<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=290086984736480&amp;ev=PageView&amp;noscript=1">
word-map-thumb

The Alternative Board Blog

Strategic Plan Using A 36 Month Planning Horizon

Nov. 25, 2014 | Posted by The Alternative Board Worldwide
road in mountains

 

Strategic plan planning horizons. Are yours as short and chopped up as a horizon between downtown buildings, or are they like an open prairie that lets you see for miles and miles?



Imagine this:
A business contact of yours calls you and says, “I have a great opportunity that is going to present itself in the second quarter of next year. I need to know, quickly, whether you want to participate in this. It will take about a half-million dollars, but it is a golden opportunity.” As he outlines the opportunity, it does sound good. But you say to him, “My budget isn’t ready for next year.  We’re just in the budget process right now. I don’t know if I’m going to have room in my budget to participate in this venture.”

If your budget is an annual calendar budget that runs through Dec. 31, you have no way of objectively testing the impact—financial or operational—of an opportunity that won’t arise until the second quarter of the next calendar year. Your strategic plan planning horizon is too short.

Start putting together a 36 month rolling horizon for your strategic plan goals. Don't limit your planning horizon to budgets, but also set a three-year rolling horizon for staff, markets, capital formation—everything that has importance to your strategic plan goals.

At the end of the first three months, the details for the next 12 months are adjusted or revised with a new starting point. You are always maintaining between 12 and 15 months of a detailed plan, and you add an additional 24 months of a non-detailed plan beyond that. If you never have a horizon of less than 36 months overall, you will be able to test the impact of your decisions before you make them.

How do you test the impacts? If you have a financial model of your business, you plug the decisions into the modeling. You project the investment level the decision will require; you project whether you can afford those dollars in your capital structure; you project whether your cash flow is sufficient. Try out the decision in your operation plan to see whether it would take people away from other critical parts of your operation to the detriment of those operations.

Your planning team should create options that supplement the goals set forth in your company’s strategic plan. The team must identify each of its members’ responsibilities. Collectively, these responsibilities should integrate into all the activities needed to achieve your company goals. Once the planning team has reached a consensus on the goals that collectively make up the strategic plan, the team can focus on the specific activities needed for each area of the company to reach those goals.

Your planning team must identify the critical success factors required to reach each goal. Each proposed success factor must be challenged as to why it is critical in attaining its specific goal. There must also be clear time frames for achieving each success factor. Otherwise, there is no way to monitor whether you are making adequate progress toward your company goals.

Read our 19 Reasons You Need a Business Owner Advisory Board

DOWNLOAD

Written by The Alternative Board Worldwide

Related posts

6 Ways to Ensure Strategic Planning Success

Dec. 28, 2017 | Posted by The Alternative Board Worldwide
A company’s strategic plan is only as effective as the process that goes into creating it. If the approach is too rigid, hierarchical or only serves as an empty exercise, it’s unlikely the business...

What to Include in Your B2B Marketing Plan

Dec. 21, 2017 | Posted by The Alternative Board Worldwide
Nowhere is the celebrated “buyer’s journey” more relevant than with B2B companies and their customers. With the vast array of digital resources at their command, these customers embark on the...

Must Haves for Impactful Business Event Planning

Dec. 12, 2017 | Posted by The Alternative Board Worldwide
Event planning may seem like a business-related activity that has little do with a CEO or business owner’s primary responsibilities. In fact, a high-profile business event can significantly affect...

Key Elements of a 'Strategy Planning Day'

Dec. 7, 2017 | Posted by The Alternative Board Worldwide
Is the thought of the strategic planning process too daunting for you to consider? Many small business owners and CEOs are inclined to put this off, thinking that such planning requires extended time...

10 Things to Look for in an Executive Business Coach

Jun. 17, 2015 | Posted by The Alternative Board Worldwide
In January 2015, The Alternative Board released a survey revealing what business owners wished they had done differently in the beginning stages of their business. Many of the entrepreneurs wished...

The Perfect Business Conference Playlist

Jun. 11, 2015 | Posted by The Alternative Board Worldwide
One of my favorite parts of planning our annual Facilitator Conference is selecting the music. We want the music to be upbeat. Create energy. Selecting the right music can be tricky. Just like good...

Your Strategic Plan Should Begin with a Personal Vision

Jun. 8, 2015 | Posted by The Alternative Board Worldwide
In a privately-owned business, the strategic plan for a company is not based solely upon the assumption that the company’s goals and vision are to maximize profit. The strategic plan for your...

8 Signs You Need Business Coaching Services

May. 27, 2015 | Posted by The Alternative Board Worldwide
Running a business is a dynamic endeavor. There are ups and downs, highs and lows, and long stretches of plateau in between. Fortunately, even when you find yourself in a rough stretch, there’s...

6 Best Business Assessment and Analysis Tools

May. 1, 2015 | Posted by The Alternative Board Worldwide
  “If you know the enemy and know yourself you need not fear the results of a hundred battles.” - Sun Tzu   Regardless of size, industry, or value, 75% of businesses face the same challenges. While...

5 Things Strategic Buyers Will Look For in Your Business

Dec. 2, 2014 | Posted by The Alternative Board Worldwide
Is selling your company part of your exit strategy? Here are 5 big considerations a strategic buyer will look at when evaluating the value of your business. 1. Purpose for Buying The first thing a...