Although many business owners have either heard of the concept or have actually formalized a Strategic Plan, many owners and executives still have a hard time describing the overall purpose and benefit of having a well-defined strategic plan.
While each organization is different on what the final outputs of a strategic plan, I have seen the following 4 outcomes consistently rank as the top benefits of having a strategic plan.
1. Direction and goals
In the absence of a strategic plan, a business is left to just simply operate without a sense of direction or defined goals for growth. If you don’t know where you are going, how will you know if you have arrived?
By having a defined direction, you can better ensure that all resources of the company are working together to move the organization in a defined direction. This alignment of resources is absolutely critical, especially in larger organizations, to ensure that resources are working efficiently towards the same general purpose.
2. Manage risk that comes with growth
While growth is exciting and desirable for any company, it is always accompanied by the introduction of new and increasing risk exposures to the organization. These risks, left unchecked, are usually the pitfalls that keep a company from succeeding on its growth initiatives, or worse, jeopardize the future of the company. A strategic plan welcomes those risks, by proactively identifying and creating mitigation plans and strategies to facilitate.
3. Agile organizations
Business environments are being disrupted and transformed in all industries across the globe. Strategic plans allow for organizations to be more agile, first through the identification of disruption risks, and through alignment of resources more quickly responding.
4. Growth and Profit
Growth and increased profits are desirable for almost any organization. The ultimate output from a strategic plan should be the identification of the opportunities, and actions required to take advantage of those opportunities.
Conclusion
Organizations that have a strategic plan are able to align resources to move a company in a defined direction, manage risks that come with growth, become more agile and ultimately grow and become more profitable.