Indispensable for predicting a company’s future development, strategic planning is an essential guide for managers, provided it’s done correctly, implemented with regular follow ups and restarted at fixed deadlines.
Strategic planning is a plan of action that a company hopes to carry out to achieve clear and specific goals. It allows the company to take time to reflect and analyze business opportunities, the direction it wants to take and the goals it hopes to achieve.
Once the goals are set, planning consists of establishing an exact plan of action spread out over the coming years that correlates with investment and recruitment needs.
Strategic planning allows you to think about the short or long-term direction you want your company to take, to determine the steps needed to achieve this and to anticipate events rather than simply reacting to them. The benefit of this type of planning is that it allows you to clearly communicate with employees the company’s objectives and the path to achieving them, and to include employees in the pursuit of this goal.
All businesses, no matter their size, domain or situation, can benefit from this exercise. Even small businesses. Some business owners wrongly believe that only large businesses can benefit from this exercise. Even the smallest investment of your time can increase the chances of your projects’ success.
Strategic planning is more useful during certain periods than others. “In a growth perspective—if the company wants to, for example, acquire another company, buy assets or equipment, enter new markets—strategic planning is essential because if it’s not done, you’re just navigating blindly,” explains Guy Dallaire, Associate Vice-President, Business Sales and Services at National Bank.
So, how can you do this? Here are the steps to follow for any informed strategic planning process.
This type of planning requires that an entrepreneur take a step back from daily tasks. Along with key members of the business, they must remove themselves to reflect on medium and long-term development. Some managers may decide to offer a work retreat for a few days, for example. Being together in the same place, far from the company’s everyday activities, encourages reflection and strengthens the team’s connection.
Generally, this team is composed of key individuals who are responsible for this task with, of course, the full support of the company director. In certain cases, the help of an external consultant who can remain neutral and objective can contribute to the success of this reflective step back.
You must review the company’s mission, vision and values to ensure they are in line with the path you are on. These different elements serve as a compass to help the company stay consistent and on the right track. Organization and strategy must be reviewed accordingly.
Once the foundation is set, determine the company’s strengths and weaknesses, potential business opportunities and possible challenges it could face. With this in mind, you can come up with strategies to solve the problems identified, benefit from these opportunities and achieve the company’s goals.
Guy Dallaire explains that it’s also the time to “analyze the characteristics of current and potential clients, assess supplier accounts, verify that payment terms respect industry standards, examine the company’s productivity and determine if the workforce is sufficient to carry out new projects.” It may also be necessary to highlight “results, the state of the market and competitors,” adds Michel Grenier, General Director of Centre d’entrepreneuriat ESG-UQAM.
“Once you’ve completed this diagnosis, you have to make a list of priorities. You can’t achieve your goals by carrying out 25 projects at the same time,” says Michel Grenier.
Based on their goals, an entrepreneur then chooses the most relevant and important areas of development, establishes the sequence of actions to take and lays out a clear deadline. At this stage, it is a good idea to validate these choices within the company, both with management and even with employees to help secure support for the business project. “This initial round of communications on the direction you plan to take also makes internal mobilization easier,” says Mr. Grenier.
You should also set budgets to calculate necessary investments and expected financial impacts. “Entrepreneurs can sometimes be a bit too optimistic… Strategic planning allows you to establish realistic and achievable budgets,” says Guy Dallaire. “By setting and adhering to a budget, you not only increase your chances of success but also gain the trust of your financial institution.”
Since the plan is used to prioritize action, all that’s left to do is solidify and implement the components. Regular follow ups should be done to make necessary adjustments when considering the evolution of projects, technologies, etc.
For a short-term plan of action spanning a year, follow ups should be done monthly. On the other hand, for long-term planning for projects spanning three to ten years, an evaluation can be done annually. It could also be relevant to use a dashboard for follow ups.
Ultimately, because it promotes informed decision-making, a structured vision and detailed and costed company-expansion projects, strategic planning should be a part of any entrepreneur’s routine. It allows them to maximize their chances of success and stay the course, even in times of turbulence.
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