What mental images do you conjure up whenever the term “strategic planning” is brought up in conversation? Is it one of screeds of paperwork, a never-ending supply of sticky-notes, and round-table talk-fests? It needn’t be any of these.
The reality is that strategic planning can be engaged quite effectively and efficiently without all the unnecessary time-wasting hoopla often associated with it. The irony is, while business owners have grandiose aspirations of business success, only a very few are investing time and energy in creating a strategic plan to carry them to this position.
In any endeavor, planning must always be the initial step before the grunt work starts. Creating a well-thought-out and effective strategy is one thing though…. executing on the strategic plan is another story.
Strategic planning illustrates your path in growing your business by allowing you to achieve your goals by following a “road map”.
Consider these 5 reasons why having and executing on a strategic plan would benefit your company and why, if you haven’t already, you should start today.
Strategic planning benefits
Setting priorities and a sense of direction
By establishing a clear vision, mission, and company goals, you’ve already taken a big step in determining what possible routes are available to take. It not only gives you a sense of direction but a well-built foundation as you start your journey.
Deciding where you want to go and identifying how to get to your goal allows you to envision how you and the company will succeed. It is foreseeing the future and anticipating the worst-case scenarios to prepare for any possible unfavorable conditions and to mitigate or minimise them.
By being proactive rather than reactive, you leverage your strategies and stay ahead of the game.
Identifying where your energy and resources should be focused
As leaders and business owners, you need to stay on track and be cautious about where you put your energy and resources. Strategic planning facilitates an objective way of making decisions while evaluating various internal and external perspectives which may impact your company.
There are often times we don’t have a plan to run by and unknowingly decide on matters that require urgent attention, not considering any potential emotional bias to the decisions we make. An example of this bias is the recency effect. This cognitive bias leads us to make a decision based on the most recent option considered, being the latest alternative and but not necessarily the best one.
Strategic planning incorporates mapping out your team members, budget, financial, and technology requirements that you’ll need as you grow your business. It also creates a opportunity to discuss team member performance and incentives to help keep your team engaged and productive.
It is also during this strategic planning process that the company should push for innovation to help strive for that competitive advantage. Whether with your systems and processes or product technology, emphasis on innovative thinking must be encouraged in all teams. At the same time, projecting its rewards and including them in your budget increases the motivation of your team members to think and act more creatively.
Strengthening your operations
By creating a system of accountability, you are increasing your team’s responsibility. It provides empowerment in making daily decisions that strengthen your operations.
As a leader, you must make decisions, but not all of them need to be yours. Empowered team members know when to take the initiative and also when to ask for advice. When strategic planning is in place, the team’s progress is also communicated, including the hurdles experienced and how to overcome them.
As you oversee how the overall system or team works together, frontline team members who directly experience the benefits and problems of a process or policy, openly convey their ideas as to how to achieve certain outcomes. Through this, your company’s functional activities become more aligned with the goals you initially set; thus, increasing operational efficiency.
Guaranteeing your goal alignment with team members and other stakeholders
Strategic planning enables a company’s goal alignment along with its stakeholders by creating one forward-focused vision. It is by encouraging everyone to contribute to building strategies that will produce the desired outcomes.
To foster an increased sense of shared responsibility in the company, leaders should consider not only making their team members aware of the goals, but communicate to them why and how they were arrived at. The critical aspect is also to ask them what contributions they can provide to achieve those goals.
By performing this, you lessen the likelihood of getting derailed from your vision since your team members become engaged and productive. It can also propel your team to drive their actions for an increase in market share and profitability.
Adjusting and responding to the changing business conditions
By analyzing your organizational Opportunities & Threats and your Strengths & Weaknesses, you can create strategies that leverage what you are good at and anticipate the obstacles that come your way.
With proper implementation of strategic planning, you can take calculated risks and adjust to the current business environment without faltering. Equipped with the strategies and information you need, you can then re-design your business to be more robust and durable to withstand external pressures or unfavorable business conditions.
A vital factor in strategic planning is its methods for evaluating and ensuring that progress is consistently achieved through regular monitoring and tracking based on Key Performance Indicators. Without this, strategic planning will be another plan thrown into the drawer, never to be seen again.
Benjamin Franklin once emphasized the importance of planning when he stated that,
“If you fail to plan, you are planning to fail.”
Strategic planning is essential for a business to thrive. Few businesses may have been lucky to grow rapidly, but sustained success does not happen by accident. We all need our blueprint to focus on our goal and not be derailed with distractions.
Betz, Meredith. (2021, September 15). Strategic Planning: Read this before it’s that time again. BetterUp. Retrieved from https://www.betterup.com/blog/strategic-planning
Cote, Catherine. (2020, October 6). Why is Strategic Planning Important?. Harvard Business School Online. Retrieved from https://online.hbs.edu/blog/post/why-is-strategic-planning-important
Maleka, Stevens. (2014, March). Strategic Management and Strategic Planning Process. [Conference Paper]. DTPS Strategic Planning & Monitoring, Pretoria, South Africa.