Why Is Strategic Planning Important to an Organization?
Strategic planning is important to an organization because it provides a sense of direction and outlines measurable goals. Strategic planning is a tool that is useful for guiding day-to-day decisions and also for evaluating progress and changing approaches when moving forward. In order to make the most of strategic planning, your company should give careful thought to the strategic objectives it outlines, and then back up these goals with realistic, thoroughly researched, quantifiable benchmarks for evaluating results.
Strategic planning starts with defining a company mission. A mission is important to an organization because it synthesizes and distills the overarching idea linking its practical strategies, enabling management and employees to align the specifics of their actions and decisions with a clearly defined vision and direction. Define your strategic mission in a way that is broad enough to guide both management and employees, and narrow enough to focus their efforts. "To help humanity," is too broad a mission, even for a nonprofit. "To feed the hungry by connecting home gardeners with food banks," is a mission that is both general and actionable.
The nuts and bolts of the strategic planning process are expressed in measurable goals. Measurable goals set specific, concrete objectives expressed in terms of quantities and timelines. Measurable goals are important to an organization because they enable managers and employees to evaluate progress and pace developments. "To grow substantially during the next few years" is not a measurable goal, but "To increase sales by 30 percent during the upcoming year" provides a concrete objective to be achieved in a specific time frame.
Strategic objectives are of necessity based on the best information you have at the time and your most realistic assessments of what your company can achieve. Organizations also benefit from building a stage into the strategic planning process that involves evaluating goals and progress after an elapsed period of time in light of the company's success in achieving these goals and developments that have arisen in the interim. For example, if you plan to grow your hardware store business 20 percent during a specific year, but a formidable competitor opens a superstore down the road, you'll probably redefine your objectives and evaluate progress in terms of preserving market share.
The process of strategic planning can be as important to an organization as the results. Strategic planning can be an especially valuable process when it includes employees in all departments and at all levels of responsibility thinking about how their activities and responsibilities fit into the larger picture, and about their potential contributions.