Strategic Planning: Why Your Business Needs

5 Apr by John Lamphiere

Strategic Planning: Why Your Business Needs

Does your business have a growth strategy? How much time do you dedicate to developing that strategy? You’ll be surprised at the tiny amount of time many companies dedicate to strategic planning. This is why 93% of organizations’ employees do not understand their strategies, and most fail to meet their strategic goals.

Here’s a look at what strategic planning is and how it can benefit your organization.

What is Strategic Planning?

Strategic planning refers to a continuous organizational process that uses available knowledge to document a business’s intended direction, prioritize efforts, allocate resources, and align stakeholders to the goals. A strategic plan declares the function of the business, its objectives over a period of time, and how you plan to get there. It outlines the “what” and “how.”

It’s important to note that strategic planning is an ongoing process, not a one-off event. Many people confuse a strategic plan with a business plan. They differ in the following ways:

A strategic plan is long-term (usually at least three years), while a business plan usually is no more than one year.

A strategic plan concerns implementing and managing an organization’s strategic direction. On the other hand, a business plan covers how to start a business, obtain funding, and direct day-to-day operations.

A strategic plan provides focus, direction, and action, whereas a business plan provides a structure for the business.

A strategic plan helps build a sustainable long-term competitive advantage, while a business plan is tactical and used to assess the viability of a business opportunity.

Reasons for Having a Strategic Plan

The volatility of the business environment, especially on the back of a global pandemic and Ukraine-Russia war, has caused many businesses to adopt reactive strategies. But these solutions are only viable in the short term. A strategic plan can help you prepare for and address issues proactively with a more long-term view. 

Some of the benefits of strategic planning to your business include:

Outlines a clear path for your company

You cannot simply hope to stumble on success in the business world. You have to plan for it. A strategic plan provides a clear roadmap to success, defining the best route to long-term success and growth. It also outlines how to overcome some of the challenges you’ll meet along the way.

Improves your business’s self-awareness

To develop an effective strategic plan, you’ll need to be aware of your organization’s strengths and weaknesses. You’ll also have to acknowledge where the business stands in the market, both individually and in relation to competitors. Additionally, you’ll have to address inherent biases such as the recency effect and Occam’s razor bias that influence decision-making.

Taking part in the strategic planning process forces you to examine every aspect of the business and make decisions backed up with data, projections, or case studies.

Brings a sense of focus

A strategic plan will establish the direction your business needs to take, sharpening the focus of every stakeholder towards achieving the laid-out goals. You will be able to develop suitable targets and clearly define every person’s role in reaching the target. It gives your employees something to work towards.

Enhances communication between management and employees

Participation and dialogue during the strategic planning process help improve the relationship between managers and employees. Managers can also communicate with employees on business goals and their expectations. It becomes easier to communicate and address challenges when everyone has clearly defined roles and objectives.

Makes it easier to track progress

You can easily track your progress based on your strategic goals. It becomes easier for each team or department to develop and track Key Performance Indicators (KPIs) if you have a strategic plan in place.

Improve Your Strategic Planning With Skope Consulting

While strategic planning requires a significant amount of resources and effort, a well-thought strategic plan efficiently fosters business growth, goal achievement, and employee satisfaction. Skope Consulting provides business consulting and advisory services in business strategy development and execution tailored to your business.

Get in touch today.

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