Understanding the principles of strategic planning

- What is a strategic plan, and why is it important? A strategic plan defines what your organization stands for. It defines the market where you compete, and how you compete in that market. It's the definition of the goals you're going to pursue and, more importantly, the initiatives you're going to pursue to achieve those goals. It's also going to help you allocate your very limited resources to pursue those initiatives and reach those goals. Why is a strategic plan so important? First, it provides focus for your efforts and your limited investments. It gives your team something to rally around and be excited about. And lastly, it helps you identify the risks and opportunities you're going to face in the market, and then plan for those risks or exploit those opportunities. There are three principles of strategic planning that you should follow. First, set a clear direction and stay in your lane, versus meandering and pursuing strategies that change every year. Second, say no to distractions. It's very easy to get caught up in the wow, that looks like a cool initiative, let's pursue that. The third is making sure you diversify your bets. You have limited pools of money and people and time, making sure you don't put all your eggs in one basket and instead pursue initiatives that are spread across different time horizons, different markets, and different products. And if you follow these three principles of strategic planning, you're going to have a clear direction that you're able to follow over time and achieve your goals.