Strategic planning within companies

Due to the increasing trend of globalisation, companies must position themselves well, especially in the long term. Strategic planning sets the direction for the next three to five years to achieve important goals, whether to increase competitiveness or gain market share. Strategic alignment can be multifaceted and encompass various aspects.
In this article, we explain why strategic planning is more important today than ever before and the benefits it brings. Small and medium-sized enterprises (SMEs) in the DACH region, in particular, must be able to meet future requirements.

What is strategic planning within companies?

Operational business focuses on core day-to-day tasks, while strategic planning emphasises achieving medium to long-term goals. A strategic plan includes important mission and vision statements that a company aims to realise in the next three to five years and beyond.

In addition, important corporate goals are defined and all necessary measures are described with which the company intends to achieve these goals. This is often set out in an action plan created specifically for this purpose. Above all, strategic planning must be clear, transparent and realistic in order to be fully effective.

What is involved in strategic planning?

Every strategic plan relies on essential components in order to fulfil its purpose in the end. The following points are practically always included and provide companies, departments and employees with the necessary points of reference for implementing the planning.

• Vision statement: The vision outlines the company’s future appearance and goals, typically spanning five to ten years, serving as a basis for strategic planning.
• Mission statement: A mission statement is a concise declaration of a company’s purpose and activities. It may also incorporate the corporate strategy and vision.
• Strategic goals: A strategic plan includes long-term goals that should be achievable, measurable, and effective to ensure clear benefits within three to five years.
• Action plan: Of course, concrete steps are needed to achieve the planned goals. This is where the action plan comes into play, defining concrete measures to steer the company in the desired direction.
• Measured values: To measure the achievement of objectives accurately, it is essential to have appropriate metrics and KPIs. Therefore, they should be included in strategic planning from the beginning.

What are the advantages of strategic planning?

The benefits of strategic planning are numerous and help to achieve a company’s vision, mission, and established objectives. Below are some of the primary advantages:

• Aligning the entire company with a common objective, while proactively staying ahead rather than being reactive.
• Achieving strategic goals that consistently strengthen the company in a sustainable manner.
• Precisely formulating and breaking down lengthy processes, while
• Better identifying opportunities and risks in light of the company’s situation.
• Increasing motivation and engagement among all employees.

Depending on the company and its strategic objectives, there may be additional advantages. An old adage states that ‘The journey is the reward,’ which can also apply to strategic planning when everyone works together.

What exactly does strategic planning entail?

Numerous small and medium-sized businesses (SME’s) in the German-speaking region are not sufficiently equipped for developing and planning strategies. However, with appropriate preparation, implementation is not as daunting as it may appear. To put strategic planning into action, follow these steps diligently.

1. First, assess the current situation:

Before proceeding with strategic planning, it is crucial for companies to first evaluate their current situation. This involves taking stock of where they   stand. Data pertaining to their relevant industry and   market can be collected, customer needs analysed, and feedback from employees can be gathered.

The SWOT analysis is a well-known tool manoeuvred in the strategic domain, which encapsulates Strengths, Weaknesses, Opportunities, and Threats. Out of these, the first two are internal factors, while the latter two represent external challenges. The analysis offers a snapshot of the present situation and serves as a robust basis for formulating strategic objectives and actions.

2. Next, the strategy development stage occurs:

A strategic plan can be developed using the insights gained from the initial assessment of the organisation’s current position. This includes outlining key components such as the Vision, Mission, strategic goals, action plan, and metrics, at a minimum in broad terms.
This phase can be particularly challenging, as smaller companies often neglect the development of Vision and Mission statements. Experienced interim managers can provide practical assistance in defining clear statements about the future of the company if the company lacks the necessary expertise.

3. Breaking down specific sub-goals and measures:

Although an action plan is in place, strategic planning can still be quite broad. Therefore, it is practical to establish smaller interim goals, such as on an annual basis, to facilitate implementation through specific measures and to measure goal achievement and Key Performance Indicators (KPIs).
Including an annual review of all strategic goals and measures enhances the budgeting process, which is already conducted yearly. This streamlines cost planning for marketing, public relations, product development, and strategic initiatives.

4.Share, implement and monitor strategic plan

Finally, the strategic plan should be shared with all employees and implemented. The entire team must work together to achieve the set goals. Open communication and collaboration can be the key to success. The right IT tools can support collaboration.

Regular updates to the plan are important for achieving goals. The frequency of updates should be determined by the industry and company, typically on a quarterly or annual basis. Strategic planning should also be adaptable to changing market conditions.

Conclusion – securing the future of the company with strategic planning

In times of increasing globalization, strategic planning is crucial for maintaining competitiveness. Small and medium-sized enterprises (SMEs) in the DACH region, in particular, must position themselves cleverly to achieve their strategic goals over the next three to five years.

Comprehensive strategic planning can be time-consuming and requires specific expertise that may not always be available within a company. Competent interim management from 3i Business Solutions can provide the necessary support.

Please contact us now to receive guidance from our specialists.