Pierrepont Accountants

What is a strategic plan and how to make it really effective

A strategic plan is provides a valuable guide to the leadership and all stakeholders in the business as to where it is going and why it is going there.

The value in the plan is to be found in the information it contains and the processes and systems used to provide the information and the sharing of the plan with the team. A great plan is not carved in stone, but rather evolves over time.

Greater effectiveness of the plan can be obtained through the implementation of the following three rules

Rule 1: Keep it simple.

Focus on what really matters – the customer. You will have the customers attention and hopefully their money if your value proposition is greater than your competitors. This is made up of two components, knowing where your target customer lies and what your compelling value proposition comprises, an example being exemplary customer service.

Rule 2: The plans value comes from an understanding and communication rather than from perfection

There is the perception that a businesses strategy should be 100% accurate. In terms of cost control that may be achievable and its importance should not be understated, but as outlined in Rule 1, strategy should be about revenue which makes perfection and impossible standard. Unless you have a perfect monopoly or are in possession of legally binding contract of supply predicting revenue over a period of time will be far from perfect.

Rule 3: Test and test again

Periodic continuous improvement of the plan will come from testing the logic of the thought going into the plan.

Assessment should be made of your knowledge of customer behaviour, the sector that you operate in and your business capabilities. By writing down the logic of thought and then comparing to actual outcomes you will be able to make the requisite adjustments to the plan leading to an improvement in strategic decision making.

As a footnote, if you are comfortable with your company’s strategy then you probably are too comfortable?

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