The research is conclusive:
- A study completed by the University of Oregon showed that companies that prepare business plans are 20% more likely to grow their business, and twice as likely to secure investment capital than those that don’t.
- The M3 Planning Strategy Benchmark of 280 U.S. firms found that companies whose owners had a high commitment to strategic planning reported 12% greater sales growth and 11% better net income than those that did not.
- Research by Solo-E.com showed that of 26,000 business failures, 67% had no written business plan.
- Research conducted by Columbia University showed that formal strategic planning reduced the risk profile of a company (as measured by variability of earnings).
- Research conducted by Entrepreneur Magazine and Washington State University, businesses that complete formal business plans are TWICE as likely to successfully grow their businesses or obtain capital than those who do not.
…McKinsey found that only 23% of companies regularly draft and update their strategic plan that 86% of executive teams spend less than an hour a month discussing strategy.
So what gives? Why does the research show how good strategic planning is for virtually any business, yet so few businesses regularly do it and even fewer do it well?
My 17+ years of experience of leading and moderating strategic planning processes for companies of all types is similar: no one argues that strategic planning is a high ROI use of time and energy, but in most companies far more often than not planning processes are undertaken either informally, infrequently, under duress, or not at all.
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And perhaps even more frustratingly, when strategic plans are started as often as not they are never finished, with a combination of planning “fatigue” and “de-prioritization” to other more “pressing” business matters being the usual culprits of abandonment.
This is sad, but with just a little “re-framing” of our planning mindset and approach we can gain the rich business benefits of strategic planning as described above, be confident that our planning process will be done right, and…
…done in such a way that when completed the process naturally and elegantly transitions to the agreed-to projects, tasks, and to-dos.
How we can do all this? It is really quite simple: Outsource It!
Just as most businesses don’t do their own taxes, or defend themselves when sued, or host their own websites, or write their own accounting software, or run their own payrolls, or self-insure, we are long past the point where executives should be expected to be experts on a process as complex and nuanced as strategic planning, especially as it is the kind of skill that is best learned by doing.
And doing a lot of it.
Now, for some very large companies like General Electric and Proctor and Gamble (both famed for the quality of their strategic planning), this is not a problem.
Firms like these have large and well-trained teams that do nothing but strategically plan all day.
This is obviously not the reality for most small and mid-sized firms, where executives are tasked with it all – strategy, tactics, execution, HR, sales, marketing, operations, and more.
These executives just don’t have the time to learn how to strategically plan the right way and then maintain the stamina in the midst of all their competing responsibilities to finish a planning process in a reasonable amount of time without burning themselves and everyone else out while so doing.
Now let me be clear: Outsourcing a company’s strategic planning process does not mean outsourcing the responsibility for the completion of the projects, tasks, and to-dos that will properly and inevitably arise from it.
Such responsibilities of course remain those of the operating executives.
But this is far different from attempting to undertake a planning process completely on one’s own.
Just like the best Olympic athletes have coaches to help them attain peak performance, so do the best-performing executives and companies have high quality, outsourced providers to help them beat the competition and win at at all aspects of their their businesses.
And strategic planning, when you cut through all of the noise, is just another business process.
When we see it like this, and not as something magical or obtuse, then almost always the right decision is to reach out and get some outside help to do it right.