How often should strategic planning be done? — Every company has its unique method of operation. This is generally impacted by external and internal factors, which include changes in technology, industry disruptions, economic fluctuations, and many more. The interval at which a company should do strategic planning depends on the type and size of the organization.
Organizations that deal with technology and tourism may be required to plan monthly strategically since most of these companies are fast-paced. In contrast, organizations like sports teams, governments, etc., may be required to update their strategic planning every one to three years because they are slow-paced.
Generally, we can understand that the duration a company updates its strategic planning depends on how slow or fast it operates. Therefore, there is no specific answer to the question of how often should strategic planning be done. It depends majorly on the company’s size and type. Having said that, let’s look at other important aspects of strategic planning, including what the strategic planning we keep talking about is.
What Is Strategic Planning?
Strategic planning involves defining future visions and also setting the goals and objectives that the company wants to achieve. This planning will include drafting out the process in which the plans will be achieved. Depending on the type of organization, the strategic planning can be the goals drafted for a few months or one to three years too.
Some people mistake strategic planning for business planning; they are two different things. While business planning involves all the ideas regarding the business, and ways to establish it, overall, it’s a short-term plan that aims at tactical goals and revolves around budget. The case is different when it comes to strategic planning, it’s a plan that can be shared with employees, investors, business partners, and other related individuals.
Every company, business, or organization needs specific goals they will be working on because it’s the driving force that will keep them going. Thus, strategic planning provides them with the guidance they need. When preparing a strategic plan, most companies usually begin with the mission; this mission provides the company with a purpose and direction. This mission generally describes everything regarding the company, what it does, and the goals it wants to achieve.
Once the company identifies its mission, they move forward to set the goals they want to achieve, mostly when doing strategic planning, the organization adopts the SMART goals concept; specific, measurable, achievable, realistic, and time-bound. This strategy allows the company to see how far they have achieved the goal and whether it’s yielding a positive or negative result. Alongside trying to meet the goals, the company will also evaluate and revise those goals to know the ones that are effective and whether they require an adjustment.
A lot of people ask, how often should strategic planning be done? As I mentioned earlier, the frequency of strategic planning depends mainly on the type of organization. Strategic planning can be done monthly, two years, three years, etc.
Factors To Consider In Strategic Planning Frequency
To effectively perform strategic planning, you will need a considerable amount of data. While most organizations focus on vital aspects like performance measurements, and data analysis, they tend to forget that there are other crucial factors to always consider during the planning. We will discuss some of these factors so you can study them well during your strategic planning.
1. Type of organization
The first factor to consider when doing strategic planning is the type of organization. Do you have a slow pace or fast pace organization? Are your goals long-term or short-term? Determining the type of organization will make it easy for you to plan well, and you will know what to include during the planning and the estimated goals you want to achieve.
2. Size of organization
The second factor to consider is the size of the organization. The size also determines the frequency you will update the strategies. For example, you may be required to be updating your strategies, perhaps monthly, if it’s a small company that is looking for ways to grow. But in large companies where the vision is wide, and you are already solid, you must set long-term goals that you can slowly achieve.
3. Market changes
Four factors stimulate market changes; these factors are government, international transactions, speculation and expectation, and supply and demand. You will need to be always on guard watching out the market changes so you can understand the kind of adjustment you may be required to make to your planning. This will minimize the risk, and you will always be updated on the market trends.
4. Goals and objectives
Your goals and objectives are also important factors in determining the frequency you will be doing strategic planning. Most strategic planning is for long-term goals and objectives, but that doesn’t mean you can make them for your short-term goals. You should look at your goals, whether they are short-term or long-term, and analyze them before you create your strategic plans.
Benefits Of Frequent Strategic Planning
Systematic strategic planning has many benefits for a company. Clayton Christensen, a business professor at Harvard University, says that “Most people think of strategy as an event, but that’s not the way the world works. When we run into unexpected opportunities and threats, we have to respond. Sometimes we respond successfully; sometimes, we don’t. But most strategies develop through this process. More often than not, the strategy that leads to success emerges through a process at work 24/7 in almost every industry.” Having said that, let’s look at some of the benefits of frequent strategic planning.
1. It helps build a solid forward vision
Strategic planning affects everybody in the company since it’s the way to achieve its goal. Among the essential benefits of strategic planning is that it creates and clear vision which aligns with the company’s staff, investors, and shareholders. Generally, the goals must be known by everyone, so familiarizing them with the goals allows them to have a strong sense of responsibility, and they will constantly be thinking of how they can achieve those goals, keep track of their progress and also make adjustments where necessary. This concept can also provide a trickle-down influence. For example, a head office that isn’t clear about the company’s goals or reasonings can make decisions according to their level, which can counteract the effort. The idea is to have a single vision to unite the company and make your employees work with one crucial broad strategy.
2. Draws your attention to biases and decision flaws
Sometimes, you can decide with flaws, so this is where the benefit of strategic planning comes into play. You aren’t going to make plans alone, and even if you do so, you must share them with other teammates. You will explain why you make the decisions and back them up with data. This allows everyone to participate and make the best decision. This lets you have different ideas at your table, making the entire organization’s strategies more solid.
3. Track success
Another benefit of strategic planning is to track the company’s progress and success simultaneously. If every department in the company is aware of your goals, they will ensure to be productive, which can affect the entire success and progress. You can divide the goals according to units, departments, and offices, clearly defining the path you want them to take and the destination you want them to reach. This way, you will ensure that each department will positively impact the company’s growth.
Four Mistakes To Avoid When Developing A Strategic Plan
Some of the mistakes you should avoid when developing a strategic plan include
1. Avoid focusing on many things
One mistake that most organizations make is focusing on many things rather than the important thing at hand. This problem usually lies in the strategy to choose; you might feel overwhelmed with the numerous methods, so rather than focusing on all of them, choose the most crucial ones.
2. Don’t use any unclear vision
Whichever vision you choose, make sure it’s clear to you and the organization. Your vision is the level you want to find in the organization shortly, so choose a realistic timeline attached to your vision. Ensure the vision is reality itself, measurable and achievable, and it should be inspirational and motivational to your people.
3. Avoid choosing goals that are not smart
We have emphasized the importance of choosing SMART goals. You should set at least one person responsible for achieving your goals. The goals should be specific, measurable, achievable, realistic, and time-bound. Your goals should have a beginning and end date too.
Every organization does strategic planning. How often strategic planning should be done depends on how slow or fast the company operates. Strategic planning offers many benefits, including building a strong forward vision, drawing attention to biases and decision flaws, and helping to track progress and success. The whole concept is to ensure a company sets goals and is also working towards achieving the goals.
Frequently Asked Questions
What are the risks of doing strategic planning?
The risks of not doing strategic planning include poor decision-making, lack of focus, failure, etc.
What are the challenges of strategic planning?
The common challenges of strategic planning include a lack of available resources, external factors, insufficient capabilities, etc.
Can a small business benefit from strategic planning?
Yes, small businesses can benefit from strategic planning by helping them discover their priorities, opportunities, challenges, etc.
Why is strategic planning important?
Strategic planning helps companies to align their capabilities, activities, and resources with their goals.
How can an organization adjust its strategic plan?
An organization can adjust its strategic plan by monitoring progress and regularly conducting reviews.
- sme.Strategy.com – four mistakes made in developing a strategic plan
- online.hbs.Edu — Why is strategic planning important
- techtarget.com — Definition of strategic planning
- betterup.com — Strategic planning