When is the Right Time to Engage a Strategic Plan or a Business Plan?
Knowing when to engage a Strategic Plan or a Business Plan is critical. Understanding which to engage at different times is important. First, let’s start with making sure you understand the Difference Between a Strategic Plan and a Business Plan. Now that you’ve read our article on the difference between the two, understanding when to engage each of them is the next step.
New Product Launch
A new product or program launch is the perfect time to engage a business planning process. This is a time when you need to figure out specifics, how you will market the new product or program, who your target market is for sales, what type of expenses will be incurred, new staff that needs to be hired, and ultimately will you turn a profit and when. These are all components of a business plan.
Don’t just take this as a for-profit tool, nonprofits also should produce business plans for new programs looking at how they will be funded, how they will build awareness, and who the program will serve. All of these get taken into account when building out a business plan for a new program or product launch for a nonprofit.
New Partnership
When looking at a new partnership, whether it be a joint venture or another form of a partnership, we recommend putting together a joint business plan. This plan should identify who will take the lead on different pieces of the effort? how the other partner will support them in that effort? how the partnership will divide revenues and expenses? and ultimately, how will the partnership define success (and hopefully not failure)? Putting this in place early on in the process allows for less arguments or confusion later on in the process. Consider this business plan your home base when questions arise.
This is a step we often see overlooked in Public-Private Partnerships. When this step is missed, partnerships lose a tool that would have often provided a much clearer, defined path and in many cases would have provided a much more successful partnership.
Leadership Change
Leadership change, especially an unexpected one, can be a great time to assess the direction of the organization. We often recommend Interim Leadership if the change is at the Executive Director/CEO level. Letting someone come in without a bias towards the organization (positive or negative) and assess the practices can be a great way for an organization to improve. One of these steps may include strategic planning. Putting the future together so that it can be easily explained as well as shown to an incoming Executive Director/CEO can put them on the path to success. Similarly, at the Board level (the group that should set the strategy), major changes at the board level should highlight a time to consider a new strategic plan. Board level change often comes with new ideas. New ideas are great, but if they aren’t clear to the staff and partners of the organization, there is often a breakdown in communication that ultimately leads to problems.
Environmental Changes
Let’s say a pandemic happens, or a recession, or a shift in the workforce. None of those would happen frequently (or all at once)? Unfortunately, we have seen at least one of these events occur in 2001, 2008, 2020, and 2021. Average this out, this is once every five years. Although the pandemic may have set off a shift in the workforce, so you might argue the average is more like three over 20 years or once every seven years. But environmental changes don’t always have to be a negative thing occurring either. As an example, the increase in battery storage has created a shift towards electric vehicles and greatly changed the paths of many car manufacturers.
So which do you deploy when the environment changes? Assuming it is a major shift in the environment like those listed above, this is time to engage a strategic planning process. You need to plot your course through and after the environmental change. While portions of your organization may remain the same, your mission and vision perhaps, how you sell your organization through an elevator pitch can change, as well as leadership challenges, risk management, financial projections, and performance measures. For that matter, any part of the plan may change depending on what is going on with the world. Not sure how these would change? Look at nonprofits that were running a capital campaign in 2008-2009 when the market crashed, what about in 2020 when the COVID pandemic hit. Would it have been fair to judge a museum, movie theater, or theme park on their visitation based upon your prior projections?
Routinely
A Strategic Plan typically looks out 3-5 years for a business or nonprofit. Looking further out sounds nice but there are too many variables. Therefore, 3-5 years is the sweet spot. It’s also important to remember the development of a strategic plan should take 4-6 months. Any longer and there may be too much change in thought and the environment to make it useful. Any less and you’ve likely skipped some important steps. What steps should be undertaken in a strategic plan? In our Strategic Planning Prep Kit we have many free resources that outline the steps of the process as well as the importance of each piece of the plan. Take a look to get a concrete understanding of the mechanics of a strategic plan. In our article on How to Write a Strategic Plan RFP we also go in-depth on what you should be looking for from the start of your process.
These are not the only times a business plan or strategic plan should be engaged, but these are five instances where it can be important to look at developing one of these two documents. Going through one of these scenarios? Reach out to NMBL Strategies today to find out how we can assist your organization!
