What is Strategic Planning and Why is it Important?
Strategic planning means developing and implementing an integrated, sequentially implemented plan to achieve your primary desired goal.
It’s critical to understand the difference between tactical, opportunistic and strategic planning.
Tactical action means just making a list of ‘To Dos’ that are just off-the-cuff ideas that seem like good ideas or are the customary ways of operating in your industry. A lot of supposedly strategic planning is just tactical ‘to do’ lists.
Opportunistic action means reacting to current circumstances and latching on to what seems, at that moment, like a good, business strengthening, profitable proposal or opportunity. It may even be a good idea RIGHT NOW… but it isn’t informed by where you want to take your company. It might take you in one direction that is good for a while but is a complete diversion from your original course. Then next year, you maybe veer off in a completely different direction due to another opportunity. And so on.
Strategic planning means the clarification of a primary goal, and the building of an integrated plan to get there. The plan is then implemented, sequentially, step-by-step, and with ongoing monitoring and adjustment to maximize the progress to the strategic goal.
Clearly, of these three different types of action, strategic planning and implementation will be dramatically more powerful for a company’s viability and profitability.
Let’s take a closer look at the benefits of planning.
Strategic planning has many benefits, including increased productivity, improved decision-making, and better communication. Businesses often use it to increase profits, expand into new markets, or improve efficiency. This blog post will discuss strategic planning and why it is vital for businesses!
Increased Productivity - When a business has a clear plan in place, it can increase productivity. With a clear goal, employees know what is expected and can work more efficiently to achieve the desired results.
Improved Decision-Making - To be successful, businesses need to make good decisions. Strategic planning helps business leaders make better decisions by providing a framework for decision-making. This framework includes identifying the company’s goals, the resources available, and the potential obstacles that could prevent the attainment of the plan. The primary strategic goal should provide a North Star to navigate by. The clearer the goal, the easier it will be to make decisions.
—> To make a further comparison with navigation: If someone has the goals of an ocean yacht voyage, but has the goals of getting across to Japan as quickly as possible AND dropping off in Fiji for a few days AND having a relaxing time, clearly these goals are in conflict and DO NOT provide a basis for making good decisions day by day. Yes, there can be multiple sub-goals, but there MUST be a primary goal to provide that guidance.
Better Communication - Good communication is key to a successful business. Strategic planning helps to improve communication by providing a common language for employees to use. Additionally, it helps to identify who is responsible for each task, ensuring that everyone involved in the project knows what they need to work on and when it is due.
Improved Efficiency - By establishing specific goals and outlining the steps necessary to achieve them, strategic planning can help a business operate more efficiently. This means that employees will work towards common objectives and avoid duplication of effort. Additionally, it allows companies to identify areas to improve efficiency by eliminating or automating processes.
Improved Stakeholder Relations - By communicating their plans to all relevant stakeholders, businesses can keep them informed about their progress towards their goals and avoid any potential issues that may arise from a lack of understanding. This helps build trust between businesses and their customer, allied companies and investors, improving stakeholder relations overall!
Growth Opportunities - A well-executed strategic plan can help businesses identify and capitalize on new growth opportunities. By taking a holistic view of the business, its strengths and weaknesses, and the external environment, businesses can uncover new opportunities that may have otherwise been missed.
So there you have it! Strategic planning is an essential process for any business looking to expand its operations or stay competitive in its industry.
Strategic planning can help businesses grow, but it’s also helpful if you want to avoid pitfalls and keep your company on track with its goals!
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