Mastering the 3 Year Business Plan
Dec 1, 2020
The first thing to consider in the 3 Year Business Plan is the same as in a one year or five year plan – consider what direction your company should be going in. Answer why that direction is important, and it’ll be easier to identify what objectives need to be achieved, understand where there might be some gaps and challenge points ahead, and how your team will work on those issues and opportunities to realize your potential.
Knowing Where You Want To Go in the 3 Year Business Plan
In considering your direction, ask yourself: do you have the capabilities to realize your goal? This could be a function of product offerings, your ability to drive innovations or with your organizational effectiveness, or the ability to drive profitability – among many other considerations.
From a leadership perspective, it’s crucial to truly understand your organization’s strengths, weaknesses, the objectives before you, and what will be required to build a high level roadmap.
Creating the Framework for a Successful 3 Year Business Plan
Some key drivers in almost any organization that you’ll want to measure in achieving your goals include sales, the cost of sales, and overhead investments. These are levers with significant impact, and they influence (and are influenced by) other aspects of your business. These metrics are your first important elements of a framework you can customize to understand progress towards your goals, and might also include products and innovation, organizational excellence, people and leadership. Get input and buy-in from other department leaders or managers as you determine your goals and measurable targets, and make sure there’s alignment on where organizational focus will be.
It’s good to have ambitious goals, but connect them to three or four value drivers you realistically influence. Other “wishlist” items can become part of the framework when and if new resources, like people or money, make them easier to focus on. Focus on winning big with a few select items rather than mediocrity across several.
Staying Disciplined To Your 3 Year Business Plan
Business and marketplace dynamics are always changing, which is why a framework created by key drivers in your business is important. Is your drivers include new products and innovation to help reach your 3 Year Goal, then even as things around your business change that focal point does not. You might find things are taking longer, or less time, or are shifting in ways you didn’t expect – but the key driver remains.
A 3 Year Plan isn’t something you build one year and revisit three years later. It’s a living, breathing thing. The framework and value drivers of your business will adapt and evolve, but if you’re focused on a few big wins you can better stay disciplined to those outcomes and avoid chasing shiny objects or having to essentially build a new plan every year. This is where annual, quarterly, and monthly goals and reports are all key considerations to the whole – those should be driving you towards your long-term vision and achievement, and and course corrections required should be relatively minimal from month to month.
Guiding the 3 Year Business Plan
Guidance, discipline, and vision for the 3 Year Plan needs to come from the functional leaders of your team. It’s their responsibility to cascade functional goals, objectives, mandated performance objectives throughout the organization. A key component of this is the CFO, who has the unique position and understanding of all the departments or people that are managing your key drivers. In addition to real-time guidance on how drivers are performing relative to goals, your CFO should be an active part in helping you create your sustainable long term vision and achieve your 3 Year Plan.
