Specific
Measurable
Attainable Ambitious
Relevant
Timed
The purpose of goals is not to help us achieve mediocre results, but to help us achieve extraordinary results. The term strategic planning has become very popular in recent years. One of my favorite curiosity exercises is to look back through history to learn where certain terms and concepts came from. Before the 1960s and Peter Drucker, the term “strategy” was used as a solely military term. Put another way, half-a-century ago, no one had ever used the word “strategy” and “business” together. When Drucker approached publishers in the 1960s with the term “management strategy,” he was rebuffed. His publisher explained that no one would understand the use of a military term like “strategy” in a business context. The corporate world did not accept the term “strategic management,” (and in turn, strategic planning), until more than a decade later.
Today, of course the world has progressed quite a distance from where it was then. Many businesses and organizations now talk about doing strategic planning, as it provides a basis for monitoring progress and for assessing results and impact. It facilitates development and enables an organization or business to look into the future in an orderly and systematic way.
In strategic planning, a leader develops a vision for the organization’s future, focusing on long-term goals rather than short-term objectives. He or she then determines the necessary priorities and procedures to achieve that vision, breaking it down into measurable, realistic units.
Strategic planning is an ongoing process of self-examination, confrontation of difficult choices, and establishment of priorities. It involves charting a course that you believe is wise, and adjusting that course as you gain more information and experience.
Strategic planning is defined as the process of addressing the following questions:
•Where are we?
•What do we have to work with?
•Where do we want to be?
•How do we get there?
The first step is to address the questions “Where are we?” and “What do we have to work with?” Your answer to the first question defines your current company and gives you your starting point. Answering the second question involves a consideration of strengths and weaknesses and a determination of how to capitalize on strengths.
The next step in the process is answering, “Where do we want to be?” As the articulated vision stems from the values of those involved in the process, it is essential that this step involve everyone who will have a stake in achieving the vision. The vision is then translated into a mission statement: a broad, comprehensive statement of the purpose of the company or business. (You will recall the steps for crafting a mission statement from the previous chapter.)
Once you determine your goals, you need to decide how to reach them. This step involves articulating strategies that recognize the strengths and weaknesses of the business and how to use them to achieve a goal.
Many organizations are familiar with the SMART acrynom for goal setting: specific, measurable, attainable, relevant, and time-bound. These are great tools in helping us accomplish our goals. Paul J. Meyer describes the characteristics of SMART goals in Attitude Is Everything.
In our strategic planning work with companies, we start by asking all participants what are the their five top goals they want to achieve, both personal and professional. We then want them to create their plan using the SMART criterea. However, to produce extraordinary results, we need to look specifically at BAG’s: Big Ambitious Goals.
One of the questions I suggest asking new hirees is, what is your five-year goal? Where do you want to be, and why? It shows a lot about their determination and ambition. Some people are afraid of hiring people who say they want to own their own business. My argument for hiring these people is that they will be very motivated to succeed and help the organization to grow.
While general goals are easy to come up with, they are often too vague and don’t really tell anyone what actions are expected of them. But if the goals are specific, they are clear and unambiguous, and they tell everyone exactly what is involved so that they can figure out what to do first, and who should be doing it.
A good, specific goal answers the five W Questions:
•What: What do we want to accomplish?
•Why: For what reasons are we doing this? What would be the benefits of reaching our goal?
•Who: Who would be involved?
•Where: What location?
•Which: What are the requirements and constraints involved?
Unless there are some concrete criteria for measuring when a goal is achieved or how close you are to achieving it, it’s impossible to know whether your team is making progress at any given point. If you can measure progress, you can make sure you’re on track and reach target dates for specific steps of the goal, and experience the exhilaration of reaching those mini-goals that will spur you on to reach the ultimate goal.
A measurable goal will answer the following questions:
•How many? (Steps, mini-goals, units of achievement, etc.)
•How much? (Effort, progress by a certain date, etc.)
•How will we know when we’ve hit our goals?
All goals need to be realistic and attainable, or you’re setting yourself up for disappointment. An attainable goal may be challenging and difficult to reach, and beyond everyone’s comfort zone, but it’s not impossible. Nor can it be too simple to reach, or it will be meaningless.
An attainable goal will usually answer this question:
•How: How can the goal be accomplished?
An ambitious goal, in the meantime, will ask:
•What else can we accomplish? What would happen if we really stretch? Can we accomplish more?
Any goal, to be worth this kind of time and effort, has to matter. An office manager’s goal to “Mow sixteen lawns by 5 p.m.” may be specific, measurable, attainable, ambitious, and time-bound, but it’s not relevant. Many of your goals will need support from your boss, your boss’s boss, and the members of your team. Only relevant goals will receive that support; a goal that is relevant drives the grand plan of the company forward, and will receive the support of everyone in that company.
A relevant goal answers the following questions (with the correct answer always being yes):
•Is this worthwhile?
•Is this the right time?
•Are you the right person/people to do this?
•Does this match our efforts and needs?
Did you start your diet today? It’s definitely on your to-do list. But it’s not until we have a wedding coming up that we actually start starving ourselves. Giving ourselves a target date helps us stay focused and not stray from the path when other emergencies come up. Having a time-bound goal helps establish a sense of urgency.
A time-bound goal will usually answer the questions:
•By when do we need to be finished?
•What do we need to have done six months from now?
•What do we need to have done six weeks from now?
•What do we need to do today?
Here is an example of how using strategic planning helped achieve a SMART BAG. Sam had many challenges getting a line of credit from a bank. His company had a poor credit rating and negative equity on its balance sheet. Sam shared with me that his goal was to get the banks to help fund some of the cash-flow needs.
I asked Sam, “If you could get the banks to give you whatever you need, what do you really need?” He said “Two million dollars: one million to buy the building I’m in and the other for new machinery, additional inventory, and improved cash flow.”
Now we had a Big Ambitious Goal: two million dollars in two years.
I told Sam it would take him two years to achieve those goals, but he needed to stick with the plan I made for him. He agreed, and we put together the SMART BAG plan. We followed the plan carefully, and I introduced him to a banker I was friendly with. We had a very specific strategy for getting the bank to want to offer him a line of credit.
At the end of six months, he was able to get $250, 000 for his cash-flow needs. We then invited in the first bank and as well as a second bank to look at the possibility of financing the purchase of the building. It ended up that both banks wanted the business, so now we had competition and were able to negotiate a great deal for Sam. Two years later he owned the building.
There are many approaches to strategic planning and different models available to implement them. There is no one perfect strategic-planning model for each business. It depends on what your business needs. For example, if planning is meant to add a new product or program, the process will probably include market research to verify the need, markets, pricing, and so on for the new product or service.
The strategy depends on whether the business has done planning before. For example, if the organization has not, extensive attention to mission, vision, and values statements is probably warranted. It also depends on whether the environment of the business or organization is changing rapidly and whether the business has had past success in planning.
Each organization ends up developing its own nature and model of strategic planning, often by selecting a model and modifying it as it goes along in developing its own planning process.
You can follow this very basic outline:
1.Identify your purpose. This is the statement that describes why your organization exists. Define or review your organization’s values. Be sure there is a consensus on why your business or organization exists, what goals or outcomes it seeks to achieve, what it stands for, and whom it serves.
2.Establish a vision statement. This statement describes the future state of your customers/clients and your business at some point in the future.
3.Select the goals your organization must reach if it is to work effectively toward your mission and achieve your vision. The SMART BAG is a great place to start. Identify specific approaches and strategies that must be implemented to reach each goal.
4.Compile the mission, vision, strategy, and action plans into a strategic-plan document, where you finalize a summary of the results and decisions of the strategic planning process. There doesn’t have to be a set format, but be sure to include the outputs of each major step. Ensure that upper management approves the plan. 5. Monitor implementation of the plan, and update the plan as needed. Build in procedures for monitoring and for modifying strategies based on changes in the business.
Whatever model you’ll be implementing, the key planning sessions often work best when facilitated by an outsider who is knowledgeable about the business or about businesses and organizations in general. A facilitator should be someone skilled in-group processes and experienced in strategic planning. They should be nondirective, committed to ensuring full discussion of issues, but also task-oriented and able to move the process forward. We used a facilitator when we formulated our personal family mission statement; they helped us keep focused and allowed family members to freely express their thoughts.
Sometimes a former board member or executive director can fulfill this role in a business sense. For family mission statements, a close outside relative, friend, or community or spiritual leader can be a facilitator. Agreeing on values, vision, and mission is usually best accomplished as a part of a planning retreat or at a special meeting.
In your business, there must be someone within the organization who can take responsibility for implementing the strategy. Be sure progress toward goals and objectives and the use of strategies is monitored regularly. Strategies should be revised and annual objectives developed based on the progress made, the obstacles encountered, and the changing environment. The board plays a critical role in reviewing progress and ensuring that strategies are changed as appropriate.
Specific criteria for evaluating and choosing among strategies should be agreed on. In doing this, the planning group should always consider the need to clearly define responsibilities for their implementation.
Many organizations are very focused on short-term goals, and some even focus on long-term goals. But to achieve extraordinary results, you need to aim for the stars, because if you aim for the stars, you at least land on the moon. Don’t be afraid to plan big. But to do so, you need to have a strategic plan and the handy SMART tools to make it happen!