These are some of the scariest words in business!  Really!  Recently I have been told by several successful, intelligent and hard-working executives that strategic planning scares them.  Another told me he does not believe that business owners actually do strategic planning.  So how are they successful?

The thing is, whether they have a written strategic plan or not they certainly have a plan, if only in their mind.  Whatever a business owner or senior executive does to make the business succeed reflects their concept of the step (or steps) they need to take to make it happen.  That is their strategic thinking in action.

Would you get into your car and start driving without knowing where you’re going and how you’re going to get there?

The strategic plan for a business is simple to define but not easy to execute.  Perhaps that is one reason that it scares people.  It usually means they have to change something.  Change is hard especially if the business is doing well.  Why spend valuable time and money to make change when things are good.  The reality is, everything around them is changing, especially customers and competitors. 

It is hard work to put together a sales and profit forecast.  A sales and profit forecast is made up of assumptions to begin with.  So risk assumptions made.  Dan Gilbert, CEO of Quicken Loans and about eight other companies, says “The numbers don’t lead, they follow.”  In other words, forecasts must be based on actions, not assumptions.  Those actions require a plan based on strategic thinking.

Strategic planning is a way of setting the future path of the company and determining what resources are needed to make it happen.  The future and success of the company is based on the decisions that are made and the goals that management commits the organization to achieve. 

Without a clear path the company will miss opportunities and lose its competitive edge.  The risks of leaving the future of the company to chance are far greater than those of creating and executing a plan that can be managed with clear purpose and effort.