News & Update
Why is Strategic Planning Important?
The ongoing organizational process of using available knowledge to inform the intended direction of an enterprise. This process helps prioritize efforts, allocate resources efficiently, align stakeholders and employees with the organization's goals, and ensure that those goals are supported by data and sound reasoning.
STRATEGIC PLANNING
Optimizing Your Strategy for Success
Do you know what your company’s strategy is? How much time do you spend each month developing that strategy? If your answers are on the low side, you’re not alone. According to a study published in the Harvard Business Review , 85% of executive teams spend less than an hour a month discussing strategy, and 50% spend no time at all. The study also found that, on average, 95% of a company’s employees don’t understand its strategy.
It’s no wonder that 90% of companies fail to achieve their strategic goals . Before a company can reap the benefits of its business strategy, planning must take place to ensure that its strategy remains agile and executable. Here’s a look at what strategic planning is and how it can benefit your organization.
WHAT IS STRATEGIC PLANNING?
Strategic planning
- The ongoing organizational process of using available knowledge to inform the intended direction of an enterprise. This process helps prioritize efforts, allocate resources efficiently, align stakeholders and employees with the organization's goals, and ensure that those goals are supported by data and sound reasoning.
- It’s important to emphasize that strategic planning is an ongoing process, not a one-time meeting. In the online course Disruptive Strategy, Harvard Business School professor Clayton Christensen notes that in a study of HBS graduates who started businesses, 93% of those who implemented effective strategies evolved and departed from their initial strategic plans.
- Most people think of strategy as an event, but that’s not the world,” Christensen says. “When we’re faced with unforeseen opportunities and threats, we have to react. Sometimes we react successfully, sometimes we don’t. But most strategies develop through that process. More often than not, the strategy that leads to success emerges from a process that’s at work 24/7, in almost every industry.
- Strategic planning takes time, effort, and ongoing reevaluation. With the right attention, it can put your business on the right track. Here are three benefits of strategic planning. Think back to the last time you attended a strategic planning meeting for your organization. You were probably faced with a challenge to solve or a goal to achieve.
- Do you remember your contributions at that meeting? Did you come up with compelling ideas and a plan of action, or did you struggle to think strategically and develop a solution? Did you have a good idea but struggle to communicate it in a logical way? Were you an active participant in the conversation, or did others lead the conversation?
- Strategic thinking skills are among the most sought-after management skills. Why? Because employees who can think critically, logically, and strategically can have a huge impact on the trajectory of a company. If you’re looking to improve your strategic thinking skills, the good news is that with the right mindset and practice, you can. Here are four ways to improve your strategy skills, so the next time you’re in a strategic planning meeting, you can make sure your contributions get noticed.
WHAT ARE THE SKILLS OF STRATEGIC THINKING?
Strategic thinking skills are those that allow you to use your critical thinking skills to solve complex problems and plan for the future. These skills are essential for achieving business goals, overcoming obstacles, and tackling challenges, especially if it takes weeks, months, or even years to get there.
Strategic thinking skills include
To develop a strategy that helps your organization achieve its goals, you need to be able to analyze a variety of elements, from financial statements and key performance indicators to market conditions, emerging business trends, and internal resource allocation. This initial analysis is essential to creating a strategy that fits the current reality your organization faces.
Implementing a strategy for your business, no matter its size, requires strong communication skills. The ability to communicate complex ideas, collaborate with internal and external stakeholders, build consensus, and ensure everyone is aligned and working toward common goals are all essential to strategic thinking.
Strategic planning is often used to solve problems or address challenges, such as unmet financial goals, inefficient workflows, or an emerging competitor. Implementing a strategy that addresses the primary challenge you face requires first understanding the problem and its potential solutions. From there, you can develop a strategy to solve it.
Strategy is not just about thinking of a solution, it also involves implementing it. Once the data is analyzed, the problem is understood, and a solution is identified, you need solid planning and management to put it all together.
HOW TO IMPROVE YOUR STRATEGIC THINKING SKILLS
✦ STRATEGIC PLANNING
Ask strategic
questions 🤘🏽
If you want to improve your strategic thinking skills, one of the simplest things you can do is ask more strategic questions. This will allow you to practice your planning skills, become an expert at identifying opportunities, and develop a more strategic mindset that you can leverage throughout your career.
According to Harvard Business School’s online course Disruptive Strategy, strategic questions can be related to a challenge, opportunity, or ambiguity you’re facing in your current situation, whether personal or professional. They might, for example, involve launching a new business or product, battling a competitor, or structuring your organization for innovation.
It is also important that your questions apply to your role and responsibilities so that you can act accordingly.
✦ Here are some examples of strategic questions you might ask:
+ How can we strategically position ourselves to enter a new market?
+ What is the direction of growth for each of our products or services?
+ Where will the organization's growth come from over the next five years, and how does it compare to historical sources of growth?
+ How should the organization respond to the threat posed by potentially disruptive competitors?
✦ STRATEGIC PLANNING
Observe and reflect 🤘🏽
In addition to asking strategic questions, you need to answer and approach them skillfully. One of the most effective ways to do this is to observe and reflect on your current situation, ensuring that any strategy you develop is based on facts.
For example, imagine that the company you work for starts losing market share for one of its products with its traditional customers. At the same time, it gains market share with a whole new customer base. It’s easy to guess why this is happening, but it can lead you down the wrong path at a critical moment in your organization’s life.
Instead of blindly following a hypothesis, gather as much information as possible to develop your strategy. For example, this could involve conducting interviews with new customers to identify the different tasks they use your product for.
Understanding why new customers are attracted to your product can help you tailor your marketing strategy and product development to better meet their needs.
✦ STRATEGIC PLANNING
Consider opposing ideas 🤘🏽
Once you have defined a strategy that can help your organization achieve its goals, challenge your assumptions and subject them to rigorous testing. This will help you ensure that you are not overlooking another possibility.
By playing devil’s advocate with your ideas, you can preemptively identify weaknesses in your argument and equip yourself to defend your strategy when others question you. It can also help you sharpen the logical skills you need to communicate and execute your strategy.
To develop this skill, get into the habit of questioning yourself every time you are about to make a statement.
+ Should you consider a different perspective?
+ Is there another possibility that you may have overlooked?
✦ STRATEGIC PLANNING
Adopt formal training 🤘🏽
By practicing the methods described above, you can improve your strategic thinking skills at your own pace. However, there are other learning options you can follow.
If you need to quickly improve your strategy skills (to address a pressing need facing your organization, position yourself for a new role, or finally launch your own business), formal training might be your best option.
For example, by enrolling in the Disruptive Strategy online course, you can learn how to make innovation a reality for your organization.
✦ In six weeks, you will discover:
+ the framework of tasks to be accomplished and the theory of disruptive innovation
+ will develop the skills needed to identify
+ execute a high-level strategy