Welcome to the Guarding against Disruption Education Series.
Strategic planning in management is the process of documenting and establishing a direction of your business—by assessing both where you are and where you’re going. So, what is the purpose of a strategic plan? The strategic business plan gives you a place to record your:
- Mission
- Vision
- Values
- Long-term goals
- Action plans
A well-written strategic plan can play a pivotal role in a business’s growth and success because it tells you and your employees how best to respond to opportunities and challenges.
A strategy to be effective must be flexible to ever changing market dynamics. A strategy without the necessary elasticity to unforeseen events, Competition, or changing customer behaviours could easily bring the downfall of any business venture. An organization’s ability to adapt is driven by their approach to strategy: incremental or dynamic.
Recognize your key competitors and outline their value propositions in clear terms.
Incremental strategic planning works on a short-term basis, with leaders systematically plotting a path from one point to another. Incremental plans are often tied to business planning cycles, and lack long-term focus. This makes it difficult for organizations to plan for the years to come.
Dynamic strategic planning outlines a bold long-term vision, and works backwards to a series of incremental actions that need to happen on a weekly or monthly basis. The predominant vision remains consistent, however, the journey there isn’t fixed. Employ competitive and market intelligence activities to monitor the market or rivals and, if it’s necessary to adapt the short-term action plan, do so.
Companies need strategies that enable them to be flexible and adaptable to unplanned difficulties and challenges. Without these strategies, time, money and effort will be wasted trying and potentially failing to handle unexpected competitor situations that arise.
Do a critical analysis of your business’s true sources of differentiation and competitive advantage.
The difference between a team equipped to lead and a team stuck in the moment is the adaptability of their strategic plan. You need to implement and foster dynamic strategic planning — layered onto incremental strategic planning — to succeed, regardless of the way your market evolves.
Incremental Strategic Planning
Incremental strategic planning can be effective in certain scenarios. If you’re trying to get from one point to another and there are multiple stops in between those two points, then incremental planning is focusing only on the step ahead. For your company, it might mean focusing on having a good month or a good quarter, but not necessarily focusing on the greater trends or where a ‘good month’ is trying to get you. Incremental goals are important and should be celebrated; however, the team should be able to tie those achievements back to a larger plan. This gives those incremental wins more purpose and importance.
Incremental strategic planning leaves gaps; there is more to be desired. Employees who have to focus on incremental goals often lose sight of the greater reason for their work. It is easy to become focused on incremental identifiers, but having a greater driving force will produce more targeted results and create more productive and happy employees.
Be aware that majority of the businesses have only a handful of differentiators.
Dynamic Strategic Planning
Adopting a dynamic strategic planning strategy requires you and your leadership team to be able to define the long-term goals and vision of your company. Identify your long-term plan, whether that is a three, five or ten-year plan. Identify how broad based your strategy is, and how beneficial that distance will be to your company’s daily activities. Then, work backwards to identify how the incremental wins that occur each week or each month contribute to your all-encompassing vision.
This big picture helps prepare your company for unexpected changes. You will be able to return to your vision when needed and navigate your immediate action plan to adjust to changing market conditions. Instead of trying to identify where to go next, you can, again, work backward and land on step one with an entire plan in front of you.
Your product can’t be carved in stone either. If the market evolves at a certain rate that makes your product less relevant, then there is always a danger for the company to take financial hits. Thus, there is always a need to stay in the present and keep your company’s pulse on the market with knowledge of competitor plans and methods.
Disrupt yourself before others do. Drop me a line – baskar@baachu.com to discuss your sales growth opportunities, goto market and renewal bid strategies.
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