Importance of Strategic Planning

strategic thinking2

In the last post titled “To become highly, focus on these activities”, there was a recommendation for us to focus more on activities that are important but not urgent.  Strategic planning is a good example of such activities.  Many of the day-to-day operational struggles we face in our organizations had their seeds sown in the past, when we failed to plan.

Of course, no one can predict the future, everyday has its own operational struggles but the fact remains that many severe operational struggles have, as their origin, a failure from months or years earlier – a failure in strategic planning. In other words, the absence of strategic planning, or poor strategic plans, usually lead to operating nightmares.

Hence the importance of strategic planning in reducing these operational issues cannot be overemphasized. Strategic planning is a process, it is systematic, it is formally documented, it aids decision making, … but most important, the plan is for the organization as a corporate whole. Get it right and the whole organization is impacted, and strengthened towards better long term performance, get it wrong and the whole organization suffers huge setback. It’s that important because of its holistic nature – providing an overall strategic direction to the management of the organization.

Strategic planning is not product planning, production planning, cash flow planning, workforce planning or any of the many of other sorts of planning conducted in today’s organizations. These are designed to plan parts or sections or departments of organizations but are guided and informed by strategic planning. So a strategic plan does not need to spell out detailed unit plans because its importance comes not from the level of detailed instruction it includes, but from the scale, time horizon, and importance of the decisions it embodies.

The business world in which strategic plan is immersed is very uncertain with sometimes chaotic realities. To try to plan in meticulous detail over long periods in the name of strategic planning,  will be quite misguided. It is possible to plan ahead in great detail for short periods of time. It is also possible to plan ahead for very long periods, but it should not be in great detail.

The importance of strategic planning is that it is planning for the whole organization, not for its parts. It is not business planning, although it should inform and shape the business plan. It is not production planning, although it should guide what is produced. It is not workforce planning, although it should  guide the type of people hired. And it definitely is not marketing, even though it guides who to market to and where to market.

It is a process that triggers a passionate  consensus among the top executives or owner in an organization as to the handful of decisions they have to take in order to place their organization in a strong position to face the long-term future. The great impact of the decisions gives strategic planning its importance.

 

One Response to Importance of Strategic Planning

  1. Gab says:

    Very good post! I like the clarification about what Strategic Planning is not. I used to mix things up.

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