Where do you want your business to be in 2 to 3 years? In five years? Do you have a clear plan for getting there? Every business needs a Strategic Plan – a carefully thought-out roadmap for your business that documents what your goals are, their rationale, and how these goals will be achieved.
Good strategic planning is based on hard facts, sound market intelligence, and clear insight. Careful analysis and data-driven decision making is at the core, not wishful thinking or shooting from the hip.
You may think that you’ve been doing just fine without a formal strategic plan. But could you have done better? The business environment is dynamic and very competitive. Conditions can change rapidly. How can you be sure that what seemed to have worked in the past will still work in the future? Do you rely on management skills or luck?
Warning Signs You Need a Strategic Plan
Here are some common warning signs that your organization may need to conduct strategic planning:
You don’t know where the business will be in 2 – 3 years, let alone 5 years. Without a clear grip on where your business is heading you don’t feel in charge of the firm’s destiny. You’re dependent on where the economy, customers, and the competition take you. You don’t have a plan for the longer term that defines the company’s direction and that defines priorities and actions.
Priorities are constantly changing. You are constantly switching back and forth between priorities. New priorities come, old priorities go. Projects don’t get finished on time, if at all. There is never time to reflect on the key issues and what it takes to make the business successful. Short-term thinking is prevalent.
The organization is reactive. You are always reacting to customers, competitors, and external events. Is the company running you, or are you running the company? Do you feel in charge of the company’s future?
This year’s revenue target will be missed, just like last year’s. That revenue target was probably a wild guess, anyway. You’re lacking the tools to set good revenue targets. You don’t really know what it will take to make the business grow and where the best opportunities are. The sales targets were perhaps no more than inspired guesses, not based on real information, nor the result of clear strategic thinking.
Every opportunity looks as good as the next one. You’re chasing every opportunity that pops up on the radar screen. Due to a lack of vision and focus you don’t know which opportunities to pursue and which ones to ignore. You don’t have a process for identifying and evaluating opportunities. Decisions are made subjectively, from an emotional perspective, rather than through a rational, data-driven process.
The business is stuck and you’re out of ideas. If sales have been flat (or worse) for years and you are out of ideas on how to turn things around, this is the time to go back to basics. A structured strategic planning process takes you through a comprehensive review of the company and business conditions.
Developing a strategic plan reinvigorates the business, wakes up the board room, and creates a clear path to the future.
It is difficult to say “No”. Saying “Yes” seems so much easier, even though that particular customer or that particular project may not be right for your firm. Remember, trying to be all things to all people is not a good business strategy. Corporate strategy is all about focus and making smart choices.
You don’t see trends and their impact. The demands of day-to-day activities are so overwhelming that you never have time to take an external perspective to find out what’s happening in the industry, among customers, developments in technology, and so on. You find it difficult to see key trends and their potential impact on your business in a timely fashion. And by the time these trends do become clearly visible, it may be too late to take full advantage of them, or to develop contingencies.
You don’t really know your customers and why they are buying from you. You basically sell to anyone who will open their checkbook, without fully understanding which customer segments are profitable or unprofitable, how much selling effort is required, and why they are buying from you versus the competition. Which market segments are the best fit for the long-term growth of your business?
You don’t know which customers should be targeted. From a strategic perspective, you may have to abandon certain market segments to focus on those segments that represent the best growth opportunities. Do you know which markets these are?
The organization is ill-prepared to seize new opportunities. You lack the right information and processes for making sound decisions. You don’t see new opportunities until the competition is already well established. And, because of internal communication and slow decision-making, it takes far too long to get anything off the ground in a timely fashion.
There are no contingencies for any future threats. For the same reason that you miss seeing growth opportunities, you fail to see any potential threats to your business. If you did, you could put contingencies in place. But you don’t, and you don’t realize a threat until it’s too late.
The competition is winning and you don’t know how to respond. You’re not quite sure how they’re doing it, but the competition is beating you. You lack information about why the competition is doing so well, and you don’t know whether to fight them or get out of the way.
In addition, lacking clearly defined target markets, it is very difficult to determine who your competitors really are. Your sales and marketing efforts are diluted and not effective.
Managers do not have the same vision. There is no shared vision about the direction of the company. No mission statement and lack of internal communication about long-term goals and objectives or how to achieve them. Discussions about longer-term goals are considered a waste of time and pivot back to short-term issues.
Employees have no idea where the company is going. Your employees are puzzled about what the company is about and where it’s going. Your best employees are leaving and you find it difficult to attract and keep top talent.
Does this look like your company?
You probably did not put a ‘check’ by each of these warning signs. But if you recognize your organization in most of these symptoms then your business needs a strategic plan. It is time to take charge of your company’s future.
Tactics without strategy is the noise before defeat.Sun Tzu - The Art of War