Taking your business to the next level

In today’s turbulent economic environment, many business would do well with a relook at the current way they are running their businesses.
What a better way to do this than having a strategic plan. Some organisations don’t embark on this road because they are intimidated by the process of coming up with a strategic plan.

Strategic planning can be defined as a formalized, documented organisational management process used to analyse its current situation, set goals/objectives, and to channel resources and energy to achieve these objectives and maintain an organization’s competitive advantage while meeting stakeholder expectations.

Many organisations have however questioned the importance of having a strategic plan.
Those sceptics should however take note of the statement that says, “If you don’t know where you are going, you are certain to end up somewhere else.” If you don’t take time to strategise about your business it will definitely not perform better than its peers.

There are a number of benefits that accrue with strategic planning. Strategic planning allows organizations to be proactive rather than reactive.
The process of preparing a strategic plan helps an organization to analyse its future and thus prepare for any eventualities.
The company will be able to anticipate certain unfavourable scenarios before they happen and take necessary steps to avoid them.

It’s important, if an organisation is to perform better than its competitors, that it is proactive rather than always reacting to situations as they arise.
Having a strategic plan helps in setting or defining the direction in which an organization should go. The process of strategic planning helps in setting realistic goals and objectives that are in line with its vision and mission.

An organisation can therefore evaluate its success against these objectives and can use the same to measure performance and ensure efficient decision-making. A strategic plan guides management in resource allocation and utilisation. It helps in ensuring that the activities in each function or department are aligned to achieve the main organisational goals.

The process of strategic planning also gives valuable insights into market trends, consumer segments the company intends to go into or is already operating in, the competitive environment as well as any product and service offerings which may affect its success.
Attending to these factors will ensure the growth and profitability of the business.

If a business is to survive the ups and downs experienced in business it’s advisable to come up with a robust strategic plan that can be used as a roadmap.

There are steps involved in coming up with a good strategic plan. Most strategic plans are typically looking at 3 to a 5 year horizon although some industries might look at more than these periods especially organisations that provide infrastructure, water and electricity will have to have a longer time horizon.

A formal process of developing a strategic plan is a multi-step process which builds each next step off the other.
The first step would be writing a vision statement that gives the organization a picture of what it hopes to become or achieve in the future.

An organisation needs to have a clear idea as to what it wants to achieve before it comes up with how it has to achieve it. The vision statement gives leadership and employees a common shared goal.
The next step would be to write a mission statement which is an explanation of why an organization exists and the path it will take to achieve its vision.
The mission statement describes what the organization is passionate about and why it exists.
The third step would be to perform a gap analysis that helps the organisation in identifying the gaps between its current state and its vision.
This step involves gathering information about the organisation and its environment.
The main focus of the analysis would be to understand the needs of the business as a sustainable entity, its strategic direction and identifying initiatives that will help the business grow.

During this process you have to critically examine any external or internal issues that can affect the organisation’s goals and objectives.
At the end of this process you should be able to come up with the key strengths and weaknesses of your organization as well as any threats and opportunities that may impact the performance of the organisation.

After the gap analysis you should write SMART goals for the next 3 to 5 years. Goals should be specific, measurable, achievable, realistic and time-bound.

For goals to be effective they need to be cascaded down to the department and ultimately the employee level.
This means identifying who will carry out the required tasks to achieve the objectives.

The last step will be to come up with strategies to achieve these goals and implement and monitor the goals at least on a quarterly basis.
This is the a very crucial step because if strategies are not drawn and monitored regularly the whole planning process is of no effect.
It’s also important that the strategic plan is reviewed annually and updated to reflect current market conditions and changes to ensure that goals are focused on the current state of the organization.

l Stewart Jakarasi is a business and financial strategist and a lecturer in business strategy (ACCA P3) and advanced performance management (ACCA P5).  He provides advisory and guidance on leadership, strategy and execution, preparation of business plans and on how to build and sustain high-performing organisations.

For assistance in implementing some of the concepts discussed in these articles or in strategic planning facilitation please contact him on the following contacts: sjakarasi@gmail.com or WhatsApp +266 62110062.