Do you know what your organization’s strategy is? How much time do you dedicate to developing that strategy each month?
If your answers are on the low side, you’re not alone. According to research outlined in the Harvard Business Review, 85 percent of executive leadership teams spend less than one hour per month discussing strategy, and 50 percent spend no time at all. The research also reveals that, on average, 95 percent of a company’s employees don’t understand its strategy.
It’s no wonder, then, that 90 percent of businesses fail to meet their strategic targets. Before an organization can reap the rewards of its business strategy, planning must take place to ensure its strategy remains agile and executable.
Here’s a look at what strategic planning is and how it can benefit your organization.
Access your free e-book today.
What Is Strategic Planning?
Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees on the organization’s goals, and ensure those goals are backed by data and sound reasoning.
It’s important to highlight 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 percent of those with successful strategies evolved and pivoted away from their original strategic plans.
“Most people think of strategy as an event, but that’s not the way the world works,” Christensen says. “When we run into unanticipated opportunities and threats, we have to respond. Sometimes we respond successfully; sometimes we don’t. But most strategies develop through this process. More often than not, the strategy that leads to success emerges through a process that’s at work 24/7 in almost every industry.”
Strategic planning requires time, effort, and continual reassessment. Given the proper attention, it can set your business on the right track. Here are three benefits of strategic planning.
Related: 4 Ways to Develop Your Strategic Thinking Skills
Benefits of Strategic Planning
1. Create One, Forward-Focused Vision
Strategy touches every employee and serves as an actionable way to reach your company’s goals.
One significant benefit of strategic planning is that it creates a single, forward-focused vision that can align your company and its shareholders. By making everyone aware of your company’s goals, how and why those goals were chosen, and what they can do to help reach them, you can create an increased sense of responsibility throughout your organization.
This can also have trickle-down effects. For instance, if a manager isn’t clear on your organization’s strategy or the reasoning used to craft it, they could make decisions on a team level that counteract its efforts. With one vision to unite around, everyone at your organization can act with a broader strategy in mind.
2. Draw Attention to Biases and Flaws in Reasoning
The decisions you make come with inherent bias. Taking part in the strategic planning process forces you to examine and explain why you’re making each decision and back it up with data, projections, or case studies, thus combatting your cognitive biases.
A few examples of cognitive biases are:
- The recency effect: The tendency to select the option presented most recently because it’s fresh in your mind
- Occam’s razor bias: The tendency to assume the most obvious decision to be the best decision
- Inertia bias: The tendency to select options that allow you to think, feel, and act in familiar ways
One cognitive bias that may be more difficult to catch in the act is confirmation bias. When seeking to validate a particular viewpoint, it's the tendency to only pay attention to information that supports that viewpoint.
If you’re crafting a strategic plan for your organization and know which strategy you prefer, enlist others with differing views and opinions to help look for information that either proves or disproves the idea.
Combating biases in strategic decision-making requires effort and dedication from your entire team, and it can make your organization’s strategy that much stronger.
Related: 3 Group Decision-Making Techniques for Success
3. Track Progress Based on Strategic Goals
Having a strategic plan in place can enable you to track progress toward goals. When each department and team understands your company’s larger strategy, their progress can directly impact its success, creating a top-down approach to tracking key performance indicators (KPIs).
By planning your company’s strategy and defining its goals, KPIs can be determined at the organizational level. These goals can then be extended to business units, departments, teams, and individuals. This ensures that every level of your organization is aligned and can positively impact your business’s KPIs and performance.
It’s important to remember that even though your strategy might be far-reaching and structured, it must remain agile. As Christensen asserts in Disruptive Strategy, a business’s strategy needs to evolve with the challenges and opportunities it encounters. Be prepared to pivot your KPIs as goals shift and communicate the reasons for change to your organization.
Improve Your Strategic Planning Skills
Strategic planning can benefit your organization’s vision, execution, and progress toward goals. If strategic planning is a skill you’d like to improve, online courses can provide the knowledge and techniques needed to lead your team and organization.
Strategy courses can range from primers on key concepts (such as Economics for Managers), to deep-dives on strategy frameworks (such as Disruptive Strategy), to coursework designed to help you strategize for a specific organizational goal (such as Sustainable Business Strategy).
Learning how to craft an effective, compelling strategic plan can enable you to not only invest in your career but provide lasting value to your organization.
Do you want to formulate winning strategies for your organization? Explore our portfolio of online strategy courses and download the free flowchart to determine which is the best fit for you and your goals.
Regardless of whether your business is a small start-up or one of the biggest players in the market, you will likely have heard stories of how other organizations have achieved success through well thought-out strategic planning.
Is strategic planning still relevant for businesses today, however, or is it just an outdated management fad? How exactly does it help an organization?
Effective strategic management can bring many benefits to any business – here are just four examples.
It outlines a clear path for your company
No business can hope to succeed by not having a plan and simply hoping to stumble across success.
A strategic plan works like a roadmap, clearly defining the best route for your organization to take in the years ahead. Whether it covers one, three or five years into the future, a strategic plan can help guide your organization to meet the challenges that lie in wait.
It brings a sense of focus
Because a strategic plan establishes a direction for your business to take, it will help it sharpen its focus in order to get there.
Strategic planning can therefore help your organization develop the right goals and targets and help everyone focus their efforts into meeting them.
It improves your business’s self-awareness
Taking the time to establish a comprehensive strategic plan means your business has a better awareness of its strengths and weaknesses and where it stands in the market, both individually and in relation to competitors.
It gives your employees something to work towards
Strategic planning isn’t just beneficial for those highest up in the management hierarchy – it gives everyone in the organization a sense of purpose.
With a definitive mission and clear goals and objectives to work towards, your staff will know their efforts count towards something and will be motivated to do their job.
With the ever-increasing competition and changing business environments, proper planning and setting of achievable strategic goals have become an integral part of all organizations, as they are two of the primary determinants of an organization’s level of productivity.
In addition, these factors are also important when it comes to defining an organization’s purpose and business direction that meant to ensure that an organization improves its profit and expands its market segment.
Although sometimes because of the ever-changing economic conditions it may be very hard to predict any changes that are likely to occur in the course of business, it is important for managers to be always prepared to challenge the status quo and put in place necessary systems to facilitate the delivery of desired outcomes.
On the other hand, it is crucial for managers to formulate plans and set goals that are not only executable, but also viable, as this is one of the primary ways of ensuring an organizations business operations are connected and aligned.
Therefore, in any organizational setting proper strategic planning and setting desirable goals are the two primary factors that determine a health care management organization level of goal attainment.
Importance of goal setting and strategic planning to productivity
Regardless of any prevailing business condition, every organization has the capacity to perform and achieve its strategic goals, so long as such an organization aligns its strategic goals with its activities.
Therefore goal setting should be one of the primary activities that an organization should do with uttermost care. Goal setting can help to define the parameters that an organization should put in place to achieve an end goal.
Without goals, it is very hard for a team to formulate other plans or to seek any financial aid, as this will be seen of lack of direction. Setting of goals can also act as a motivating factor towards achieving an end goal, because different have set targets, which they must achieve; hence, to avoid being defeated by other teams, they will always remain motivated towards achieving their goals.
Further, goals give teams something to look forward to, as goals are aims that must be achieved, regardless of the prevailing conditions and challenges. Most teams with set goals have a tendency to utilize their time productively; because they know any failure to achieve such goals will not only be a failure in their part, but also to an organization that they pledged to help achieve its mandate (Lawhorne, 2008, p.1).
In addition to setting of achievable goals, strategic planning is another important strategy of increasing the level and quality of work output. With the ever-increasing scarcity of resources and competition in most business scenarios, it is important for an organization to formulate appropriate strategic plans, as they are the first step in any goal setting endeavor aimed at increasing productivity.
Productivity improvement is a crucial part of strategic planning, as this one of the primary gateways to increased profits and meeting of scheduled targets.
Strategic planning is primarily concerned with an organization’s long term goals and the ability of an organization to utilize the available resources to maximize production. Therefore, strategic planning aids in the development of better managerial and working decisions that are coupled with increased energy and capacity to improve customer satisfaction.
Moreover, strategic planning will give an organization some competitive advantage over other organizations, as it provides an organization with better solutions to any emerging business and operational challenges (Lawlor, 2006, pp. 1-2 and Kerzner & Rea, 1997, pp. 264-265).
Conclusion
In conclusion, regardless of the prevailing economic condition, the level of productivity of any healthcare organization will primarily be determined by two primary factors in an organization; these are setting of appropriate goals and formulating appropriate strategic plans.
Through doing this, an organization is guaranteed to achieve its set targets, deal with emerging challenges, optimize resource allocation, and maximize its success chances.
Reference List
Kerzner, H. & Rea, P. J. (1997). Strategic planning: a practical guide. New York: John Wiley and Sons. Web.
Lawhorne, P. (2008). The importance of setting goals. Divine Caroline. Web.
Lawlor, J. F. (2006). The importance of strategic planning. Web.
Need a custom Argumentative Essay sample written from scratch by
professional specifically for you?
801 certified writers online