No serious traveler would begin a trip without having a detailed map to help him reach his destination. The map provides directions and alternative routes in case of construction, bad weather, or other challenges. Consulting the map will save the traveler both time and money. We all agree that maps are useful and necessary, right? In business, the road map is called a strategic plan, and in this blog, we will discuss why your business needs one.
What Is a Strategic Plan?
A strategic plan is a document that a business creates. It identifies the company’s goals, the strategies they intend to use to reach those goals, and the ways in which they will measure their progress so they can fine tune their plan over time. Creating a strategic plan is a process that can be ongoing. In fact, this process should have feedback loops that allow the company to see if their efforts are pushing their business forward towards their goals or if they are leading them down the wrong road.
This process has four distinct parts, or phases:
Vision – For most companies, the strategic planning process begins with creating mission and vision statements. It’s important for leadership to define the company’s mission and communicate it to every member of the organization. The mission statement specifically states what the company values and what its objectives are. The company’s vision flows from its mission, putting it into practice.
If your company already has a mission statement, it’s worthwhile to revisit it to see if it still reflects the company’s present values and mission before you begin strategizing and setting goals.
Strategy – In a previous blog we discussed financial strategy. Creating a strategic plan is a similar process in that the company will specify concrete, measurable actions that will make their vision possible. Goal-based planning is useful here. These goals can be financial or non-financial. Both require taking specific actions, such as hitting sales targets, bringing in new clients, or expanding marketing efforts.
Strategic Plan – The end result of strategy is the creation of a strategic plan. This is a formal document that includes specific details such as milestones the company intends to achieve, timelines for implementation, progress monitoring, and expected financial results.
Having a strategic plan doesn’t mean that a company cannot pivot or take advantage of unforeseen opportunities if they arise. In fact, the strategic plan can be helpful for the company’s leadership to consult when making these types of decisions. If they have internalized the company’s mission and vision and know what their goals are, they will be able to evaluate if taking a specific action will advance their strategic objectives.
Execution – The final part of the process is the execution. This is when you put the road map on the passenger seat and start your engine, metaphorically speaking. You know where you’re going, you know how to get there. Now you have to hit the road.
Follow up is a crucial part of the execution process. It involves checking to see if progress is being made on those set goals and, if not, why? Strategic planning is not a one-and-done process. In order for it to work effectively, it needs to be ongoing. Leadership needs to schedule time for it, in fact. The clearer the set goals are, the easier it will be to determine if they are met. If they aren’t, then those goals and actions will be subject to review to determine if they were too ambitious or if the execution itself fell short.
Why Does Your Company Need a Strategic Plan?
Planning is what you do when you are serious about setting and meeting your goals. Good planning also encourages better communication within your company. When your leadership and your workforce are on the same page about the company’s goals, it helps to instill a sense of responsibility, improve productivity, and it also makes it harder for employees to make excuses. If your company is responding to a changing economy or market, launching new products or services, or experiencing a change in leadership, strategic planning is essential to achieving success.
It may seem time consuming to communicate about goals and create a strategic plan, but, in the long run, it saves time because it focuses attention on the things you determine matter most and gives you actionable items to implement. Without good planning, most businesses will fail, or they will spend far too much time spinning their wheels.
If you have questions about strategic planning or need other business advice, Prometis Partners is always available for consultation. We have worked with many businesses, helping them set goals and create strategies to achieve them. If you have questions, call us. We are here to help.