Strategic Planning Helps Your Business - Here's How

Updated: Nov 26, 2020

Having a vision isn’t enough for your business to succeed. You need a plan to follow through and support it. Strategic plans can feel like taking on a daunting task, but it doesn’t have to be and what’s the alternative?

David Norton and Robert Kaplan, authors of the classic business book, The Balanced Scorecard, noted a problem with business planning. They found that 90% of organizations fail to deliver their strategies.

Despite the popularity of visioning, having a vision isn’t enough. You need a strategic plan. Read on to learn why strategic planning is so important and how knowing this will help you create the right one for your business.

It’s Not All About the Vision

Creating a vision for your organization can be exciting. It’s thrilling to imagine a bright future and to visualize that future in great detail. This might even help it come about.

The problem is that business leaders often stop there. Creating a vision helps leaders understand what direction to move in but it fails to answer important questions. It’s the answers to these questions that leaders and their people need before any real change can happen.

If the vision identifies the destination, what it lacks is the route to that destination. A strategic plan seeks to address this problem. It’s the plan to get to the destination described in the vision.

It’s Not Even About the Plan

So, if you have a vision and a strategic plan, you're set up for success. Yes? Unfortunately, the straight answer is “no”.

Too many strategic plans are formulaic and safe. They meet the need to have a plan and not the need to have a strategy. That’s why so many of them sit on a shelf gathering dust and it’s why so many organizations fail to deliver the strategy.

You need a vision and plan but there’s more to it. Understanding why you need a strategic plan will help you make sure your plan addresses these needs. It’s not about having an impressive document, engaging presentation, or a set of flashy spreadsheets.

OK, You Need to Know Where You Are Going

Don’t think that this criticism of the state of strategic planning in organizations regards a vision as a wasted exercise. On the contrary. Creating a vision is vital but it’s not a one-off exercise followed by a strategic planning process.

For a vision to be useful it needs to be tested and to evolve. The vision sets the destination. The strategic plan explains how you will reach the destination and so it’s conceivable that this process might prove, given the current assumptions, that the vision is not achievable.

If this is the case then you need to test those assumptions or change the vision. The assumptions could be about resources, timescales, or business forecasts. Test them thoroughly.

Don’t just make the assumptions fit the vision you want. That’s not strategic planning. That’s self-delusion.

A vision, even one that’s been thoroughly grounded in reality isn’t enough. It must be a clear plan. One that is specific and rich in detail.

The vision helps define the destination and it’s needed so that everybody in the organization can move together towards that destination. For this to happen it needs to be shared with everybody. This is a challenge because as soon as you try to communicate the vision to others, you discover that what’s clear to you isn’t clear to others.

A clear shared vision is only achievable if it is communicated in terms that everybody understands. All the better if people have been involved in some way in the development of the vision so that they can relate to it. In any case, if you have a clear shared vision you have the beginning of a shared understanding of the end game.

Where Are You Now?

All the focus on creating a vision ignores a crucial issue. It doesn’t address the question of where you are now. A strategic plan cannot get you to your destination unless it also explains your current position.

You might think that where you are now is obvious. Understanding your current position may not be as easy a task as you first think it is. If you are wrong about the current position all your impressive strategic plans are likely to be flawed.

Most business leadership activity is focused on managing the business as usual. Managing marketing, people, operations, and finances generates a particular set of information. It doesn’t necessarily provide you with the data that you need to identify your current strategic position.

You need to know your position relative to the environment you operate in. You need to know what’s happening to the social, economic, political, and technological environment and how that is impacting your organization. You also need to understand what is happening with competitors, suppliers, and customers too.

You need to have a solid understanding of your internal state. What’s working well and what’s not.

This needs you to free yourself from the unconscious biases we all have that distort, generalize, and delete information. This can be a good time to have an external perspective.

With the current location identified and the destination envisioned, your strategic plan can provide the route map.

A Reason to Change

Having everybody on board with the vision and with the strategic plan in place isn’t enough. It doesn’t address the question as to why anybody should move towards the vision. People need a reason to change what they are doing.

This reason for change supplies essential motivation. Things will get difficult at some point. If people don’t have the motivation they won’t overcome the obstacles.

This reason for the change could be either negative or positive or both. A negative reason may be that unless the vision is attained, the organization will fail and everybody will lose their jobs. A positive might be that the vision will secure market share and job security.

The Capacity to Change

Once everybody knows where they are going and are motivated to move in that direction they need the means to do it. Without the capacity for this change, you will end up with people who are highly motivated but unable to act on it. That’s a formula for some very frustrated people.

Knowing this, you will provide that capacity in your strategic plan. The capacity could be provided by resources in the form of finance, time, or people.

The First Few Steps

There’s one further reason why the vision alone is not enough. Inertia is a force that keeps things in a steady state unless that state is overcome by an external force. It applies to people and organizations too.

Even a team with a clear shared vision, a reason to change, and the capacity to do so won’t begin that change unless the inertia is overcome. They need the first few small steps defined so that they can start moving.

Knowing this, you must include the first actionable steps in the strategic plan. Implementing the plan starts here.

How Strategic Planning Works

Understanding how strategic planning works will help you create one that can deliver your vision. Share the vision, give people a reason to change, and build capacity. Break the inertia with some small initial steps and you’re on your way to success.

Talk to us about your strategy by booking a call right now.

-Renata Porter