What is the significance of strategic planning?

Often businesses start out with a fairly clear vision, and that vision can be accomplished in several ways: sometimes through some great streak of luck, but most likely with the help of a well-thought-out, realistic, and carefully designed strategic plan combined with intentional, and focused actions. Business strategy is the blueprint or roadmap that should guide all activities in an effort to achieve the business vision and deals with the questions of how it should compete.

There are many questions that should be addressed, but generally, a business will need to answer two key questions at the very least:

  1. Which industry should it be in?
  2. And how should it compete

Conducting business without a strategic plan is akin to getting in a car, driving blindfolded, and hoping to reach the desired destination without running off the road. Barring that great luck that I previously mentioned, or a solid plan, it is almost impossible to reach the desired destination without the result being multiple incidents or a complete disaster.

Every business needs to have strategic goals that drive decision-making and business initiatives. Absent these, the likely outcome is an exercise in squandered company-wide time, effort, and resources. Businesses simply can’t expect to achieve goals without investing what may seem like copious amounts of up-front work and resources to identify and plan for desired results. With business strategy also comes the identification of other necessary components such as internal processes, policies, and procedures; roles and responsibilities; schedules; resources; and so forth. But setting a plan in place and just jumping in with both feet is insufficient.

As mentioned before, a business plan is a guide and can at any time be impacted by various internal or external factors, and as a result, a plan may need to be modified. That said, it makes no practical sense to change a business plan each time a change occurs unless it impacts the business goals in a marked or fundamental way. In the new business world, change is all around us, almost every minute of the day.

Change can come in many forms

Suffice to say change can come from factors internally and externally to the business, a few are stakeholder expectations, human resources, environmental, leadership, organization structure, policies and processes, and regulations. To deepen the scope, the economy, industry, technology, and demographics all work to make change a constant.

Stakeholder expectations can ebb and flow at the drop of a hat. From internal stakeholders in multiple departments to external clients, their needs will change depending on their own internal and external criteria, which can create a chicken-or-the-egg scenario.

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