what is the importance of strategic planning in an organization?
Strategic planning is a disciplined, creative process for determining how to take your organization from where it is today to where you wish it to be in the future.
Strategic planning is fundamentally a decision making process, based on asking simple (but deep) questions, analyzing the range of answers, and choosing among them:
What do we do?
Where are we going?
Where are we now?
How will we get there?
How did we get here?
When will we get there?
Why are we in business?
What will it cost?
This process encompasses the entire spectrum of issues an organization faces, ranging from the big ones of who you are, what you do, and what your corporate values are to the smaller but equally important ones that connect the focus on the future with the work that must be performed soon to move the organization forward.
WHAT ARE ITS BENEFITS?
The benefits of strategic planning are manifold since it:
- Asks and answers questions of key importance to the organization
- Provides a framework for decision making throughout the organization
- Reveals and clarifies future opportunities and threats
- Sets specific objectives for achievement
- Provides a basis for measuring performance
- Serves as a channel of communication
- Develops a team which is focussed on the organization's future
- Provides managerial training
The above benefits can be encapsulated in a single statement:
Strategic planning aligns the total organization – people, processes, and resources – with a clear, compelling, and desired future state.
WHAT ARE ITS LIMITATIONS?
While the benefits are manifold, unfortunately so so its limitations:
- The future is uncertain and might differ substantially from expectations on which parts of the plan may be built.
- There will be internal resistance to formal planning due to multiple factors:
- Information flows, decision making, and power relationships will be perturbed.
- Conflicts within organization are exposed.
- Current operating problems tend to drive out long-term planning efforts.
- There are risks and fears of failure.
- New demands will be placed on managers and staff.
- Most people wish to avoid uncertainty.
- Planning is difficult, messy, hard work.
- Planning is expensive - in time and money.
- The completed plan limits choices and activities for the organization in the future.