Business Plan Tips : Strategic Business Plans

Why companies need a strategic plan? Most companies don't have one, but even it's unwritten, every company has a strategy. Whether it's written or not, all activities in the firm are related to strategy.

Story about GM: GM for years has struggled to try to compete effectively with the Japanese and other off-shore competitors. And only recently have they begun to really get some traction in trying to create the kind of cars that people want to buy. And so, one of the keys was getting everyone to understand what they needed to do and pull strategically in the same direction.

The key to strategic plans is they tell everyone in the organization what's important and what they need to be doing. If someone's doing some activity, they need to be able to come back and say, is it on strategy or off strategy. If it's off, they need to try something else.

Now the key with strategy is that it's always long term. You recognize it because it has to do with investing now for payoffs in the future. Sometimes they're trying to develop strategy, businesses get caught up in what are sometimes called the tactical weeds.

Now, tactics are extremely important. They really are the legs of strategy. They're the execution of strategy. And strategy gives the guidance to what tatics ae doing. If you get hung up in the tactical weeds, it's easy to get off in a direction that is not really productive for the company.

Strategy has just three basic parts. So the good nes is, it's dificult to get a hold on sometimes, but ideea is fundamentally very simple. It has three parts: vision, where we are going; road map, how we are going to get there; and resources, what it's going to cost us to make the journey.

It's really the number one job of the CEO to develop strategy. It tells everyone in the company what's important and what they need to be doing.


Source: YouTube