Once upon a time, conventional wisdom held that a 3 or 5 year strategic plan was critical for any growing business to achieve their long-term goals.
However, that was at a time when sectors and industries were slower to change and evolve, competition was less intense, and there were greater barriers for businesses to start or scale.
Why the (Detailed) Long-Term Plan is an Outdated Idea
Nowadays, the idea of a company plotting out its next 5 years with some kind of prescriptive formula and in any kind of reasonable detail seems both archaic and unfathomable.
Why? Well, put simply, companies have to be more agile and adaptive, opportunities and threats are now emerging in a rapid-fire manner and technology is driving change and innovation at an unprecedented level.
For example, if you are a venture-funded start-up operating in the tech sector, there are so many variables and unknowns – constant pivoting and experimentation to find product/market fit, when and whether you will raise investment etc. – that make predicting the future virtually impossible.
The world – and business – is now a much more turbulent place and what inevitably happens, is the 5-year plan becomes outdated well before its achieved. But there are also other reasons why it fails too.
Three Other Reasons Why The 5 Year Strategic Plan Fails
It’s a Hazy Pipedream
The CEO, Board or Management Team dreams up a five year vision that has no real practical steps towards achieving it. Numbers and words are put into a plan on the assumption they will simply be achieved.
It Bears No Reality to the Day to Day
The company sets lofty strategic goals that bear absolutely no reality to what the business and its people are doing on a daily, weekly and monthly basis. The plan sits on a hard-drive, doesn’t really mean anything and isn’t used to guide people’s actions and behaviours.
Bigger Goals aren’t Chunked Down into Short to Medium-Term Priorities
Big goals are not translated into day to day deliverables and so they inevitably fail because there is no defined first, second or third rung on the ladder towards them.
There is no silver bullet in business. If you manage the small victories, the big victories take care of themselves. Or put simply, do certain things correctly and consistently and you will achieve certain results. And herein lies the crux: if you fail to translate your long-term objectives into near-term priorities that all build towards your bigger goals then you will inevitably fail. But there is a way to avoid this. Enter the 90 Day Plan.
A Better Approach to Business Planning
You can’t put off making strategic choices within your business so we aren’t advocating you abandon the idea of longer-term planning. Rather, you do it in a different way – by balancing strategy with agility. Here’s how.
Start with a looser 3 year strategic plan (ideally on one page) that is based around a number one goal, a certain direction you want to pursue (or the kind of company you wish to create, starting with the end in mind) and some key milestones that ladder towards this.
These milestones might be based around things like revenue growth, EBITDA, key hires, projects that create exit value within the company, customer acquisition, key sectors, operational improvements etc.
The 3-year plan should not be overly prescriptive but, rather, a strategic framework (or set of navigating principles) within which to work.
Assuming this has been developed in advance of the first year of the plan, you should prepare a more detailed plan and budget for year one of the plan.
This will be much more detailed than the 3-year plan because, ultimately, it can be. You aren’t attempting to predict something that may or may not occur in 3 year’s time so more granularity is appropriate and, indeed, sensible.
What is a 30/60/90 Day Plan?
Once you have done this, the next step is to create a 90-day plan. But what is a 90-day plan?
Something which Mirrors Your Financial Quarters
The 90 Day Plan should mirror each of the fiscal quarters within your financial year and provide a set of specific deliverables to be achieved within the period.
A Translation of Your Big Goals into Short-Term Deliverables
The 90 Day plan should break down the key things that need to be achieved in the next 30, 60 or 90 days that support the achievement of any goals you have defined for the next 12 months. Your 12 month goals (or year 1 of your plan) should link to your 3 year goals.
Accomplishments not Metrics
The 90 Day Plan should be based around key improvement initiatives (things that are moving the business forward towards its bigger goals, creating value or addressing challenges / stress-points), rather than metrics which are separate and should be reported through the combination of a budget and/or a dashboard or business scorecard.
Initiatives Above and Beyond the Day to Day
The 90 Day Plan shouldn’t simply be an extended to-do list, nor should it be a dumping ground for tasks / activities that would happen ordinarily. What it should be is a set of key initiatives that can be accomplished within a 30, 60 or 90 day period and are primarily about working “on the business”.
Three Reasons Why You Should Use a 30/60/90 Day Plan
If you aren’t convinced already, the benefits and advantages are numerous:
It Provides a “Live” Accountability Framework
The 90 Day Plan becomes a valuable “live” tool for the Owner or Management Team to set and agree personal accountabilities on a quarterly basis that drive improved performance within the business and can be worked on immediately.
It Keeps You on Track to Your Bigger Goals
The 90 Day Plan creates a hugely valuable connection between the strategic goals of the business and the “here and now”, giving people clarity on what needs accomplishing in the next 30, 60 or 90 days, rather than simply falling into the trap of “busy being busy” (or “busy doing stuff” that is non value-adding).
Monitor Monthly, Course Correct Quarterly
You should monitor your key metrics on a monthly basis but avoid making decisions based on a single months figures. This can be too knee-jerk because there isn’t enough evidence to suggest a positive or negative trend is emerging and a single month can be skewed by a number of factors (e.g. a large contract fails to start on the date assumed or payment isn’t received for a large invoice). 90 days, however, provides a better yardstick of whether the business is performing or under-performing in a given area and the 90 day plan allows for course correction or remedial action on a quarter to quarter basis.
How to Use a 30/60/90 Plan
Whilst it might sound relatively easy, there are a few important principles to adhere to:
Link to Financial Quarters, not Calendar Quarters
If your financial year is April – March then your Q1 Plan should be based around April – June. Your Q2 Plan would be July – September etc.
Set at the Start of Each Financial Quarter
You will be creating 4 quarterly plans – but not all at the start of the year. Each 90 day plan should be constructed at the start of the quarter for the business to remain agile.
Manage Your Position Quarterly
You should assess the business at quarterly intervals vs. its 12 month plan. Any shortfalls from the previous quarter (e.g. sales variance or project lag) should be carried forward to recover any deficits.
How to Monitor a 90 Day Plan
Once live, we suggest having a fortnightly review meeting lasting roughly 60 – 90 minutes where anyone with accountabilities in the plan attends (more later on this).
These meetings (6 in total over the 12 week period) will alternate in focus. 3 of these fortnightly meetings (at weeks 2, 6 and 10) should be more informal catch-ups to address any concerns or potential challenges.
The other 3, falling at weeks 4, 8 and 12) will coincide with the “hard” 30 day, 60 day or 90 day milestones in the plan and allow for tracking of progress against plan.
The final (week 12) meeting should be an expanded session (around 2 – 2.5 hours in length) where the next Quarterly Plan is created.
Who Should be Included in the 90 Day Plan?
Ultimately, this will differ by business but, essentially, the key people with ultimate responsibility for the company’s growth plan should share the accountabilities defined within it.
In a micro business with less than 5 employees, this might be just the business owner. In a business with a Management Team or Board, this will likely be all of the Owners direct reports, which should ideally be no more than 6 people and senior staff only (or those responsible for strategic results within the company).
How to Construct a 30/60/90 Day Plan
Let’s assume your 3-year plan has a set of objectives or key goals. Ideally, there should be between 3 and 6. Fewer than 3 is too few and more than 6 is too many.
The idea is to focus on “the critical few” key focus areas that will make the biggest difference within the business, rather than the “insignificant many” (i.e. things that have limited consequential value).
These key areas could cover things like revenue growth, margin or bottom line improvement, sector mix, customer or key account acquisition, operational improvements to occur, exit readiness (or key projects that will improve your valuation multiple) or, even in a small business, the key things that need to occur to reduce the company’s reliance on its owner(s).
Within your 3-year plan, these objectives should each have annual milestones. The year 1 milestones for each should then be broken down into quarterly objectives that link to the achievement of the 12 month goal.
So, as an example, let’s assume you have 4 key goals (or focus areas). Each of these should then become a quarterly goal within your 90 day plan or what we call a QM (Quarterly Milestone). The following principles then apply:
Agree an Owner for Each Goal
Each QM should be assigned to a relevant person who has functional responsibility for that area. A quarterly sales objective would obviously be owned by the Sales Director (or whoever has responsibility for Sales). In a tech company, a quarterly objective around say meeting certain product roadmap milestones or releasing new product features would be owned by the CTO.
Set Deliverables for the Quarter Against Each QM
Each QM (or goal area) should be expressed in one sentence but then have a corresponding number of deliverables, activities or tasks that require completing in the next quarter to support achievement of the QM. These can be more granular and could easily number 10-12 for each area.
Define Whether they are 30, 60, or 90 Day Deliverables
This should be based on the size of the task or project and the capacity of the individual or business to deliver it. Bigger initiatives could also have sub elements that break down into 30, 60 and 90 days.
RAG Rate Each on a Fortnightly Basis
When you review the plan on a fortnightly basis with the team responsible for delivering it, RAG rate (red, amber, green) each deliverable based on progress. Green would signify complete or on-track; amber would indicate some potential risks and red would indicate significantly at risk or well adrift.
Do NOT Adjust Once You’ve Created the 90 Day Plan
If a deliverable has been assigned for completion within 30 days, don’t simply move it to 60 days if it is at risk of not being achieved. This is a cop-out, it dilutes accountability and means initiatives will be constantly deferred as soon as there is any indication of a deadline not being met.
Three Examples of 30, 60 and 90 Day Goals and Deliverables
Here are three hypothetical examples of 30, 60 and 90 Day Goals and Deliverables:
Let’s say you had an objective to increase revenue from £5m to £10m over a 3 year period and that was possible based on your historical run-rate and the commercial opportunities available to you. Your year 1 sales objective might be to reach £7m (assuming the correct forecasting principles had been used etc.). Your budget might assume your YTD position at the end of Q1 to be £1.5m which would become your Q1 sales goal. However, you might define a range of 30, 60 or 90 day deliverables to achieve this, such as acquiring one large key account (of a certain value or in a certain sector) by the end of the period; or improving the daily call time of your sales team from 3 hours to 4 hours within 90 days; or reducing account churn from 10% to 7%; or completing a full review of your account base for growth opportunities.
Improving Project Margins in a Service Business
Let’s say you were running a service business and had a 3 year goal to increase project gross margins from 40% to 55%. Within this, let’s assume you had a year 1 goal to reduce over-servicing from 10% of billable time to 2%. Your first Quarter’s objective might be to reduce over-servicing to 7.5% and contain a range of deliverables to support this, such as a root and branch review of your client base to identify unprofitable accounts and to assess gross profit by client; coaching and feedback with certain fee earners who are regularly over-servicing clients, the implementation of stronger time-tracking systems or a full review of pricing and/or hourly rates.
Reduction of Reliance on the Owner
Let’s say you had a 3 year goal to build a business that can work without its owner(s). Within this, by year 1, you may have targeted completion of an Operations Manual to codify the owners knowledge and lock it into the business. Within this, your Quarter 1 goal might specify the completion of a Master List of all processes to be created within the Operations Manual and a list of the first 12 processes to be developed with 4 set for the first 30 days, 4 set for the first 60 and another 4 for the first 90 days.
The point is that your deliverables have to make sense – they support the achievement of your quarterly goals, which in turn accumulate to deliver your 12 month goals and, ultimately, your 3 year goals. What they can’t be is simply a collection of “nice to do’s”.
Tools and Recommended Resources to Use to Build the 90 Day Plan
Conclusion: Why You Should Have a 90 Day Plan
So, in summary, setting 90 day plans (which also include 30 and 60 day deliverables) on a rolling basis allows you and your business to chunk your higher level goals down into micro-chunks in a way that creates great connectivity between the here and now and your desired future.
Ross Golightly is an experienced Growth Strategist, Consultant, Coach, Mentor and Non-Executive Director. His firm (Sphera Consulting Ltd) typically works with ambitious, growth-led CEO’s, Entrepreneurs and Owner-Managers to build, grow, scale and exit their businesses.
Ross has over 20 years industry experience, having held Senior Commercial roles in two Fortune 300 multinationals and has spent the last 14 years working with over 800 businesses, ranging from start-ups to multi 8-figure PLC’s across manufacturing, services and digital/technology.
He regularly works closely with a range of Boards across the UK and Europe to drive aggressive revenue and profit growth and is an experienced Non-Executive Director with 3 x current NXD roles on the Boards of other high-growth companies and 1 x Not for Profit NXD role.
His firm works with companies to increase revenue and profit growth, build a growth plan that can achieve this, ready a business for succession or exit, build a business that can work without the owner and overcome the typical growth constraints and challenges associated with scaling a business.