5 Reasons Why Strategic Planning is Vital for Entrepreneurs Envisioning a framework for the future helps to ensure that everyone's on the same page, among other success essentials.
By Aytekin Tank
Opinions expressed by Entrepreneur contributors are their own.
I have a good friend who detests making plans. Our small circle of colleagues jokingly refers to him as "Houdini," as he'll seemingly go to any lengths to get out preparing. When it's time to detail our yearly group vacation, for example, he'll come up with the unlikeliest excuses to avoid participating. "I prefer to go with the flow," is the reliable response.
I'm sure we all have someone in our lives like this — a person who leaves much for the last minute. And I can understand that desire for spontaneity. Back in 2006, when I founded my startup, Jotform, I promised to never get so caught up in strategic planning that I forgot how to live without it. Of course, I was then a newly minted entrepreneur and had many untested ideas about running a business. Now I know better and have grasped that, as leaders, it's not simply planning that's key to success, but doing so strategically.
To me, this means not simply generating daily or weekly to-do lists (which are helpful, to be sure), but also making decisions about how to best allocate resources.
At my company, we hold vision meetings in which we discuss reaching goals and engage in team-building exercises — while keeping the agenda on track so that time isn't wasted. As a result, planning for us hasn't become a dreary and pointless endeavor.
But don't just take my word for it: Entrepreneur contributor Nick Mascari advises (see link below) that successful businesses would be wise to do the same. "Without a plan," he writes, "your company will likely wander haphazardly with no priorities and [with] employees confused about their purpose."
Related: Strategic Planning Is Essential for Your Business to Succeed. Here's Why (and How to Do It Right).
Five additional reasons why planning is essential:
1. It helps you stay relevant
As Harvard Business Review contributor Graham Kenny notes: "Strategy involves a plan, written or not, to create advantage. Or to put it another way, it's a plan to create value for key stakeholders, which in turn produces competitive advantage."
But keep in mind: plans shouldn't produce just a fixed point: They should allow for growth and change, because, as Kenny observes, few ever turn out exactly as drafted.
"It may seem obvious to state this post-pandemic when every organization on Earth has had to contort itself to survive," he writes. "But… critics seem to think that strategic planners always assume that the world is standing still — and consequently are doomed to fail."
As he also points out, envisioning a good plan means hoping for the best, but preparing for the worst — perhaps our primary task as leaders.
2. Ensures that everyone's on the same page
This is one of the greatest benefits that comes from strategic planning: helping an entire team stay aligned and committed to a vision. At Jotform, everyone's roles must be defined from the get-go so that things end up running smoothly. "Everyone should know what they are responsible for and how their work fits into the larger picture," observes Mascari in the above-mentioned article.
Related: Having a 10-Year Plan Is a Bad Idea. Here's Why — and What You Should Do Instead.
3. Makes communicating easier
The thing about making plans is that it forces you to draft out ideas, and then communicate them in a thoughtful, concise way. But more than that, it ensures that everyone reaches the same understanding. Whether this is written or verbalized during meetings, the point is to reach out regularly so that concepts become solidified in staff members' minds. As Mascari helpfully explains: "Strategic planning is only successful if everyone knows and works towards the same goals."
That's one of the reasons why our vision meetings have been so effective: They involve team-building exercises where everyone's voice is taken into account. Talking through strategy helps people, at all levels, understand key elements.
4. Strengthens relationships
At Jotform, dynamic bonds between teams gives us a competitive advantage: Not only are we then set up to attract better talent, the resulting amplified employee abilities create a domino effect that makes customers happier with our products.
In the end, strategic planning is all about solidifying connections. Kenny defines this as "…designing a system whereby the various key stakeholders of an organization interact to produce a virtuous circle that is, in turn, a source of sustainable competitive advantage. Get this right and you'll fast-track your organization to success."
Related: Make Better, Faster Decisions Using This Simple 3-Step Framework
5. Helps envision a framework for the future
When you're an entrepreneur, there will be many moments when you want to throw in the towel. In her fascinating story for Harvard Business Review, quantitative futurist Amy Webb encourages the acceptance of uncertainty, as executives continually recalibrate a company's vision.
"Leaders can articulate a strong vision for 10 to 15 years in the future," she writes, "while being open to iterating on the strategy and tactics categories as they encounter new tech trends, global events, social changes and economic shifts."
Even with all that understood, I don't have to tell you that there will be events that will completely blindside you. The pandemic has taught us that much, and more. Still, despite our limitations, we can plan for these kinds of setbacks, and respond to them in ways that make us better equipped and energized.
