The Long Range Plan

Long Range or Strategic Planning can be intimidating whether you are a new entrepreneur or a director on a corporate board.  The key is to keep it simple and let yourself and your team be guided by two ideas: convert your vision into goals, and make your goals SMART!  Those goals become the source of the details for your annual operating plan.  By the way, it’s a good idea to have someone with a gift for strategic planning work with you because each goal will need to be divided into team and individual tasks.  The process of drilling down requires a fair amount of organized thinking.

How long do we plan for?  The cliché that a goal is a dream with a deadline is true for long range plans.  The starting point is your dream or vision statement, supplemented by your purpose or mission statement.  Focus your thinking by setting the horizon for your LRP, typically three to five years; and you’ve just put a deadline on the dream, or at least part of it!

Arguments are made for different time spans with three years often preferred due to the pace of change.  Five years is more traditional with longer times like ten or even twenty years set for slow moving and massive changes like building aircraft carriers or reclaiming and protecting large wildlife habitats.  Pick a horizon that makes sense for your organization’s vision.  And remember, you don’t have to achieve your vision in three years; you just need to decide what the organization is going to do over the life of the LRP to move toward the vision.

Speaking of the life of the LRP; think of it as immortal.  The LRP needs to be updated annually.  Each year you can add new long range goals that feed the annual operating plan, assuming that you’re achieving your older goals and they’re rolling off the plan into maintenance mode.  The three or five year horizon is that “rolling” horizon that is always a few miles ahead of your car out on the highway.  The new goal is the milepost way out on that horizon and the horizon always appears to be moving, but the mileposts beside the road identify the previous long range goals you established.

What should we include?  Use the business plan outline as a guide and ask, “What will it take in each of these areas to achieve the vision?”  Remember the first point in each component of the business plan: approach, risks and measures.  How will your approach contribute to achieving the vision?  What risks need to be addressed to enhance the chances for success?  How will you know you are succeeding?

Identify the most significant goal with the greatest benefit for each business plan component and quantify it.  Make it SMART: Specific, Measurable, Achievable, Realistic, and Time-bound.  Make it specific so you can break it down into tasks to be tackled each year.  Make it measurable, you need indicators of progress and results to recognize success or the need for corrective action.  Measurable includes not only the desired result, but also rough estimates of resources and timing.  Make it achievable and realistic; nothing is more frustrating than trying to do something that cannot be completed in a reasonable amount of time.  Make it time-bound; the assumption is that the goal will be achieved within the three year span of the current LRP so specify the date.

You might have noticed I didn’t mention Strength Weakness Opportunity Threat (SWOT) analysis until now.  I mention it now because although it’s a step up in complexity from what I consider to be better business basics and common business sense, it is a very helpful approach to evaluating opportunities and related risks (threats).  It’s also useful for sizing up your core competencies and resources (strengths and weaknesses), key considerations in developing a workable LRP.  There is plenty of guidance available on using SWOT analysis so I won’t elaborate on it here.

One last thought on long range planning; don’t over-analyze or over-plan.  It’s too easy to become the victim of analysis paralysis, a business disease that will keep you from doing anything big and increase your risk of failure.  Learn to know when to say, “That’s good enough!”  It keeps you moving forward and cuts back on those perfectionist tendencies (I speak from a great deal of experience in this area)!

What do we do today?  You’ve come this far; take a breather; building a long range plan is hard work!  Next you’ll need to break down each goal into stages with shorter deadlines of one year or less, and actual tasks that can be completed in the shorter stages.  In other words, you convert your LRP into an annual operating plan (AOP) defining what you’ll do this fiscal or calendar year.

But that’s the subject of another post…

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