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Why is strategic planning important for any organization?

Updated: Sep 24, 2022

Regardless of the size of their company or how many years they have played in the market, organizations have achieved success through well thought out strategic planning. Strategic planning must be important for any organization if it wants to be successful. When done correctly, it provides a sense of direction to the entire company, regardless of title, position or hierarchy, and outlines clear and measurable goals. It will also help you allocate your very limited resources to carry out those initiatives and achieve those goals. Why is a strategic plan so important? The purpose of Strategic Planning is to guide day-to-day decisions and also to assess progress and change approaches moving forward, particularly when leadership is unable to participate in the decision-making process. It is how employees will find guidance in making those decisions. To get the most out of your strategic planning, your business needs to think carefully about the strategic goals that you outline in your vision, mission, and also set clear, measurable goals. Let's dive a little deeper into how Strategic Planning will help your organization.


Purpose of Strategic Planning


Strategic Planning provides a focus for your efforts and your limited investments. It gives your team something to get together and get excited about. It should also help you identify the risks and opportunities you will face in the market and then plan for those risks or exploit those opportunities. Avoid distractions. It is very important to set a clear direction and stay the course. You don't want to switch and follow strategies that change every year. That said, the main purpose of Strategic Planning is to connect the organization's mission and vision by addressing the following three questions:


  • What is our purpose? (Mission)

  • What are we trying to achieve? (Vision)

  • How are we going to get there? (Plan)

Gives everyone in the organization something to work for, a purpose Strategic planning gives everyone in the organization a sense of purpose by establishing a clear mission statement and measurable goals and objectives to work toward. It will be the beacon your people navigate toward, and every effort they make must support that vision. Describes a clear path for your organization A well-thought-out strategic plan defines the best path for your organization to take in the next 3-5 years and should help guide your organization through the challenges ahead. Provides everyone with focus When strategic planning takes place, your organization will come up with SMART goals and objectives and help everyone focus their efforts on achieving them. Many goals have been left out during planning sessions because they have not been strategic to the success of the organization. Your organization must be empowered to stay on track and avoid distractions for the critical goals that have been set, creating a clear sense of focus for success.


The strategic planning process


For Strategic Planning to be carried out in a meaningful way, it must include employees from all departments and at all levels of responsibility. With that broad representation, you'll ensure everyone understands how they fit into the bigger picture and how they can contribute to the success of the company. The Strategic Planning process should be as important to any organization as the results themselves. There are some commonly used tools and steps that can help and guide you through the planning process. Remember, you need to set clear direction and that starts with articulating the company's vision, mission and goals. The next step is to have a meaningful conversation about what your company is really good at. Those are your core competencies and possibly what sets you apart from your competitors, perhaps what makes you unique. But the key to the process is to identify and filter that information.



You will be evaluating by analyzing the proposed initiatives that you are going to follow or not and you will define the objectives of your company. Remember that you will need to stay away from distractions and focus, so you will need to learn how to say NO as a team. To do so, you'll use tools like a two-by-two matrix to assess which opportunities the company should take advantage of and which it should avoid. Strategic planning is all about focus and you will have your list of initiatives from which you will identify the top ones, the bottom ones and properly fund them. If you do this right, you will only commit to working on things above the line that you have the resources for.

The Mission – The purpose of the organization


When you are setting the direction of your organization, you need to clearly articulate your mission. The company mission is important to an organization because it clearly establishes and expresses the big picture that allows each employee to align the details of their actions and decisions with a clearly defined vision and direction, or simply why the organization exists. It helps everyone in the organization and outside of it to know what this organization stands for and what its overall purpose is. The company's strategic mission should be broad enough to guide both management and employees and narrow enough to focus their efforts on tangible and measurable goals. It should be a cultural reflection of your values, your beliefs and the philosophy of the organization. Make sure your mission statement is clear, short, and understandable to everyone, and that includes employees and people outside of the organization. Your mission should clearly define what business your organization is in and where it competes, worded in such a way that it should get people excited about living that mission.


Vision Definition

The company's vision must be clear about where it wants to be as an organization in three to five years. When you build your vision statement, you need to be clear about what value your organization creates. You must define why the company exists and how its customers benefit. The vision of the organization must be ambitious but realistic. Ambitious because it will push the organization to innovate, and realistic so that no employee looks at it from day one and sees the vision as achievable and never gives up, always feeling motivated throughout the journey. You want your entire organization to be excited about the delivery. Make sure your vision statement is concise and clearly encompasses what your organization does, the market it operates in, and how it differs from your competitors.

Set goals, evaluate and establish continous improvement


The basic elements of the strategic planning process are expressed in SMART objectives. And they are critical to the success of any organization because they allow everyone to assess progress toward those goals. It is important to recognize that when the company goes through an initial round of successful strategic planning and leads to the development of the first strategic plan for its business, it is not yet finished. The plan has to be implemented and that is when many companies fail. It would be foolish to think that we can set goals for business success and not reassess whether the market, or even business conditions, have changed. Change is the only constant, so reviewing your current Strategic Planning on a set cadence is more than beneficial in allowing business agility in your company to adapt and succeed. A quarterly strategic planning review is usually recommended for a company that has set 3-5 year goals. As you can see, your strategic planning is a long-term vision of where your company is headed, which needs to be adjusted along the way. Your Strategic Planning should always have a continuous improvement process embedded at its core to ensure business sustainability. Strategic planning is a permanent commitment.

How and when do strategic plans fail?


Strategic plans can go wrong. As we explained before, if you cannot adapt to the new market conditions, if you cannot adapt to the new internal scenarios of the company, or simply if the goals and objectives that were initially set are not realistic. However, the top three reasons why strategy implementation fails are:

  • Lack of leadership

  • Bad communication

  • Using wrong metrics to assess success

If you are starting your first Strategic Planning session, first, gather your team and commit resources to the planning effort. Remember it's not just the leadership team. Make sure you have adequate representation from all departments and all levels of your organization to assess your portfolio of initiatives. If you already have a plan in place, run the strategic planning process annually and focus on doing a prioritization process to evaluate new ideas regularly, perhaps quarterly, as part of your relentless process of improvement.



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