Posted on 25th June 2020 at 20:35
Author: Arah Perrett, Business Consultant
"I can’t see the wood for the trees."
If, like me, you are a person of a certain age, you may remember a song by Diana Ross that included this refrain:
Do you know where you're going to?
Do you like the things that life is showing you?
Where are you going to?
Do you know?
These are questions that we can all usefully ask of ourselves from time to time, especially when we run a business!
What is a Strategic Plan?
I am often surprised by how many businesses operate without a clearly defined strategic plan. Strategic planning is an organisation's way of defining its strategy or direction. A strategic plan is an outcome of the planning process. Typically, it focuses on five key areas: vision, mission, goals and objectives, action and how often the plan will be reviewed. Many plans aim to set the focus of the business for the next year and 3-5 years.
Why don’t business owners have a plan?
I have worked as a Development Consultant within the financial services industry for more than 10 years. When asked, the most common answer I get is that time-pressed owners feel they are too busy doing the doing to stop and think strategically. They know that this is important and often worry that this isn't being done. However, they struggle to see the wood as they are too busy cutting down all those individual trees.
Does a lack of planning matter?
Most of us wouldn’t contemplate going on a long trip without a map, compass or satnav. Without a plan, that is effectively what many businesses are doing.
An article I read recently proposed that ‘accidental success is dangerous’. Its premise was that it is relatively easy for businesses to be successful in favourable economic environments. However, when the going gets tough, and boy, the going is tough right now, things get more difficult.
It is hard to make effective decisions where there is no clear understanding of why the business exists and where it is heading. A strategic plan provides that true north around which a business can coalesce in both good and more challenging times.
Benefits of a strategic plan
There are many benefits to strategic planning. They include:
Enabling a business to be proactive.
Providing a sense of direction.
Increasing operational efficiency.
Increasing market share and profitability.
Make a business more sustainable.
Palo Alto Software 2010
One study found that, if a company plans, it grows 30 percent faster than those that don’t.
‘The multiple effects of business planning on new venture performance.’ Journal of Management Studies. (Burke, A., Fraser, S., & Greene, F. J. 2010).
Ideas for Strategic Planning
Strategic planning is one of those ‘important and not urgent things’ that can sometimes be put on the back burner. The perception that it is a time-consuming activity is one of the big inhibitors to action.
Here are some ideas that can speed up the process...
Elevate the importance of strategic planning – see it as an asset that will ultimately improve the performance of the business
Consider individual days offsite to focus purely on strategic issues. This can be more time efficient than trying to build it into a busy working day
Involve your team – they will have a perspective and ideas that didn’t occur to you
Use a one-page business plan. This takes less time to produce, is more digestible and can be changed more readily
Work with a Business Consultant to develop your plan, identify marketing needs and assist in enhancing your skill set.
There is no getting away from the fact that creating a plan requires some time and energy. However, the benefits you will gain from this thinking process will be amply rewarded in the days, weeks, months and years to come.
Thank you for reading this! I hope you have found it helpful. Please get in touch on 01452 489 942 if you would like any other information.
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