“THE IMPORTANCE OF STRATEGY”
Often established businesses achieve a level of success and then stall. There are many reasons why this can occur. Usually these reasons include lack of a clear and comprehensive plan and lack of effective implementation. Other factors can be resistance to change on the part of both management and staff, lack of knowledge and skills to manage change, ineffective organizational structures, out of date business processes, poor monitoring and review mechanisms, lack of accountability, poor cross-functional teamwork.
The lack of a well understood, inspiring strategic plan directly impacts a company's work force. Employees who sense aimlessness within an organization may suffer morale problems because, as far as they are concerned, the future is uncertain, unpredictable and out of control. These depressing conclusions can only be interpreted as a threat to employment, which adversely affects productivity.
If a strategic plan doesn't help focus energy and guide staff toward a shared goal in an ever-changing world, then it’s not doing its job. Creating an effective and workable strategic plan takes effort and discipline. The results, however, are well worth the effort because a good plan, properly implemented, will drive future organizational success through a series of well thought out, fundamentally sound set of business decisions.
In any organization, certain "nay-sayers" not only question the value of strategic planning, but may actively deride it. If this attitude becomes part of the corporate culture, it can prove deadly. Watch out for short-term thinking, leadership fatigue, complacency and deeply ingrained traditional outlooks.
The essence of strategic planning is the establishment of a direction for the company (values, vision and goals) and a decision about how to get there (the strategy, key strategic initiatives and detailed action plans). The strategy is critical. It essentially defines how the company is going to compete – what it will do that will differentiate it from competitors in order to win new business, retain existing business and deepen customer relationships.
The development and implementation of a strategic plan is a critical business activity:
¨ Provides Direction and Action Plans
It establishes in a clear, concise and strategically sound way a) the direction for the organization and b) how this will be achieved, including detailed action plans.
¨ Prioritizes and Aligns Activities
Strategic planning is about making choices, establishing priorities, allocating scarce resources to strategic initiatives and coordinating to achieve desired results.
¨ Defines Accountabilities
It defines clear lines of accountability and timelines for achieving expected results on the agreed strategic initiatives.
¨ Enhances Communication and Commitment
In clarifying the vision and accountabilities, the strategic plan increases the alignment of all organizational activities and fosters commitment at all levels.
¨ Provides a Framework for Ongoing Decision Making
Since all decisions should support the strategy, the strategy and the strategic initiatives are the reference point for decision-making.
Although the strategic planning process culminates in publication of a plan, it doesn't end there. Strategic planning is an ongoing business process. To be truly successful, it must be integrated into the continuous management process and become part of the fabric of how the business operates.
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