If you want to compete, you must know what “big guys” do, and Strategic Planning is part of their arsenal.
Peter Drucker defined Strategic Planning as: “The continuous process of making present entrepreneurial (risk-taking) decisions systematically and with the greatest knowledge of their futurity; organizing systematically the efforts needed to carry out these decisions; and measuring the results of these decisions against the expectations through organized, systematic feedback.”
It is the process your organization should follow over a determined period of time. It can be for a specific business unit or for the company as a whole. Normally, the board of directors defines the overall strategy for the whole company, and each business unit or area plans its strategy aligned to the overall strategy. The period of time defined will depend among others on how dynamic and fast that specific industry is moving.
Leading your company with no strategy is like driving to an unknown destination without directions, a map or a GPS. Strategic planning should be an integral part of your business, and every effort at every level should be conducted to point towards the direction your company wants/needs to go.
A strategy needs to be flexible to be revised and adjusted depending on changing external factors: industry, competitors, suppliers, customers.
A basic and general strategic plan should contain some critical components:
Strategic Vision and Business Mission
A Strategic Vision is the identification of the ultimate aim or purpose for a business and defines the general direction that the business will pursue, and determines where the owners want the company to be at some point in the future.
Answers to : “Who are we? What do we do?, and Where are we headed? chart a course for the organization to take and helps establish a strong organizational identity. Those answers define the company’s Mission. A Mission statement defines a company’s business and provides a clear view of what the company is trying to accomplish for its customers.
These are the goals you are aiming. The Mission is how you plan on accomplishing those objectives. There may be conflicts between these objectives, but simply list them and discuss with your leading team. Do not attempt to list hundreds of goals for each mission. Since you can’t do everything, just look at the broader spectrum in choosing your business goals. Which are the possible goals your organization is going to pursue within the time frame of your plan.
A widely used method is the SWOT (Strengths, Weaknesses, Opportunities, and Threats) Analysis. Once you have it developed, it is available for future planning efforts with minor updates.
Strategies for Reaching Business Objectives
Strategies or plans on how to reach your business goals is the part of your plan that will most likely change frequently. During this step you will be building checkpoints to make sure the strategy is working, being flexible enough to make changes when necessary.
Action Plans to Implement Strategy
Once you define your strategy you need to formulate action plans with those activities needed to carry out the strategy. When your plan involves multiple departments are involved, it is recommended that you have each department set their own objectives so you involve each department involved.
Monitoring Plan Implementation
Many strategic plans fail in this step. You need to follow through to see how the plan is being implemented and how it is doing. Set up checkpoints. Include benchmarks in your financial reporting system. By being disciplined following through you will be able to verify that you are on track toward your goals, and allow you to make changes when necessary.