In our last blog we went into some detail about why your company needs a strategic plan. There are many good reasons why planning is essential for success. In this blog we will further explore this topic by discussing the pitfalls of avoiding strategic planning. There are benefits to taking action and also risks involved in failing to act. What are those risks?
“Failing to plan is planning to fail.” –Benjamin Franklin
Strategic planning has often been compared to making a road map. We’ve made that comparison ourselves. This is a good metaphor to use to understand the kinds of problems that crop up without proper planning. What are the odds that you and your favorite people would have a great vacation if you all just piled into a vehicle and turned the key in the ignition? Low. Why is that?
What Happens without Strategic Planning?
A Lack of Measurable Objectives – Just as “having fun” is too broad a goal when planning a vacation, “making money” is too broad for planning a business. If you plan a trip from Michigan to Florida, you will have to think about how far you can drive in a day, if there are places you want to stop and see on the way, and what the fastest and safest routes are. These are specific objectives. If you fail to meet them, you can make adjustments, driving a little longer the next day, for example, to make up for lost time.
Your business goals need to be specific and measurable in the same way. Your sales team needs to have specific quarterly and annual goals that are measurable. If by the end of Q1 they have not met their sales targets, they can make adjustments to their strategy or markets to make up for lost time in the same way.
Wasted or Unused Resources – Marketing is one way to reach a broader audience with your sales pitch. However, if you do not identify marketing as one of the strategies you will use to meet your goals, you will not research the different types of marketing or allocate funds for them. You will have nothing to measure and tweak for greater success. If your company has the “Throw it at the wall and see if it sticks” approach, your end result will be a messy wall, missed opportunities, and wasted money down the drain. In fact, the tighter your budget is, the more strategic planning will help you because you have fewer resources available to waste.
Confusing Leadership Structure – Without clear goals, the people within your organization will not know who is in charge of what. That “what” encompasses quite a bit, too: duties, projects, outcomes, employee management. Different types of leadership structures work, but deciding on which one you will use, either structured or loose – needs to be an early priority. Everyone in the business should be clear on who they report to and who and what they are responsible for.
Another problem with having an undefined leadership structure is that usually a handful of overachievers will burn out and grow resentful that other people are not carrying the load. Even if someone loves driving, one person should not drive all the way down to Florida. It’s unfair, and it’s exhausting.
Poor Communication – “Communication is key,” is an overused adage, but it’s also true. One study done by Harvard Business Review revealed that 95% of employees do not understand the strategy of their companies. What a failure! Sadly, board members often do not understand it much better.
Every employee and board member should understand the company’s mission, its goals, its strategy, and how their position in the company advances all of those. Communication should flow from leadership to management to employees, but often leadership will either hoard information or communicate it ineffectively. Your business strategy should specify how information will be communicated both within and without the organization and who people are to talk to about their problems and concerns. Otherwise, each person will focus on their own needs and the company’s goals will fall by the wayside.
As you develop your planning, leave room for change and modification. You may need to back out of dead ends or detour around construction. There are things that you can’t anticipate even with the best of planning. We’ve all seen that in the past two years.
Avoiding Strategic Planning = Self Sabotage
No good leader wants to set himself or his business up to fail. The business world is challenging and competitive. Give yourself every edge you can and develop your planning skills.
If you need help with your strategic planning process or other challenges you are experiencing in your business, that is why Prometis Partners is here. We enjoy challenges, and we love helping people succeed. Call us today.
