Corporate planning is a continuous process in which a company first defines its philosophy, mission and vision in a strategic plan, and then uses that plan to direct, monitor and manage the business. Strategic planning, detailed operational planning and performance monitoring are the three components of corporate planning.
Studies prove that companies who do corporate planning perform significantly better than competitors who do not use corporate planning. An annual survey by management consultants Bain and Company continually confirms that executives get more value out of strategic planning than any other management tool.
Strategic plans define the long-term vision and once created, plans are typically reviewed every five to ten years. Business departments do detailed planning annually, and operations groups monitor the results throughout the year.
Corporate planning gives companies consistent guidelines for making decisions. When there is a crisis, opportunity or gradual evolution of business circumstances, planning helps a company maintain its strategy.
Many companies rely on consultants to facilitate planning.
It's difficult to assess whether the value of corporate planning offsets the cost. The best measure is to study the performance of companies in relevant industries that have adopted planning.
Laurie Phillips is a freelance writer in Richmond, VA. She has 20 years of experience writing about business management, technology and start-ups for Fortune 500 and professional services firms. Laurie has started four successful businesses, blogs about the economy and journals her rides for motorcycling publications. She holds a Bachelor of Arts in economics from the College of William & Mary.