Strategic plans ought to align with the overall vision and mission of an organization. As the business environment changes it is important to assess and revise a company's strategic plan to ensure it personifies the vision and mission of the business in the current business climate. Revising strategic plans also help keep management on the same page as it allows for healthy discussions on where the business should be heading.
Just how often should you review?
Strategic plans should be revised as frequently as possible. In today's global marketplace every organization is faced with quickly changing, uncertain and complex business environments where frequent plan reviews allow for strategy course corrections more often. Determining the right review frequency requires each company to analyze how fast its business assumptions are typically changing, how long it takes to measure existing plan progress and how long it takes to act upon new challenges that are presented. The more stable the business environment and the quicker a company can change direction, the longer its intervals for strategic plan review can be. Here are a few scenarios that may call for strategic plan revision outside of normal intervals:
1. Costs rise or revenues fall:
One of the most notable indications that a business is in a critical stage is when costs are skyrocketing or when revenues hit an unexpected slump. Yet many managers ignore these warning bells because the pace at which these trends occur might be very slow. Much like a frog caught is slow boiling water, managers can get use to flat or slighltly declining group revenues and avoid reassessing the group's strategic plan until its too late. To avoid these scenarios managers should keep their pulse on the business through key business metrics such as gross profit trends, overhead trends, top line revenue growth and decreases in cash reserves.
2. Key projects falling behind schedule:
An effectively growing business is a well orchestrated symphony of projects. As soon as you notice that important projects are lagging behind schedule, bring together all stakeholders and keenly evaluate the situation. Identify the root cause of the delays and put in place plans to get the projects back on schedule. If meeting the previous deadlines is impossible, then identify business environment changes that might be causing the delays or if the delays will put the company at a significant competitive disadvantage. If so, consider reevaluating your projects and the strategic plan overall. Re-prioritize company wide initiatives and figure out if some projects need to be cut in order to ensure critical milestones are being hit.
3. Growth is out of your control:
Entrepreneurs normally don’t complain if business is booming but rapidly growing businesses can become a challenge if inadequate preparations are made. A booming business can pose serious challenges to customer service, manufacturing and administration as each function may find itself struggling to undertake even the most basic tasks. In many situations of rapid growth businesses realize their initial structure does not fit the new changing requirements of the organization. In such situations reassessing strategic plans and business fundamentals is critical in order to make the right adjustments for continued growth. Room to expand and flexibility are always important in order for a business to continue to grow.