Most businesses think that strategic planning is something that only Fortune 500 companies need to worry about. The truth is that all businesses need to think about their strategic direction. While the time devoted to the strategic planning process differs depending upon the size of the company, the thought process is the same.
Generally, strategic planning focuses on what you want to achieve and tactical planning focuses on the specific steps of how to get there. There have been countless books written on strategic planning so I won’t spend any time on that today. Instead, I want to emphasize the importance of the strategic planning processes to a business . . . especially if you are not doing it today.
Unless management takes time out from day to day activities to plan its future, it will likely end up doing more of the same which is almost always sub-optimal. Specifically, management needs to give consideration to the core strengths of the organization and how those fit against market opportunities. It is also important to consider how core strengths differ from that of the competition. If all of your competitors are equally good at something, then it isn’t much of a differentiator. Whereas if you are clearly better at something compared to your competitors then that is an opportunity to differentiate yourself in the marketplace assuming the customer cares about that difference and is willing to act because of it. That action may be simply choosing you over your competitor or the advantage may be so great that they are willing to pay a premium. The exercise may also help identify gaps that need to be filled in order to make the company more successful.
Turning the strategic planning process into goals and a roadmap will help the organization focus on what it wants to take on over the next 2-3 years. Just as importantly, it can help the organization decide the kinds of things that it will not try to do over the same time period. Both are important.
I have seen organizations suffer from a lack of ideas just as I have seen them suffer from too many ideas. Some companies are so rooted in “we’ve always done it that way” that they are living in the past. They have not changed their product, marketing, or their internal process and haven’t looked outside themselves to recognize their deficiencies. Accordingly, they are not set up to compete in the world in which we live. On the other hand, some businesses suffer from so many new ideas that none of them actually get fully implemented. They start implementing a new idea and stop to go onto the next one without ever making much progress. In both cases, a few days invested in purposefully planning the business can make a dramatic difference.
Strategic planning is really a matter of asking oneself “what do we want this business to look like at some point in the future and what specific actions do we have to take in order to get there from where we are now?” Do you have a plan?
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