It’s never too early for an organization to establish its strategic direction. You would not take a trip with your family without knowing your destination, time of arrival, and how much it will cost you to get there (at least a ski trip to the Alps has a significantly different cost associated with it than a weekend camping trip to your local state park). So you should not embark on your journey with your business without some idea of what your final destination is, or at least what you hope to accomplish along the way.
The process of understanding your target market (who you serve, who you don’t, and why), organizational strengths and weaknesses, and the opportunities and challenges that lie ahead, your position relative to the competition, your unique selling proposition, and how you should be allocating resources should be done as soon as possible. The process should define an organization’s mission and vision, principles of doing business, and key goals. The process should establish what the organization defines as success. These are crucial considerations for any business. Making them sooner ensures you have a path to success. Failure to do so will leave you floundering in a sea of failure.
Strategic planning ensures that you can allocate resources effectively, make the proper investments in infrastructure or people, and get the entire organization on the same page moving forward. Strategic planning is not a one and done process either. Effective organizations constantly revisit their strategic plans to adjust to emerging competitive, regulatory threats, or other changes in the environment.
A good strategic planning framework should include:
1) Analysis: an assessment of the internal and external factors/environment facing the business. Should include demographic, social, economic, legal, political, and competitive factors, position in the market place, and target customer, to name a few. A SWOT (strengths, weaknesses, opportunities and threats) analysis is often a popular deliverable in this context, too.
2) Following analysis, a high level strategic plan should be developed. The plan could include mission and vision, principles of doing business and key business objectives and the strategies employed to achieve them. This strategic plan should guide the organization in the long-term.
3) Execution: Now you are ready to execute strategy. The high level plan can be broken down into more specific operational plans and tactics that support each one of the strategies.
4) Finally no plan is complete without the evaluation process. Here is where many businesses fail. The organization needs to assess whether or not it is heading in the right direction and then adjust the course appropriately. Often, they need to validate that the investment decisions they are making are having the intended results. Is the strategic direction sustainable in the long-term? Is the culture you are establishing valid to achieve the results you intend? Are we performing adequately to achieve the results we expect? What additional investments do we need to make? Are there other opportunities we need to go after or businesses we need to divest? If you are not heading in the right direction, the evaluation phase will help you to get back on track.
Have you developed a strategic plan for your business? If not now would be a good time to commit to starting one. Contact me today. I would be happy to discuss your particular situation at no expense to you.
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