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In the competitive landscape of modern business, having a strategic plan is essential for long-term success. 

A strategic plan serves as a roadmap, guiding an organization toward its goals and ensuring that every action taken is aligned with its overall vision, mission, and core values, which are foundational to all subsequent planning and decision-making processes. 

By defining these elements, an organization can ensure that all employees understand the overarching goals and are working cohesively towards the same objectives. This unified focus prevents efforts from being scattered and ensures that resources are allocated efficiently.

But determining when the right time is for an organization to review and update its strategic plan is something that leadership should always keep in mind, suggests Peter Wright, President of The Planning Group. 

“If you have a strategy that you’re going to grow in this particular direction and all of a sudden the world around you is changing from a competitive perspective, then you need to be able to adapt to that,” he says. “A strategic plan really never lasts for more than three years.”

Peter recommends never leaving a plan ‘on the shelf’ during that time, and depending on the industry, supports a refresh within at least a year, followed by a performance review on a quarterly basis.

Planning establishes benchmarks

“Most of the companies we deal with are on a good trajectory already, with good leaders and customers who trust them,” he says, adding most companies can advance with ongoing operational improvements but that good strategic planning can help them advance even further. “The very act of planning should take you to a new place where you wouldn’t have arrived otherwise.”

A good strategic plan also establishes benchmarks and key performance indicators (KPIs) that are essential for measuring progress. By setting specific, measurable goals, organizations can track their performance over time and make informed adjustments as needed. This continuous monitoring and evaluation process ensures that the organization remains on track to achieve its long-term objectives and can respond swiftly to any deviations. 

Organizations that operate without a strategic plan often find themselves reacting to changes and challenges as they arise. This reactive approach can lead to hasty decisions that may not align with long-term goals. Conversely, a strategic plan allows an organization to anticipate changes, identify potential obstacles, and develop strategies to mitigate risks. This proactive stance enables businesses to navigate uncertainties with confidence and agility.

Surprisingly, Peter says the benefits of updating a strategic plan may not be obvious to many business leaders, and that some go through the process because they feel it’s expected.

“A lot of our clients come to us under the assumption they want to change their strategic plan because they just always do a strategic plan,” he says.

Plan should focus on the future

A strategic plan is not just a document but a vital tool that guides an organization toward its future goals. It provides direction and focus, enables proactive management, ensures efficient resource allocation, facilitates performance measurement, boosts employee engagement, and secures a competitive advantage.

For any organization aiming for sustained success, investing time and effort into developing or updating a comprehensive strategic plan is indispensable and doesn’t have to be an insurmountable task, says Peter.

“With our clients, we’re always trying to set the bar at a place that will scare them a bit, but not so much so they say, ‘that’s aspirational and we’re not actually meant to get there’,” he says, adding a good plan should always focus on a specific, tangible, practical and measurable view of the future.

In terms of the process itself, Peter says businesses often get bogged down in creating or updating a strategic plan that is too detailed which can sour the whole experience. 

“We often mistake detail for rigor, so we make these processes so detailed and put so much detail into a strategy that’s never going to come to fruition, and then it does become a big chore,” he says. “It shouldn’t be a chore. It should be something that excites and enthuses people.”

Reviewing a strategic plan is crucial for a business due to several key reasons:

• Adapting to Changes in the External Environment: Markets, technologies, regulations, and competitive landscapes are constantly evolving. Regular reviews ensure that the strategic plan remains relevant and aligned with external changes.
• Monitoring Progress and Performance: Reviewing the strategic plan allows a business to assess its progress against its goals and objectives. This helps in identifying what is working well and what areas need improvement or adjustment.
• Resource Allocation: As priorities shift or new opportunities arise, it may be necessary to reallocate resources (financial, human, technological) to better support strategic initiatives. Regular reviews facilitate effective resource management.
• Risk Management: By continually evaluating the strategic plan, a business can identify and mitigate potential risks. This proactive approach helps in avoiding or minimizing disruptions.
• Alignment and Communication: Regular reviews ensure that all stakeholders, including employees, management, and investors, are aligned with the strategic direction of the company. This enhances communication and fosters a cohesive effort towards common goals.
• Competitive Advantage: Staying ahead of competitors often requires agility and responsiveness. Regularly reviewing and updating the strategic plan allows a business to capitalize on new opportunities and maintain a competitive edge.
• Innovation and Improvement: The review process encourages a culture of continuous improvement and innovation. It provides an opportunity to incorporate new ideas, technologies, and best practices into the strategic plan.
• Financial Health: Strategic reviews often include financial performance assessments, ensuring that the business is on track to meet its financial goals and can make necessary adjustments to improve profitability and sustainability.
• Stakeholder Confidence: Demonstrating a commitment to regular strategic planning reviews can build confidence among investors, partners, and customers, showcasing the business's dedication to strategic growth and stability.
• Employee Engagement and Motivation: Involving employees in the review process can increase their engagement and motivation, as they see how their efforts contribute to the overall success of the business.