Simple Strategic Planning for Startups

It’s that time of year when most companies start to think ahead to next year (if they haven’t already started) and do some planning for what comes next.

Strategic planning is an area that many startup leadership teams struggle with. It’s often something companies want to do but don’t make time for. Or when they do undertake the effort, they don’t integrate their plans into their business operating system and it ends up being outdated and forgotten as soon as planning is over.

Until you have gone through a few cycles of planning, it can be hard to create the discipline to do it in your company.

I tend to have a bias toward action (and an aversion to discussions that don’t yield immediate outcomes), so I personally had trouble with consistently planning for many years. But I found that at some point, to run your company well, you just have to figure out how to have a repeatable, effective framework for strategic planning. 

Here’s the cadence, process, and framework I finally settled on after a lot of trial and error. It’s really rooted in OKRs as the final output. I find it to be robust enough to be high impact, but simple enough to allow for flexibility. I think it works for teams and founders who are planning-adverse as well as those who fully embrace planning. It scales to a company that’s upwards of $50m in ARR (but after that, it probably needs some adaptations and additions to work well at a larger scale). It can also be tweaked easily to adapt to any startup culture.

First, what is strategic planning?

Strategic planning is the process of determining the direction of your business. In a simple approach to strategic planning, you just assess where you are, and discuss where you want to go. You plan ahead, set the course, communicate it, do it, and measure it. 

Why is strategic planning so important?

If everyone across your company doesn’t know where you want to go, how will you ever get there?

Through planning, you set goals and define high-level strategies to achieve the goals. It helps ensure you, and your entire company, focus on the right things at the right time.

With planning, you are able to set a strategic agenda and priorities for the short, mid and long term. As you cascade the strategic agenda out to the organization you ensure your entire company is aligned on the areas of focus and effort.

More than anything, planning can help your company radically focus on the most important things and drop the distractions that aren’t adding value to the company’s strategic agenda.

How to do simple strategic planning

Here is a process for strategic planning that isn’t overly complicated. You can do this with your executive leadership team (your direct reports). As a company leader, you should spend some time thinking about these things in advance, but come to the planning sessions ready to listen more than you talk.

Step 1: Review

Depending on the stage of your business there may be a lot, or a little, to review. Essentially you are reviewing the state of the business today. Topics for this step include:

• To kick-off, revisit your mission, vision, and values to help frame the review work and also ensure leadership is in agreement that they represent the culture and direction of the business. If you don’t yet have a mission, vision, or values, now is the time to do the work of defining and documenting them.

• If you have a previous strategic plan, start with a review of that plan—what went well, what didn’t? What should you start, stop, and keep from it? How well did you execute against the plan and what are your learnings?

• Consider conducting a SWOT analysis to get a baseline on the business.

• Review key internal metrics.

• Review external market data, research, and trends if applicable.

Step 2: Discuss

If you are thinking through how you will run your strategic planning session you are probably wondering how “review” and “discuss” are different. In reality, they blend together very much. As you are reviewing you are no doubt also discussing, debating, and deciding. The first three D’s blend together. The most important aspect of the Discuss step is to really spend time on the desired future state of the business. Based on the information you reviewed, where are you headed and what do you want to achieve? Are there market trends that may impact where you are headed?

Step 3: Decide

After Review and Discuss, it’s time to make decisions. Make sure you leave your strategic planning with a clear definition of the future state and alignment in your ELT that it’s the right direction to be heading. What you’ll need to decide & align on together:

• Mission

• Vision

• Values

• Theme/internal campaign for the coming period (if applicable)

• Strategic priorities

  • Finance

  • Product

  • Customer

  • People & Culture

  • GTM

• 1-3 company OKRs for the coming year or quarter

Step 4: Document

Create a shareable plan based on whatever strategic framework you are using (see below for an example). You can post the plan in your internal wiki so that staff can refer to it as needed.

Step 5: Communicate

Here’s where things usually break down inside of companies. The best plan is pointless if it just stays locked in the minds of the executive leadership team. It’s the entire company that breathes life into a plan. Communication is the fuel to get momentum created inside of the organization so that the team can execute.

The strategic plan document should be available centrally to all staff and should be referenced frequently in company communication so that everyone knows, and understands, the direction of the company. It’s literally how you get the entire company on the same page.

From there, all plans, goals, and strategies that occur in the company should be aligned with the strategic plan.

Step 6: Execute

This is another area where strategic plans die. Once a plan is determined, there must be a culture of execution. This comes from holding people accountable and monitoring & sharing progress often. A great OKR tool can really help shape this culture and maintain a focus on execution.

Step 7: Monitor

Once you have a plan, communicate it and start executing, you’ll want a consistent way of tracking and reporting progress against your goals and initiatives. Real-time dashboards are great, as are templates that mirror your actual plan. If you use an OKR tool, updating progress as part of your OKR culture can be an easy way to implement monitoring.

Updates on progress and results should be reviewed and shared company-wide on a regular cadence (monthly usually works best).

Strategic planning framework

There are many different strategic planning frameworks you can choose from. The version I use is rooted in OKRs, with learnings from balanced scorecard and cascade. It takes what I’ve found most useful and flexible from each. It’s just something stripped down to focus on the most essential aspects of planning & executing against your plan. My intention with this example is for you to use it as a starting point and make it your own!

When to do your strategic planning

So you have the process and the framework, but how often should you be doing this whole planning thing? Here is a basic schedule for strategic planning, that is ‘often enough’ but not too often that you spend all your time planning and forget to execute. Modify this to fit the right cadence for your business.

Strategic planning do’s and don’ts

I think many startups don’t do strategic planning or do it in fits and starts because it seems harder and more cumbersome than it actually needs to be. When you do strategic planning on a regular basis you will find it brings order to your thinking about the business and provides a rudder for what gets prioritized. Here are a few final “do’s and don’ts” to keep in mind as you get started.

DON’T:

• Pick a framework that doesn’t feel right culturally.

• Over-invest time in planning relative to your stage. It’s OK to just spend a couple of hours, or a couple of days if that’s what is right for your company.

• Put your plan on a shelf and let it collect dust. Lots of strategic plans get made, few get executed. Make sure you actually act and monitor.

DO:

• Create the discipline of planning early. Keep it simple, documented, and organized.

• Start with a pre-determined process and framework to get the ball rolling, but evolve it over time to fit your company.

• Create a culture of strategy execution.

What else you should know about how to plan

In terms of how long you should spend on this process, I think it depends on the stage of your company, the maturity & dynamics of your leadership team, your company culture, and your tolerance for planning. Spend anywhere from 6 hours to 3 days on the Review, Discuss and Decide portion of the process. The Communicate, Execute, and Monitor steps should be ongoing throughout the year.

Some companies do 1, 3, and 5-year strategic planning. Just do the range of time that makes the most sense for you. Startups typically need half or annual plans. As you scale, it probably comes time to do a little more work on the 3-year agenda. But the bulk of your time & energy should be going into the 1-year plan. And if times are crazy (uh, like in the midst of a global pandemic, for example), it may even be appropriate to adopt an even more lightweight process and just do 3 or 6-month planning cycles to focus on the most acute issues.

Whoever you include, however much time you spend and whatever period of time you plan for, the outcome you are looking for is a documented strategic plan that you can execute against and measure. Success in strategic planning is when everyone knows the objectives and can formulate actionable plans to execute the strategy across your entire company.