Four Things You Must Do For A Successful Five-Year Strategic Plan

The point of a strategic plan is to track your company’s strategic progress over a certain period of time. It outlines where you want to be in the future and how you plan to get there, which makes it a strong tool for reaching your key goals.

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 are four elements that should be in place to execute a five-year strategic plan successfully.

1. Determine your strategic planning technique.

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 instead of 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; see these other strategic planning techniques and tools.

Your framework can change as you grow. Nest Wealth, a wealth management software company founded in 2014 in Toronto, started strategic planning with the Objectives and Key Results (OKR) framework. Progress was updated by hand in PowerPoint and Google Slides, and action items captured at offsites in Excel sometimes got lost during the quarter. As the company grew, leaders saw that the rest of the team thought more tactically and was not as aware of the strategic plan. In mid-2020, Nest Wealth moved from OKRs to the Balanced Scorecard. By the end of its first month in ClearPoint, it had created 25 different summary reports for audiences across the organization.

2. Home in on your company’s vision statement.

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 home in on where you want to be in five years. Follow these six best practices for how to write a vision statement.

A good vision is specific enough to guide choices. The City of Vaughan, Ontario, describes its future as “a vibrant, multicultural community that is inclusive and progressive; a city that is environmentally responsible and sustainable; a strong, healthy and prosperous community where diversity, innovation and opportunity are encouraged for all citizens.” Vaughan also learned that a vision needs a way to show progress. After several years of reviewing its priority initiatives, the city still could not consistently demonstrate how it was doing, so it built a performance measurement scorecard and a public website to report results.

3. Craft your company’s mission 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.

4. Define the company’s objectives.

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. If you’re using a Balanced Scorecard, you will also need to develop measures and initiatives to link to these objectives. If you need examples, start with these 56 strategic objective examples.

Two habits keep objectives useful over five years. First, use the “Verb + Adjective + Noun” format, which turns each objective into an action statement. Second, add a short objective statement of no more than 2-3 sentences. A three- to five-word objective often isn’t enough for people who weren’t in the room when it was decided. Our guide on writing strategic objectives has examples of both.

Get Buy-In At Every Level

Everyone, at every level, should know that a five-year strategic plan is in place, what it entails, and buy into the idea. A good framework and a solid vision, mission, and key objectives make the strategy easy to communicate, keep day-to-day decisions in line with the plan, and help you evaluate progress toward your goals.

The City of Germantown, Tennessee, built buy-in into the plan itself. For Germantown Forward 2030, the Board of Mayor and Aldermen handed development to a 30-member steering committee representing all aspects of the community. A town hall discussion with over 200 citizens reviewed the vision, and citizen task forces created action plans and measures. By completion, community members had invested approximately 2,000 hours in the plan. The city later won the 2019 Malcolm Baldrige National Quality Award.