Leadership & Strategic Planning

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It’s important leaders understand that the fundamental purpose of strategic planning is to align an organization’s mission with its vision. Without missionOpens in new window and visionOpens in new window, the plan exists in a vacuum, as the mission is the starting point for planning, the vision is the destination, and the strategic plan is the roadmap that helps leaders navigate from one to the other.

Strategic planning involves a disciplined effort to produce fundamental decisions and actions that shape and guide what an organization is, what it does, and why it does.

What Is a Strategic Plan?

A strategic plan should be the driving force for actions at all levels of an organization 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
• assess and adjust the organization’s direction in response to a changing environment.

This effort consists of much more than conducting an annual off-site to determine an organizational philosophy (i.e., vision, mission, values, core competencies, and priorities).

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. If the strategic plan is properly executed, it will facilitate a way of thinking, acting, and learning that is necessary to achieve organizational success.

Without a strategic plan that is effectively executed an organization may continuously react to near-term issues with members of the organization not understanding why their work is important.

What Is Strategic Management? What Is Strategy Execution?

Strategic planning links and synchronizes actions at all levels of the organization, resulting in leaders and followers who understand where they are heading and why their day-to-day actions matter.

Because resources are normally limited, strategic planning must occur to ensure that resources are not expended unnecessarily because of a lack of strategic and operational focus. Sometimes, however, synchronization of actions and organizational focus at all levels do not happen, even if a strategic plan exists.

Unfortunately, in some organizations, the annual strategic planning off-site is viewed as an intrusion into day-to-day priorities and tasks—a “check-the-box” activity that does not translate into actionable objectives and tasks.

Benefits of Strategic Planning

While the strategic planning process can take some time, it is beneficial for everyone involved. At a minimum, organization members will have a better idea of the goals and objectives leaders want to accomplish and a path to do that.

Based on our discussion to this point the following should provide a better understanding about the importance of having an organization strategy; other benefits leaders and their organizations can derive from planning include:

1.     Creates a sense of direction.

A strategic plan helps to create a sense of purpose and defines the direction in which an organization must travel, and aids in establishing realistic objectives and goals that are in line with the vision and mission charted out for it. (Remember the Cheshire Cat’s comments to AliceOpens in new window.)

It also creates the necessary foundation and boundaries to determine resource allocation and efficient decision-making in the following areas (e.g., budget allocation, hiring decisions, operational processes, marketing strategy, etc.).

2.     Identify strengths and weaknesses.

As part of the strategic planning processOpens in new window, organizations can examine and analyze their entire organization. Leaders will look at what the organizationOpens in new window does well and the areas where it still needs to improve.

By identifying the organization’s current strengths and weaknesses, the process gives leaders and others an opportunity to improve in the future and become a better organization.

Although leaders may have a good idea about what the organization excels at and areas that need to be improved upon, leaders have the opportunity to involve other stakeholders. They may identify something the leaders and others may not have thought of.

3.     Increase operational efficiency.

With a clear plan and direction in place resources can be channeled and monitored more effectively to ensure that effectiveness is enhanced and wastage is reduced. Effective goals and key performance indicators could be set and measured to determine the progress and growth of the organization.

4.     Increase market share and profitability.

By crafting and adopting a dedicated strategic plan, organizations can get valuable insights on market trends, consumer segments, and buying behavior/patternsOpens in new window. With a well-planned and targeted approach, a clear strategic intent can be channeled into sales and marketing efforts, leading to a higher possibility of increasing profitability and market share.

5.     Unique differentiation: Avoid “competitive convergence.”

Many organizations have developed a habit of looking at their competitors and their best practices and then trying to duplicate them that in turn makes it harder to tell the companies apart. At some point, all of these organizations start to look the same with less distinction in unique value.

A clear and effectively executed strategy and strategic plan increases the likelihood that an organization will have a unique differentiation that sets them apart from their competitors.

5.     Increase durability, longevity sustainability.

Organizations are constantly adapting to change, especially in a digitally-driven economy.

The purpose of strategic planning is to flag potential internal/external shocks and prepare the organization to be more effective in adapting. With industry trends and consumer demands constantly changing, organizations that lack a strong foundation, focus and foresight will have a difficult time riding the next wave.

6.     Being proactive instead of reactive.

The current dynamic business environment requires every organization to be equipped with a good strategic plan. Strategic planning enables organizations to stay ahead of the curve and be on top of the competition. It will also enable an organization to find and benefit from potential opportunities present in the market.

7.     Increased job satisfaction—meaningful and full of purpose.

Consistently one of the top reasons for leaving an organization is the lack of job satisfactionOpens in new window. Employees need to be motivated to come to work and feel like they are part of the team.

Employees are the greatest source for innovative ideas. If an organization’s employees were in essence bricklayers, would they say that they are building a wall with each brick they lay each day or building a cathedral? The clarity, purpose, and meaning of work gives employees a new focus and reason to show up each day.