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Compounding Effort: Why Strategic Planning is Critical for Business Growth

Imagine you were to poll your leadership team with three questions:

  1. What are the top 3 challenges to growing the business

  2. Top 3 opportunities for business growth

  3. Top 3 priorities for our company to get accomplished ASAP

How likely do you think it is that they would all agree on what those three are for the next quarter? What about next year? What about the next two years? Could you articulate what those are for your company in a way that is consistent and clear to you?


We've done this exercise before on teams that believed they were naturally aligned, only to find that there were as many takes on priorities as participants. What some people saw as opportunities, others saw as challenges. More importantly, some leaders were more narrowly focused on the priorities, opportunities, and challenges in their own areas and unaware of the needs of the business as a whole.


This exercise reflects the daily reality that without a purposeful practice of re-establishing priorities and defining goals and plans, the team members begins to find their own direction. The process of deliberately setting goals, establishing priorities, and noting down the approaches and plans through which these goals and priorities will be achieved is called strategic planning.


How Teams Operate With a Strategic Plan


In a team that has mastered strategic planning the CEO and their leadership team establish (and re-establish) the direction of the company regularly. They have a process for this that runs throughout the year which includes the review of results against the plan, re-assignment of responsibilities and resolution of issues that come up as the plan is carried out. A team who has mastered strategic planning communicates the goals and strategy to everyone around them and makes clear what is expected from all employees to support that effort. They are even able to share pieces of their strategic plan with customers and suppliers. This creates a strong compounding effect - the plan is able to be executed more quickly and with less tension.


How Teams Operate Without a Strategic Plan


In the absence of clarity about goals and priorities, the team members will gravitate towards the priorities and goals that are based on their own pain points. Those goals and pain points might not be the most important to the broader team or might be misaligned with your goals as the owner, founder, or CEO of the company. If your team is very small and works together daily, this might not be very perceptible yet. As your business grows from a one-room office into many groups or departments or if your team transitions to working remotely – this will become painfully obvious. Outcomes such as information silos, team tensions, and slowed decision making will be the first signs. Unless addressed these are followed by low team morale, missed objectives, and eventually reduced profits. Even if goals are occasionally alluded to by the leadership, without clarity on how they get accomplished and what is expected of everyone to accomplish them they will always take the back seat to day-to-day activities.


Compounding Effort through Strategic Planning

On the left: a leadership team without a strategic plan, represented as small arrows, pulling the company, represented as a box, in different directions. They are unable to reach the goal - their arrow does is off center and doesn't reach very far when their efforts are added up. On the right, a team with a strategic plan, pulling in the the same direction together. They are able to achieve the goal and their arrow is right on target due to the compounding effect of everyone working together.

On the left: is a company that left all its leaders to their own devices, without a plan.

  • Activities of the different leaders conflict with each other or the overall priorities of the company.

  • There is no defined plan for overcoming the obstacles so managers postpone resolving them.

  • Without a strategic planning practice, the changes goals fall behind the priorities of the day-today.

  • The result – the company moves towards slowly. There’s a lot of wasted effort and not a lot of positive energy around the strategy.

  • Ultimate result: the company can't grow or outpace the competition.

On the right: a team clear on the objectives that has a strategic practice.

  • There is a constant effort to reconcile the day-to-day vs growth priorities in a way that serves the overall objectives.

  • Potential risks are identified early, tracked and addressed before they stop progress.

  • All leaders understand their role in achieving the objectives.

  • The leaders are helping each other proactively.

  • The whole company feels excited because they have a sense of direction and accomplishment as they see the strategy realized.

  • The compounding of effort results in a more direct path to the objective, more quickly and with less tensions between the team.

  • Ultimate result: your company can quickly surmount the changes needed to grow and thrive.

The daily firefighting can easily distract us away from the long-term improvement projects necessary for the business to grow. But your burgeoning company, your leadership, your growing team, your customers and your investors need you to have a strategy planning practice for you and your team to achieve at your maximum potential.

 
Tell us about your strategic planning practice

How often does your team review the strategic plan

  • 0%We don't have a plan

  • 0%Yearly

  • 0%Quarterly

  • 0%Monthly

 

StratCraft prepares innovative companies to grow rapidly by equipping their leadership team with the practical tools and the essential discipline for executing winning strategies. We are doers who jump in to do the most difficult projects within your strategic plan and deliver measurable results. We want your company to grow, be resilient in difficult times, and continue delivering value to customers and shareholders for many years to come.


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