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 that spells out the “what, why, how, and who” of the actions needed to achieve success.
Warning Signs You Need a Strategic Plan
Good strategic planning is based on hard facts, sound market intelligence, and clear insight. At the core is careful analysis and data-driven decision making, not wishful thinking or shooting from the hip.
The best way to predict the future is to create it.
You may think that you’ve been doing just fine without a formal strategic plan. But, could the business have done better?
How can you be sure that what seemed to have worked in the past will still work in the future? Do you rely on sound decision making and skills or on luck?
Here are some warning signs that your organization may need to develop a strategic plan:
It’s not clear where the business will be in 2 – 3 years, let alone 5.
Without a clear grip on where your business is heading you’re not in charge of the firm’s destiny.
Without a plan, the business has no direction, no roadmap for achieving whatever goals it may have. The business is simply floating with the current created by market conditions. You’ll probably end up somewhere where you don’t want to be.
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? Does it feel you’re in charge of the company’s future?
Without a strategic plan, you lack the foundation for taking the initiative.
Priorities are constantly changing.
As a result of the lack of any strategic direction, priorities are changing all the time. Projects come and go on a whim. Projects don’t get finished on time, if at all.
There is never time to reflect on the key issues and what it will take to make the business successful. Short-term thinking is prevalent and management has adopted an “idea of the month” mindset.
Revenue targets are not going to be met, just like last year.
That revenue target was probably a wild guess, anyway. You’re lacking the tools to set good revenue targets. The sales targets were perhaps no more than inspired guesses, or wishful thinking – not based on real information and sound planning.
A good strategic plan specifies how and where the company is going to make money and includes best-effort revenue forecasts based on insight, not guess-work.
Revenue is not growing 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 market conditions to help identify new opportunities.
Developing a strategic plan reinvigorates the business, wakes up the boardroom, and creates a clear path to the future.
Every opportunity looks as good as the next one.
It’s not uncommon for smaller firms to chase every shiny object that pops up. Due to a lack of vision and focus you don’t know which opportunities to pursue and which ones to ignore. So, to be safe, you decide to go after all of them.
This leads to a dilution of effort and resources. As a result, even the worthwhile opportunities may not pan out because they were not given the right level of attention.
Business strategy is all about focus. Deciding what not to do is just as important, perhaps even more so, as it is to figure out what to focus on.
It is difficult to say “No”.
Saying “yes” to a customer or a project seems so much easier than saying “no”. But, not every customer is the right fit for your firm. Not every project is worthwhile pursuing.
Remember, trying to be all things to all people is not a good business strategy. Strategy is all about focus and making smart choices.
Marketplace trends and their impact are being missed.
The demands of day-to-day activities are so overwhelming that you never have time to stay in touch with what’s happening in the industry, among customers, developments in technology, and so on. You don’t find out what’s going on until after the event.
As part of proper strategic planning key trends in the marketplace are identified and their impact on the business evaluated. This insight can then help to define initiatives to take advantage of positive trends or develop contingencies for negative trends.
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? Strategic planning provides the answers and formulates the actions needed to be successful in the most attractive market segment.
You don’t know which markets to target.
Not all markets are equally attractive. What works for one firm may not work for another. You have to make choices.
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.
No contingency plan for any future threats.
For the same reason that you miss identifying 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.
Strategic planning provides an answer to these questions and gives you the framework for defining your firm’s roadmap.
Managers do not share 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. Any tentative discussions about longer-term goals are considered a waste of time and always pivot back to short-term issues.
A robust strategic planning process engages management in deep discussions about the past, present, and future of the business. As a result of everyone participating in strategic decision making the vision is shared and a higher level of buy-in is achieved.
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 top talent, let alone keep them.
A good strategic plan defines a clear direction and goals. This makes it much easier for management to communicate where the company is heading. Everyone is on the same page.
Does this look like your company?
You probably did not put a ‘check mark’ by each of these warning signs. But, if a number of these symptoms look familiar your business can benefit from strategic planning.
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