Strategic Planning or A Root Canal – Which Would You Prefer?

Posted by Jim Connolly on 17 April, 2010  Email This Post -  Print This Post

As the leader of a small or medium sized business, strategic planning is one of those time consuming efforts that only Fortune 500 companies have time for, right?  Besides, there’s real work to be done instead, right again?

Granted, strategic planning looks simple on paper, but is difficult to do effectively.  When done well, strategic planning will multiply your efforts, focus your teams and achieve results that are not possible without thinking strategically about the future of your company.

There are many benefits to developing a strategic plan for your company.  Here are four primary benefits of strategic planning:

• First, an effective strategic plan allows your organization to chart its own course instead of allowing your competitors to decide what customers they will take while leaving you with the leftovers.
• Second, the goal of the strategic planning effort is to identify not only markets where you can compete, but also to identify market segments in which you can dominate.  If you can dominate a market segment, you are driving what happens in that segment.  You’re not one of the “also rans” left to compete for business solely on the basis of the cheapest price.
• Third, an effective strategic planning process focuses your company on its strengths instead of trying to be all things to all people.  In addition, it relieves you of the temptation to be consumed by fixing your company’s weaknesses.  The real return on investment is not in fixing your weaknesses.  The real ROI is achieved by focusing on your strengths.
• Finally, the strategic planning process forces you to live in the real world.  If a train is headed right for you, an effective plan gives you the time to see it and do something about it.  Do your customers see the strengths that you say you have?  Is the market opportunity as large as your sales manager says it is?  Will there ever be a return on investment for a product that requires a capital intensive investment on the front end?

No doubt, strategic planning is challenging.  It takes time, energy, focus and resources.  However, when it is done well, the organizational and financial benefits will far outweigh the cost of the process.