Strategic planning is the development of a measurable goal or a set of goals, as well as the complex plan structure required to achieve these goals. Business executives often rely on strategic planning to establish a sequence in which both short-term and long-term goals should be completed, along with a specified timeframe in which objectives should be met to achieve optimal growth. When developing a strategic plan, businesses generally look three to five years into the future.
Before strategic planning can begin, it is important to create a planning committee or team to lead the process. Ideally, the team should be made up of representatives from all areas within the business and these key players should be open and transparent in the way that they communicate and share information. Once a committee has been formed, each member should research and gather essential information to better understand the current status of the organization, as well as factors that could influence the future of the business.
What Is Strategic Planning?
From small startups to larger corporations, businesses of all sizes and in all industries benefit from strategic planning. A strategic plan outlines a clear path for a company by defining the best routes for generating profits and achieving accelerated growth. It can also help business leaders bring focus to an organization by specifying in which order goals need to be reached and the methods for reaching those goals. By taking the time to develop a comprehensive strategic plan, businesses become more aware of their strengths and weaknesses and gain a better understanding of where they stand in the market compared to their competitors.
Without a proper strategy in place, a business may suffer from lack of drive and vision; however, strategic planning gives organizations the focus they need to increase productivity and profitability in the present and the future. Businesses utilize a variety of frameworks in strategic planning, such as objectives and key results (OKR), balanced scorecard (BSC) and the theory of change (TOC). When used effectively, these frameworks can help businesses make more informed decisions and allow room for adjustments as problems occur, requiring an immediate response. Strategic plans should be reviewed and adjusted annually, to ensure accuracy and relevance.
Strategic planning tells a business where it should focus its time, energy and money ensuring resources are not wasted on a project unlikely to generate satisfactory results. By streamlining operations, a business and its employees stay focused on specified goals and maintain a sense of purpose. There are countless benefits to be achieved with strategic planning that impact management, employees, customers and other stakeholders. Some of the top benefits of strategic planning include:
Better Team Communication
Strategic planning encourages better team communication by getting employees, vendors and others involved in the growth of the business. A business’s employees play a pivotal role in the day-to-day operations; feedback from them during strategic planning provides direct insight. Employees are able to share information and ideas about which goals to set and prioritize, and can also inform management of changes that may occur in the workplace that could require the strategic plan to be changed or updated.
In addition to gaining feedback from employees, reach out to other people that may have a unique perspective of the company, such as vendors. Get their thoughts about the business in its current state and how they see the business progressing in the future. It is important to keep a strategic plan that is highly flexible so that new ideas can be easily implemented.
Strategic planning can also help increase productivity among employees. Implementing a strategic plan, employees often feel a greater sense of accountability and are more driven to complete their role within the organization to the best of their ability. Even when employees are not directly involved in the creation of a strategic plan, making all staff aware of the plan and its goals can help improve productivity as employees will be more motivated to help an organization reach its goals.
Studies have shown a direct link between the creation of a strategic plan and increased productivity among employees. According to research published by HR.com, approximately 40 percent of businesses claimed that there was a sudden increase in employee productivity when a strategic workforce plan was implemented. An organization and its employees naturally function better when working towards a specified goal. Strategic planning encompasses key metrics for long-term success that can be tracked, such as profitability, customer retention and business revenue.
Easier Ability To Identify Strengths
One of the biggest advantages of developing a strategic plan is the ability to analyze a business more concisely. This includes identifying and examining the strengths of a business, such as customer service or online marketing, and how these strengths could be used to help the business reach its goals. Once a business knows and understands its strengths, this information can be used as an opportunity to improve business and minimize certain risks.
It is not always clear to a business what strengths it possesses or how these strengths can be used to generate higher profits and reach important objectives. Employees are a valuable resource, providing insight about areas in which the business excels, as well as ideas of how to best leverage these strengths.
Talk To The Strategic Planning Professionals
An increasing number of businesses are turning to strategic planning to make more informed decisions and meet their long-term goals faster. A detailed strategic plan has the power to foster company growth, improve employee satisfaction and promote goal achievement. Strategic planning also increases overall operational efficiency by aligning operational activities to specified goals.
Strategic planning is a highly structured activity that requires intuition and experience. Planners need to be able to look toward the future and identify potential risks and challenges. The strategic planning process can be complex and challenging to complete; it can be helpful to speak with a business consultant about the unique needs of your business. Reach out to the business benefits experts at Business Benefits Group today to learn more.