Leadership consulting agencies and seasoned administrators sometimes say that annual planning and strategic planning are two different things. MNK believes otherwise. Annual planning and strategic planning go hand in hand. They are two sides of the same business planning coin. Both are necessary for proper business operations.
Just as a good map shows which way is north, the fastest route to a destination, and the potential obstacles along the way, a strategic plan will lay out the direction the business wants to go and the quickest way to get there. The strategic plan will articulate steps that must be completed before pursuing additional tasks.
For example, if the corporate headquarters will be remodeled, a contractor, an architect, and a building inspector must be hired. They each need to assess the building before they can estimate how long it will take and how much it will cost. That must be part of the strategic plan before calculating a budget.
The strategic plan is the long view, the view from the top of the mountain. Sometimes, it can be helpful to have a local guide at the summit, pointing out landmarks and hazards in the distance. Fractional GCs and COOs are of great assistance in looking down from the mountaintop, especially if the land ahead has never been seen before.
An annual plan also looks forward to the year to come. This is a tactical plan, the execution of the strategic plan. Having surveyed the land from the mountaintop, the viewers now shift to the road immediately ahead. Guided by the long-term plan, the fractional GC or COO can discuss immediate hazards, the obstacles to overcome, and ideal strategies for short-term (monthly and quarterly) successes.
An annual plan is how the business navigates the year, and how it grows. Outside advice helps keep the yearly advance aligned with the strategic plan, providing advice about unexpected bumps along the way.
Annual Strategic Planning
Seasoned explorers know that sometimes maps are out of date and landscapes can change dramatically. Strategic business plans are no different. Just as old maps may have roads that no longer exist, the original strategic plan may have outdated or unnecessary stages or goals that no longer apply to the short-term realities and long-term goals of a business.
Combining elements of the strategic plan and the annual review, the annual strategic planning session updates the original plan with any changes found during the past year.
The view from the mountain may have exposed hazards that were not evident before. Perhaps this year’s descent revealed a previously hidden pathway. Strategy and tactics reinforce one another, and the annual strategic planning meeting should refine the long-term goals of the business.
The assistance of a fractional general counsel or COO may be the most useful during the annual strategic planning session. When revising the overall business strategy in light of recent events, outside professional assistance can be invaluable in identifying key events that insiders may miss.
The annual strategic plan should also account for any changes in personnel that occurred during the year. As the business grows, the staff will grow as well. Changes will likely need to be implemented in how personnel issues are handled.