Strategic planning for an advisory agency, on one page

What strategic planning is

A strategic plan answers three questions. Where are we going? What's stopping us? What will we do about it, in what order, and who owns each part?

Most plans answer the first question and skip the other two. The agency sets a production number for the year, splits it by manager, and calls that the plan. A number tells the team how far to go. It says nothing about how.

Richard Rumelt, a management professor at UCLA Anderson, wrote one of the clearest descriptions of the difference. In a June 2011 McKinsey Quarterly article adapted from his book Good Strategy/Bad Strategy, he says good strategy has a basic structure he calls the kernel:

1. A diagnosis: an explanation of the challenge that picks out the few parts of the situation that matter most.
2. A guiding policy: the approach chosen to deal with the obstacles the diagnosis found.
3. Coherent actions: steps that fit together to carry out the guiding policy.

He also lists four signs of bad strategy: fluff, failure to face the challenge, mistaking goals for strategy, and bad strategic objectives. A production target with no diagnosis is the third one. A list of twelve priorities that don't connect is the fourth.

How it differs from the other plans you already have

Agencies already live with several plans, which is part of why strategic planning gets skipped. Each one answers a different question.

The strategic plan sits above the others. If the diagnosis says first-year advisors are leaving, the recruitment plan and the budget should change to match. When those plans are written separately, the agency ends up recruiting harder into the same leak.

The kernel applied to an agency

Here is an illustrative example for an agency of 20 advisors. The numbers are made up to show the method.

Last year, production missed the target by 15%. The leader's first read was "we need more recruits". The data said something else. Advisors in their first year booked plenty of first appointments, but about a third of those appointments never happened. And half the advisors recruited last year had left by month twelve.

The diagnosis: the agency loses most of its growth in the first year of each advisor. New advisors book appointments that don't happen, earn too little in their first months, and leave. Recruiting more people feeds the same leak.

The guiding policy: fix the first year before adding recruits. Every new advisor works a set routine, with confirmed appointments, and gets coached weekly on their own numbers.

The coherent actions:

• Every appointment gets a confirmation the day before, for every advisor in their first year.
• Each first-year advisor has a 30-minute one-on-one with their manager every week, looking at four numbers: contacts, appointments booked, appointments held and cases closed.
• Recruiting targets drop for two quarters while the managers' time goes into the first-year group.
• A first-year advisor who's behind plan by week six gets a specific fix, agreed in writing, before month three.

Each action supports the same policy. None of them would come out of a plan that started with "grow production 20%".

The plan on one page

Write the plan at four time horizons. EOS uses a similar ladder: a 10-year target, a 3-year picture, a 1-year plan and quarterly Rocks. Use whatever names your team will remember.

If a goal can't be traced back to the diagnosis, cut it or move it to next year.

How to run the planning session

A one-day session works for most agencies. Put the agency leader and the managers in the room, and nobody else. Advisors give input before the day; they don't sit in the session.

Before the day

Pull the last 12 months of numbers, by advisor and by month: contacts, appointments booked, appointments held, cases closed, advisors who joined and left, and open servicing requests. Send them out a week early so nobody sees them for the first time in the room.

On the day

The diagnosis takes longest and matters most. If the room can't agree on it, stop and get more data rather than moving on to goals.

After the day

Write the plan on one page and share it with the whole agency within a week. Each manager explains it to their unit in their own words, the same week.

If you run an advisory firm rather than an agency

A firm founder plans the same way, with more on the page. An agency leader works inside an insurer's or a firm's structure. A founder owns the whole business: the costs, the support staff, the licences and the compliance resources, and the decision about which clients the firm serves.

So the diagnosis may sit outside sales. It could be that advisors spend a third of their week on admin because there's no support staff, or that the firm takes on every kind of client and serves none of them well. The kernel works the same way. Name the obstacle, pick the approach, and make sure the actions fit together, including the ones that cost money, such as a hire.

Keeping the plan alive

Three habits keep the plan in use after the planning day.

A weekly check

Spend ten minutes of the weekly leadership meeting on the plan: the weekly numbers, then each quarterly project on or off track. Anything off track becomes an issue to solve in that meeting.

A quarterly reset

Every 90 days, close out the quarter's projects, check the year's goals, and set the next quarter's projects. Change the diagnosis only if the numbers show it was wrong.

One owner per item

A goal owned by "the managers" belongs to nobody. Every project and every number has one name next to it.

Common mistakes

• Treating the insurer's targets as the plan. They're inputs to it, and they don't tell you what's in the way.
• Writing the plan alone. Managers who didn't help write it tend to wait it out.
• Too many priorities. Five goals for the year and three to five projects a quarter is plenty for most agencies.
• No weekly numbers, so the first sign of trouble is the month-end report.
• Fluff, such as "be the most client-centric agency". It sounds good and decides nothing, and Rumelt names it as a sign of bad strategy.

For the sales side of the plan, turning the year's number into weekly calls and appointments, ActivityTracker (our sister site for sales teams) has a free sales plan template.