Long Term Planning For Business / Strategic Planning - The Steps

Summary

This video guides viewers through the complex process of long-term business planning, focusing on the strategic steps needed to achieve a company's goals. The speaker, Jess Coles, shares insights on identifying the future state of the business, assessing its current capabilities, and formulating a plan to bridge the gap. The video emphasizes using tools like SWOT, PESTLE, and Porter’s Five Forces to analyze external factors and the competitive landscape. The key to success lies in implementing these plans effectively, anticipating risks, and maintaining flexibility for unforeseen events.

Takeaways

• 😀 Long-term planning for business is challenging because it involves projecting over years and managing changes in business environments, competitors, and regulations.
• 😀 Strategic planning is not about setting long-term goals, but choosing the investments, projects, and activities to bridge the gap between the current state and the desired future state.
• 😀 To begin long-term planning, clearly define what the future state of your business looks like, focusing on your purpose or vision for the next 5-10 years.
• 😀 Use tools like PESTLE analysis and Porter's Five Forces to assess external factors like political, economic, social, and competitive trends impacting your business.
• 😀 When planning, consider the future state of your business model, and how the financial structure should evolve to support long-term growth and investment.
• 😀 It's essential to assess the current state of your business honestly, identifying both strengths and weaknesses through tools like SWOT analysis and business model analysis.
• 😀 Understand your team's capabilities and strengths as they will be responsible for executing the long-term plans.
• 😀 Keep a close eye on financial drivers and model different scenarios to assess their impact on profit and cash generation during the transition from current to future state.
• 😀 The third step is to plan how to bridge the gap between the current state and future state by identifying key investments and necessary structural changes in the business.
• 😀 Scenario planning is critical in long-term planning. You should consider potential risks and assumptions and adjust your plan if unexpected events or trends emerge.
• 😀 Implementing the plan is the hardest step, requiring the right capabilities, resources, and continuous monitoring of smaller steps to ensure they align with the broader strategy.

Q & A

What is the key difference between long-term planning and strategic planning in business?

Long-term planning focuses on choosing the investments, projects, and activities needed to bridge the gap between where the business is today and where it wants to be in the future, whereas strategic planning sets out the direction and goals for the business to fulfill its vision.

Why is it important to consider external market forces when creating a long-term business plan?

External forces, such as political, economic, social, technological, legal, and environmental trends (using tools like PESTLE), can significantly impact the business. Understanding these factors helps ensure that the plan is resilient and adaptable to changes in the marketplace.

How does a PESTLE analysis contribute to long-term business planning?

A PESTLE analysis helps identify and evaluate the political, economic, social, technological, legal, and environmental factors that could affect the business. This analysis provides a comprehensive understanding of external trends and market forces, aiding in more informed decision-making.

What role does the SWOT analysis play in assessing a business’s current state?

A SWOT analysis helps identify a business's internal strengths and weaknesses, as well as external opportunities and threats. It enables a realistic evaluation of where the business stands and informs the development of strategies to address gaps and leverage advantages.

Why is it necessary to review the current business model when planning for the future?

The current business model may need to be adjusted to support the strategic goals for the future. Reviewing it ensures that the business model is aligned with the desired future state and identifies areas that may require change or improvement.

What is the importance of scenario planning in long-term business planning?

Scenario planning allows businesses to anticipate potential risks and changes in external factors. By creating different scenarios and assessing their impact, businesses can develop contingency plans, ensuring they are prepared for unexpected events or shifts in the market.

How can a business model analysis assist in long-term planning?

A business model analysis maps out key areas such as customer segments, value propositions, and revenue streams, helping businesses understand their core operations. This understanding is crucial for determining what needs to change or evolve in the future to achieve strategic goals.

What are the risks of not involving key people in the long-term planning process?

Without involving key team members in the planning process, critical perspectives and insights may be overlooked. This can result in gaps in the plan, leading to inefficiencies or failure to address potential risks and opportunities.

What steps should be taken to ensure the successful implementation of a long-term business plan?

Successful implementation requires ensuring that the business has the necessary resources, skills, and capacity to execute the plan. It also involves breaking down the plan into actionable steps, regularly reviewing progress, and maintaining flexibility to adjust to unforeseen circumstances.

How does regular review and flexibility improve the chances of successful long-term planning?

Regular reviews allow businesses to assess whether they are on track to meet their goals. Flexibility ensures that the plan can adapt to changing market conditions, new opportunities, and unexpected challenges, helping to keep the business aligned with its objectives over time.