People often ask me, “Why does strategy matter?” In other words, why is it important? I have a lot to say about that, but before we get into its importance, let’s review some basics about strategy.
What is Strategy?
- At its’ simplest, strategy is a basis for making decisions about how you will achieve your vision and serve your mission.
What is Strategic Planning?
- Strategic planning is an organizational process that is used to set priorities, focus energy and resources, strengthen operations, and to ensure that employees and other stakeholders are working toward common outcomes. According to Michael Porter, a strategy expert and professor at Harvard Business School, “strategy should define and communicate an organization’s unique position, and it should determine how organizational resources, skills, and competencies should be combined to create competitive advantage.”
What is a Strategic Plan?
- A strategic plan is the document used to communicate the organization goals and the actions needed to achieve them. Internally, with staff, it drives focus and priorities. Externally, it is often shared with grantors as part of a grant application. Your strategic plan defines what your organization stands for. It represents the goals and objectives you’ll pursue, and it helps you to allocate resources properly. I compare a strategic plan to a road map that helps to ensure that you’ll arrive at your destination.
Now that we have a common understanding of what strategy and its related functions are, let’s think about what is the importance of strategy.
Here are just a few of the benefits of strategic planning:
- Provides focus for the leadership team, staff, board of directors and funders. A good strategy helps all stakeholders easily understand the aim of the organization. It also lays out the goals and objectives that will help achieve the desired outcome.
- Helps to align everyone to the same direction and path forward.
- Is a tool for leaders to know what and how to hold their employees accountable.
- Develops a sense of ownership. When everyone knows where they’re going and how they’ll get there, it builds a sense of team. An organization that has strong buy-in from its people will more assuredly achieve their mission. That buy-in helps to build consensus and creates enthusiasm.
- Ensures most effective use of resources. This is perhaps one of the most important benefits of strategy. We live in a time when it’s easy to chase the next bright, shiny object. Yet purchasing decisions based on a whim can be both costly and actually drag you off course.
- Provides a base for measurement of progress, success, and program outcomes.
- And, not insignificantly, Strategy is a best practice for every organization, no matter how small.
I hope by now you understand the many reasons why strategic planning is so important. And, if you haven’t refreshed your strategy since March, now would be a good time to look deeply into your organization to find what needs changing. America is in a new phase of its evolution. Now is a good time to realign to meet those needs.
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