I’ve been writing about differentiation in particular and strategic planning in general and I’ve just realised that I’ve not gone through the benefits of strategic planning.
I’m planning to fill that oversight now.
The Big Benefits Of Strategic Planning
- You should make more profit for a longer time if you regularly use an effective strategic planning process. You’ll be in a better position to take advantage of profitable opportunities and you’ll be able to defend yourself better against the damage that comes from threats to your profitability.
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Without a strategy, you may miss opportunities, see opportunities but not fully exploit them, miss damaging threats or inadequately defend against the threats.
. - Your business makes a stronger connection with customers because you build in their problems, issues and frustrations into what you do. This creates a stronger commitment back from the customers to your business on the basis that “we care about those who show they care about us.”
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Without a strategy which aligns the interests of the customers with the interests of the business, the customer can be treated more as an enemy who has got money you want than a friend you can help.
. - Your business will have a stronger, clearer purpose which helps to unite your team and guides all the decisions made in the business towards achieving your strategy.
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Without a strategy, your business purpose may become vague and different parts of the business may set their own priorities which conflict.
. - You can set goals for each and every part of the business which drives forward continuous improvement and keeps the business competitive.
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Without a strategy, you may not set goals because you’re not clear what improvements you want.
. - You’re able to concentrate your resources on the best opportunities. Every business has more things that it could do than it can do.
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Without a strategy, you may mis-allocate your resources and waste time, energy and money.
. - Capture a summary of your best thinking and an assessment of what’s happening in your business environment at the moment. This helps you to identify changes from year to year.
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Without a strategic plan that captures what you think now, your mind plays tricks on you as it continuously adjusts to the new realities. This creates the “boiled frog syndrome” which can mean you miss major changes until it’s too late.
Why the Benefits From Strategic Planning Can Go Missing
Personally I think that’s a compelling list of big benefits from strategic planning but even I – a strong advocate for developing a strategy – have to admit that sometimes the benefits go missing.
Strategic Planning takes time and effort and when you work with an external strategy coach, consultant or facilitator – which I think you should – the costs can mount up too.
To get the strategic planning benefits, you need to pass through each stage of the strategy process – analysis, insights, planning, actions and results
You do the strategic analysis using popular strategic planning models like:
Unfortunately – and particularly if lip service is paid to the strategic analysis techniques – you can build up your SWOT Analysis with no real insights.
This lack of insight into competing more effectively in the future may stop the development a strategic plan or the strategic plan that is created is bland and uninspiring.
And a bland plan doesn’t create the energy, enthusiasm and commitment to implement the actions outlines in the plan and without effective action, results don’t get better.
If the strategy process is followed effectively and the insights are true and are followed by purposeful action, the results provide confirmation that the strategy is right, confirming the analysis. If the results aren’t as expected, then the organisation can learn more about its competitive environment with further analysis. and modify its plans.
This is how benefits from strategic planning work through in the real world as intentional strategies are modified by real world feedback.
The Small Benefits Of Strategic Planning – What Should Change In Your Business After You’ve Been Through Your Strategic Planning Process
The Benefit Of The Strategic Planning Process
To get the benefits of strategic planning, the process must:
- Give you more confidence in tentative decisions you’ve been thinking about.
. - Help you to make decisions where there has been uncertainty.
. - Help you and your team to focus on the few things that you need to focus on, your key success factors.
The Benefits Of Strategic Planning Choices
Strategy is about making choices. You should be able to see the impact of your strategic planning work and how it will benefit the business through the following issues:
- Who you will sell to – and who you won’t.
. - What you will sell – and what you won’t.
. - How you will beat competitors and win customer preference.
. - How you will encourage customers to keep buying.
This clarification of the big issues will translate into specific actions that you expect to deliver an improvement in results, the tangible element of the benefits of strategic planning.
The Benefit Of Strategic Planning Actions
Your strategy analysis, insights and planning need to translate into specific actions – where I’ve written products, it includes services:
- Products where you will increase prices or reduce prices to improve margin or competitiveness.
. - Products where you will increase customer value by focusing on delivering a better customer experience and more benefits.
. - Products you will stop selling and products you will introduce.
. - Markets you will stop competing in and markets you will either start competing in or develop.
. - Areas in the business where you will concentrate on improving effectiveness, however you define it.
. - Areas in the business where you will reduce costs and improve efficiency.
. - How you communicate your strategy to your key stakeholders – employees, customers, suppliers
. - How you translate the big strategy goals into specific but consistent objectives and goals that ripple down throughout the business
. - The specific performance measures and targets you set that provide the feedback for your results.
. - How you will review the progress you are making in implementing your strategic plan and update it based on real world feedback and responses from customers and competitors.
Strategic Planning is Important
The benefits of strategic planning can be big if the business thinks about strategy in the right way.
Like many things, if you don’t commit to doing it properly, then you don’t get the full range of benefits.
For more thoughts on these ideas please see Why is Strategy Important?
Can You Get Some Benefits From Strategic Planning If You Don’t Do The Full Process?
I believe you can get benefits from strategic planning, even if you don’t do a big strategy project.
The important thing is that you follow the strategy process loop:
- Analysis
. - Insights
. - Plan
. - Actions
. - Results… that then feed back into further analysis and reflection based on the real world battles with competitors.
Take one analysis technique as an example, PEST Analysis.
As you work through the difficult categories of political, social, economic and technological changes you may spot an opportunity or a threat much earlier than you would have done normally.
This gives you a chance to think deeply about it, decide how it will potentially impact on your business and then decide what you will do about it. As you take action and watch the situation unfold, you see your competitors scrambling to catch up.
How much of the full strategy process you need depends on your situation, both the business and its competitive environment and also on the time and resources you have.
When I’ve spoken to turnaround experts, they believe in the strategy process but often there is only time for a limited amount of work before the big decisions have to be made.
