When facilitating a strategic planning session, I often describe this model that shows the difference between strategic and operational planning:
First, I draw a horizontal axis that is a timeline from today to the duration of the strategic plan (usually 3-5 years) – along with a vertical axis that represents metrics of success – however an organization quantifies success (Gross Revenue, EBITDA etc.). I then put a mark on “today” and the midpoint of the metrics axis and say, “Here is where we are today at this level of performance.”
I then draw a box around the graph to represent the organization’s mission – the box you play in, the purpose and reason why you exist. Anything in that box may be worthwhile to the enterprise. Anything outside is not.
In operational planning, we assume things are going to be the same (maintenance) or we estimate a percent of linear growth – so the line is flat or has a modest increase. (In reality, though, if there is no energy or lift in the operations, you actually will have a glide path that goes down…so it’s important to have an operational plan to keep the trains running!). I then draw a line extending from today out in to the future that is flat or incrementally upward.
Unlike operational planning, strategic planning looks at the future first and then backs into the current day. I then draw a cloud out into the future well above the current day’s metric. This is the leadership’s vision of the future – the most desired state 3 to 5 years out.
We then go back to the vertical axis and note the gap between our metrics today and the metrics from the desired future (no, I don’t go into what those metrics are at this point!). And voila! We note that there is a gap between the two. These typically become the strategic areas and/or strategic initiatives that will we discuss during our session. We will also discuss the strategy on how to leap forward.
Finally, we will create a long-term plan that works our way backward from the vision by asking, “What do we need to do to achieve the vision?” These key activities become our critical milestones – and when married up with a date, becomes a plan of action.
You’ll also note that in strategic planning, we are going to assume that the day-to-day operational business is being taken care of (everything below the line). Our strategic planning discussions are going to focus on “above the line” issues: mission, vision, strategy, strategic areas/initiatives and critical milestones. That being said, groups will periodically dip below the line (it’s alot easier to talk about tactics vs. strategy!) and so I then point to a “parking lot” flipchart where we will post operational items that come up in our discussion. My promise is that it will not be a graveyard of ideas – that we will return to the parking lot at the end of the day.
As you go through this basic model, you can add other components, but at the beginning, I like to keep it fairly simple and straightforward, so that people have a good idea of what we are going to be talking about.
I hope this helps you and your team have a greater understanding of strategic planning – and you can also access this model on Slideshare.