Why is Strategic Planning Important?
All executives know that strategy is important. However, many executives are apprehensive with creating strategy, because it forces them to confront an unknown future. Not only that, but strategic planning also forces executives to make decisions that explicitly cut off possibilities and options. While many may fear creating a strategy, strategic planning is incredible vital for an organization.
1) A strategic plan outlines a clear path
“If you don’t know where you're going, any road will take you there.” - Lewis Carroll
Clear goals matter. Without them, the company ship wanders and drifts. A strategic plan defines the direction in which an organization must travel. It establishes clear goals and objectives that are in line with the vision and mission. A strategic plan offers a much-needed foundation from which an organization can grow, evaluate its success, compensate its employees and establish boundaries for efficient decision-making. Without clear goals, mission, and vision, your organization will wander.
2) A strategic plan drives organizational alignment
Having everyone participate in the strategic planning process fosters camaraderie and creates an opportunity for discussion about the direction of the organization. (This is why strategic planning often results in cultural transformation). In addition, the process promotes the open and creative exchange of ideas, including resolving disputes and working out effective solutions that ultimately aligns an organization’s activities to achieve goals - thus increasing operational efficiency.
It can often be helpful to have a third party (i.e, a strategic consultant) to help facilitate these conversations as they offer the important objective opinion. They help organizations avoid common strategic planning mistakes.
3) A strategic plan helps ensure long-term survival of a business
Planning is anticipating the inevitable. If you are not contemplating the inevitable, then you obviously cannot plan for it. If you are going to be in business for more than one year, it is imperative that you plan for how you going to survive and make money beyond the current year.
Strategic plans ensure the long term survival of your business. They make your business more durable. They also help your business be more proactive rather than reactive.
True strategy is about placing bets and making hard choices. The objective is not to eliminate risk but to increase the odds of success (or Increase the Odds To Achieve as we like to say at iota consultants). Strategic planning should not be feared, but rather, lack of a plan should be feared. A strategic plan is the first step to organizational success.
Our team of business and strategic consultants at iota consultants can help you create a strategic plan. Feel free to reach out!