Business gurus talk a lot about having a strategic plan. They stress that these policies are important to businesses of every shape and size, across every industry imaginable. But with all of this talk, strategic plans can sound like yet another overblown fad.
You may be wondering why you should buy into the hype, but it turns out that there are plenty of ways businesses actually do benefit from strategic planning. Read on to find out how.
What Is Strategic Planning?
A strategic plan begins with envisioning your desired future. During strategic planning, the business thinks about where it wants to go in the future, and then delineates the steps that need to be taken to reach that future. Goals or objectives are broadly defined, and the steps are laid out like a road map that takes you from where you are now to that future. Most businesses use strategic planning to map out the next three to five years.
How Is It Different from Other Business Plans?
Long-term planning begins by taking stock of where you are now. After you’ve assessed the current situation, you begin to plan for the future. Strategic planning takes the opposite direction: You work backwards from where you want to be.
A strategic plan is also different from tactical planning in that it has more broadly defined objectives. Tactical plans tend to focus on a narrower set of goals, which have predetermined means. A strategic plan is much more flexible in terms of how its aims can be achieved, which means the plan can be adjusted during the three-to-five-year timeframe it covers, and a review of the plan at the end of that period may allow additional adjustments.
The Road Ahead
Since strategic planning forces businesses to think actively about the future, it’s a useful exercise in surveying what is on the horizon. One of the major benefits of a strategic plan is that it allows your business to take stock of what opportunities and challenges may arise. It also provides a clearer picture about what will be needed from the organization to meet those challenges or seize the opportunities that present themselves. You might want to take advantage of an opportunity in an emerging market, but to do that, you’ll need to invest heavily in upgrading your current IT capabilities. A strategic plan will allow you to prepare for that reality more effectively.
Having a better understanding of challenges and opportunities also allows the organization to be better prepared to meet those obstacles. That means that businesses that use strategic plans usually spend less time on crisis management, as they’ve been anticipating the challenges they encounter and have prepared accordingly.
The Common Mission
Strategic planning also helps rally your employees around a common mission. When everyone knows where they’re supposed to be going, it becomes much easier to motivate people to work toward their goals. Businesses that lack a strategic plan often struggle with making their future come to fruition; a vision is not enough to guide your people along the path to the future business.
That could mean that your firm becomes lost or distracted during its journey, leaving you aimlessly looking for your place in the market. Your employees may find it difficult to be motivated in such an environment—how can they do their best work when they don’t even know what they’re supposed to achieve?
Strategic plans also create standards, and standardization in turn improves accountability. That means everyone is more responsible for their work in the company. And with a clearer idea of the mission, the goals, and how to get there, your employees will more easily work toward their future.