The purpose of strategy is to determine what the organization is trying to accomplish. The plan is how they will do it.
Thirty years of hands-on business management experience and study of the hundreds of books and articles I have read have led me to understanding why so many businesses struggle or fail. Of the many distressed companies I have worked with, none had a clear strategy or action plan. Not one! The leaders of these businesses were all smart and dedicated people. They worked hard. They knew what they wanted, but not how they were going to achieve it.
Strategic planning is the main tool of the organization’s leadership. It provides a map for guiding the organization from where it is in the present to where it wants to be in the future. Building and developing a strategic plan is the hard work that sets the direction and provides the focus for the organization. Developing the plan is what provides the knowledge and information to grow the business and how to go about doing it. A strategic plan is an inanimate object. Strategic planning, however, is a dynamic process that continuously evolves and spirals forward.
In business, action and result are separated by the dimensions of distance and time. Very often, the cause of the action and its effect are not connected. The unintended consequences of an uninformed decision may never be tied to the actual cause. Good strategy and planning reduce the risk of making uninformed decisions. It is about knowing what you do now in the context of what you are trying to achieve in the future. Planning allows you to draw a thread from the future vision or goal you desire back to the present. To make a decision in the moment you simply ask, “Is this consistent with my strategy?” If you have a clearly thought through intention, there is a better chance that you will achieve your desired results. The better the planning, the more risk is reduced. Risk is inversely proportional to the quality of planning.
Planning ties together thinking, strategy, performance, and results. It helps you know what to do. Planning anticipates the possible future results of actions made in the present, on the long term while maximizing performance in the short term.
When a business is in trouble leaders simply have to know what to do. Without a strategy and plan, how are they to act? If the vision is the organization’s North Star, then the strategy and plan are the GPS that get it there.
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