In my 25 plus years as an independent business consultant specializing in strategic planning I have developed or accumulated more than 25 definitions of “What is Strategic Planning?” The following are the five that have proven to be the most useful, particularly for small and medium sized companies.
1. Strategic planning is the process of focusing a company’s efforts on understanding its current situation, developing goals, and creating goal oriented action plans.
This is a good illustration of the ready, aim, fire approach – systematically gathering the right information then analyzing the information to form goals and the ways and means for achieving them.
2. Strategic planning is concerned with proposed actions which affect the fundamental character of the business; the products it offers, pricing, quality, distribution, and production.
This illustrates a more fundamental approach that zeros in on answering the question “what business are we in?” It takes you back to square one and is useful when management is concerned with the overall direction of the business and its long term viability.
3. Strategic planning pertains to how a business allocates its resources to achieve its goals or objectives.
Sometimes business mis-allocate their resources. Many small companies under-allocate resources to marketing and new business development and therefore struggle to grow. This approach to strategic planning can put a spotlight on this weakness so that corrective action can be taken.
4. Strategic planning is positioning a business to optimize its performance for the benefit of the owner.
In some small and medium sized businesses the owner ends up working very hard for modest compensation. By taking a step back and doing some planning, owner compensation can be improved. In the end it’s not how much you take in that counts, it’s what you’re able to take out.
5. Strategic planning is a process for developing realistic goals and selecting tactics to achieve these goals.
This is a straightforward short term approach to strategic planning involving setting goals and pursuing them. For many companies, this is all that is needed to revitalize the business and get it onto a profitable growth path.
Because not two companies are alike, strategic planning is not a one size fits all proposition. At Beta Consulting we approach each strategic planning assignment with fresh eyes so as to develop the right approach for that client.