Creating and sustaining a valuable business enterprise is a difficult task under the best of circumstances. Strategic planning is a key to facilitating superior performance and value creation, yet businesses tend to ignore strategic planning, often relying on seat-of-the-pants management and/or business folklore. Even businesses that begin the strategic planning process get distracted by the latest crisis and put planning on the back burner. As Benjamin Franklin said,
“If you fail to plan, you are planning to fail”.
Mark Thompson and Brian Tracy in their book Now…Build A Great Business!, note that…
“people and organizations with clear visions, values, and plans tend to accomplish far more and do it faster than their competitors. When everyone in your organization is united by a clear strategic vision of your desired future state, you create a powerful mental synergy that will move you toward your goals and move your goals toward you”.
Thompson and Tracy cited six key questions that should be asked when creating or revising business strategy:
- Where are you now? What is your current situation?
- How did you get to where you are today?
- Where do you want to go from here?
- How do you get from where you are today to where you want to be in the future?
- What obstacles will you have to overcome? What problems will you have to solve?
- What additional knowledge, skills, or resources will you require to achieve your strategic objectives?
The answers to these questions are critical input to strategic plans that identify the vision, mission, goals and objectives of a business and how resources will be managed to achieve those objectives. Management of resources is facilitated by action plans, milestones, accountability and time sensitivity.
Management theorist Peter Drucker defines strategic planning as…
“…the continuous process of making present risk-taking decisions systematically with the greatest knowledge of their future; organizing systematically the efforts needed to carry out these decisions; and measuring the results of these decisions against the expectations through organized, systematic feedback”.
Strategic planning is the alpha and omega of business processes and performance. All business activity should flow from the strategic plan. Effective management and performance of resources, including human, financial, technological and time, are a function of the strategic plan. Profitability and value creation are facilitated by a strong, flexible and well executed strategic plans.
We have been inundated with statistics regarding business failures at every stage of growth of the business. There are those who credit factors other than planning to the success of their business. However, as with anything in life, one must avail themselves of all relevant resources to provide the best opportunity for success. A critical resource is preparation, including education, experience and planning. An effective strategic plan is not a guarantor of a viable, valuable business enterprise, but it can better facilitate the realization of that viability and value, and it is clearly superior to reliance on seat-of-the pants management or folklore!
No time like the present to put together your business strategy! Greater Phoenix SCORE holds workshops regularly to help you no matter what stage your business is in. Click here for the schedule!
About the Author:
Michael is a seasoned business executive with extensive experience in finance, planning, operations and marketing with both large corporations and small businesses. He served as an adjunct professor of entrepreneurship at a Maryland community college and an adjunct professor of business in the MBA program of a Maryland university. Michael received his BA in Economics and his MBA in Finance from Columbia University.