From Vision to Reality – 4 Steps to Craft a Winning Strategic Plan with John Downes

From Vision to Reality: Crafting Your Strategic Plan in 4 Steps

JD: today we’re diving into the bedrock of any successful business, the strategic plan. Now, if you’ve ever felt like you’re running your business without a clear direction, or maybe you’ve got too many ideas and not enough focus.

This episode is tailor made for you. I’ve been in the trenches with businesses of all size from startups just finding their feet to established mid market companies looking to break through to the next level and large listed and government agencies. One thing I’ve consistently seen is that businesses without a clear, actionable, strategic plan often struggle to reach their full potential.

I remember working with a growing tech firm full of energy and ambition, yet they were like a ship in a storm without a compass, tossed around by every new opportunity, but never really moving forward. That’s when they realized the importance of a solid strategic plan. So today I’m going to walk you through the approach I’ve been using for the last 15 years.

to create a strategic plan that not only charts your course, but ensures you’re focusing on the criticalfewactions™ that will actually drive your business forward. And as always, I’ll share real life examples to show how this works in practice, so you can apply these insights directly to your business.

I believe that developing a strategic plan isn’t rocket science. It’s just a matter of following four straightforward steps and always keeping the customer at the center. Let’s start with a metaphor that really resonates with clients. Strategic planning is a lot like preparing a birthday cake. Before you can bake, you need to decide what kind of cake you want.

That’s like understanding what your business’s end goals are. You gather your ingredients. This is assessing your business , where it stands now. And you visualize the finished cake, setting your vision. And finally you bake it. That’s your implementation plan. Imagine little Johnny’s birthday is coming up and you decide you want to bake him the perfect cake. You wouldn’t just start throwing ingredients together without a plan, would you? No, you’d first figure out what kind of cake he wants. Does he want a chocolate, a vanilla, maybe something more elaborate, like a layered cake with frosting and sprinkles?

I’m salivating. Um, that decision is crucial because it guides everything that comes next. In business, this is equivalent to understanding your customer’s needs and desires. It’s the foundation of your strategic plan. If you don’t know what your customers want, You’re just guessing and in today’s competitive market, guessing is a luxury you can’t afford.

So one of my clients had an IT services company, Charles, and he was trying to be everything to everyone, offering IT systems to anyone with a checkbook in a wide range of markets without a clear understanding of who their target clients were and what they actually wanted. They were spread thin, their messaging was unclear and their sales were accidental and reactive.

When we narrowed down their focus in on who their ideal customers were, which was medical practices, they realized they needed to focus on understanding exactly what flavor their customers were craving. And by narrowing their focus and aligning their products to those customers needs, they saw a significant increase in conversion and satisfaction.

To dig into the customer more, I use the business model canvas to understand the customer’s view. This isn’t just about a surface level understanding. It’s about diving deep into who your customers are, what problems they face and how your business can solve these problems better than anyone else.

anyone else. The business model canvas has been around for years and that’s divided into several key components that help you map out your business’s value proposition. For example, when you look at customer segments, you’re asking who are our most important customers? What type of relationship does each segment expect us to have with them and how we’re doing?

With which channels do the customers want to be reached, and which are we actually using? Are we forcing them to use something that they don’t want to use? What value do we deliver to our customers, and what problems are we solving? And, uh, What makes us distinct? And then what are the key activities we need to perform to deliver that value?

And what key resources or partnerships do we need to help with that delivery process? And then finally, what revenues do we receive and what costs do we incur? And is this business model viable? Each of these components is critical because they help you see the business from the customer’s perspective.

Then we can reflect and challenge the model to see how it changes under different circumstances, such as what would happen if we couldn’t meet face to face? What would happen if there were severe import restrictions or other major supply chain disruptions? What if there was a new technology or a very low cost competitor entering the market?

And how would the model change? This level of understanding allows you to tailor your products and services to meet customers specific needs. Which can significantly boost your customer attention and satisfaction. So for instance, Peter and Roger had a landscaping services business that I worked with a number of years ago.

They’d been serving a broad range of customers from corporates to urban planners and councils without a clear focus. They were good at a lot of things, but exceptional at only serving one type of client. By using this sort of analysis, we identified that their success rate, most reliable and profitable revenue came from one specific customer segment. And once we honed in on that sector, they jettisoned a range of unnecessary services. And doubled down on their niche. Now, after five years, they pretty well own that segment of mega customers in long stable contracts.

This step is foundational. Without a deep understanding of your customer, your strategic plans, just a shot in the dark. Your customers are the reason your business exists and understanding them fully is the first step towards creating a strategy that drives real results. 

Step two. After you’ve decided on the kind of cake you want, the next step is gathering up the ingredients.

You check your pantry to see what you already have and what you need to buy. In business terms, this is where you assess your current situation. Looking at your resources, capabilities and market position. So, This step is really to take a good heart look at where your business stands today, a comprehensive assessment of your entire business.

And so I think there’s four parts to that. First, we look at the operations of the business and I use the Organization Performance and Value™, (OPV) framework to do this. It’s like holding up a mirror to your business, forcing you to see everything as it really is both the good and the bad. The OPV framework is built around six levers that every business leader can pull to improve their business.

One vision and strategy. Two. 3. Delivering profit. 4. Supporting your people to perform. 5. Driving asset returns. And 6. Developing your learning from the organization. Each of these layers represents a different aspect of your business. And by assessing each of the 75 factors, you can identify where you’re strong and where you’re weak, and where there are opportunities for improvement.

For example, under vision and strategy, we look at your why, and we need a clear and compelling vision that everyone in the organization understands and is committed to. This is crucial because without a clear vision, your team won’t be aligned, and then your efforts will be scattered. Building revenue focuses in on your marketing strategy, your sales process, and your ability to generate demand for your products and services.

Delivering profitability examines how you deliver product and services to your customers in full and on time and at what margin and how your costs are structured and your ability to retain profit after all expenses have been accounted for. Supporting people’s performance is all about your team, your culture, your leaders, and how you recruit, train, , and manage your people to ensure they’re performing at their best.

One of the questions I like to ask came from Vern Harnish in his book, Scaling Up. If I knew what I know now, would I rehire this person again unreservedly for the job they’re in? And we start with the CEO and work down. It’s a great way to see if we have the right people on the bus in the right seats and whether or not we’re supporting them to perform well.

Driving asset returns looks at how effectively you’re using your assets, whether they’re physical assets like equipment and facilities or intangible assets like brand and intellectual property and how you’re financing your growth. and infrastructure. And then finally, we look at how you develop your organization learning, which is all about how well you learn the lessons that your business is trying to teach you every day.

What are our budgets, our KPIs or OKRs, and how are we tracking and what can we learn from our performance? So, I worked with a professional services business in the building and construction game. I thought they were doing pretty well because they had steady sales, great cash flow, and to die for profitability.

Yet, when we looked closer with the OPV framework at their business unit performance, we found that one was dramatically over subsidizing the other because of bloated staffing levels, poor communication and leadership. And no adherence to performance metrics. These blowouts were not only costing the money, but the inequities in workload were causing severe hits to the culture within the business.

By confronting these issues head on, getting clarity around the numbers and the leadership, they were able to set the teams free to run their own race and culture improved and profitability is sought. But without that intervention, they were destined for destruction. It’s easy to get caught up in the day to day operations of your business and assume that as long as you’re not losing money, everything’s fine.

But that kind of thinking can lead to complacency and complacency is really dangerous in a competitive market. Another aspect we look at is to get some independent industry research. I’ve been using IBISWorld Research Reports for years because they cover all the major standard industry classifications for large and SME businesses.

This just gives you an independent outsider’s view of who’s in your market, what are the market dynamics now and in the future, and what are the metrics you should be targeting. It navel. And finally, I think it’s essential to review our financials in detail and ask how are we performing against industry norms?

And are we performing well enough for the risks that we’re taking in running a business? Reflection, honest, in depth reflection is essential if you want to ensure that your business is not just surviving, but thriving. And that’s exactly what this, where are we now steps all about. Thank you and step back.

Assessing your situation and identifying those areas when you, where you can make meaningful improvements. 

Step three then is where are we going now that we’ve taken stock of where we are, the next step is to define where we’re going. It’s about painting a picture of success that not only motivates you.

But also rallies your team around a common goal. Bit like me with that chocolate cake. vision is your North star. It’s what guides every decision you make. and every action you take. Without a clear vision, you’re likely to find yourself drifting, reacting to circumstances rather than proactively shaping your future. But when you have a compelling vision, it gives you a sense of purpose and direction.

It helps you prioritize your efforts and ensures that everyone in the organization is aligned and working towards the same goals. But before you can define your vision, You need to understand your why. Why does your business exist? What’s the impact you want to have on your customers, your employees, and your community?

Simon Sinek, in his famous 24 million view Ted Talk, talks about how great leaders inspire action by starting with why. People don’t buy what you do, they buy why you do it. And when you can articulate your why clearly, it resonates with people. It gives them a reason to care about your business, and it gives your employees a sense of purpose beyond just making money.

 remember working with Daniel in a homewares import and distribution company that had been operating comfortably without a clear vision for years. They were doing well enough, hoping for annual growth, but there was no real sense of direction and no unifying purpose. This lack of clarity was a source of mediocrity in their teams, which in turn was affecting operations, customer service and sales.

We spent time asking the question, if we’re getting together in five years time, what would we be celebrating this business has become? How will it be different? What will our customers be saying? What will it look like and what will it feel like to be here? This led us to develop a vision that everyone got behind, which wasn’t just about making people feel good, it had tangible results.

We saw a 15 percent increase in business performance year on year to achieve that doubling of profitable revenue and a more cohesive company culture. But a vision is only as good as the action plan that follows it. That’s why the next step is crucial. Turning that vision into reality by focusing on the criticalfewactions™ that will make it happen.

Your vision sets the destination, but it’s the action you take every day that will determine whether or not you get there.

So step four, how do we get there is about bringing the plan to life. The final step. is where the rubber hits the road. Implementation planning. Here we take all the insights and visions we’ve developed and lay out the building blocks that we need to get us from where we are to where we’re going in clear, actionable steps. The key here is to focus on the criticalfewactions™ that will have the biggest impact.

It’s not about doing everything. It’s about doing the right things. And I like to address it at two levels. First, we look at the five year vision. What are the major building blocks we need to get there? Do we need new infrastructure, new plant, new capability? Do we need to develop new product and service lines?

Do we need new staffing, new locations, maybe some acquisitions or some divestments? What do we need to stop doing? What are the key initiatives that need to be undertaken, and who’s going to be responsible for each of them, and what resources are going to be required, and crucially, what are those timelines?

This isn’t about creating a long list of to dos, it’s about identifying the few critical actions that will drive the most significant progress towards your vision. And once we understand those big building blocks, I then like to focus down to detailed planning of the next 12 to 18 months and break that down into quarterly and monthly goals.

This creates a clear roadmap that not only shows where you’re going, but also how you’re going to get there. And by focusing in on just a few key actions at a time, you avoid the overwhelm that comes from trying to do too much at once. I believe that planning in any detail beyond 12 to 18 months. It’s just a fantasy as we can’t see clearly that far into the future.

Let’s face it. Few of us even predicted or planned for COVID or the GFC, or even the introduction of accessible AI with chat GPT. And all of those were game changes. Let me tell you about Callum at a tech startup I advised in the global logistics industry. And they had a lot of great ideas and a seriously ambitious vision, but they were fragmented, stagnated, and spread too thin. They were trying to execute on too many fronts at once, and the focus was changing every few months.

Almost in a panic. And as a result, they weren’t making meaningful progress in any particular direction. The CEO Callum was getting really frustrated and money was evaporating faster than they could deliver progress by reclarifying and getting agreement on the vision and prioritizing those criticalfewactions™ like stabilizing their platform, digging deep into their country rollout strategy and targeting key functionality.

They were able to double their customer base, deploy to more countries, and were acquired for over a hundred million bucks within two years. This wasn’t magic, it was the result of disciplined focus and execution. By narrowing their focus, they were able to do fewer things better, and that made all the difference.

I’ve seen it time and time again, businesses that focus on a few key actions achieve more than those that try to do everything at once. You simply can’t do everything for everyone. All of the time, nothing much is achieved and you live in a constant state of overwhelm and frustration. So by focusing on those criticalfewactions™, that if you did nothing else, you give yourself the best chance to succeed in delivering your vision.

To recap, we’ve walked through our four step approach to strategic planning, understanding the customer’s view, reflecting on where we are now, Defining where we’re going and planning for the implementation. Each of these steps is critical, but it’s a combination of all four that truly drives success.

So as we wrap up, I want you to think about your business. What are those criticalfewactions™ that you could focus on right now? What does success look like for you and how will you measure it?

And if you’d like to look into this more, you can have a look at the process, templates, and instructions your team can follow to deliver your strategic plan in the show notes.

Thanks for joining me today. I hope you found this discussion valuable and I’m excited to continue this journey with you. Until next time, remember that I’m all about helping you get pleasure, fulfilment, and a sound financial reward from your business.

So let’s get started on making those criticalfewactions™ work for you.