We are approaching the time of year when companies should plan their work to prepare or update their strategic plans. Crafting a good strategic plan is not an easy or quick task, so the sooner we take the necessary actions to start with a good work plan, the better.
International studies indicate that around half of all companies have a formal strategic planning process. The statistics are clear and compelling. Strategic planning associations with a formal strategic planning process, around 70 per cent of them believe they are outperforming their peers. In contrast, among those companies that do not have a formal strategic planning process, over 70 per cent of them report performing at the same or lower level than their peers and even not performing at a sustainable level.
Given the difficult times we live in, it is more important than ever that companies decide to work with a formal strategic planning process. Unending economic crises, increasingly empowered consumers and customers, technology impacting our business models in new ways every day, new competitors chasing innovative value propositions and employees less engaged with their employers, among other reasons, make managing and building our businesses more complex and more critical.
Today’s need is no longer just to do the right things right, the first time, but to do so in a timely and consistent manner over time. While it is true that most people would agree on the importance of this way of doing things, it is equally true that a majority of people are unclear about how difficult it is to do so. It is equally true that a large majority of people understand – or think they know – the value and necessity of a strategic plan. Still, some confuse it with the process of preparing the company’s budget.
A Strategic Plan involves the process of materialising in a good long-term plan, the understanding that an organisation must have and decisions it must make concerning where the business is and why, where it wants to go to win in the marketplace and how to do so by creating a sustainable advantage and superior value over the competition. A Budget, on the other hand, involves the anticipated calculation of the income and expenditure of economic activity over some time, usually on an annual basis. Action plans to meet an expected goal, expressed in values and financial terms, to be achieved in a given time and under certain foreseen conditions.
But working with a formal strategic planning process goes beyond the impact of making good business decisions, which is essential and the objective that most executives perceive. Working with a formal strategic planning process makes it much easier and more achievable to work with a well-aligned and committed team. And it is precisely in difficult times that having a well-aligned and committed organisation is more important and relevant than ever.
When we work with different organisations to help them implement a formal strategic planning process, we insist on the importance of involving the organisation so that they can contribute to building the best possible plan, but even more importantly, to do so by getting the organisation to see the strategic plan as theirs and not just that of the managers who lead the company. To this end, it is essential to involve them inefficiently supporting the strategic planning process, making them participate with sufficient time in those stages in which their contributions can be more relevant and more significant, from the initial diagnosis stage to the downloading of the strategic plan to the business plans of the different functions and business units. We even recommend involving suppliers and customers in the diagnostic stage.
Carrying out the Strategic Planning process is neither quick nor straightforward: it is necessary to have methods and work tools to prepare the Strategic Plan and execute it with excellence. It is a process that is improved year after year with the proper involvement of those who lead the business and the organisation that must lead its implementation
The answers to these key questions – which must be answered in the respective order – are the basis for materialising the decisions taken as part of the strategic planning process into a practical and effective Roadmap with clear objectives, goals, strategies and actions that the company will seek to take forward in an aligned, committed and even passionate way.
Are you ready to start working in a new, better way to be among the 70 per cent of companies that believe they are outperforming or outperforming their peers? If the answer is yes, you should also plan your work to prepare or update your strategic plans and do so with a formal strategic planning process and contact strategic planning consultants.