importance of business strategic planning

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Why Is Strategic Planning Important?

• 06 Oct 2020

Do you know what your organization’s strategy is? How much time do you dedicate to developing that strategy each month?

If your answers are on the low side, you’re not alone. According to research from Bridges Business Consultancy , 48 percent of leaders spend less than one day per month discussing strategy.

It’s no wonder, then, that 48 percent of all organizations fail to meet at least half of their strategic targets. Before an organization can reap the rewards of its business strategy, planning must take place to ensure its strategy remains agile and executable .

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

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What Is Strategic Planning?

Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees on the organization’s goals, and ensure those goals are backed by data and sound reasoning.

It’s important to highlight that strategic planning is an ongoing process—not a one-time meeting. In the online course Disruptive Strategy , Harvard Business School Professor Clayton Christensen notes that in a study of HBS graduates who started businesses, 93 percent of those with successful strategies evolved and pivoted away from their original strategic plans.

“Most people think of strategy as an event, but that’s not the way the world works,” Christensen says. “When we run into unanticipated opportunities and threats, we have to respond. Sometimes we respond successfully; sometimes we don’t. But most strategies develop through this process. More often than not, the strategy that leads to success emerges through a process that’s at work 24/7 in almost every industry.”

Strategic planning requires time, effort, and continual reassessment. Given the proper attention, it can set your business on the right track. Here are three benefits of strategic planning.

Related: 4 Ways to Develop Your Strategic Thinking Skills

Benefits of Strategic Planning

1. create one, forward-focused vision.

Strategy touches every employee and serves as an actionable way to reach your company’s goals.

One significant benefit of strategic planning is that it creates a single, forward-focused vision that can align your company and its shareholders. By making everyone aware of your company’s goals, how and why those goals were chosen, and what they can do to help reach them, you can create an increased sense of responsibility throughout your organization.

This can also have trickle-down effects. For instance, if a manager isn’t clear on your organization’s strategy or the reasoning used to craft it, they could make decisions on a team level that counteract its efforts. With one vision to unite around, everyone at your organization can act with a broader strategy in mind.

2. Draw Attention to Biases and Flaws in Reasoning

The decisions you make come with inherent bias. Taking part in the strategic planning process forces you to examine and explain why you’re making each decision and back it up with data, projections, or case studies, thus combatting your cognitive biases.

A few examples of cognitive biases are:

• The recency effect: The tendency to select the option presented most recently because it’s fresh in your mind
• Occam’s razor bias: The tendency to assume the most obvious decision to be the best decision
• Inertia bias: The tendency to select options that allow you to think, feel, and act in familiar ways

One cognitive bias that may be more difficult to catch in the act is confirmation bias . When seeking to validate a particular viewpoint, it's the tendency to only pay attention to information that supports that viewpoint.

If you’re crafting a strategic plan for your organization and know which strategy you prefer, enlist others with differing views and opinions to help look for information that either proves or disproves the idea.

Combating biases in strategic decision-making requires effort and dedication from your entire team, and it can make your organization’s strategy that much stronger.

Related: 3 Group Decision-Making Techniques for Success

3. Track Progress Based on Strategic Goals

Having a strategic plan in place can enable you to track progress toward goals. When each department and team understands your company’s larger strategy, their progress can directly impact its success, creating a top-down approach to tracking key performance indicators (KPIs) .

By planning your company’s strategy and defining its goals, KPIs can be determined at the organizational level. These goals can then be extended to business units, departments, teams, and individuals. This ensures that every level of your organization is aligned and can positively impact your business’s KPIs and performance.

It’s important to remember that even though your strategy might be far-reaching and structured, it must remain agile. As Christensen asserts in Disruptive Strategy , a business’s strategy needs to evolve with the challenges and opportunities it encounters. Be prepared to pivot your KPIs as goals shift and communicate the reasons for change to your organization.

Improve Your Strategic Planning Skills

Strategic planning can benefit your organization’s vision, execution, and progress toward goals. If strategic planning is a skill you’d like to improve, online courses can provide the knowledge and techniques needed to lead your team and organization.

Strategy courses can range from primers on key concepts (such as Economics for Managers ), to deep-dives on strategy frameworks (such as Disruptive Strategy ), to coursework designed to help you strategize for a specific organizational goal (such as Sustainable Business Strategy ).

Learning how to craft an effective, compelling strategic plan can enable you to not only invest in your career but provide lasting value to your organization.

Do you want to formulate winning strategies for your organization? Explore our portfolio of online strategy courses and download the free flowchart to determine which is the best fit for you and your goals.

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• Business Essentials

The Importance of Strategic Planning

Every successful business has a plan and knows where it is heading in the future. Setting a plan with goals, target dates, and a purpose should be finalized before embarking on a business. Taking the time on an ongoing basis to review the company's past performance, and predict its future performance, gives it a road map to follow.

Without strategic planning , which is knowing the current state of your business and where you want it to go, most businesses will fail. A strategic plan allows you to see what is important, how to get there, the pitfalls to avoid, and the noise to ignore. Below we discuss some of the reasons why strategic planning is important and how to implement it.

Key Takeaways

• Strategic planning is crucial for a business as it creates a map for a business to follow and course correct when need be.
• The first part of a strategic plan is the business plan, which outlines the purpose of the business, budgets, goals, and the mission statement.
• Making time to evaluate your business on an ongoing basis will allow you to determine how well your results are adhering to your plan. This will allow you to make adjustments or double-down on how the business is being run.
• Communicating your strategic plan to your employees is critical so that everyone is on the same page and working towards the same goals.
• Reviewing and following up on your business will highlight strengths and weaknesses in your business so that you can continue with what works well and eliminate what is hindering the growth of your business.

Making a Business Plan

The very first strategic planning most businesses do is a business plan . When you first start your business, you will likely have prepared a mission statement , a budget, and a marketing and promotion plan. The business plan is a good first step, but it needs to be reviewed and updated as the business continues and grows. If you shove it in a drawer and let dust gather on it, it won't serve as the foundation of your business, as it was meant to.

Using Goal-Based Planning

How you go about conducting strategic planning will depend on many variables, including the size of your business, the time frame included, and your personal preferences. The most common style of plan is goals-based. In this type of plan, you set goals for the business (financial and non-financial) and map out the steps needed to meet those goals.

For example, if your goal is to have $100,000 in revenues next year, the steps to get there might include bringing in five new clients a month and attending three trade shows. Whatever the goals you set for your business, they should be concrete and measurable so that you know when you reach them. Another method of strategic planning is mission-based.

When you first started your business, you likely developed a mission or values statement, outlining the purpose of your company and its overall reason for being. A mission-based strategic plan ties each part of the plan into the mission, to ensure that the company is always operating in the service of that mission.

For example, if your mission statement is to be recognized as a leader in the financial services sector and to help families become financially independent, your strategic plans should address how you will meet those goals.

Making Time

It can be difficult to find the time to plan your business. Other, more pressing priorities, like trying to bring in revenue , may grab your attention; however, carving out time regularly will help you keep on top of your business.

Blocking off a few hours a day or week to focus on your plan should be part of your business operations. During that time, you can examine the prior week's financial performance and update any marketing initiatives to make sure that your business is on track with your initial plan. If it's not, then you'll need to make adjustments to get back on track.

Regardless of how often you plan, make sure that you set it in stone in your day planner. Block off the time and don't let anything else get in the way. Turn off your cell phone and, if at all possible, go somewhere away from your office to plan in order to minimize distractions.

Promoting Communication

As a business owner, you will most likely have employees. It is critical to inform them of your strategic plan so that they are on the same page and working towards the same goal as you.

Including your staff in your strategic plan will instill a feeling of responsibility in their jobs that will help ensure productivity.

For example, if you have a sales team and your strategic plan involves bringing in five new clients a month, your sales team needs to be aware of this so that they know the goal to achieve. If they don't, perhaps they would be under the assumption that bringing in two new clients a month is excellent, when in actuality, it is only 40% of your goal. Without clear communication to your employees, your business will be a boat set adrift without any course to follow.

Following Up

A critical part of the planning process is reviewing your previous plan and comparing it to your actual results. Were you able to bring in five new clients last month? If not, why not? Tweak the plan going forward to account for changes in your business or the general economic climate. The more experience you get with the planning process and with the operational side of your business, the more accurately you will be able to plan.

Once you have had your business running for a while and block out time to follow up on your strategic plan, you will be able to determine where the strengths and weaknesses in your business lie. This would allow you to correct course, perhaps changing your business plan and goals slightly to focus on your strengths, while allowing you to eliminate your weakness, making your business stronger and increasing the likelihood of achieving your goals.

The Bottom Line

Planning out the future of your business is the best way to ensure success. Creating an initial plan and communicating that plan to your employees will ensure that everyone is working towards the same goal.

Taking out time to review your business's results and comparing them to your plan will help ensure that the right policies and procedures continue whereas those that are not benefiting the company will be removed. It may seem awkward and difficult at first to create a strategic plan, but with practice, you will be able to move your business in the right direction.

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Strategic Planning

5 benefits of strategic planning.

By Mary King

20 january 2023.

• 1 1. It makes your organization proactive rather than reactive
• 2 2. It instills a shared sense of responsibility
• 3 3. It increases operational efficiency among leadership
• 4 4. It improves staff satisfaction and retention
• 5 5. It manages expectations and bolsters trust
• 6 Get the template ↓

Many organizations understand the importance of strategic planning, and they’ll invest a great deal of time and money coming up with the strategic plan itself. But once the strategic planning process is complete, it’s really common for that plan to just… well, sit there. Maybe it gets reviewed once a year–an obligatory thing your company or organization simply “has to do.” Or worse, it becomes a glossy (and expensive) document that sits gathering dust on the shelf.

Well, as the leading provider of strategic planning and execution software , we disagree! A strategic plan is the compass for your goals, and we’re here to re-ignite that strategic planning spark. To get you started, you can grab our Free Strategic Plan Template , which you can download as a PDF.

In this post, we are going to look at five of the major benefits of a strong strategic plan, the purpose of strategic planning in the first place, and how it will improve virtually every aspect of your operations – from employee engagement, to plan execution, to leadership.

“If you don’t know where you are going, you are certain to end up somewhere else.” – Yogi Berra

A strategic plan is so much more than words on a page (or a shelf!)

If you have a strategic plan that you (and your employees) reference regularly, then it becomes a living document, a dynamic process that guides, responds to, and helps actualize large-scale dreams.

Here are five benefits of strategic planning.

1. It makes your organization proactive rather than reactive

Why is strategic planning important?

A strategic plan allows organizations to anticipate things that are most likely to happen and prepare accordingly. Through strategic planning, companies can anticipate certain unfavorable scenarios before they happen and take necessary precautions to avoid them. And, if something unfortunate–whether a small scale mishap, or a full blown crisis–does happen, then you already have something in place to ensure you’re able to get back on track.

When a crisis hits, such as the COVID-19 pandemic, having a strategic plan versus not having one can make a huge difference. For example, instead of having to halt construction plans, further disrupt learning, and be stuck in a pattern of only reacting during the pandemic, White Bear Lake Area Schools, MN, leaned on their strategic plan :

“We’ve completed projects already. Construction continued throughout the pandemic, which was really exciting for us. And through it all, our strategic plan has continued to inform our decisions about what type of learning environment we’re building for our students. That’s been invaluable . We’ve had to make decisions on learning models, remote work, distance learning… we’ve been able to root those decisions in asking what does our strategic plan compel us to do, and what opportunities have emerged along the way?” – Dr. Alison Gillespie, the Assistant Superintendent for Teaching and Learning with WBLAS.

Of course, the importance of strategic planning and being proactive is not just for catastrophe prevention, or mitigating poor outcomes. Another benefit of a strategic plan is it also gives you a competitive edge.

When you make being engaged with your strategic plan a habit, an integral part of how your organization operates, it means your overall vision, and the steps required to be there, are front of mind. This will keep your team alert, attentive, and able to keep up with changing trends.

While other strategic plans for other organizations may sit on the shelf, excellent strategic planning is enough to maintain a competitive edge. Staying one step ahead of what everyone else is doing requires a clear idea of what exactly you are doing. Rather than just always reacting to the trends, you want to be anticipatory. Better yet, be the trendsetter.

A strategic plan gives you this ability to be truly proactive – and, therefore, flexible – in your vision.

2. It instills a shared sense of responsibility

A strategic plan helps to define the direction in which an organization must travel, and aids in establishing realistic objectives and goals that are in line with the vision and mission charted out for it. But it also creates a sense of collaboration and collective responsibility.

The key to successful strategic planning is to engage everyone with the plan as early as possible in the planning process, and build in measures and implementation steps that allow you to monitor the results at regular intervals. When you do this, goals become stepping stones to even greater goals, and everyone becomes familiar with the aspirations and pain-points of your overall vision, and their contribution to it.

When everybody has a sense of purpose in their role within the greater organization, they are going to care about the outcomes. Everybody wants to feel important, needed, valued, and heard. One benefit of a strategic plan is that it formalizes this process. It’s really important to make sure everyone implementing a plan feels responsible for their part in it; when people are intrinsically motivated to complete their tasks, this creates energy and momentum on all organizational levels.

For the people involved in the actual strategic planning process itself, it creates a sense of democratic engagement. People are able to bring their own perspectives, thoughts, and ideas to the table, and will be encouraged when they see their strategies and actions come to life. For people carrying out those actions, they will feel more encouraged to be responsible for those outcomes when the goals are attainable and clear. A strategic plan makes those actions clear.

A strategic plan offers both the much-needed foundation from which an organization can grow, but also helps establish the roles and boundaries for everyone, thus improving efficient decision making and creating a greater sense of overall momentum and direction.

Ensuring employees feel engaged and responsible is one of the most important strategic planning benefits.

3. It increases operational efficiency among leadership

When discussing the importance of strategic planning in an organization, we need to consider leadership. One way that an organizational vision can fall short in its implementation is when there isn’t a clear enough idea of what change is needed where, and how complex that level of change needs to be. That’s where we can really see the value of strategic planning. In terms of strategic management, a plan provides leaders with the roadmap to align the organization’s functional activities to achieve set goals.

At Envisio, we aren’t afraid of complex plans. In fact, we love them. Because we exclusively work with publicly accountable organizations, such as local governments, our clients frequently have really complex plans that can span years (sometimes even decades)!

What we’ve learned is that there is no need to shy away from a grand vision; what matters is making sure the strategy to get there is clear.

People in leadership roles are often juggling many different priorities and ideas, and they are overseeing the entire operation. Management discussions, meetings, and decision making can sometimes suffer from not being able to see the forest from the trees–meaning, everyone is capable of losing perspective. A strategic management plan helps carry some of that load for leadership.

A strategic plan also increases operational efficiency in that it helps determine those important, practical, company-wide leadership considerations, such as budget requirements to accomplish set objectives. These practical, operational considerations illustrate why strategic planning is important.

4. It improves staff satisfaction and retention

Research has shown that over the course of COVID-19, local government employees are feeling as though they lack autonomy in their jobs, are feeling burnt out, and are experiencing disconnection from their work and colleagues.

As previously mentioned, a strategic plan can help empower your employees to feel responsible and engaged with their work, but it can also be used to plan initiatives like improved career advancement, perks and benefits, and improving workplace culture.

The reality is that public sector workplaces (local government and beyond) need to find ways to empower and support employees, otherwise these sectors will experience high turnover. Incorporating improved onboarding processes, feedback processes, and building in a process for positive recognition are all things that can be formalized in a strategic plan. Having a strategic plan can also reduce the experience of being “micro-managed,” which can increase senses of autonomy, and therefore satisfaction, in the workplace.

5. It manages expectations and bolsters trust

A strategic plan increases transparency, which helps build trust and eliminate ambiguity–both inside the organization and among key stakeholders. Strategic planning done well is beneficial because it creates more opportunities for collaboration across teams. Working together to see what each department is doing, rather than having disjointed groups, improves trust in the overall direction of the organization. Because so much of strategic planning refers to determining organizational goals, this helps set expectations across the different areas of your organization, and improves the overall functioning of the company.

Public sector work requires a lot of passion and care; it tends to attract value-driven people. Ensuring that the values of the organization are built into the strategic plan communicates to staff a sense of openness, and helps assure them (and remind them) about the overall mission.

One of the other benefits of having a strategy is it shows how information is being managed, in a modernized, quantifiable, secure manner. Being able to back up decisions using data, for example, is an objective, non-partisan way to communicate the rationale behind the moves your organization is making. All of this goes a long way in improving trust – both internally, and externally, to the community being served.

And if you really want to boost trust with your external stakeholders, consider sharing your organizational progress against your strategic plan via a public strategic plan dashboard .

Get the template ↓

Ready to start your strategic planning journey? Check out our strategic planning template!

Mary King is a professional writer and researcher based in Toronto. She comes to Envisio with a Masters Degree, where she researched the relationship between the disappearance of urban public spaces, and high level decision-making processes in local governments. For nearly a decade, Mary has worked as a community organizer, promoter, and supportive researcher in a variety of nonprofits and think-tanks, and her favorite area of focus was in connecting local artists with marginalized youth. Since 2017, her writings and research on policy, local governance, and its relationship to public art and public space has been presented at conferences internationally. She has also served as both a conference chair and lead facilitator on professional and academic conferences across Canada on how to better bridge academic research with local change-agents, policy makers, artists, and community members. Envisio’s mission of excellence and trust in the public sector maps onto Mary's interest in local government and community mobilization. She loves working at Envisio because she cares about having well organized, strategic, and transparent public organizations and local governments. Mary is also a creative writer and musician and has been supported in her practice by the Canada Council for the Arts. Her stories can be found in literary journals across Canada.

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The importance of strategic planning in an organization

Every company needs to be goal oriented!

Every successful company has a plan and knows where it is going in the future. Taking the time to review the company’s past performance and predict its future performance provides a roadmap to follow.

But if you stick it in a drawer and let dust accumulate, it won’t serve as the foundation of your business, as it should.

The importance of strategic planning

1) Gives a sense of direction to all teams

It is very significant for management and company employees to realize the importance of strategic planning as well as to follow the actions proposed by that planning.

Often, with the increase in work pressures and the need to satisfy customer demands and meet strict deadlines, the company loses its responsibility and moves away from real goals and targets.

And, by adopting the strategic planning aspect, each and every team member gets a sense of direction and knows where to go with a properly structured plan in mind. It is absolutely imperative to have a long-term vision for the organization to grow in the market.

2) Competitive advantage in the market

A company with an action plan and a strategy in mind, accomplishes its goals and objectives before its competitors in the market, gaining competitive advantage.

Strategic planning involves the study of market conditions, research on the next moves of competitors, the creation of innovative product ideas and customer satisfaction.

3) Innovation

As discussed in the previous point, understanding the importance of strategic planning and following it, the company creates products and services that highlight aspects of innovation.

As well as in strategic planning and in the contributions of the internal team, external parties and specialists; the company plans the offer strategy, unique and exclusive in the market, and will certainly increase sales, profit margins and brand value.

4) Make the company proactive by nature

Realizing the importance of strategic planning helps the organization to be more proactive, rather than being reactive to future issues and problems in achieving goals and objectives.

Although the achievement of all short and long term goals, problems and issues will arise, as long as the company follows the fundamentals of strategic planning, it becomes more proactive in predicting the problems that are coming.

5) Increases productivity and operational efficiency

With the right strategy and plan, there is an increase in productivity and operational efficiency levels for the entire company.

The team knows and understands all tasks and how to perform them in the most efficient and effective way.

A properly formulated strategic plan acts as a plan or roadmap for the company to achieve its objectives. It also helps to maintain harmony with members and departments, as well as a positive and healthy work atmosphere.

6) Higher sales and profits

When the company follows strategic planning in each of its facets and business operations, it is rapidly moving towards achieving the goal of greater sales and profits. For instance, if a company isn’t getting its target clients, having a strategic plan to meet the goals could help. The team responsible for such targets might hire an SEO Company that can carry out the digital marketing strategies and help them become visible online to the potential customer base. This could not only boost sales but also help the website rank higher in terms of visibility amongst competitor websites. Therefore, hiring a digital marketing company (like Firefly Digital ) could prove to be a boon for your business to kickstart as they would identify the product opportunities of the clients and curate their ads around that.

7) Keeps employees motivated

As mentioned above, following the strategic planning route helps the company to have a sense of direction and employees are well aware and informed about how to achieve the assigned short and long term goals. And when they are given the tasks and responsibilities according to their knowledge and professional qualifications, together with the appropriate rewards, they feel highly motivated and do their best.

8) Attracts financial investors

The company continues to require investments and financial funds from third parties, such as banks, private equity and investors, in order to expand its business, offering an innovative range of products and services to customers.

9) Minimizes risk

Any and all commercial and sectors domains must work with the risk factor in question. But, if the company realizes and follows the importance of strategic planning and makes each movement understand the nuances and intricacies, the risk factor is minimal.

For a business to grow and expand its operations, it is crucial to understand the importance and implement Strategic Planning within the company.

Planning the future of your business is the best way to ensure success. It may seem strange and difficult at first, but with practice, you can move your business in the right direction.

Currently, there are many online tools designed to establish and monitor the objectives and action plan that drive your company’s performance.

This is the case of the Strategic Plan Excel Template developed by Adnia. By using it, your business grows and you are able to manage risks and opportunities with key performance indicators (KPI).

One comment

You make an excellent point that strategic planning is important as it gives our business a competitive edge. Assuming that I own a business, I would definitely want the edge. I will be sure to keep this tip in mind.

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PROCESS & IMPORTANCE OF STRATEGIC PLANNING

Strategic planning is the ongoing process of utilizing available knowledge to make decisions about the future direction of a business. A strategic planning process enables organizations to identify priorities, allocate resources, align leaders and employees around goals, and ensure those goals are supported by data and analysis.

Nonetheless, developing a company culture that values and executes an annual planning, budgeting, and forecasting process is difficult for management because effective business strategic planning requires time, effort, and constant reassessment. However, an annual strategic planning process and a performance management system are very powerful tools for guiding an organization to success and using them diligently will result in above-average results.  

The organization’s strategy serves as an operational guide to achieve its goals by collecting and making actionable financial data, business analytics, competitive information, management, employee, and customer sentiments. The strategic plan will align the company’s stakeholders, leaders, and employees, in addition to creating an operational guide for the company. The development of a strategic plan and its implementation will instill a strong sense of purpose throughout the organization.

Furthermore, the business strategic planning process will make employees aware of the company’s goals, how and why those goals were chosen, and what actions the employees can take to assist the company in meeting those goals.  

PROCESS OF BUSINESS STRATEGIC PLANNING

Every business should have a strategic plan, but the number of companies that try to operate without one (or at least one that is clearly communicated) may surprise you. Because so many businesses fall short in these areas, strategic planning can help you get ahead of the competition. In this article, we will describe the strategic planning process and the steps involved.  

WHAT IS THE BUSINESS STRATEGIC PLANNING PROCESS?

In its most basic form, the strategic planning process is the method by which organizations develop plans to achieve overall, long-term goals. This is not the same as project planning, which is used to scope and assign tasks for individual projects, or strategy mapping, which helps you determine your mission, vision, and goals. The business strategic planning process is broad—it assists you in developing a roadmap for which strategic objectives you should work to achieve, and which initiatives will be less beneficial to the business. 

Before you begin the strategic planning process, it is critical to establish some ground rules to ensure the success of both you and your organization.   

• ESTABLISH YOUR STRATEGIC POSITION.

This preparation phase lays the groundwork for all subsequent work. You must first figure out where you are, where you need to go, and how you are going to get there. Involve the appropriate stakeholders from the start, taking both internal and external sources into account. Identify key strategic issues by speaking with company executives, collecting customer feedback, and gathering industry and market data. This will give you a clear picture of your market position as well as insight into your customers.  

It’s also a good idea to go over – or create if you don’t already have them – your company’s mission and vision statements to give yourself and your team a clear picture of what success looks like for your company. Furthermore, review your company’s core values to remind yourself of how you intend to achieve these objectives. 

To begin, use industry and market data to identify the issues that must be addressed, such as customer insights and current/future demand. Document your company’s internal strengths and weaknesses, as well as external opportunities (ways your company can grow to meet market demands) and threats (your competition).  

Make a SWOT analysis as a starting point for your investigation. You can quickly categorize your findings as Strengths, Weaknesses, Opportunities, and Threats using input from executives, customers, and external market data (SWOT).  

PEST analysis is a form of SWOT analysis. PEST, which stands for Political, Economic, Socio-cultural, and Technological, is a strategic tool for identifying threats and opportunities in your business.  

As you synthesize this data, the unique strategic position of your market will become clear, and you’ll be able to begin solidifying a few key business strategic planning objectives. These objectives are frequently established with a three- to five-year time frame in mind.  

• PRIORITIZE YOUR OBJECTIVES

After determining your current market position, set goals and objectives to help you get there. Your objectives should be in line with your company’s mission and vision.  

• Prioritize your goals by asking important questions like: Which of these initiatives will have the most impact on achieving our company’s mission/vision and improving our market position? 
• What are the most important types of impact (for example, customer acquisition vs. revenue)? 
• What will the competition say? 
• Which initiatives are the most pressing? 
• What will I need to do to achieve the organizational objectives? 
• How will we track our progress and determine whether we meet our objectives?  

To assist you in reaching your long-term business strategic planning goals and initiatives outlined in step one, objectives should be distinct and measurable. Potential goals include updating website content, increasing email open rates, and generating new leads.  

• DEVELOP A PLAN

It is now time to develop a plan to achieve your business strategic planning objectives. This step entails determining the tactics required to achieve your goals, creating a timeline, and clearly communicating responsibilities. 

Strategy mapping is a powerful tool for visualizing your entire plan. Strategy maps, which work from the top down, make it easy to see business processes and identify areas for improvement.  

• EXECUTE AND MANAGE THE PLAN

You are now prepared to put your strategy into action. To begin, share pertinent documentation with the organization in order to communicate the plan. The real work begins then. 

You can turn your overall business strategic planning goal into a concrete plan by mapping your processes. Dashboards with key performance indicators (KPIs) can be used to clearly communicate team responsibilities. This method illustrates the completion process and ownership at each stage. To ensure you’re on track, schedule regular check-ins with individual contributors and their managers.  

• REVIEW AND REVISE THE PLAN

The plan’s final stage, review and revise, allows you to reevaluate your priorities and course-correct based on past successes or failures. 

Determine which KPIs your team has met and how you can continue to meet them on a quarterly basis, adapting your plan as needed. It is critical to reevaluate your priorities and strategic position on an annual basis to ensure that you remain on track for long-term success. 

Track your progress with balanced scorecards to gain a comprehensive understanding of your company’s performance and to implement business strategic planning goals. Your mission and vision may need to change over time; an annual evaluation is a good time to consider those changes, prepare a new plan, and implement it again.  

You will begin to see measurable progress toward achieving your company’s vision as you continue to implement the strategic planning process, repeating each step on a regular basis. 

Instead of constantly putting out fires, reacting to the competition, or focusing on the latest hot-button initiative, you’ll be able to keep a long-term perspective and make decisions that will keep you on track for years to come.  

THE IMPORTANCE OF BUSINESS STRATEGIC PLANNING IN AN ORGANIZATION

A strategic plan outlines the future direction of your company. It describes your company’s goals and why they are important. The strategic planning process also aids you in identifying opportunities for performance improvement. It could, for example, spark ideas for reorganizing your organization to maximize its potential. As your company grows, a well-designed strategic plan will dictate how you respond to opportunities and challenges of every color, shape, and size.  

BUSINESS STRATEGIC PLANNING IS ITSELF A BUSINESS GROWTH STRATEGY

Of course, before you can respond, you must first recognize the opportunities. The strategic planning process illuminates the path for business owners, and it’s easy to see why. When combined with an honest assessment of an organization’s strengths and weaknesses, a clear set of goals reveals what’s important, relevant, and actionable in your environment.  

Every business owner must be able to make these distinctions because the business landscape is changing faster than ever before. Every business is affected differently by new government regulations, changing workforce demographics, advancing technology, and economic uncertainty. 

A strategic plan allows you to contextualize these business challenges. It provides you with the foresight required to approach them in a coordinated manner. You’ll have a better understanding of how a particular problem affects your business, making it easier to take control of your own future.  

So, what kinds of business challenges will business strategic planning help you overcome? Whatever the situation, your plan will help. Examples of obstacles or opportunities that strategic planning can help you respond to more easily include: 

• Responding to a competitor’s launch of a new product
• A technological upgrade for your manufacturing floor
• Managing a new customer base’s request
• Increasing your workforce’s technical capabilities

However, your strategic plan is more than just a lens through which to view the world. It does more than simply direct your attention. It is also necessary for communicating your vision to investors, managers, and employees, as it depicts the process by which that vision will be realized.

During the business strategic planning process, you will create a written document that clearly details your company’s future and goals. Your business partners will not be confused about where they fit in or how they can help you achieve your vision. Everyone is on the same page thanks to the business strategic planning process.  

Remember that a plan of action that only exists in your head may work for a short time, but running your own business requires collaboration with others. You’ll have to do it if you want to see your business grow, and as you grow, you’ll have to do it more and more.  

HOW CAN BUSINESS STRATEGIC PLANNING BENEFIT AN ORGANIZATION? 

• Provides all teams with a sense of direction  

It is critical for management and company employees to understand the importance of strategic planning and to implement the actions recommended by that planning. With increased work pressures and the need to meet customer demands and strict deadlines, the company frequently loses its responsibility and drifts away from real goals and targets. 

Furthermore, by incorporating the strategic planning aspect, each team member gains a sense of direction and knows where to go with a well-structured plan in mind. A long-term vision is absolutely necessary for the organization to grow in the market.  

•   Market competitive advantage  

A company with a strategy and an action plan achieves its goals and objectives ahead of its competitors in the market, gaining a competitive advantage. Business strategic planning entails researching market conditions, researching competitors’ next moves, developing innovative product ideas, and ensuring customer satisfaction. 

As previously discussed, the company creates products and services that highlight aspects of innovation by understanding the importance of strategic planning and adhering to it. 

In addition to business strategic planning and the contributions of the internal team, external parties, and specialists, the company plans the offer strategy, which will undoubtedly increase sales, profit margins, and brand value.  

• Make the company proactive by nature 

Recognizing the significance of strategic planning allows the organization to be more proactive, rather than reactive, in achieving goals and objectives. 

Although problems and issues will arise despite the achievement of all short and long term goals, if the company follows the fundamentals of business strategic planning, it becomes more proactive in predicting the problems that will arise.  

INCREASES PRODUCTIVITY AND OPERATIONAL EFFICIENCY 

With the right strategy and plan, the entire company’s productivity and operational efficiency levels increase. The team is familiar with and understands all tasks, as well as how to complete them in the most efficient and effective manner. 

A well-crafted strategic plan serves as a road map for the company to achieve its goals. It also contributes to maintaining harmony among members and departments, as well as a positive and healthy work environment.  

• Keeps employees motivated 

As previously stated, business strategic planning provides the company with a sense of direction, and employees are well aware and informed about how to achieve the assigned short and long term goals. And when they are assigned tasks and responsibilities based on their knowledge and professional qualifications, along with appropriate rewards, they are highly motivated to perform well.  

• Attracts financial investors 

In order to expand its business and provide customers with an innovative range of products and services, the company continues to require investments and financial funds from third parties such as banks, private equity, and investors.  

• Minimizes risk 

All commercial and sector domains must collaborate with the risk factor in question. However, if the company recognizes and adheres to the importance of business strategic planning and ensures that each movement comprehends the nuances and intricacies, the risk factor is minimal. 

Leaders of businesses must become experts at analyzing and comprehending data, developing annual strategic plans based on that data, and effectively administering those plans to achieve their goals in today’s complex business environment. It is critical for a company to understand and implement business strategic planning in order for it to grow and expand its operations. The best way to ensure your company’s success is to plan. It may appear strange and difficult at first, but with practice, you will be able to steer your company in the right direction. 

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Strategic planning provides a road map to help your business get from where you are now to where you want to be. Milestones are expressed in specific terms, as quantifiable objectives that measure whether you're proceeding as planned and, if not, how far you've gone off path.

Long-Term Objectives

Long-term strategic objectives help you think in terms of big picture goals and overarching visions. The farther in the future you're planning, the more difficult it is to set specific goals. You may project an intention to open five stores in the next ten years without knowing what the real estate market or demand for your product will look like that far into the future. This objective can still be useful because it provides a general time frame, a schedule and a plan for ongoing growth, and it will still be relevant, even if you only open four stores in five years.

Long-term objectives provide distant milestones that help you orient your shorter term decisions. For example, if you plan to eventually open five stores, you can build supply chain relationships based on your intention of eventually doing considerably more business with these suppliers. Or, you may approach your branding as an effort that will start off small but build on memes and themes over time.

Short-Term Objectives

Align the short-term objectives in your strategic plan with your longer term goals. This syncing allows you to make incremental steps while also proceeding in a clear direction. If you plan to open five stores in ten years, you'll need to open them one by one, and the opening nearest at hand is your most urgent goal. It's easier to be specific with shorter term objectives, and the more specific you are, the better able you'll be to assess your progress.

If you plan to open your next store in two years, you can base your timeline on this objective, making plans to finalize your lease and financing in six months, complete major construction after a year and half, and spend the final six months on finishing work, furnishing, collecting inventory and training your staff.

Strategic Planning as a Team

Strategic planning is an important tool for bringing your team together and motivating them to work in tandem. If your managers and staff know the company's short- and long-term goals, it's easier to stay on task and rein in projects and individuals when they're veering off track. Strategic objectives provide a shared sense of purpose, a shared language to gauge progress. They also provide milestones to celebrate, once they have been achieved.

• Balanced Scorecard Institute: What is Strategic Planning?
• SME Strategy: What is the Strategic Planning Process?
• Center for Simplified Strategic Planning

Devra Gartenstein founded her first food business in 1987. In 2013 she transformed her most recent venture, a farmers market concession and catering company, into a worker-owned cooperative. She does one-on-one mentoring and consulting focused on entrepreneurship and practical business skills.

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Why is strategic planning important for your business.

“If you don’t know where you're going, any road will take you there.” -  Lewis Carroll, as paraphrased by George Harrison

The Cheshire Cat and our favorite Beatle didn’t necessarily have business owners in mind when they suggested that an ambiguous destination is right around the corner if you just start walking, but they might as well have. In fact, if that cat were to host a business leadership seminar, he’d say much the same: that while all roads lead somewhere, sometimes somewhere is just another kind of nowhere. His thesis statement?

That in business, clear goals matter.

Without them, every choice is just another mysterious door in a rabbit’s warren of possibilities. Without them, the company ship wanders and drifts. Sure, maybe the currents will lead you to safe harbor. But you’re just as likely to end up crashed on a reef in the Maldives.

At TAB, we believe that every business owner has the right to expect that their business can deliver for them what they want out of life. A written strategic plan, when done well, is both the forward path and the map itself. It’s the basis for any business owner to achieve his or her vision. Strategic planning – by helping you refocus on your foundational purpose, your goals and your opportunities – reintroduces you to “the big picture.”

You remember the big picture, don’t you? It’s why you started your business in the first place.

What Is the Importance of Strategic Planning?

A strategic plan is a written document that points the way forward for your business. It both lays out your company’s goals and explains why they’re important. The strategic planning process also helps you uncover ways to improve performance. It can, for instance, spark insights about how to restructure your organization so that it can reach its full potential. Developing new products, expanding operations, reaching into new market segments, solving organizational problems – as you grow your business, a well-designed strategic plan will dictate how you respond to opportunities and challenges of every color, shape and size.

Strategic Planning is Itself a Business Growth Strategy

Of course, before you can respond, you have to be able to identify those opportunities. For business owners, the strategic planning process lights the way, and it’s easy to see why. A clear set of goals, when combined with an honest appraisal of an organization’s strengths and weaknesses, shows you what’s important, what’s relevant and what’s actionable in your environment.

Every business owner needs to be able to make these kinds of distinctions, because the business landscape is constantly changing, and faster than ever before. New government regulations, changing workforce demographics, advancing technology and economic uncertainty affect every business differently.

A strategic plan allows you to put these business challenges into perspective. It gives you the foresight you need to tackle them in a coordinated way. You’ll have a better view of the ways your business is affected by any particular problem, which in turn makes it easier to take control of your own future.

So what are the sorts of business challenges that strategic planning will help you to rise above? You name the situation – your plan will help. Some examples of obstacles or opportunities that strategic planning can help you more easily respond to include:

• Responding to the launch of a new product from a competitor.
• A technological upgrade on your production floor.
• Handling the requests of a new customer base.
• Upgrading the technical capabilities of your workforce.

But your strategic plan is more than just a lens to look through. It does more than just focus your attention. It’s also essential for communicating your vision to investors, managers and employees, and it illustrates the process by which that vision will be made real. Through the strategic planning process, you’ll create a written document that clearly details the future plans and goals of your company. Your business allies won’t have questions about how they fit in, and they won’t be confused about how they can help you achieve your vision. The strategic planning process ensures that everyone is on the same page.

Remember, a plan of action that resides only in your head may work for a little while, but owning your own business involves collaborating with others. You’ll have to do it if you want to bring your business growth strategy to fruition, and as you grow you’ll do it more and more.

What Can Strategic Planning Do For Me? The Small Business Pulse Survey

 The results of TAB’s Small Business Pulse Survey show the positive effect that the strategic planning process can have on your business. This survey was focused specifically on the importance of strategic planning, which allowed business owners to give real feedback about the usefulness of such plans. What did the survey find?

Owners were broadly enthusiastic about the benefit and importance of strategic planning. 

Business owners who say they’ve got a high-quality strategic plan are much more likely to forecast sharp increases in profits and sales revenue over the next year than are owners who lack a strategic plan. More than three-quarters of the owners surveyed believe that a written strategic plan causes their business to perform at a higher level. And most business owners cite “sales revenue” as the business area most likely to benefit from the implementation of strategic planning.

At the same time, only 9% of small business owners have a strategic plan that they’d describe as “excellent.” Only 16% of business owners review and update their strategic plan at least once a month. A full 22% have no written plan at all.

If you want to grow your business, an updated strategic plan is the place to start. Putting real effort into your strategic planning process today, and keeping your plan up to date and relevant, gives you a continued competitive edge.

What Are the Features of Effective Strategic Planning?

The initial strategic planning process is too often thought of as a one-time effort – many business owners are content to put their plan on the shelf once they’ve written it. Once a year, maybe , they’ll do an annual review. That may feel like a kind of engagement, but if you want your strategic plan to do what it’s designed to do – what it’s truly capable of doing for you– it’s just not enough.

Allen E. Fishman, founder of TAB, places special emphasis on what he calls “Turning the Wheel.” In order to grow your business, Fishman believes, you’ve got to review your strategic plan as often as possible, checking benchmarks and timelines and revising strategy when new opportunities or obstacles make themselves known. A plan with ongoing relevance is vital to an effective business growth strategy.

In other words: you’ve got to actually use it, and it’s got to be adaptable.

Want additional insight? Read 4 Step Guide to Strategic Planning now to learn more

Finally, a truly excellent strategic plan is built around an identifiable, overriding factor that gives your organization something specific to work towards at all times. This is called your Driving Critical Success Factor (DCSF), and it will act as a guidepost for all of your decisions while helping to keep your team focused. Say, for example, that you’re based in New England but you’re eager to break into a West Coast market. This would be your company’s DCSF, and communicating this goal clearly with management, employees and investors will help you take advantage of any opportunities that might come up in Seattle or Los Angeles. Your DCSF also gives you a clear way to measure progress.

Since strategic planning is so crucial as you prepare to grow your business, in our next post we’re going to walk you through the process. We’ll focus on concrete methods that will result in a clear and concise written guide to your goals, methods and benchmarks for success. This will give you the strategic plan you need to meet the business challenges that await your organization on the road ahead. It will keep you from getting overwhelmed with today’s tasks at the expense of tomorrow’s opportunities. It’ll be your sextant when the clouds roll in – and in a pinch it’ll even serve as an effective deterrent against riddling cats

Discover the 5 ways entrepreneurs and business leaders seize opportunities during difficult times here

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Written by The Alternative Board

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