Strategic planning is one of the most important elements to get right for a company aiming for success. It is not simply about setting out what a company does, and it does not dictate exactly what a company will be doing in five years time, it will allow the company to function correctly and for growth to be sustainable and long lasting. The aim of a strategic plan is to point the company in the right direction with strategic landmarks along the way to make sure that there is direction in the company's journey.
Below we look at five reasons why strategic planning has become essential to successful companies today:
As a company begins to grow or change over time, knowing the rough path that it needs to follow and the eventual goal is essential. Without a knowledge of the direction a company needs to go, it will be impossible for the collective employees and departments to understand how to get to the eventual end point.
This is certainly not a roadmap outlining every move that the company needs to make in order to achieve success, but an end point needs to be set out in order to point the company in the right direction. The concept of direction is arguably more important than creating a more comprehensive roadmap because a strategic plan should be something that can be flexible and changed slightly without causing chaos. With a plan with little leeway, as soon as one change is made, the entire plan needs to be changed.
Recent trends in recruitment have seen people moving between companies at a faster pace than they ever have previously, even in senior levels of the company. With this shift in labour and knowledge from company-to-company, it is necessary to have a plan that is understood throughout the company, even if the people who initially conceptualized and implemented the plan have left.
Having this strong plan and sense of what the company is trying to achieve through it, will mean that regardless of how many people leave and are replaced, there will always be an understanding of where the company is heading and what the plan is to get there.
A big part of creating a strategic plan is the ability to look beyond the small gains of the present and at the big gains of the future. Without a strategic plan the goals can be lost in favour of short term gains, with decisions made now that slow growth down the road.
With a strategic plan, the goals and bigger gains in the future are constantly the target, not the short term gains that could potentially damage this. It means that the sustainability of the company is always in the mindset of those operating within it.
When a company doesn't have a strategic plan, the managers of individual departments need to set the agendas of what their departments need to achieve, often purely in a financial sense. It means that different parts of a company will almost operate independently of one another, meaning a disjointed and confusing way to operate.
With a clear strategic plan showing how the company needs to operate and the directions it needs to head, those in charge of the individual parts know roughly the direction that other departments are heading, without needing to know the intimate details of how they are doing it.
Throughout any company's growth there will be as many times of hardship as there will be of plain sailing. When in the most difficult situations, losing sight of what the company stands for and what you are aiming towards is common. There are thousands of examples of companies who diverted away from their original plans to avoid short term problems only to find that it destroyed the company in the long run.
Having a concrete aim through a strategic plan means that despite hardships, everybody in the company is focussed on the end goal, not simply changing course to avoid any hurdles that they may come across.