Many organizations spend a lot of financial resources in performing formal strategic planning for their business. It seems to them that this planning will help in enhancing their long-term performance significantly. There are a few academic researchers, who have different opinion about it. They do not find any relation between business performance and such formal planning. To know how effective is strategic planning for business, you need to know about it in depth.
What does corporate strategic planning do?
Strategic planning is known and implemented by different organizations under different names as “long term planning”, “strategic management” or “corporate planning”. Formal strategic planning assists an organization in describing its managerial process. This type of planning comprises of a series of procedures to:
- settle long term quantified corporate goals and
- determine the key strategies, and
- assign accountabilities that directs the allocation and acquisition of resources
- achieve the main objective of an organization
What is the idea behind conducting formal strategic planning?
Formal strategic planning has the main purpose to convey that there are explicitly defined systematic procedures by an organization. These processes are executed to gain commitment and involvement of primary stakeholders that are impacted by the plan, and the beneficiaries that are benefited by the organization.
What makes the strategic planning as formal?
In a strategy workshop, all the roles, and contributions towards such type of corporate strategic planning are designed in the systematic organization of the overall planning process. Also, the different data focused activities involved in this planning assists in forming strategic decisions that are administered by explicit procedures. The decisions made as part of the planning are made by gathering evidence and analyzed during the entire planning process.
What type of data is required to be collected for strategic planning?
To perform formal strategic planning, an organization has to collect three types of data. These are:
- The goals and aim of a corporate
- Strong zones and weak zones of an organization
- Danger and opportunities in the outside environment
You need to collect the data on the basis of the above-mentioned factors. Once you have the data, you need to discuss its significance for organization’s future performance. You can then see the strategic possibility with the best clarity. The outcome in the form of strategies will be developed into elaborate actionable and business plans that are utilized to make an efficient planning. Once the business plan is executed, it is then monitored.
Long and thoughtful discussions are carried out to ponder on very critical issues that are likely to influence the performance of the organization in the long run. These discussions are organized into a few stages that embody key procedures to gain consensus and agreement to address the issues.
Using adequate measuring techniques, formal strategic planning processes clearly leads to improved flexibility, innovativeness and firm performance to an organization. Thus, when implemented properly this method can give you very useful insights to an organization to improve its current and future performance significantly.