One year ends, another begins - 2021 is all about getting from disruption to transition. Is Strategic Planning the answer?
One way or another, 2021 is likely to be the year when the world transitions to the next normal. 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 a 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 – eroding entrepreneurs’ self-belief and dampening employees’ motivation alike. Before an organization can reap the rewards of its business strategy, planning must take place to ensure its strategy remains agile and executable. Sounds cliched as much as it may be, but at YYC Group, we categorically assure you there is nothing closer to truth than this as we ourselves would not have even grown barely a quarter as much in the last decade should we not have embarked on leap-of-faith strategic planning transformation then.
Here’s a look at what strategic planning is and how it can benefit your organization.
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 business owners think of strategy as an event, but that’s not the way the business world worked much less how it is going to work in the increasingly challenging landscape. When confronted with unanticipated opportunities and threats, businesses immutably have to respond. Sometimes we respond successfully; sometimes we don’t but most strategies are developed through this process and more critically the insatiable desire to stay ahead. More often than not, the strategy that leads to success emerges through a process that’s at work 24/7 in almost every industry.”
At YYC, we do not only believe but preach religiously that every business owner has the right to expect that their business can deliver for them what they want out of life. A written strategic plan, when done well, is both the forward path and the roadmap itself. It’s the basis for any business owner to achieve his or her vision. Strategic planning – by helping you refocus on your foundational purpose, your goals and your opportunities – reintroduces you to “the big picture.”
You remember the big picture, don’t you? It’s why you started your business in the first place despite the change in business plans throughout the course.
Benefits of Strategic Planning
It is the difference between being proactive or reactive. Be on the defensive or the offensive. Be a victim of circumstances or be victorious in the fight. Not every situation can be foreseen but you can make decisions and react to changing market conditions with the end in mind.
2. Establish direction
Clearly defines the purpose of the organization and establishes realistic goals and objectives consistent with the mission which can be clearly communicated to constituents. Provides a base from which progress can be measured, employees compensated and boundaries established for effective decision making.
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. We constantly assert that business’ 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 – and transparent communication is the cornerstone of YYC’s Strategic Planning System.
4. Increasing Operational Efficiency and Excellence
A strategic plan provides management the roadmap to align the organization’s functional activities to achieve set goals. It guides management discussions and decision making in determining resource and budget requirements to accomplish set objectives — thus increasing operational efficiency and by extension operational excellence.
5. Increased Profitability and Market share
Focused planning and strategic thinking will uncover the customer segments, market conditions, and product and service offerings that are in the best interest of your firm. An intentful and targeted approach to markets and opportunities which guide your sales and marketing efforts, distribution and other business decisions which ultimately mean more profit to the bottom line and a stronger market position.
6. Unique Differentiation: avoid “competitive convergence”
Companies have gotten so used to looking at their competitors and their best practices and then trying to duplicate them that it becomes harder to tell the companies apart. They all start to look the same with less distinction in unique value. Strategy means having a unique differentiation that sets you apart from your competitors.
7. Building foundations for longevity and succession planning
The world market and industries are changing faster than ever and those companies who do not have a solid foundation and have relied on luck or opportunity most likely will not be around for the future. Data reflects that one out of every three companies at the top of their industry will not make be there in five years. Focus is powerful. Similarly for business continuity sake, strategic planning does encompass the long-term view of ensuring the right talent is in the pipeline to take over the leadership mantle when the time comes.
That’s where we come in. For decades, YYC has played an instrumental role helping clients improve and even reinvent their operations. Our long-held reputation as the “practical strategists” and leading foresight in operations give us a unique positioning this field.
Today, as part of the YYC’s purpose, we turn vision into reality by empowering entrepreneurial success. We’ll work alongside your teams to help transform your capabilities systems, solving problems right from the start, while building resilience for the future. We’ll build automation, raise productivity, cut costs and accelerate growth—enabling more efficient production, higher levels of customer satisfaction and a stronger corporate culture. This is what we do. This is strategy, made real.
Feel free to contact us to find out more.