Strategic planning is one of those business buzzwords that is talked about but does not always turn into action. It should turn into action though. This is because strategic planning is one of the most important things you can do to improve your business’s chances of success and sustainability. It takes some time, sure, but the nice thing about the strategic planning process is that it’s all in your control.
For example: you devote the time, resources, and energy into crafting a strategic plan for your company, thus setting yourself up for preparedness and success. Or by not doing so, you could be leaving your business more vulnerable. It’s a choice business leaders can make; it’s all in their control.
In this article, we will review the benefits of strategic planning and the business risks that a good strategic plan will help mitigate. We will also provide an overview of the steps of the strategic planning process. Lastly, will then discuss the question of hiring outside help in your strategic planning process.
What is Strategic Planning?
Strategic planning is the process a business undergoes to create a visionary and tangible plan for the future. It is a departure from running the day-to-day operations of your company. Rather, it requires thinking about both the short-term future and long-term goals of the organization. We will review the specific concepts covered in a strategic plan in more detail below.
However, there are several key questions that are essential to the strategic planning process:
- What is the mission of your business?
- What is the vision of your business?
- Does the path your business is on support your desired mission and vision statements?
If the answer to this last question is no, do you need to amend the work you’re doing and/or your mission or vision statements? (Don’t be afraid to change these — it is unusual for an organization’s work, mission, and vision to stay stagnant).
What Are the Benefits of the Strategic Planning Process?
Now let’s spend some time discussing the benefits of strategic planning, because — as mentioned earlier — it is a time commitment. Hence, so you certainly want to know what you’re getting yourself into and why it’s important before you begin.
Strategic planning, when done correctly, provides enormous benefits to the business owner, its customers, its stakeholders, and its employees. As the owner, a well-constructed strategic plan will provide you with a greater understanding of your business’s strategic objectives, and the steps you are taking to achieve your goals.
For your employees, strategic plans will typically boost morale. Being a part of something more, when involved in the strategic planning process, will often foster a renewed sense of confidence and enthusiasm for the business. And feeling like they are part of a solid team usually leads to increased productivity. For these reasons it is important to include your employees in the strategic planning process; something we will touch on in the following paragraphs.
In a very pragmatic sense, strategic planning is meant to protect your company from both internal and external threats and risks. In fact, an important part of the strategic planning process involves identifying the threats and risks facing your company.
Thus below, we want to review a few critical risk factors that your business will be vulnerable to if you do not develop a strategic plan.
Identifying Risks and Threats via the Strategic Planning Process
Physical risk factors are a big one; it’s important to have a plan for how to react to water, fire, and other types of physical damage to your place of work. By doing so, you will be saving yourself a lot of time, money, and headache in the long run.
Financial risks are also important to keep in mind. No business owner wants to think about a financial downturn. But the reality is that financial losses — whether caused by internal or external factors — happen. And when they happen it will greatly benefit you and your company to be prepared for how to handle them.
The final risk we want to mention here — although there are certainly many more — is the technology risk factor. In the increasingly information technology-oriented world we live in, our business operations are becoming more and more centered around digitalization.
This, of course, leads to impressive innovation and increased efficiency, but it also opens businesses up to previously unusual problems such as data breaches. Does your company rely on smart technology (as almost every company now does)? Then it would be a very good idea to devise some sort of plan for what you will do if and when a security breach occurs.
Steps to Take in the Strategic Planning Process
Now that we have covered a fair amount of background information, let’s get to the substance of this article: the four steps your business needs to take to create a strategic plan.
1. Get your team involved
The first thing you need to do is gather your team. If you choose to hire a strategic planning consultant, which we highly recommend and will discuss more later, they will be an essential part of your team. It is also recommended to involve several other key stakeholders with unique perspectives — this could mean employees, high-level executives, or board members.
It is very important to have these diverse perspectives going into the strategic plan management process; even if you know your company best, your fellow team members will likely be able to offer valuable insights and perspectives.
2. Strategy mapping together
Once you have a strategic planning team, the first step in your strategy mapping should be reviewing and updating — if need be — your company’s mission and vision statements.
The goal of this step is three-fold: to
- brainstorm ideas for the company’s future
- ensure that everyone is on the same page moving forward
- analyze how your current mission and vision statements fit in with your collective ideas and vision for the company’s future
As mentioned earlier, you may need to tweak your mission and/or vision statements to fit in with your current ideas for the company — and that is perfectly fine. It’s better than fine actually — businesses can and should grow and change.
3. Set strategic goals
The next step is a big one: setting your strategic goals. In setting your business’ strategic goals there are two main factors you want to keep in mind — your goals should be clearly laid out and realistic, and you need to develop action plans for how you will achieve them. This is typically where your SWOT (strengths, weaknesses, opportunities, and threats) comes in.
A SWOT analysis is an examination of your business’s internal and external strengths, weaknesses, opportunities, and threats, and can be a very powerful strategic management and planning tool. It serves as an effective forum for you and your team to review what your organization is doing well, what it can improve upon, and outside factors that you see as particularly beneficial or concerning for the organization.
Sometimes the SWOT analysis part of the strategic planning process can be uncomfortable, but it is imperative to review these variables honestly and accurately to effectively create your strategic plan.
4. Execute your strategic plan
And finally, we have reached the strategy execution step of the planning process. The first component of effective strategy execution is to prioritize your strategic goals and objectives.
With the help of your team and your strategic planner, identify several goals that will most help you to achieve your mission and vision statements — these will be the goals that you will focus on first.
Once your priorities are established and ranked, it’s time to create the actual strategic plan.
Hiring Help with the Strategic Planning Process
This is where having a professional strategic planning consultant is enormously helpful. Companies who have hired a consultant can take a step back at this point in the process while the consultant drafts the strategic plan, with all the information and ideas discussed throughout the planning process in mind.
There will likely be several drafts of your business’s strategic plan, but the final version should be quite detailed, including timetables, built-in checkpoints, due dates, notes on who is responsible for each step in the process, and more.
The overall goal of the plan is to lay out how and when you will proceed with achieving your strategic objectives. At this point, the bulk of the strategic planning process is done, but there is one last — very important — step: monitoring your business’ performance.
As mentioned, the strategic plan will include checkpoints where you and your staff can check in on your progress. It is imperative that you follow through on these checkpoints. The entire strategic planning process falls by the wayside if you do not frequently and regularly check in to ensure that you are delivering on the goals and objectives you established.
We Can Help Your Business with the Strategic Planning Process
Lastly, we want to briefly discuss the importance of hiring an advisor to help with the strategic planning process.
There are two main reasons that most businesses choose to hire a strategic planning consultant:
- Hiring a professional outside of your organization gives you the best chance at carrying out the strategic planning process objectively
- Hiring outside help is actually more cost-effective — having an expert lead the process will be more efficient and require less planning time from you in the long run.
Whether you enlist outside help or go it on your own, an informed decision is a good decision. The goal is always to be as profitable as possible with the right financial decisions for your business.
At Saddock Advisory, we can help determine if your business is financially healthy. Get in touch with us here to find out more.