The answer is too straight to the point. It’s because…

If we fail to plan, we plan to fail.

Not being consistent with strategic planning or worse, not planning at all is like walking or running non-stop but not going in any clear and specific destination. And companies are no different. It’s like the business just goes through the drill every year and just settles for still being able to exist and managing not to close down. Mediocre. Complacent.

The danger with not strategizing at least every year (Tactical Planning) is that companies tend to keep on doing the same things but expect to be getting different or better results. It doesn’t work that way.

Companies end up being transactional.

When we say transactional, what we mean to say is too routine to a fault. Current customers or clients avail of a product or a service and then the company just provides or delivers. It just becomes a vicious cycle. As long as the company is earning, meeting customer demands, and paying for its employees’ salaries, not a problem. Well, that’s not the case.

Unfortunately, no company out there would just like to remain stagnant.  All companies desire to grow, increase their revenues and profits, hire more people, innovate and introduce more value-adding products and/or services, or widen their influence and reach in the market.

Now, the question is how can all of these ambitions be realized if a company doesn’t do Strategic Planning and just keeps on doing the same things?

What doesn’t challenge us, doesn’t change us and what doesn’t change us doesn’t help or make us progress.

Companies must be planning strategically every 3 to 5 years. At least, there must be tactical planning every 1 or 2 years, if not strategic planning.

In these must-do company strategic planning sessions, the company gets to revisit its Vision, Mission, and Core Values to check the following:

• Has the vision already been achieved? Yes or No? Even if not yet, is there a need to update it considering the owners, investors, and/or top management’s brand new directions?
• Does the mission still reflect the company’s reason for existence? Yes or No? If new products and/or services are being introduced, new markets are being penetrated, and/or new focuses are being emphasized, unavoidably, the mission must be changed.
• Do the core values still mirror the culture that needs to be promoted and strengthened to empower and engage people to achieve the needed results? If not anymore, there’s this imperative that they must be modified too.

Unless there’s Strategic or Company-wide Planning, the need to update these VMV statements will never be realized to begin with.

Strategic planning sessions are also an opportunity to do a Self-Critique.

When we say self-critique, the company gets to assess its internal strengths and internal weaknesses.

The internal strengths show what the company has been doing well that it just has to keep on doing, improve doing, or level up. The internal weaknesses, on the other hand, show what aspects of doing business must be corrected, replaced, enhanced, aligned, timed, and/or eliminated (if applicable) inside to be better than the previous year/s.

In self-critique, the company gets to explore opportunities and anticipate threats that happen outside of the company as well.

The external opportunities present positive situations that the company can take advantage of to beat the competition, to enhance its operations, to increase its market share, to improve the relationships with the government and other stakeholders, and the like. The external threats on the other hand are those negative scenarios that must be countered, avoided, or eliminated if the company doesn’t want to encounter serious situations in the future that might lead to business losses, bankruptcy or worse, closure.

Imagine if a company doesn’t plan strategically and just welcomes new years just going through the drill? These internal and external evaluations will never be looked into because the management doesn’t involve itself in such cerebral sessions. Where and how do the company get its strategies? It’s only in Strategic Planning sessions or Businesses that these matters are analyzed.

And last but not least, it is through strategic planning sessions that companies get to set their new Strategic Goals and Objectives for the next years as results of their internal and external company analyses.

The Strategic Goals answer the question, “What are we going to do moving forward given our internal strengths, internal weaknesses, external opportunities, and external threats (S.W.O.T. Analysis)?”.  The Strategic Objectives, on the other hand, answer the question, “How are we going to achieve these Strategic Goals?”.

Therefore, strategic initiatives or activities are planned and implemented to respond to the results of the internal and external analyses. They become the bases of the Strategic Action Plans that will cascade down to the divisions, departments, and/or teams for execution at their level. They become the bases of the new or updated Key Result Areas (KRAs) and Key Performance Indicators (KPIs) of the company and its departments and employees. They become the bases of the budgetary priorities for the next year or years.

Imagine if a company never plans strategically or never does this consistently. These important pillars that aid in company growth and development will never be looked into because they don’t give themselves opportunities in which to do these things. We all know they’re usually analyzed in comprehensive strategic planning sessions.

So, these are the answers to the question, “Why Companies Must be Planning Strategically Every 3 or 5 Years”. In other words, it is that important. It is that mandatory. It is that critical.

How about your company? When was the last time you organized your own purposeful Strategic Planning with your key leadership? When will you do your next one? If not this year, when? Do you even know how to do it?

MSS Business Solutions is one of the authorities in helping companies do Strategic Planning in their respective companies. If you would like us to help you plan strategically for your next 3 to 5 years or so or at least plan tactically for the next 1 or 2 years, give us a call at (02) 725568, email us at info@mssbizsolutions.com or message us here.

If you would like our expert trainer-facilitators to train you on how to do Strategic Planning yourselves, read the following links below:

Strategic Planning Training in the Philippines

You can also read our related training outlines below:

Strategic Management Training in the Philippines

Strategic Thinking Training in the Philippines 

Strategic Thinking in Sales Training in the Philippines