There are seven key questions in strategic planning, both for you and for your business. These are questions that you need to ask and answer over and over, throughout your career. Sometimes a new answer to any of these questions can dramatically change the direction of your business and your life. Insights that you get from continually asking these questions can lead you to establish new goals and new focal points for your future.
Define Your Business or Career Clearly
The first and most important question is, “What business am I in?” What business are you really in? Define your business in terms of what you do for your customer or your company. Keep expanding the definition of your business so that it is as broad as possible. Never be satisfied with the first answer.
For example, railroads defined themselves as being in the business of moving people and freight by rail. In reality, they were in the transportation business. By ignoring the other avenues of transportation that were developing, such as trucks, buses, ships, and airplanes, many railroads went out of business.
Many Internet companies defined themselves as providers of free information geared toward attracting as many eyeballs as possible. In reality, the Internet is a communication and distribution channel that must be focused on selling products or services and making a profit, like any other business. This failure to accurately define the business has led to the loss of many billions of investment dollars and market capitalization.
Define your business in terms of the effect your products or services have on the life or work of other people or organizations. By the same token, define your personal work in terms of the effect you have on the people you work for and with.
Once you have decided clearly what business you are in, apply zero-based thinking to your activities and ask, “Knowing what I now know, is there anything I am doing today that I wouldn’t get into again if I had to do it over?”
Creating the future means leaving the past behind. Keep asking yourself, “What are the activities that I should reduce, discontinue, or avoid altogether, based on the situation the way it really is today?”
Think About the Future
The next question to ask is, “What business will I be in if things continue the way they are today?”
If you do not change, what will you be doing one year, two years, and five years from today? Is it an intelligent strategy to continue in your current line of business, or should you be looking at changing in some way?
What business should you be in? Look at yourself, your talents, your abilities, your ambitions, your energies, and especially your heart’s desire to determine the business you should be in, the work you should be doing sometime in the future.
What business could you be in? If you were to dramatically change your level of knowledge or skills, your products or services, your industries or markets, what business could you be in if you really wanted to be? What changes would you have to make today to create the business of the future? What changes will you have to make personally to become the kind of person who can live the life and do the work you would really like to be doing sometime in the future?
Identify Your Customers
The third question is, “Who is my customer?” Whom do you have to satisfy in order to survive and thrive in your career? Of course, your first customer is your boss, the person who signs your paycheck. Your primary job at work is to make sure that you are satisfying his or her essential needs. Do you know what they are?
You can define a customer as anyone who depends on you for his or her success and anyone you depend on for your success. Under this definition, your colleagues and your staff are also your customers. Everyone around you whom you help, or who helps you, is a customer in some way.
Who is your external customer, the customer who uses what you produce? This is the focal point of business success. Your ability to accurately identify the external customer whose satisfaction determines your success in your career is critical to every element of strategic planning.
What does your customer value? What specific benefits does your customer get from using your products or services? What does your customer want and need from you to be completely satisfied? How does your product change or improve his or her life and work
The twenty-first century has been called the Age of the Customer. The customer is king or queen. Your ability to identify and satisfy your key customers is a critical determinant of your success and your rewards in life.
Who will your customer be in the future if current trends continue? Who should your customer be if you want to rise to the top of your field? Who could your customer be if you were to change your product or service offerings? How could you upgrade your knowledge and skills and your ability to satisfy that customer?
Fire Your Customers
Are there any customers in your business, whom, knowing what you now know, you wouldn’t start working with again today? Answering this question honestly is an essential part of liberating yourself and your company from some of the decisions of the past.
Many companies today are analyzing and identifying the qualities and characteristics of their very best customers. They are then sorting their customers into high-value and low-value customer segments. By doing this, they can focus more of their time and attention on their highest-value customers and on acquiring more customers like them. Simultaneously, they spend less time on their lower-value customers, and in many cases they encourage their lower-value customers to do business with other companies.
Not long ago, a friend of mine, a successful entrepreneur, applied the 80/20 Rule to his customer base. He determined that 20 percent of his customers contributed 80 percent of his sales volume and 80 percent of his profits. He decided to “fire” the 80 percent of his customers who contributed 20 percent or less of his revenues. One by one, he handed them off to other companies in his industry whom he felt could serve them better. He then focused all his attention on his higher-value customers. Within a year, his business and his personal income doubled. Would this strategy work for you?
Identify Your Area of Excellence
The fourth question is this: “What do I do especially well?” What is your area of excellence, your area of superiority? What is your personal competitive advantage over the other people in your field?
This is a vital question in personal strategic planning. You will be truly successful only to the degree that you become excellent at the most important part of your work. One of your chief responsibilities in life is to select the area of excellence that can have the greatest positive impact on your career and your income, and then throw your whole heart into becoming very, very good in that one area.
In Competing for the Future, Gary Hamel points out that the top companies are those that project forward five years and then identify the core competencies they will need at that time to dominate their industries. They then implement a development plan to ensure that they have those core competencies in place when the future arrives.
You should follow this strategy as well. What are the core competencies you will need to be in the top 10 percent of your field three to five years from now? How do they differ from your key skills today? What can you do today to begin developing those additional skills and abilities? Whatever competencies you will need to be the best, set them as a goal, make a plan, and begin working on developing them every day.
Focus on Your Highest-Value Activities
The fifth question in personal strategic planning is this: “What are the 10 to 20 percent of my activities that could account for 80 to 90 percent of my results?” What are the tasks you do today that yield the highest returns and rewards relative to the cost and effort of performing those activities? How can you organize your work life so that you are doing more and more of these higher-value tasks
Remove Your Key Constraints
The sixth question in personal strategic planning is this: “What are the critical constraints on my ability to achieve my goals?”
In every work or production process, there are a series of steps between where you are today and the result you want to achieve tomorrow. Invariably, one of these steps is the constraint or chokepoint that determines the speed at which you complete the process and achieve your goal
For example, between your home and your office, there may be a stretch of road or freeway that sometimes is extremely crowded. Before that stretch and after that stretch, the traffic is light. But if that stretch is jammed, this can be the major bottleneck that determines how fast you cover the entire distance.
If your goal is to double your income, the first thing to do is identify the different steps you must take to get from the income you have today to the income you want. You then examine each of these steps and determine which step is the limiting factor that determines how fast you achieve your income goal.
Ask yourself, “Why aren’t I at my goal already?”
If you want to double your income, why aren’t you earning twice as much already? If you want to spend more time with your family or friends, why aren’t you doing it already? Often, forcing yourself to develop the answers to these questions will enable you to see the critical constraint that is holding you back.
Here is an important point. I would contend that fully 80 percent of all the constraints that are holding you back from achieving your most desired goals are inside you. Only 20 percent are on the outside. Fully 80 percent of the reasons that your company is not achieving its goals are inside the company, in some way. Fully 80 percent of the reasons that you are not making more money or increasing your free time are within yourself. Your major constraints usually lie within your own habits, beliefs, attitudes, opinions, skills, and abilities.
When you want to accomplish great things, you always start with yourself and work out from there. Ask yourself, “What is it in me that is holding me back?” You are in control of yourself. You can have an enormous effect on what you do personally or fail to do. But you have only a minor influence on external factors and other people. Always start with yourself.
Choose to Take Action
The seventh question in personal strategic planning is, “What specific action or actions am I going to take immediately based on my answers to these questions?” The purpose of strategic thinking and planning is to choose the actions you are going to take to bring about different results from what you are achieving today.