Strategic planning is not a new concept to business owners; however, it is an activity that is constantly put on hold by many of us. The tendency to get caught in the details rather than the big picture is a trap. It impacts our growth opportunities, increases our stress, and makes the day longer.
Below are the four ways that planning can increase the success of your business.
Proactivity
Why to do it:
Creating a strategic plan that outlines your company’s position in the market and against the competition helps you focus on your key differentiations. By proactively developing a strategy, you can identify your goals – not over the quarter, or six months – but rather a one year, three year, and five-year plan.
Once you identify realistic goals through understanding past trends, current positioning techniques and key differentiators, you can create a plan working backwards, outlining key tactics to reach your objectives.
The key here, often overlooked, is having an early warning system combined with the initiatives. This will help raise red flags for the company when you start going off the path. The most important part is we recognize the obstacles early so we can prepare how to return to our strategy.
The impact it can have:
These planning techniques increase the strength of our company. We become more durable to complications, allowing our company to either avoid them completely, or if we hit a speed bump our recovery is more streamlined.
Example:
If Blockbuster or Kodak, would have an early warning system, they may have been able to avoid filing for bankruptcy. Rather than analyzing the competitive field, which includes substitutions, both organizations continued moving forward with the same strategy. Neither company identified the “red flags” as they were emerging and eventually, it became too late for the companies to react.
Synchronization
Why to do it:
As the strategy mission, and goals, are communicated throughout the organization, it allows the business to synchronize efforts from the top down. Your company will align operational efforts and tactical initiatives together more effectively.
The impact it can have:
With everyone working together, we create a multiplier effort, increasing our time, labor, and force to a higher degree than if we were working independently. People understand what their role is, how it impacts the organization, and what needs to be done to work towards defined success.
Example:
The airlines are a notoriously difficult industry, yet Southwest has consistently competed and beat its competitors. Southwest focuses on low cost services. As such, its decision making is centered on furthering that strategy throughout the whole organization. From only operating one type of aircraft to reduce maintenance and training costs, providing no frills, and only allowing ticket purchased through their website, Southwest has aligned is strategic mission throughout the entire organization.
Team Empowerment
Why to do it:
Communicating a strategy gives greater confidence to employees. It empowers them to make decisions quicker, saving the company time and money, and inspires them to contribution by generating ideas about how to make the company achieve its success more efficiently. It allows the opportunities for employees to generate ideas that could help the organization achieve their defined success in a more efficient manner.
The impact it can have:
By empowering the employees, business owners are saying “we trust you” and “we know you can do a fantastic job if given the right tools.”
Example:
Amazon is famous for their customer service. They work quickly to help you resolve issues, whether it is a refund, tracking an item, or answering questions, the employees are empowered to help remedy it. Amazon is given the customer service front line, the flexibility and trust to resolve most issues quickly. Could you imagine if for every refund request, question, or issue a person has with Amazon, the employees had to report to their supervisor prior to answering? That would drag the process on for days, perhaps weeks, costing the company money and time. Instead, Amazon provides employees the ability to act, within reason, to the majority of issues customers face.
Team Creation
Why to do it:
The biggest issue we hear from business owners is there is never enough time. Time to plan, time to network, time to do anything but work within the business. This creates an endless cycle of trapping the employer and never allowing them enough time to pop their head above the trees to breath.
The impact it can have:
Planning allow owners to save time and focus on the highest priorities of the business; taking control of the organization rather than letting it control you.
You will find it easier to remove redundancies located within the organization. Projects that have the biggest impact on your plan are implemented first, allowing greater focus on key targets.
Example:
Automating systems as much as possible saves the company time and money, allowing it to focus on the larger projects. Whether it is automating payment of bills, sending out marketing newsletters, or generating reports, these time intense tasks can consume an owner.
Summary of Four Reasons Strategic Planning Can Up Your Business Success
These four main benefits work together to support the main purpose of any for profit business – profitability. Proper planning can eliminate distractions, increase decision making opportunities, and allow you to take control of your environment, all of which in turn saves time and money for an organization.
Disclosure: Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc. a Registered Investment Advisor. Cambridge and Langan Financial Group, LLC. are not affiliated.
