Harvard Business Review Buliding Your Companys Vision Cite You
Do you know what your arrangement's strategy is? How much time do you dedicate to developing that strategy each month?
If your answers are on the low side, you're not alone. According to research outlined in the Harvard Business Review, 85 percentage of executive leadership teams spend less than one hour per month discussing strategy, and 50 percent spend no time at all. The research likewise reveals that, on average, 95 percent of a company's employees don't understand its strategy.
Information technology's no wonder, then, that 90 percent of businesses fail to meet their strategic targets. Before an organization can reap the rewards of its concern strategy, planning must have place to ensure its strategy remains agile and executable.
Here's a await at what strategic planning is and how information technology can do good your organization.
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What Is Strategic Planning?
Strategic planning is the ongoing organizational process of using available knowledge to document a concern's intended management. This process is used to prioritize efforts, effectively allocate resource, align shareholders and employees on the organisation'due south goals, and ensure those goals are backed by data and sound reasoning.
It'southward important to highlight that strategic planning is an ongoing procedure—non a 1-time meeting. In the online course Disruptive Strategy, Harvard Business Schoolhouse Professor Clayton Christensen notes that in a report of HBS graduates who started businesses, 93 percent of those with successful strategies evolved and pivoted abroad from their original strategic plans.
"Most people think of strategy as an issue, but that's non the way the globe works," Christensen says. "When we run into unanticipated opportunities and threats, nosotros take to answer. Sometimes nosotros answer successfully; sometimes nosotros don't. But virtually strategies develop through this process. More than often than non, the strategy that leads to success emerges through a procedure that's at work 24/7 in almost every industry."
Strategic planning requires time, effort, and continual reassessment. Given the proper attending, it tin can set your business concern on the right track. Here are three benefits of strategic planning.
Related: 4 Means to Develop Your Strategic Thinking Skills
Benefits of Strategic Planning
i. Create One, Frontwards-Focused Vision
Strategy touches every employee and serves as an actionable way to attain your visitor's goals.
One significant benefit of strategic planning is that it creates a single, forward-focused vision that tin can marshal your visitor and its shareholders. By making everyone enlightened of your company'due south goals, how and why those goals were chosen, and what they can do to help reach them, y'all can create an increased sense of responsibility throughout your organisation.
This can also accept trickle-down effects. For instance, if a manager isn't clear on your organization's strategy or the reasoning used to craft it, they could make decisions on a squad level that counteract its efforts. With one vision to unite around, everyone at your system tin can act with a broader strategy in mind.
2. Depict Attending to Biases and Flaws in Reasoning
The decisions you make come with inherent bias. Taking part in the strategic planning procedure forces y'all to examine and explain why you're making each determination and back it up with data, projections, or instance studies, thus combatting your cognitive biases.
A few examples of cognitive biases are:
- The recency outcome: The trend to select the choice presented well-nigh recently because information technology'southward fresh in your heed
- Occam'southward razor bias: The tendency to assume the nearly obvious decision to be the best decision
- Inertia bias: The tendency to select options that allow you to think, feel, and deed in familiar ways
One cognitive bias that may be more difficult to take hold of in the act is confirmation bias. When seeking to validate a item viewpoint, it'southward the tendency to only pay attention to information that supports that viewpoint.
If you lot're crafting a strategic plan for your organization and know which strategy y'all prefer, enlist others with differing views and opinions to help look for information that either proves or disproves the idea.
Combating biases in strategic decision-making requires effort and dedication from your entire team, and information technology can make your organisation's strategy that much stronger.
Related: 3 Group Determination-Making Techniques for Success
iii. Track Progress Based on Strategic Goals
Having a strategic programme in identify tin can enable you to track progress toward goals. When each section and squad understands your company's larger strategy, their progress tin directly impact its success, creating a top-down approach to tracking fundamental performance indicators (KPIs).
By planning your visitor'south strategy and defining its goals, KPIs can exist adamant at the organizational level. These goals tin can then be extended to business units, departments, teams, and individuals. This ensures that every level of your organization is aligned and tin positively impact your business's KPIs and performance.
It's important to call up that even though your strategy might exist far-reaching and structured, it must remain agile. As Christensen asserts in Disruptive Strategy, a business organisation'south strategy needs to evolve with the challenges and opportunities it encounters. Be prepared to pin your KPIs as goals shift and communicate the reasons for modify to your organization.
Improve Your Strategic Planning Skills
Strategic planning tin benefit your organization'south vision, execution, and progress toward goals. If strategic planning is a skill you'd like to amend, online courses tin can provide the noesis and techniques needed to pb your team and organization.
Strategy courses can range from primers on fundamental concepts (such as Economics for Managers), to deep-dives on strategy frameworks (such as Confusing Strategy), to coursework designed to help y'all strategize for a specific organizational goal (such as Sustainable Business Strategy).
Learning how to arts and crafts an effective, compelling strategic plan tin can enable you lot to not only invest in your career but provide lasting value to your organisation.
Practice you desire to codify winning strategies for your system? Explore our portfolio of online strategy courses and download the free flowchart to determine which is the best fit for you and your goals.
About the Author
Catherine Cote is a marketing coordinator at Harvard Business concern Schoolhouse Online. Prior to joining HBS Online, she worked at an early-stage SaaS startup where she plant her passion for writing content, and at a digital consulting agency, where she specialized in SEO. Catherine holds a B.A. from Holy Cross, where she studied psychology, education, and Mandarin Chinese. When non at piece of work, you tin discover her hiking, performing or watching theatre, or hunting for the best burger in Boston.
Source: https://online.hbs.edu/blog/post/why-is-strategic-planning-important
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