Strategic Versus Yearly Planning
Strategic planning is all about building a clear vision for how you’re going to beat out the other companies in your industry. It’s a multi-step process that defines how you’re different or how you’ll meet a customer need in a way that wins you market share for the next 3-5 years.
Many well-known companies have mastered strategic planning: Tesla’s strategy was to make electric cars that, while still looking like traditional gas vehicles, could run faster and use Tesla’s own charging network. Uber’s strategy was to develop a booking app that supported prepaying, which added convenience and customer control.
When you do strategic planning, part of the process is making a conscious choice about who you want to be as a business. Toyota decided it would not try to compete against luxury brands like BMW and Mercedes. At Vagaro, we initially decided to use a similar strategy and focused our efforts on small to medium-sized business owners in the salon, spa and fitness industries. In this way, companies are a lot like athletes. They don’t try to pummel everybody in the gym. Instead, they decide which specific sport or segment to train for. As our capabilities have grown and our goals as a company have progressed, we have now also set our sights on larger-sized businesses and enterprises.
Yearly planning can only happen after you’ve developed a strategic plan that defines who you are as a company. It pins down the logistical or operational details necessary to execute your strategic plan, such as whether you need to create departments, hire more people, invest in certain tools, or how you will market your strategy.
Strategic Planning Is Fluid
Leaders aren’t fortune tellers, and competitors are falling in and out of industries all the time. So as much as leaders might analyze and try to make educated decisions, they have to keep a constant eye on the markets and maintain pace with changing needs. COVID-19 is a perfect example of how the unexpected can force companies to pivot and adapt, with Vagaro embracing the development of new contactless check-in and payment software that businesses can use well into the future.
The fluidity of the world means that, even though you don’t necessarily want to bend to every trend or challenge, you should be willing to reevaluate your strategic plan regularly. If you decide your strategy doesn’t work for the situation you’re in, that’s okay — you can build a new strategy that’s a better fit. When you’re considering your options, ask yourself: What would a winning strategy look like in your current market? Who are your biggest competitors? The answers to these questions will vary from company to company, but these questions serve as a guide for strategic planning.
Achieving a Narrowed Focus
Strategic planning is always connected to the larger vision and goals your business has. So, when you do it well, a natural, positive side effect is that everybody becomes more aligned. Both individually and as a team, they become more comfortable in their own skin. They also understand where you want to take the company and what their role is on that journey.
As your team achieves this narrowed focus, it becomes easier to pay attention to the right things. Instead of getting distracted and pulled into the weeds by every shiny opportunity, they only go after the winning strategy.
Businesses have the greatest need to define their brands and carve out exactly what they want to be when they’re small. For this reason, strategic planning that offers a narrow focus can be helpful for companies that are just getting off the ground.
As your business grows, however, people will have their own ideas they want to bring to the table. The business will adopt multiple goals, and it’s likely not going to be as easy to connect personally with others as it was when the business was smaller. So strategic planning becomes increasingly important the bigger you get. And everyone, not just the CEO, has to take the ideas people present and figure out how it fits into the company’s strategy.
The Right Plans in the Right Order Can Direct Both Your Business and Your Field
Strategic planning is absolutely critical in that it gives everyone a common target to rally around and a clear road to reach it. It’s all about providing vision, direction, and differentiation. Yearly planning is what brings your strategic plan to life in your everyday operations. It’s all about execution and logistics. So, make sure to get the order right — create your strategy first, and then let the yearly planning follow. With everyone on the same page, you might just write a new chapter for your entire industry.
