Strategic management can make or break a company. Without a strong strategy, many companies will falter. Leaders who have a strong vision and grasp of what a company needs will always have a leg up on the competition. Setting business goals and tying them to a company's vision are critical when developing a roadmap to growth. As a company grows and changes, a strategic plan can provide benchmarks and gauge success.

What Is Strategic Planning?

Consider a strategic plan as a blueprint for success. Whether an outside consultant is brought in to facilitate this process for a company or it is done internally among leadership, a strategy is a long-term plan to help you manifest your vision. It can include: goals and objectives; a mission statement; what services and products are being provided; target customers and clients; and plan revenue earning. A strategic plan should always be written as a living, breathing document. Changes should be encouraged as the company moves forward and evolves, based on when you reach critical business benchmarks.

Why Strategic Management?

Strategic management is critical to staying competitive and standing out in a crowded marketplace. A good strategy helps management prioritize activities within the company and how resources get spent. It is a systematic way to execute a company's initiatives and goals under the guidance of its leadership.

Peter Drucker, an Austrian-born American business management consultant and a significant thought leader in the area, believes that once a business has defined its goals and objectives, the owners should define the metrics that will be used to gauge progress, and should ensure they're used equally across all levels of management.

But strategic management isn't all theoretical; it is a practical way to implement a company's decisions, vision and goals. For strategic management to be successful, the organization's leaders must have a thorough understanding and analysis of their company. A SWOT analysis should be conducted (strengths, weaknesses, opportunities and threats) to optimize the company's strengths and minimize the organizational weaknesses. It's also crucial for leaders to know what opportunities are on the horizon and how to address any threats that may be lurking.

Create the Perfect Plan

Strategic planning should be reflective of the company's beliefs and personality. And, while many leaders do spend money on creating such a plan, once it's done, it tends to be forgotten. Create a plan that is realistic and relevant and that provides a real service to your organization. No matter what industry your company is in, business is always changing. So while leaders may come and go, a well-executed plan could very well keep your business functioning like a well-oiled machine. By keeping your plan tied to the vision of your company, you'll be much more likely to reach your ultimate business goals.