Definition of Strategic Planning:
Strategic Planning is the process of setting a direction and a course of action for your business. It lets you document your plan, your goals (both long term and short), and the means to achieve them. It lets you explore opportunities, remain ever prepared, and handle challenges effectively.
Based on a 2018 Constant Contact survey of small business owners (1005 businesses), 63% of them plan ahead only for a year. While it is still effective, having a long-term plan will help your business stay afloat and prepared during unexpected challenges. By creating a strategic plan, you create a formal document that notes down the realistic goals and expectations of the company.
Why should you do Strategic Planning?
Benefits of Strategic Planning are multifold, not just for the employers, but for the employees.
- There’s clarity on where the organization is headed. The formal document lays out the goals, and means of achieving in the given timeframe. It lets you know what the organization needs to do to achieve the goals, for example: Open a new office, address a new market, change their core competencies and so on.
- It becomes easier to communicate the goals to investors, employees, and its other constituents. It gives your employees a chance to be a part of something bigger. Their opinions are valued, and they feel a sense of ownership on the plans developed.
- You will know where to spend your time and resources and where to avoid. For example, if product quality is your core strength, you will think of allocating more resources in that aspect.
- You will know how to measure your business's success and keep a back up plan for when things don't go according to the plan.
- It helps in building stronger relationships among team members, since they all know what they are looking to achieve.
When should you do Strategic Planning?
It largely depends on the nature of your business and its needs. For example, if you are in a business whose growth largely depends on the changing consumer requirements, you should be done frequently, probably twice a year, to analyse the result of your previous strategy and make changes if any with respect to the timeline, budget, goals and so on.
- Do Strategic planning when you start your business. Choose your marketing, financial, workforce, management and overall business plan.
- Setting up a new product, new department, or a new branch? It calls for Strategic planning
- Do it at least once a year, to see how much of your goals and achievements went or are going according to the plan. It also lets you know what should be prioritised for the year to come, in terms of funds, R&D and so on. See if you need to realign your goals, and prepare for unexpected challenges.
- Revisit your plan to check the feasibility of your goal. See if your plans are realistic at the given time or not. Ideally, it would make sense to do a quarterly check in.
Who should be included in Strategic Planning?
- The Chief Executive Office and the board chairperson should head and drive the planning and implementations.
- Include people who are directly responsible for driving the plan i.e. the leadership staff. This includes the head of departments, product managers, directors and so on. These are folks who have the authority to take decisions.
- Involve someone who can represent the consumer community. Their opinion can help the organization from a different perspective.
- Involve folks who can directly oversee the progress of the plan. They should be able to analyse and do periodic check-ins to see how well the plan is going.
Defining your Strategic Planning process:
Here are some quick tips that can help you with strategic planning of your business:
- Have an Internal discussion. Have multiple meetings with stakeholders who will help you achieve these goals. Set up an agenda for these meetings and have clarity on your meeting goals. Know your position in the market and be sure of where you want to be after a few years.
- Do a SWOT analysis. Know your strengths and weaknesses. What are your strengths? Where do you need to improve? How are our competitors in the industry faring? Be honest and candid about this, since it plays a critical role in setting up your future strategy.
- Take external input from investors, analysts etc who know the market or the industry you are in. Understand their perspective, particularly when you are preparing for long-term. This will also give you an idea about the opportunities and threats that lie ahead for your business.
- Once you have identified what to achieve, the next step is the implementation. You need to create a document that talks about your mission statement, the goals and objectives, the course of action, timeline, and the outcome of the plan. Be realistic in your implementation and approach and set attainable goals.
- Review your goals and actions regularly. This will tell you whether your plans are feasible. Also, this is useful particularly when an unexpected problem comes up. You can update your plan, change your goals, or change the methods for achieving your goal. Most importantly, ensure that all the stakeholders are updated when this happens.