Why businesses cannot afford to skip strategic planning
Despite global uncertainty
In a typical year, companies often focus attention on planning during the fourth quarter. Coming out of such a turbulent 2020, this process will present business leaders with new challenges as they prepare for 2021.
2020 would have been a difficult year to plan for; from a global pandemic and related economic impacts, to rising social unrest, a presidential election and many personal hurdles we’ve all faced, it is no surprise that leaders may lack confidence in their abilities to anticipate what lies ahead in 2021. While we cannot predict the future, strategic planning can help leaders manage risk and provide an opportunity to be more proactive – a certain need in today’s environment.
When done holistically and with intention, strategic planning can result in a tangible ROI. The process creates a roadmap with clarity and direction to aid decision making and provides a framework to adapt quickly to new challenges. 2020 aside, this is a discipline that companies need to embrace.
Think of strategic planning as a mindset rather than a task
Based on 2020, business leaders may be tempted to save the energy and resources that would go into planning for 2021; however ineffective last year’s plan might feel, this investment in the exercise provides lasting value, especially when unforeseen forces impact your business plan.
The key to success is in shifting our mindsets around strategic planning. Instead of viewing it as a one-time exercise to create “The Plan,” consider strategic planning to be an ongoing activity that you must consistently practice. By developing a mindset to think critically about business activity, areas of risk and windows of opportunity with a regular cadence, business leaders can ensure their plan is activated and engaged throughout the year rather than collecting dust on a shelf.
Setting the Course: Success in business requires a detailed roadmap with many alternative routes
Even in the best of years, we cannot plan for every eventuality, which is why it’s important to plot multiple courses to the same destination to help avoid setbacks from unforeseen impacts.
As a first step to the strategic planning process, leaders must define key levers of the business. What is of central importance? Where is the boundary line between core functions and peripheral activities? Understanding what that core is, and how far it extends given a variety of scenarios, positions leaders with the intelligence they need to respond to the unexpected.
After you’ve drawn the boundaries, move into a process of analysis and questioning to set a clear direction. What is working and what isn’t? Pull key inputs and evaluate your data. Look for opportunities to improve and be intentional in considering what factored into your successes.
Next, conduct visioning sessions, scenario brainstorms and consider hypotheticals to evaluate your position. What happens if your most important asset goes away or becomes irrelevant? Exploring different outcomes during the strategic planning process and envisioning how your business could pivot or react in these various scenarios ensures you have the frameworks in place to course correct quickly as detours, dead ends and other roadblocks present themselves.
Finally, you cannot conduct effective strategic planning in a vacuum. You must involve everyone. The talents of a full team dictate an organization’s success; ideas and perspectives from all levels are needed to inform a successful strategic plan.
The 2021 strategic plan should facilitate a responsive approach
Whatever the next year brings, companies that are disciplined in strategic planning will have the advantage. Some of 2020’s biggest success stories originate with companies that capitalized on the market shift and created new revenue streams with a responsive approach. For example, plastic manufacturers shifted production lines to create masks in response to the increased demand for medical-grade personal protective equipment; with restrictions on in-person dining capacities, restaurant owners shifted their strategy to recoup lost revenue by optimizing and expanding to-go services; primary care medical offices shifted to telehealth appointments as the standard of care for the majority of patients’ needs. These are all examples of the quick adjustments business leaders should be ready to make in 2021 and beyond to take advantage of constant changes in the business environment.
There has never been a more opportune time to embrace innovation and be disciplined in the practice of consistent evaluation. If strategic planning is not a core competency of your business, it’s a good time to prioritize this mindset and establish the framework, processes and rhythm to improve preparedness as we face an uncertain future. In doing so, industry leaders will see with more clarity and improve their ability to adjust to changes quickly – a critical skill when it comes to building a resilient business, minimizing disruptions and navigating all that lies ahead in 2021.
Lisa Gibbs is the chief strategy and branding officer and principal at Dietrich Partners, a nationally recognized professional advisory services firm with expertise in M&A divestiture and integration, program oversight, operational performance and restructuring engagements. She can be reached at email@example.com.