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Strategic-Management Blog Images

What is the Purpose of Strategic Planning & Why is it necessary?

In an organization, strategic planning may be defined as a process of a company defining its strategy, direction and its decisions with a long-term view of where it wants to be. Strategic planning is executed by strategic managers also known as strategists. These people usually have a business management degree and specialise in strategic marketing management. They may also undergo a strategic leadership program from time to time to fine tune their strategy development skills and keep themselves updated. Strategic planning is the job of the senior management of any organization.

 

If you are strategist, you will find yourself researching on your business and that of your competitors and aligning the findings with the company goals. In this way, you will come up with the strategy of any organization. This will have to be done in discussion with the management of the organization like board of directors, managing director, finance head etc.

 

Strategic planning involves many steps. It includes setting the goals for the organization, finalising the action points that need to be done to achieve those goals and mobilising the resources required to complete the actions. Thus, strategic planning involves both formulation of the strategy and defining its implementation. Strategic planning helps a company in articulating its goals and prepare a roadmap for achieving the goals. It outlines specific and measurable goals for the company. This is its main purpose.

 

Without strategic planning, a company will be at a loss about the direction where they want to go and will not have a clear-cut plan of what to do every year, every month or even every day. Without It will lose the focus that is required to run any profitable business. Thus, strategic planning helps in giving focus and direction to an organization.

 

As a tool, it helps in defining the day to day objectives of any organization and helps them track the progress with respect to the goals. In this way, they can evaluate their progress and make up for any gap in time. They can change their approach if there is something not working or if there is a change in their environment which requires the company to tweak its planning.

 

Since so much depends on the strategic planning, it is important that the leadership puts proper thought and time in this stage keeping in mind their objectives. Strategic planning is based on thorough research and backed with facts and analytics so that the outcome can be quantifiably evaluated.

 

The strategic planning starts with the company’s mission. It is a synthesis of a company’s direction aligned with its vision. It is a broad idea of what the company wants to do and why it exists. A mission is both general and actionable. This is followed by setting measurable and actionable goals. Measurable goals are specific with clear objectives and aided with quantified targets and timelines.

 

Strategic planning is a valuable process as it directly affects the workings of any organization. It makes a company look at all the aspects like the external environment, stakeholders, market dynamics, technology, challenges and opportunities etc. It helps them think at a granular level about the role of each and every employee and their contribution to the organization’s success. It helps employees also see how they fit into the larger scheme of things so that they can evolve themselves as per organizational needs.

 

Strategic planning combines the long-term vision with the short-term activities. It syncs the daily activities to the company’s vision. For example, if a company wants to spread its retail presence in all parts of the country, it can quantify its mission as opening 100 retail stores in the next 5 years. In order to do this, they will need to align the supply chain function, the finance function, the sales and marketing teams, the human resources function etc. so their work can help them achieve this goal in time. Hence, every month all the functions will have targets related to their work that will help the company take steps to achieve the final goal.

 

Strategic planning as a tool also helps in bringing the team together. It aligns them to the larger objective and hence allows them to sync their jobs together. As organizational teams start working in tandem, the processes become more seamless and faster. Mutual cooperation also makes the teams feel motivated and increases their efficiency. Thus, strategic planning gives a shared sense of purpose to individual team members with a shared language to evaluate progress.

 

Strategic planning is the cornerstone of any business. It serves as a tool that makes the workings of an organization transparent to its stakeholders and brings them on the same page. Without strategic planning, the company will be a lost ship with no sense of direction.

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