Take these four things into account for a successful five-year strategic plan.
Future planning can often seem daunting. Even so, planning only one year in advance doesn’t give you enough time to adjust your strategy, and you may lose sight of the direction you want your company to take. And if you look out 10 years from now you may end up gridlocked, unable to clearly see that far into the future. So while the five-year strategic plan isn’t a rule, it is a sweet spot.
Below, we’ll walk through four critical elements that should be in place to execute a five-year strategic plan successfully. Take a look:
Before you can create your five-year strategic plan, you must select a strategy management framework. We favor the Balanced Scorecard, as it takes four perspectives (financial, customer, internal processes, and learning/growth) into consideration as opposed to just one—finance. The Balanced Scorecard also ensures you have leading and lagging indicators as well as key projects linked together across your organization. But it is not the only approach you can use. Take a look at this article to see other strategic planning techniques and tools.
A vision statement should describe the future state of your organization. This is not the same thing as your mission statement (see below). Its goal is to get your employees excited about the strategic plan and the progress you’ll be making in the future. Keep in mind that your vision statement may change over time, but you’ll want your current vision to hone in on where you want to be in five years. Follow these six best practices for writing a vision statement.
Your mission statement describes what your company does and how you differ from others in your industry. A solid mission statement is timeless and may remain a part of your organization forever.If you’re just starting out, you can use your current mission as a springboard for where you hope to go in the future. Focus on your objective, advantage, and scope (OAS) when crafting a mission statement.
Strategic objectives are statements that indicate what is critical or important in your strategy. In other words, they’re goals you’re trying to achieve over the next five years. Think of them as more detailed offshoots from your mission statement. For example, if your mission is to provide the best car parts to manufacturers, an objective could be to develop a special or customized part for a certain sector of the automotive industry.
Your objectives should cover all aspects of a business—and if you’re using a Balanced Scorecard, you will also need to develop measures and initiatives to link to these objectives. If you need some examples, take a look at these 56 strategic objectives to get you started.
All of the above will ensure that your day-to-day decisions are in line with your five-year strategic plan, and help you evaluate progress toward your goals. Throughout the process, be sure you have buy-in across your organization. Everyone, at every level, should know that a five-year strategic plan is in place, what it entails, and buy into the idea. Using a good framework, and having a solid vision, mission, and key objectives will allow you to communicate your strategy across the organization easily.