8MAY 2024Interestingly, I get this question a lot and it's usually under the context of whether it's better to develop a three-year or five-year strategic plan. To me, it doesn't matter what time horizon a company chooses as it relates to the shelf life of a strategic plan because the answer is the same: zero - it has no shelf life!Strategic plans need to be living, breathing documents to be effective and should never be literally or proverbially placed on a shelf. To help `make it real,' there are three areas of focus that help ensure actionable strategic plans: strategic and operational planning alignment, transparent accountability, and rigorous execution.Alignment of Strategic & Operational PlanningThe overall planning cycle includes strategic and operational planning that should be aligned to increase efficiency and improve results. For organizations on a calendar year-end, I like to kick off the Strategic Plan update in April, after Q1 results are finalized, and complete the strategy in the July timeframe. Notice I used the term `update' versus `create.' Unless the company is new or recently merged, once the plan is created, an annual update that extends out one year should suffice instead of creating a new Plan from scratch. For example, in 2024, a three-year strategic plan from 2023 to 2025 should be updated to cover 2024-2026. A review of mission, vision and core values should still be performed with a SWOT Analysis (strengths, weaknesses, opportunities, threats) but in an abbreviated manner, versus the extended workshops necessary when developing a new plan.After the strategic plan update is completed in the Summer, it can be leveraged for budget development in the Fall for the subsequent year. In the example above, the 2023-2025 strategic plan updated in the Summer of 2023 should be the framework for the 2024 budget developed starting in the Fall. In this way, strategic planning is aligned with operational planning, so the work included in the strategic sessions flows nicely into the efforts to produce the budget commitments for the subsequent year. A few words of caution here though: don't let the strategic plan development become a forecasting exercise--it's a slippery slope that defeats the purpose. Be sure that the focus is on strategy development and let that drive the results, not vice versa. STRATEGIC PLANNING: WHAT IS THE SHELF LIFE OF A NEW STRATEGIC PLAN?By Paul S. Young, Chief Financial Officer, Liberty BankOPINIONIN MY
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