Durability in business is determined by how well prepared you are to address future problems.
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Strategic planning is basically setting goals and objectives that if actualized will shape the future of a company, and then creating a roadmap to achieving those goals and objectives within a stipulated duration. But while many organizations have a glossy document they call “strategic plan”, many of them don’t care to review it or to actualize anything written in that document. That makes little sense because there is no need to invest in a strategic planning process if you aren’t planning on using that document ever.
Strategic Plan vs. Business Plan
Many business managers fail to see the need for a strategic plan because they feel like a business plan is the only “plan” they need to succeed. But they are wrong. Although a strategic plan is a type of business plan, it focuses mostly on how you can implement and manage the strategic direction of a business, one step after the other. It predicts changes that might occur in a business within a given period of time, mostly between 2-5 years.
A business plan, on the other hand, is more of an operational plan that you have when starting a business. It defines the value proposition, vision, and mission of your business. It helps you appeal to investors. It helps you implement ideas that define your business at first and sets up the structure of your company, but it doesn’t necessarily give you the direction and actions needed to sustain the business. You will only sustain and grow your business if you capture and implement ideas in a strategic plan. That being said, what other factors make strategic planning so critical in business
1. It helps you understand the prevailing business environment
Preparing a strategic plan forces you to understand where your business is as of now, where it needs to be in 2-5 years, and how it will be affected by the prevailing business environment. It helps you understand the drivers of profits and how you can tweak internal operations to lower overhead costs without hurting overall productivity. It forces you to compare your operations with your direct competitors, which then helps you identify the industry weaknesses you can capitalize on and the weaknesses you need to fix in your backyard. That all-around analysis of your business in context to itself and its environment helps you set ambitious but realistic goals and objectives.
2. It enhances job satisfaction among employees
Job satisfaction goes hand in hand with the purpose and meaning that employees attach to your company. Ambitious employees want to grow their careers consistently and they know that the only way they can grow while still in your company is if the company has consistent growth. And how do you convince them that your company will grow consistently over a given period of time if you don’t have a strategic plan? How do you motivate them to come to work every morning if they keep doing the same things year after year; if they don’t get a chance to put their innovative ideas to practice?
This is the point: If your employees cannot see the bigger picture, if they keep laying bricks on your growth wall with no idea of how high you intend the wall to be in a year or two, chances are they will not find the meaning or purpose of working for you. A strategic plan is a document that helps employees gauge their progress as they work towards a greater goal.
Speaking of employees losing meaning and purpose when working for you, modern employees want to work in environments that allow them all the flexibility they need to achieve work-life balance. They want to work remotely so that they can chase after their life goals, such as traveling and further learning, before retirement. That is why you should adopt flexible working plans such as allowing employees to work from coworking spaces so that they can build their own professional networks even as they work for you.
3. Helps businesses predict and navigate future problems
Durability in business is determined by how well prepared you are to address future problems. You could be leading in your niche at the moment and be in neck-deep debt in a few short months; there are no guarantees in the fast-paced business world. The only way you can cushion your business’ future is if you have a strong foundation, focus, and foresight. Simply put, have a strong strategic plan!
A poor strategic plan, or poor implementation for that matter, is tantamount to having no plan at all. Don’t just prepare a plan and leave it lying idle on a shelf. Put it down to work and review it every time the business environment changes.