The importance of strategic planning is that your business can operate the most effectively when everyone is working in the same direction. Think of your business as a longship with each of your teams at a different oar. A clear strategic plan is a drumbeat that keeps your teams rowing in unison. Without that rhythm, or if it is confusing, your teams will pull in different directions. You’ll drift off course, and if that goes on for too long, you’re sure to go under.  

Unfortunately, this is the reality for most businesses. According to Harvard Business School, 90% of businesses fail to meet their strategic goals. A lack of clear benchmarks, measuring methods, and communication with stakeholders all contribute to these shortcomings.

There is a silver lining, though. Once you improve your strategic planning process, you’ll have a significant competitive edge over the 90% of businesses that lack direction. You don’t have to reinvent the wheel, either. At Elate, we’ve done that for you. Our dynamic strategic planning platform provides you with the tools and guidance to build, execute, and continuously improve your roadmap.      

In this guide, we’ll get to the root of what is strategy and its importance, so you can lead your business into a more cohesive and productive future. 

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What Is Strategic Planning?

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Strategic planning is the process a business goes through to define their overarching goals and allocate resources to achieve them. Thorough strategic plans don’t end after planning, however. They are dynamic documents that are reviewed and updated regularly to provide guidance for how to execute steps for improvement, measure success, and adjust accordingly.  

You may be familiar with some of the common frameworks for guiding your strategic planning:

• Blue Ocean Strategy: Seeks to identify market opportunities with little to no existing competition
• Value, Rarity, Imitability, and Organization (VRIO): Compares the value your products or services provide compared to those of your competitors
• Objectives and Key Results (OKRs): Defines metrics for success
• Political, Economic, Social, and Technological (PEST) Market Forces: Analyzes how external forces affect your opportunities
• Strengths, Weaknesses, Opportunities, Threats (SWOT) Analysis: Identifies your current position in the market and what tools you can use to improve it 

Implementing these frameworks can help you decide which goals are worth pursuing, how to achieve them, and if what you’re trying is actually working or not.

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What Is the Purpose of Strategic Planning?

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The purpose of strategic planning is to make your business more effective and efficient by helping everyone to work toward the same high-level goals, instead of only worrying about their own day-to-day tasks. Depending on your organization’s specific goals, your strategic plan will lead you in different directions than other businesses. Some examples of strategic goals include:

• Growing brand recognition
• Expanding into a new location
• Increasing customer satisfaction
• Attracting more investors
• Developing new products or services

Whichever goals you choose to pursue, Elate makes it radically simple to stay on the right track. With intuitive forecasting tools, you can analyze past performance to find opportunities for improvement and supercharge results going forward. 

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Project Management vs. Strategic Planning

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The key difference between strategic planning and project management is the scope and specificity of your goals. Strategic planning focuses on higher-level, long-term goals such as expanding into a new market or overtaking a key competitor. Project management tackles specific steps toward achieving those goals. For example, you might create a marketing campaign that directly compares your latest product to your direct competitor’s.

It’s crucial to differentiate the two tasks because each provides unique value. Strategic planning provides an overarching roadmap that guides each of your projects, while individual projects actually move the needle. If you let your strategy get too in the weeds of each project, no one in your organization will understand the bigger picture. Teams won’t be coordinated in their efforts, and results will suffer. 

With Elate, you can create a simple, unified strategic plan. Your vision will also be easy to update and share with team members, so everyone can always be working toward the same goals.  

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What Is the Importance of Strategies and Planning?

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The importance of strategic planning in an organization is that without it, you’ll be wasting precious resources while your competitors who are better aligned leave you behind. Your business will be faced with obstacles—both internal and external. Having a strategic plan in place helps you overcome these challenges in stride to outperform your competition.  

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What Are the Benefits of Strategic Planning?

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The benefits of strategic planning can range from increased market share and profitability to improving operational efficiency. One of the key advantages of strategic planning is that you can tailor it to meet your specific needs. Do you want more consistent business throughout the entire year? Would you benefit from proactive decision making? Are you excited about putting customers first? With the right plan in place, you’re that much closer to achieving your goals.  

The 5 Benefits of Strategic Planning

1. Increases Market Share and Profitability: Your strategic plan can make it easier to achieve specific goals, including increasing profitability. But you can also see this benefit even when it isn’t your primary objective. For example, if your goal is to expand into a new region, doing so successfully will also improve your bottom line. Strategic planning also helps keep you ahead of your competition. Using the Blue Ocean Strategy, you could identify a new market to innovate in, connecting with customers before any competitors enter the space. Using the VRIO framework, you can see why a customer might choose a competitor’s offerings over your own, so you can make adjustments and win more business. 

2. Establishes Unified Sense of Direction: Having a clearly-defined and communicated vision makes it easier for everyone in your company to work toward the same goal. Without an overarching plan, team leaders will often focus only on the outcomes of their own projects and not on how they affect the company as a whole. For example, if you want your business to take a customer-first approach but don’t communicate that to your engineering team, they may focus on making improvements they think are important but add little value to your customers. That means a lot of resources are used for objectives that yield few returns. This may seem like a straightforward concept, yet 95% of employees don’t understand their company’s strategic plan. 

3. Improves Operational Efficiency: A strategic plan prioritizes your goals. Working toward objectives that will yield the highest return on your efforts will propel your business forward faster than achieving benchmarks that have little impact. For example, if you want to attract more customers, each department will interpret this in a different way. Should you lower prices, improve quality, ramp up advertising, or create a rewards program for loyal customers? You could end up with a finance department that wants to reduce the cost of production while your product engineers work on higher quality that requires more expensive materials or tools. Instead, you could set a much more specific goal, such as increasing brand recognition. This will make it easier for different departments to work in unison rather than pulling in opposite directions. 

4. Enables Proactive Decision Making: “An ounce of prevention is worth a pound of cure” is a cliché because it’s true–in medicine and in business. It often takes far less resources to solve a problem early on or avoid it altogether than to let it grow and try to contain it later. During your strategic planning, a SWOT analysis can help you identify challenges, both internal (weaknesses) and external (threats) before they require drastic measures. For example, you may focus on a competitor’s new product launch. This would be a potential threat because customers could choose to shop with them instead of you. Instead of waiting until you lose customers to that competitor, you could find ways to become more appealing. You might aim to increase quality, come up with a more convincing marketing campaign, or work on a new release to outdo the improvements made by your competitor. 

5. Builds Resiliency: In business, you have more external worries than just what your competition is up to. New laws, advancing technology, and changing social expectations can throw a wrench in your plans. However, you don’t have to let these changes surprise you. Incorporating a PEST analysis into your strategic planning prepares you for how these forces can impact your business landscape. How will new labor laws impact the cost of your supplies? What about public opinion regarding data collection and use? Is your business seen as environmentally responsible? Are you vulnerable to disruptions caused by advancements in technology, or are you in a position to leverage new tools?

At its core, strategic planning puts you in charge of your business’s path—not competitors, not the government, and not the shifting of public opinion.  

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What Is the Strategic Planning Process? 

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While the strategic planning process can seem overwhelming, you can break it down into three manageable steps: build, execute, and review. 

1. Build Your Plan

This is when you set your objectives and build alignment. It’s important to have stakeholders from multiple departments involved so everyone can offer their perspective into what’s important and understand how they’ll be able to help. A strategic plan should include both threats and opportunities. Remember the frameworks from earlier? These will help you understand your current position so you can chart the best path forward.  

2. Execute Your Plan

Now it’s time to roll out your plan across multiple teams and departments—all in unison. During this stage, it’s important to drive engagement and collaboration as different teams focus on their individual projects. To ensure everyone is still keeping the common goal in mind, it helps to regularly update teams on progress so employees can see that their efforts are making an impact. In fact, using a strategic planning software like Elate allows teams and individuals to easily report metrics. 

3. Review Your Plan’s Success

Don’t save the review stage for after you’ve met your goal or failed to do so. You can receive and apply feedback during the execution stage of your plan. To help overcome roadblocks as they happen (or even before), provide your team leaders with regular opportunities to report progress and challenges. 

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What Are the Most Important Features of Strategic Planning Software?

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Strategic planning software can make a world of difference when developing a clear plan—if it has capabilities to improve your building, execution, and review stages. Here’s a breakdown of what your software should feature to make each step seamless:

• Build: Single view planning, intuitive framework, ability to tag relevant team members across departments 
• Execute: Integration with your workflow software, ability to prioritize objectives and metrics, reporting assistance, real-time data
• Review: Built-in review cadence, custom reporting and date filters   

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Elate: Strategic Planning Made Radically Simple

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The answer to “Why is strategic planning so important?” may be different for each organization, but you don’t have to develop your plan in isolation. With Elate’s groundbreaking software, you can segment your big plans into actionable objectives. The best part? It’s easier than ever for your whole team to participate in planning, update their progress, check on objectives, report challenges, and brainstorm solutions. Here’s how:

• Simple sharing tools allow you to communicate your company’s vision with all team members 
• Integrations with common workflow tools like Slack and Microsoft Teams to give updates in real-time
• Built-in reporting tools to encourage consistent, accurate updates and enable changes in direction

Are you ready to choose your direction and pursue your goals like never before? See Elate in action and contact us for a demo today.