Either in the start up process or when re-inventing one’s business development, the design of a strategic business plan is an indispensable step towards a successful and viable business. Strategic planning involves setting up a sound and multifaceted plan or strategy to follow over a defined time period. It can involve all aspects of the business, or just a small part of it i.e. a selected department such as the marketing department. However, this does not mean that strategic business planning is only for large scale businesses since it can also benefit the small business, especially at start up, when the business sets its first goals and establishes itself in the business landscape.
Writing up a business plan is an important step of a starting business, since most lending bodies will not authorize loans in absence of a detailed business plan. Why is it important? Imagine sailing off for a voyage in the sea and not planning for resources or supplies that you might need. Developing a business plan is the only way to determine the allocation needs, personnel, utilities, marketing goals, outreach and all valuable aspects that make your business useful and unique in the sea of business. However, strategic planning is a process employed in any time period in a formal business administration, since it usually comprises of a long range planning process of a specific or broader managerial aspect, that will in a time-frame manner set the outline of the business goals and image and ultimately form its policy.
To be successful, a strategic business plan, either at start up or as a means of sustainment of a particular policy, should provide with day to day reference for the decision making in organization and management of the business and should provide a template against which all decisions can be evaluated. Ackoff’s typology of planning, provides with several points to the understanding of the planning process, identifies as a key step in the business or organization’s decision to adhere to the long term goals of strategic planning. These are;
- Reactive planning ( planning through the rear view mirror) – Reactive planning is an active attempt to turn back the clock to the past. The past, no matter how bad, is preferable to the present. And definitely better than the future will be. The past is romanticized and there is a desire to return to the “good old days.” These people seek to undo the change that has created the present, and they fear the future, which they attempt to prevent.
- Inactive planning (going with the flow) – Inactive planning is an attempt to preserve the present, which is preferable to both the past and the future. While the present may have problems it is better than the past. The expectation is that things are as good as they are likely to get and the future will only be worse. Any additional change is likely to be for the worse and should therefore be avoided.
- Preactive or future planning – Preactive planning is an attempt to predict the future and then to plan for that predicted future. Technological change is seen as the driving force bringing about the future, which will be better than the present or the past. The planning process will seek to position the organization to take advantage of the change that is happening around them.
- Proactive or designing the future planning – Proactive planning involves designing a desired future and then inventing ways to create that future state. Not only is the future a preferred state, but the organization can actively control the outcome. Planners actively shape the future, rather than just trying to get ahead of events outside of their control. The predicted changes of the preactive planner are seen not as absolute constraints, but as obstacles that can be addressed and overcome.
The most challenging and demanding type of planning is the proactive planning, which is based on the belief that the organization or business itself, is responsible for shaping its future and thus can do differently i.e. to solve an anticipated problem. In order for an administration to sustain an applied strategic planning process in its midst’s, it is anticipated that efforts are made to develop an openness for new ideas and allow for envisioning in serving the future. An area where envisioning is particularly useful is the mission development: who the business customers are, how will the business go about its tasks and the business raison d’etre.
Moreover, the strategic planning process must be strongly interrelated with the organizational culture of the business, the latter being the social context in and through which the business performs its work. This connection will facilitate the easy transmission to the workers and administrators of the mission of the business, the specific operational goals and the means to achieve them. After the decision and contexts of the strategic planning are made, several steps are indispensable in the successful implementation of the process:
- Setting the stage for planning: understanding the way planning works, the values scan and mission formulation
- Setting strategic business directions : strategic business modeling such as performance auditing, gap analysis
- Implementing the strategic plan : integrating action plans, contingency planning and implementation.
In conclusion, a strategic business plan is an expansion of the traditional business plan method towards the future development of the business, that formulates a strategy in anticipating change and maintaining its status in the business arena. Several steps are necessary in implementing a viable and successful strategy plan, most of which require serious documentation, market research and official design and control. In several examples in history, an inspired and well grounded strategy plan has been the means to ground-breaking entrepreneurship’s and immense success.