Why Is Strategic Planning Important to a Business?
Strategic planning provides a road map to help your business get from where you are now to where you want to be. Milestones are expressed in specific terms, as quantifiable objectives that measure whether you’re proceeding as planned and, if not, how far you’ve gone off path.
What is Strategic Planning?
Strategic planning is an organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended outcomes/results, and assess and adjust the organization’s direction in response to a changing environment. It is a disciplined effort that produces fundamental decisions and actions that shape and guide what an organization is, who it serves, what it does, and why it does it, with a focus on the future. Effective strategic planning articulates not only where an organization is going and the actions needed to make progress, but also how it will know if it is successful.
What is Strategic Management? What is Strategy Execution?
Strategic management is the comprehensive collection of ongoing activities and processes that organizations use to systematically coordinate and align resources and actions with mission, vision and strategy throughout an organization. Strategic management activities transform the static plan into a system that provides strategic performance feedback to decision making and enables the plan to evolve and grow as requirements and other circumstances change. Strategy Execution is basically synonymous with Strategy Management and amounts to the systematic implementation of a strategy.
What Are the Steps in Strategic Planning & Management?
There are many different frameworks and methodologies for strategic planning and management. While there are no absolute rules regarding the right framework, most follow a similar pattern and have common attributes. Many frameworks cycle through some variation on some very basic phases: 1) analysis or assessment, where an understanding of the current internal and external environments is developed, 2) strategy formulation, where high level strategy is developed and a basic organization level strategic plan is documented 3) strategy execution, where the high level plan is translated into more operational planning and action items, and 4) evaluation or sustainment / management phase, where ongoing refinement and evaluation of performance, culture, communications, data reporting, and other strategic management issues occurs.
What Are the Attributes of a Good Planning Framework?
Long-Term Objectives
Long-term strategic objectives help you think in terms of big picture goals and overarching visions. The farther in the future you’re planning, the more difficult it is to set specific goals. You may project an intention to open five stores in the next ten years without knowing what the real estate market or demand for your product will look like that far into the future. This objective can still be useful because it provides a general time frame, a schedule and a plan for ongoing growth. It will still be relevant, even if you only open four stores in five years. Long-term objectives provide distant milestones that help you orient your shorter term decisions. For example, if you plan to eventually open five stores, you can build supply chain relationships based on your intention of eventually doing considerably more business with these suppliers. Or, you may approach your branding as an effort that will start off small but build on memes and themes over time.
Short-Term Objectives
Align the short-term objectives in your strategic plan with your longer term goals. This syncing allows you to make incremental steps while also proceeding in a clear direction. If you plan to open five stores in ten years, you’ll need to open them one by one, and the opening nearest at hand is your most urgent goal. It’s easier to be specific with shorter term objectives, and the more specific you are, the better able you’ll be to assess your progress. If you plan to open your next store in two years, you can base your timeline on this objective, making plans to finalize your lease and financing in six months, complete major construction after a year and half, and spend the final six months on finishing work, furnishing, collecting inventory and training your staff.
Source: <https://smallbusiness.chron.com/strategic-planning-important-business-2671.html>
