For most of us, planning is a painful exercise. We distinctly remember the anxiety and frustration we experience during the process Not everyone feels this way about planning, some people are naturally gifted when it comes to planning and keeping things in order. It is easy for them to make plans and stick to them. Whether it is painful or enjoyable, planning is important. The strategic planning process helps an organization create a map in order to achieve its goals. When these plans are implemented, it results in progress. Planning allows firms to adjust growth if something unexpected happens. Decision-making changes from being near-sighted to focus on the long term. Planning is just like learning to ride a bike. It begins with cuts, bruises and falls, but the thrill of accomplishment makes it all worthwhile.
Benefits of Planning
Planning empowers you to do the following:
Foresee the Future
Planning pushes organizations into a proactive mode of working. Plan definitions that include contingency plans allow firms to be prepared when an unfavorable situation arises. This can lessen the impact of uncertainty and fuel growth. Firms can keep up with emerging trends and stay ahead of competition with carefully formulated strategic plans.
Use Resources Efficiently
As operating costs continue to increase, organizations must be prudent while utilizing limited resources and work towards eliminating waste. Decisions regarding resource allocation consume less time when plans are already in place. Resources can be directed towards projects that have a high probability of success and those that contribute to the achievement of organizational goals.
Bring the Organization Together
Planning at the higher levels of the organization must filter down and be communicated to each department. Each department defines plans to achieve certain objectives. This promotes a sense of cooperation. Every department and every employee begin to understand how their work contributes to the growth and success of the organization.
Evaluate and Control
Planning defines the results that you want to achieve. Current performance has to be periodically evaluated and compared against the desired result. This serves as a warning sign, where firms must adjust their performance to stick to the plan. If the sales quota is below the desired result, then the firm discusses alternatives to achieve the required quota. Or if there is greater demand for the product, the firm has to optimize its service and support. There is constant focus on the end result, thus every action is geared towards it.
Gain a Competitive Edge
During the planning process, organizations analyze their strengths and weaknesses and perform a competitor analysis. This helps anticipate competitors actions and also devise strategies where the competitor appears to be most vulnerable. This can reveal new markets and customer groups for the product or service.
Steps to Create a Strategic Plan
Here is how you can start crafting a strategic plan.
Define Your Vision
The vision is a dream statement of ideal conditions. The vision statement must answer the following questions:
- Where is the company headed?
- What do you want your company to become?
The vision communicates the guiding principles and beliefs to the entire organization and to your customers. Your vision statement must not be more than 100 words.
Analyze Your Business
Conduct an audit to understand where your business presently stands. Use a SWOT Analysis Template to get a clear picture of the present and also forecast future growth.
Questions to ask at this stage include:
- What do we do best?
- Why is this business important?
- What resources do we have - physical assets, people, intellectual property?
- What are the new capabilities we need?
- What improvements are needed and where?
From this audit you will also understand issues that affect the health of the organization, Strategic plans must be developed keeping these issues in mind.
Understand Your Customers
Success depends on how well you fulfill your customer’s needs compared to your competitors. Spend time understanding their characteristics. All efforts must be focussed on solving their problem and giving them value. It will be worthwhile to develop strategies to improve your customer base at this stage.
Set Objectives and Define Goals
Objectives are broad plans that define how the vision will be achieved. These focus on the long-term and must take a few years to complete. Break down each objective into goals.
Goals are usually meant to be achieved within a year. Goals must be SMART (specific, measurable, action-oriented, reasonable, and time-bound)
Goals must address the following:
- The kind of performance to be achieved
- By when it should be achieved and
- By whom
Tactics list the specific actions that must be taken to achieve goals defined above. Analyse the obstacles that prevent goals from being achieved, using these as a guide, create action items. Don’t forget to assign them to an able employee with clearly defined deadlines.
Create and Implement a Review Process
Collect and organize all of your goal measurements in one place. Use this to compare actual performance against the desired performance and make adjustments where required. Set up regular review sessions to keep performance on track.
Planning isn’t something you set aside for later. Planning can increase productivity, eliminate stress and ensures that what’s important is always prioritized. Stop waiting, draft your plan right now!