What follows is an edited excerpt from the book Understanding and Creating Vision and Mission Statements by Dobri Stojsic and Barry Linetsky, available from amazon.
Organizations require all sorts of plans. There are project plans, business plans, financial plans, marketing plans, hiring plans, floor plans, bonus plans, etc. Each of these plans guides business thinking and outlines intentions and boundaries for employees in getting their work done and serving the larger business purpose and objectives.
A plan is just a road map or compass to get you from one place to another. It need not be overly complicated, but it needs to be detailed enough to serve its purpose. Anything done long-term requires a plan.
If an organization is to serve its purpose, it requires a high-level plan to provide over-arching guidance to its employees. This type of plan is known as a Strategic Plan.
Generally, organizations manage their work based on a fiscal calendar year to correspond to annual accounting cycles. An annual plan for the entire business is usually referred to as a Business Plan. The business plan often consists of a series of high-priority projects and budgets to support revenue and expense targets for the current corporate fiscal year.
In contrast to the annual business plan, a strategic plan is plan of longer duration, usually from three to five years, and in some cases much longer—20 years or more—depending on the nature of the business. For some businesses that are smaller or in a state of chaotic flux and disruption with no clear path forward, a plan may be as short as two-years in duration until the fog lifts somewhat, the business environment stabilizes to some degree, and the path towards success and a viable future shows greater visibility.
Strategic plans are often transformational and aspirational, in contrast to business plans that are primarily operational.
The complexity of the business needs, including geographical scope, technological requirements, capital requirements, political and economic climate, and consumer support, can all be significant factors in determining the appropriate timeframe for a strategic plan.
Anything that is very complicated or complex requires multiple layers of plans and connected plans within plans. Plans should begin with broad longer-term goals and cascade in terms specificity and timespan towards shorter and more specific plans and actions as required components of achieving the goals of longest duration.
A business operates in a dynamic environment where all elements from staffing to capital resources to consumer preferences are constantly changing. Because of this, long-term strategic and business plans must be flexible.
If you want to achieve a specific result at some point in the future, it is necessary to plan for that future result and start to take action now.
Because of the dynamic nature of business, the longer the duration of the plan, the more vague the details become as the plan stretches towards the future. As a general rule, the pathways to arrive at more distant destinations are always shrouded in more fog resulting in less clear visibility than is the case with nearer-term goals.
Because of a lack of future visibility in implementing strategic plans in times of rapid innovation and change, executives and managers are usually more focused on immediate and short-term business needs and results and are sketchier on specific details as the road stretches out towards a more distant future. There is an ongoing and continuous need as work gets done for managerial leaders at different organizational levels to shift the focus of work forward in time towards new tasks that serve as stepping-stones to the desired future as articulated in the vision and mission.
© 2020, Barry L. Linetsky & Dobri J. Stojsic. All Rights Reserved.
Barry Linetsky is a Partner with The Strategic Planning Group in Toronto, Canada, where he and his colleagues have been helping executives and owners define and align their business purpose with customer values since 1994. Barry is the author of the acclaimed business biography The Business of Walt Disney and the Nine Principles of His Success (Theme Park Press). His most recent books, Understanding and Creating Vision and Mission Statements and Understanding and Creating Strategic Performance Indicators and Business Scenarios, co-authored with Dobri Stojsic, are available from amazon. Barry’s thought-leadership articles have been published by Ivey Business Journal, Rotman Magazine, Mises Wire, and the Economist Intelligence Unit in conjunction with Harvard Business School. Barry is also a writer, researcher, analyst, photographer, and business strategy enabler. Read his blog and learn more at barrylinetsky.com. Follow him on Twitter @BizPhilosopher.