Setting extensive goals for your business and building a strategy to reach them are the two primary objectives of business strategy planning. Strategic planning aims to establish the goals of the business with the help of a proper plan.
Why is Business Strategy Planning extremely crucial?
Ensuring business growth
A proper understanding as to how the business operates and where exactly it stands with respect to other businesses is required when it comes to creating an effective plan to ensure the growth of the business.
Considering the necessary factors
First, what is needed is gathering as much information as possible about the business and this includes understanding how the business operates internally, what drives its profitability and how exactly the business can be compared with its competitors.
Next, it is important to list down the different objectives of the business. The vision, mission, strategies, goals, and objectives need to be carefully organized in a proper plan. It becomes crucial to answer different questions like where do you exactly see the business standing in the next five to ten years, and what would be the core purpose of the business and the central idea that would drive all the business decisions as well as actions.
It is crucial to understand the adjustments that are required to be made in order to achieve the strategic goals and how exactly can the modifications be implemented in the most effective manner. The budget factor is also something that needs to be considered.
The roadmap that ensures business success
The business strategy planning happens to be a roadmap that helps to achieve the corporate objective and it provides the direction without which it becomes almost impossible to determine if the company is on the right track to achieve the objectives.
The Business Strategy Planning models
Let us look at some of the models of strategy planning briefly.
The Balanced Scorecard
The Balanced Scorecard - this happens to be one of the most popular strategy planning models. This model was created to provide a detailed perspective of the business operations, which involves considering the market demands, the competitive landscape, the internal capabilities, within the constrained timeframes. Both the financial data as well as the operational data are taken into consideration for providing useful information about the past performance of the firm, the current performance and how exactly it is likely to perform in the near future.
The four important concerns that this particular approach addresses are quality, time, performance and service, and also cost. Consumer perception of the business, enhancement of the internal processes, expansion, modification and advancement of the organizational capacity, the possibilities of business success from the financial point of view - these are the four areas which form the basis when it comes to setting targeted goals and also evaluating the business performance.
The Theory of Change
TOC or theory of change, which is another business strategy planning model and it describes the overall focus as well as approach for bringing about change. It involves a process of planned change and a TOC does not describe just one way of bringing about the change; instead it describes all the ways a business might actually work.
A TOC can be considered to be good and proper if it is able to draw logical connections between the business operations and the respective outcomes. The theory of change helps to understand the relationship between the problems that the business is addressing and the strategies that are being used to deal with the problem and achieve the desired outcomes.
A TOC helps to assess the risks associated with a particular initiative and gain an understanding which strategy is likely to work and which is more uncertain. It also paves the way for efficient and effective application of resources that are limited or scarce.
Hoshin Planning
Hoshin Planning is yet another approach that paves the way for transparent and active communication within the business organization and the effort is directed towards reducing conflict and also inefficiency. This idea revolves around the fact that every employee of the business organization regardless of the seniority level or the department has appropriate information about the goals of the business.
There are certain components that make Hoshin Planning an effective strategy framework. They are the catchball process, the A3 problem solving, gemba walks, PDCA continuous improvement, standardized visual management. Let us look at these components which are a part of business strategy planning in brief.
Catchball process involves streamline goals from the executive level to the frontline employees to pave the way for alignment and suggestions back up from the employees to the management and that shall enable adaptation.
Incorporation of A3 problem solving leads to the identification of gaps between the current business conditions and the target objectives.
Gemba - this is associated with the place where the actual work is being done. Gemba walks are conducted to engage with the employees in order to track the progress associated with the key goals and also identify the obstacles.
PDCA or Plan-Do-Check-Act cycle helps to enable iterative goal deployment as well as process refinement.
Visual management which is applied by Hoshin Planning promotes effective communication and problem solving.
Final Note
With the help of strategy planning, it is possible for businesses to anticipate the events that are most likely to occur and make the required preparations. Any bad situations can be avoided through strategic planning. Thus, it can be said that such strategic plans help to bring the business back on track even if it faces some unfortunate crisis.
Comments
0 comment