Failing to achieve 80% of the annual strategy is not a verdict. The secrets of strategic planning.

By Viktor Andrukhiv, (pictured) ukrainian entrepreneur,  co-founder of Fibermix and Savex Minerals

The pre-New Year period is a favorite season not only because of family holiday traditions. For an entrepreneur, it is an important time to reflect on the current state of the business and determine the direction for the future. In other words, it is a period of assessment and strategic planning for the upcoming year.

Even in the midst of a full-scale war, the basic principles of long-term planning remain unchanged. Ukrainian companies adapt to the global economy and business standards. However, the changes have been spotty. For example, the frequency of interim strategy adjustments has increased. A few years ago, we made adjustments about twice a quarter. Now we do it every 10 days, responding to the demands of business in this era of turbulence.

It’s important to remember that while a long-term strategy is a critical document that provides a roadmap for action and desired outcomes, it is not static. It requires systematic adjustments in response to new challenges.

When summarizing the year’s results, we often acknowledge the underperformance of the plan. In one instance, this deviation amounted to a staggering 80%! However, the profit indicators achieved at that time were 90% in line with the initial plan. In other words, the new strategy, crafted through continuous adjustments to the primary plan, yielded the desired figures. Could we have achieved these numbers by blindly following the annual plan? Unlikely.

Guidelines for a Successful Strategic Session:

Every year, we typically hold two strategic sessions—one for the top management team and the other for the entire company. I firmly believe it’s crucial to involve all key employees in planning for the next year, both in the office and production. They should not only comprehend the overall business picture but also feel their value to the company and have the opportunity to showcase their potential. These sessions often reveal unexpected potential in employees.

Fundamentally, the purpose of strategic planning is to outline the overall roadmap for the company in the coming year. During the session, we must address several key questions:

1. The primary question is how much and how we plan to earn. We analyze factors and indicators from previous years and make decisions for the next year, favoring a particular product or direction. We establish the main priorities, keeping in mind that the key task of the business is to generate profit.
2. Determining how to maintain our positions, establish ourselves in the market, and grow throughout the year is crucial. Any company that remains stagnant for an extended period is essentially dying. Therefore, we consistently prioritize questions of development and expansion.
3. Concerning team planning—which departments to develop and how to motivate them—I don’t know many examples of large, successful businesses created by a single person. Thus, it’s crucial to recognize the value of the team. This is also a question of financial resources. It’s five times cheaper for our company to retain, develop, motivate, and train the team than to recruit new people. Hence, we invest in corporate culture and employee qualifications.

The success of the strategic session depends on how seriously the team approaches the task.
All key players must present a brief report with figures and proposals backed by calculations. If the proposals of one department representative depend on the resources of another, the second should provide feedback. Decisions are made only when they are understandable to all team members, and any objections that may arise during the discussion are resolved. Only then do we move forward.

Key Conditions for Conducting the Session:

The strategic session is not a corporate event but a meeting, and employees should understand that. Therefore, we structure the day with clear coffee breaks, no wasted time, and everyone’s focus should remain on the common task. Occasionally, we conduct off-site sessions outside the city, but we split the days: 2 for relaxation and 3 for planning. The absence of a dress code adds informality. Employees should feel free to express their opinions.

Preventing sabotage is crucial. In every company, there are people, and in every business, you can find a saboteur—someone who is always dissatisfied. This person is capable of disrupting brainstorming with their behavior, lack of seriousness, or bullying colleagues. Therefore, it’s crucial to identify the saboteur and their accomplices in advance and discuss these issues with them on the eve of the session. If discussions do not help and employees do not take it seriously, in my opinion, considering termination may be necessary.

After the session, we compile a document, make adjustments, and coordinate with the executive team. This becomes our strategic plan for the year. If the strategic session is conducted correctly, you will not only have an annual plan but also a team inspired by common ideas. This makes it much easier to achieve the desired results.