behind it.
Your business performs exactly the way your systems and processes allow it to perform.
So what happens when you put a big goal on top of a broken process?
Your systems start to crumble.
Now you’re constantly reacting, putting out fires, scrambling to keep up.
Welcome to firefighting.
If you actually want your strategic plan to work—and hold up under the pressure of higher goals—you need to adjust your processes and your people to support those goals.
You can’t just raise the target… you have to upgrade the system that’s supposed to hit it.
Ok, so you have your goals aligned across the organization, your processes, and your performers. You’ve defined the steps each level needs to take.
Now what?
Now you need a plan to hold all three levels accountable.
- What happens if they miss the goal?
- What happens if they hit the goal?
- What happens if they exceed the goal?
Most leaders I ask these questions to just give me a blank stare.
So how do you actually hold departments accountable? Meetings?
No.
Data and feedback.
You need to constantly monitor progress toward the goal and track compliance with the action steps. Then you provide feedback based on that data.If they’re trending in the right direction and following the plan—you need to reward that.
If they aren’t, you don’t you give feedback, understand their constraints, identify what’s getting in the way, and implement solutions.That’s how accountability actually works.
And that leads me to my fourth and final point.
Very rarely do things ever go according to plan in business. Which is exactly why you need a plan for when things go wrong.
During your strategic planning, you should be asking:
“What do we do if we are not trending toward our goals?”
That’s not an easy question to answer—and it’s different for every business. Every company has different goals, different constraints, and different problems.
But that’s the point.
As a leadership team, you need to have a clear idea of what actions you’ll take when things start to fall off track. What happens if a department loses a key person? What happens if a critical process breaks down? What happens if external factors—completely outside your control—impact your product or service?
If you don’t think through those scenarios ahead of time, you’re just reacting in the moment.
And that’s not strategy—that’s survival.
This step, combined with everything we’ve talked about before, is what actually creates a real strategic plan.