Harvard Business Review the New Game Plan for Strategic Planning

Exercise y'all know what your organization's strategy is? How much fourth dimension practice you dedicate to developing that strategy each month?

If your answers are on the low side, you're not lonely. According to research outlined in the Harvard Business Review, 85 percent of executive leadership teams spend less than one hour per calendar month discussing strategy, and fifty percent spend no time at all. The research besides reveals that, on average, 95 percent of a company'due south employees don't understand its strategy.

It'due south no wonder, then, that xc pct of businesses fail to meet their strategic targets. Before an organization can reap the rewards of its business strategy, planning must accept place to ensure its strategy remains agile and executable.

Here's a look at what strategic planning is and how it can do good your arrangement.

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What Is Strategic Planning?

Strategic planning is the ongoing organizational process of using bachelor knowledge to document a business concern's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees on the organization'southward goals, and ensure those goals are backed past information and sound reasoning.

Information technology'southward important to highlight that strategic planning is an ongoing process—not a one-fourth dimension meeting. In the online class Confusing Strategy, Harvard Business Schoolhouse Professor Clayton Christensen notes that in a study of HBS graduates who started businesses, 93 per centum of those with successful strategies evolved and pivoted away from their original strategic plans.

"Well-nigh people think of strategy as an result, just that'southward not the way the world works," Christensen says. "When nosotros come across unanticipated opportunities and threats, we have to respond. Sometimes we reply successfully; sometimes we don't. But most strategies develop through this process. More frequently than not, the strategy that leads to success emerges through a process that's at work 24/7 in virtually every industry."

Strategic planning requires time, effort, and continual reassessment. Given the proper attention, it can set your business concern on the correct track. Here are iii benefits of strategic planning.

Related: iv Ways to Develop Your Strategic Thinking Skills

Benefits of Strategic Planning

1. Create One, Forrard-Focused Vision

Strategy touches every employee and serves equally an actionable mode to accomplish your visitor'due south goals.

One significant benefit of strategic planning is that it creates a single, forward-focused vision that can align your company and its shareholders. By making everyone aware of your visitor'southward goals, how and why those goals were called, and what they can practise to aid reach them, you tin can create an increased sense of responsibleness throughout your organization.

This tin can too have trickle-downwards effects. For instance, if a manager isn't clear on your organization's strategy or the reasoning used to craft information technology, they could make decisions on a team level that counteract its efforts. With one vision to unite around, everyone at your organization tin can human action with a broader strategy in listen.

2. Draw Attending to Biases and Flaws in Reasoning

The decisions you make come up with inherent bias. Taking office in the strategic planning process forces you to examine and explain why you lot're making each decision and back it up with data, projections, or case studies, thus combatting your cerebral biases.

A few examples of cognitive biases are:

• The recency effect: The tendency to select the option presented nearly recently because it's fresh in your mind
• Occam'south razor bias: The tendency to presume the almost obvious decision to be the best decision
• Inertia bias: The tendency to select options that let y'all to think, feel, and act in familiar ways

One cognitive bias that may be more difficult to catch in the act is confirmation bias. When seeking to validate a particular viewpoint, information technology'southward the tendency to only pay attention to information that supports that viewpoint.

If you lot're crafting a strategic programme for your organisation and know which strategy you lot prefer, enlist others with differing views and opinions to assistance expect for data that either proves or disproves the idea.

Combating biases in strategic decision-making requires endeavor and dedication from your entire team, and it can make your organization's strategy that much stronger.

Related: 3 Group Determination-Making Techniques for Success

three. Runway Progress Based on Strategic Goals

Having a strategic plan in place tin enable you to runway progress toward goals. When each department and team understands your company's larger strategy, their progress can direct impact its success, creating a top-down approach to tracking key performance indicators (KPIs).

By planning your company's strategy and defining its goals, KPIs can be determined at the organizational level. These goals can then be extended to business units, departments, teams, and individuals. This ensures that every level of your system is aligned and can positively impact your business's KPIs and performance.

It's important to recall that even though your strategy might be far-reaching and structured, it must remain active. As Christensen asserts in Disruptive Strategy, a business'south strategy needs to evolve with the challenges and opportunities it encounters. Be prepared to pivot your KPIs as goals shift and communicate the reasons for change to your organization.

Improve Your Strategic Planning Skills

Strategic planning can do good your arrangement's vision, execution, and progress toward goals. If strategic planning is a skill you'd like to improve, online courses can provide the noesis and techniques needed to lead your team and organization.

Strategy courses tin range from primers on cardinal concepts (such as Economics for Managers), to deep-dives on strategy frameworks (such as Confusing Strategy), to coursework designed to help you strategize for a specific organizational goal (such as Sustainable Business Strategy).

Learning how to craft an effective, compelling strategic plan tin can enable you to not only invest in your career only provide lasting value to your organisation.

Practice you want to formulate winning strategies for your arrangement? Explore our portfolio of online strategy courses and download the free flowchart to decide which is the all-time fit for you and your goals.

About the Author

Catherine Cote is a marketing coordinator at Harvard Business Schoolhouse Online. Prior to joining HBS Online, she worked at an early-phase SaaS startup where she found 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, educational activity, and Mandarin Chinese. When non at work, you can notice her hiking, performing or watching theatre, or hunting for the all-time burger in Boston.

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Source: https://online.hbs.edu/blog/post/why-is-strategic-planning-important