“If one does not know to which port one is sailing, no wind is favorable.” ~ Lucius Annaeus Seneca
Strategy was/is/will always be a 'hot topic' for business leaders. The reasons are simple - without a strategic plan there is no direction for the business, resources are wasted, and worse time is wasted! Seneca said it best nearly 2,000 years ago as captured in the quote above.
With considered Strategic Management practices in place, regardless of the size of your business (or business unit), your organization will be more effective. Let's discuss some of the benefits of Strategic Planning.
Many of you are doing things right, but how do you know if you are doing the 'right' things? That is to say how do you know the value added activities you contribute are effective in achieving your business's strategic goals? This is especially relevant if your organization does not have a well-defined strategy. How do you tie it altogether?
I speak to many business owners and directors that are frustrated with their team's performance because by appearances they 'seem' to be doing all the right things. However, growth is slow or nonexistent. In the worst cases, profits are falling and customers are slipping away.
So how can a well-defined strategy bring benefits to your business? After a thorough strategy formulation exercise the leadership team will be able to solidify a common approach to achieving the organization's strategic goals. This exercise will bring focus on creating value for your customers, thereby making better use of your time and resources.
Additional benefits include wasting less time 'fighting fires' as team members are all working from the same strategy and they can then communicate more effectively with all stakeholders. Finally, following a systematic strategic planning process will increase the ability to manage sustained, profitable growth.
Assuming your business follows the calendar and your fiscal year runs from January to December, now is an opportune time to bring your leadership team together to plan. As 2016 is an election year, and the global economy continues to improve, planning now for 2017 will enable your business to be prepared to focus on growth in the new year.
As an added bonus, a well-planned Strategy session should also include an opportunity for team building among your key managers. The typical strategic planning session would entail some 'homework' prior to meeting and then two to three days at an off-site location to formulate the 'first draft' of your Strategic Plan. This exercise would then be followed by further editing and refining of the strategic goals until a final version is produced that can be agreed upon by Senior Management.
If your business lacks the resources to hire a full time Strategist, then hiring a consultant could make sense. Traditionally, Consultants have been used to fill such skill gaps in small and medium size businesses and it is more cost effective to hire a Consultant only for time required to fill the gap as opposed to bringing on an expensive staff member.
Planning vs Reality
If you have ever been part of a Strategic Planning process where the Leader was just 'going through the motions' you may be skeptical of the benefits mentioned above. As Michael mentions in the video, if your business is not willing to devote the necessary time to the planning process, it is better not to go through it all. Having no plan is better than a weak or poorly executed plan. A poor plan is a sure way to disaster! It's like following a faulty road map that leads to nowhere. Don't fake it!
Even the best plan has limited purpose and fit for use. Plans are based on hypothesis and learned guesses. No one can see the future, but with some careful, thoughtful deliberations, an organization can at least identify reasonable approaches to accomplish strategic objectives. And, then ...
In reality, things change. Everything changes. But that does not mean you should not plan. Another popular quote from Helmuth the Elder states, "In the last analysis, luck comes only to the well prepared."
As Helmuth the Elder has noted, even the best laid plans change when they are actually put into effect, but when considering the benefit that comes from the preparation and planning, the effort is worth it even (not if but) when the plan changes. And the plan will change. The plan should change.
The core of your Strategy will not change. The Vision statement, Mission statement, and Value statements should remain static. The overall strategic goals of the organization will also be more enduring. The tactical activities that are driven by the strategic goals should be reviewed often as they will change as work gets done and environmental factors change.
In conclusion, planning is crucial to all businesses, but especially those where resources are extremely limited. Good planning reduces inefficiencies. The Strategic Plan is an excellent tool for all businesses, but it is not a panacea and it is not a one-off exercise.
The Strategic Plan is a living document that will need to be reviewed and revised often, but if done correctly will add much value to the effectiveness of any organization. In a 2013 article on HBR, Don't let strategy become planning the author makes the case for why many people believe the planning process to be just an academic exercise to complete a document that goes onto a shelf, thus, missing the most important aspect of the exercise, Strategizing!
For more than two decades, Greg Pilkington has focused on assisting senior executives address their most complex core business issues. He has led talented professionals dedicated to delivering smart insights and innovative solutions to their clients -- giving clients the confidence to win in today’s complex and dynamic global landscape.