Strategy Validation: Have You Validated Your 3-5 Year Strategic Plan?
You had a great annual planning session. You worked hard developing your 3 year strategic plan for revenue growth and profit (scaling up) for the growth strategy next 3-5 years. You brainstormed multiple strategies that have the potential to double your business revenue in the next 3-5 years. You used your best estimates and available market knowledge and made certain assumptions in order to prioritize these potential 3 year strategic plans (winning moves) using the following criteria:
- Impact on Revenue Growth
- Easy to Do
You paired down to two or three moves that fall into the “high impact / easy to do” categories.
The team is feeling good about the progress made. However, your work is not finished. Patrick Thean always says that 3-5 year business strategies are not birthed over night; they take months or sometimes years to get right.
The next step is very important. You need to check your estimates and validate your assumptions by taking the following steps:
Step 1 - Name your Strategic Initiative or Winning Move
Give some thought to a unique and descriptive name for each 3 year business strategy you want to move forward with. This will help you communicate internally, removing confusion and allowing the team to maintain focus as the strategy progresses.
Step 2 - Find the “Who”
Who can help accelerate your progress? Who has already demonstrated success in this area? Chances are that a new winning move is going to move you into some unfamiliar territory, and your chances of being successful are much higher if you engage the expertise of someone who knows the territory better than you. It may be someone already in your organization, a consultant or advisor you can reach out to, or a new hire you need to make.
Step 3 - Develop projections
You may have started this during the session, but you will want to work with the team to dig deeper and make sure your estimates are based on the best information available, real world data and insights. You'll want to estimate the amount of revenue, the total addressable market, how much it will take your focus off other initiatives and any risks.
Step 4 - Identify and test assumptions
Make a list of the questions you need answered and begin researching and capturing the information:
- What “data” do we need to collect?
- Does our core customer care about this?
- Will this differentiate us or is our competition already doing it?
- What is the business model and projected gross margins?
Log “Insights” gained for each question.
Example of format from Rhythm Program:
The goal is to ask as many questions as you need to develop confidence that the Winning Move will produce the desired results and provide the insights into what priorities you need to develop to support the effort.
Step 5 - Adjust
As you test each assumption, you will learn something new. Each time you learn something new, you should adjust your Winning Move. The iterative process of making assumptions, testing, learning and adjusting will eventually lead you to a conclusion about whether or not to move forward with the strategy.
Based on all you have learned, you will be able to predict the probability of success, and based on the probability of success, you will be ready to take one of three steps:
- Confirmed and Ready: Move forward and develop annual and quarterly priorities to carry out the Winning Move.
- Later: Put it on the idea bench if you discover that it’s a good Winning Move, but not one of your top Winning Moves. You should say yes to the ones that rise to the top, but save other good ideas for future development.
- Stop: Kill and put in the graveyard, while moving on to evaluate the next move.
The right Winning Moves have the potential to dramatically increase revenue, but to do this requires a lot of due diligence and testing. Don’t be in a hurry and short cut the process.
Here are a few other tips to help you succeed:
- Ensure the Winning Moves you commit to are aligned in helping you reach your BHAG Big Hairy Audacious Goal (10-25 year goal.)
- Implement a “Think Rhythm” so that you continue to work on your Winning Moves monthly and not just during your team quarterly and annual planning sessions.
- Determine if you have the financial resources to carry out the move if it is high impact but difficult to implement.
- Kill losing moves that fall into the lower two quadrants of the Winning Moves matrix. These are the moves that suck the life out of the company.
You can download and use our Winning Moves Planner Tool or you can use the Winning Moves screens in the Rhythm software to document and collaborate on your Winning Moves as they advance through this process.
I have always believed that just because we get together and plan for a few days, we are not assured that we have all of the information or answers to confirm our assumptions. The work needs to continue after the session. Commit the time to creating a healthy rhythm of Strategic Thinking and using that time to validate your Winning Moves and take the next step to accomplishing your long-term goals. Your efforts will pay off with the revenue gains you desire.
Share your successes and plan well, Alan
Interested in learning more about your 3 year strategic plan?
The CEOs Strategy-Execution Gap...And How To Fix It
Choose Your 3 Year Strategic Growth Initiatives Wisely With This 4 Step Process
5 Steps to Getting Started on 3 Year Strategic Plans with Winning Moves
Have You Validated Your 3 Year Strategic Plan?
Strong 3 Year Strategic Plans to Grow Revenue and Stay Competitive
16 Strategic Planning Tips to Keep Your Strategic Plan Alive
Don't Confuse Strategic Thinking And Strategy Execution Plans