Part 2: Strategic Planning
Last week in Part 1 (go to Part 1) we tried to explain what Strategic Planning is and the benefits of such planning for the business. Today we continue talking about Strategic Planning risks and why it can fail.
One of the pitfalls of doing business without a strategic plan in place is the risk of a lack of clarity around accountability across your organisation. Strategic planning should clearly establish accountability for the various tasks required to progress the company. Otherwise it is all too easy for deadlines to be missed, and catastrophic errors to occur in your financial planning, your marketing or your customer service (where only one negative post on social media is enough to undermine all your efforts to build a reputable brand).
In contrast to all of the above, there exists numerous companies who complete strategic plans, only for the documents to sit gathering digital dust on a server somewhere, never to be read. The problem? It was a document they felt they should do for the business plan, but don’t execute in actuality. Indeed more than 70% of companies with a strategic plan never execute it, research suggests. Why is this?
Forbes suggests several reasons why strategic plans fail, most notably among the causes are a reluctance to address large complex issues, and creating a document that is too confusing and while outlaying the issues, clearly leads nowhere. Indeed there are so many options when it comes to the level of depth of strategic plan, that unexperienced strategists can end up wasting a lot of valuable time compiling an unusable and unrealistic ‘plan’. That or it is a ask that gets abandoned long after it was begun; too mind boggling to justify the time requirements. The cost of that wasted time could be better spent in learning how to draw together a realistic and achievable strategic plan – a plan that provides direction to the whole organisation and a reference point for leadership in the face of industry challenges.
At Growth Idea, you can invest in yourself and your company by learning the skill of creating and executing clear, concise and insightful strategic plans. We help businesses propel themselves forward by showing them how to craft a plan that is precise, exacting and devoid of all the unnecessary stuff. We will show you how to choose the metrics and the KPIs that bring quantifiable boundaries to the steps in the strategic plan. We will teach you how to get your strategic plan working for you. Still not convinced on the importance of a strategic plan and the ability to get it right?
Then consider this: there is demonstrable research based evidence from the Harvard Business Review that strategic planning has a positive impact on profit performance, with others citing businesses using strategic plans as being 12% more profitable.
Can you afford to be without a usable strategic plan? Talk to us today.
Part 1: Strategic Planning
Would you consider getting on an airplane without knowing where that airplane was going? Neither would we. Strategic planning is the equivalent of Google Maps for a company to achieve their objectives. It’s the tool that guides you on your journey to achieve those objectives, however long and complex that journey may be. In fact, most businesses don’t have a ‘final destination’ per se; once they achieve their objectives, they start the process again with a new set of objectives to achieve business growth.
Regardless of whether you are an aspiring entrepreneur, a seasoned managing director or the CEO of a multinational corporate, you need to be skilled at strategic planning. Let’s repeat that: you need to be skilled at strategic planning. That’s right – it is NOT an innate ability, it is not the preserve of the wealthy, highly educated or already successful individual. Money and education can only help you in so far as you can be trained in the strategic planning process – such as the training Growth Idea provide – but in fact these things are the hoped-for outcomes of learning how to strategically plan; they are not the entry criteria.
Some businesses have a shortage of resources: capital, human and knowledge resources – particularly start ups – and their businesses struggle to survive while they spend their ever shrinking budgets on acquiring these resources, until finally they they are out of operating cash flow and cannot continue. Research shows that of 26,000 failed startup businesses, 67% did not have a strategic plan in place. Other businesses have a wealth of resources, but are unsure where to utilise those resources for the best return on investment, or perhaps they are struggling to see new growth opportunities once their current objectives are achieved and their revenues diminish as they reach market saturation.
It is hoped that most businesses and individuals have goals. Goals are great – but the problem is they are only the destination. For example, putting your business goals in front of a group of investors is only showing them where you want to end up, and not how you will get there. Goals are the overarching reason why a strategic plan is needed. A strategic plan contains the step by step ‘directions’ you will follow as you conquer the territory on the way to your destination.
Another benefit is that it forces business owners into considering what their mission statement should be. If you don’t have a mission statement already, you really need one. Often it gets overlooked by startups and entrepreneurs as they get bogged down in the day to day of getting their product or service out to the market. And yet your mission statement is your raison d’etre – your absolute singular purpose – against which your core values, your business decisions and your growth trajectory should be judged.
One of the most critical things about strategic planning is that you need to be able to objectively assess where you are in your journey – now. This is a lot harder than it seems as it is hard to stay objective when looking at the culmination of your efforts so far. Learning how to create a strategic plan will give you the tools and techniques to establish your baseline objectively. You cannot move forward until you accurately locate where you are now.
Go to (Part 2) of this article….
This article was contributed by Lindsey from Flow20, who offer web design, SEO and other digital marketing solutions.