Strategy and Business Planning
The board is responsible for defining the organisation’s vision and values, setting out its strategy and developing business plans to achieve its goals.
The strategy document will include the organisation’s:
- Core business – its primary purpose
- Long-term goals – where it wants to be in five or ten years’ time
- Vision and values – the vision is the very reason for the organisation’s existence while the values set out the standards of behaviour expected and would invariably define the culture for the organisation.
The business plan is a route map to achieving the organisation’s objectives, detailing how its goals will be achieved.
It should include:
- Risks that could impede progress
Differences between a strategic and business plan
While a strategic plan is a type of business plan, there are several important distinctions between the two types of plans that should be noted.
A strategic plan is primarily used for implementing and managing the strategic direction of an existing organisation, whereas a business plan can be used initially to start a business, obtain funding, or direct operations. The two types of plans typically cover different timeframes as well. A business plan normally covers a period of no more than one year, while a strategic plan takes a longer term view, generally covering a period of 3 to 5 (or more) years.
A strategic plan is used to provide focus, direction and action in order to move the organisation from where they are now to where they want to go. Such a plan is critical to prioritising resources (time, money and people) to grow revenues and increase the return on investment (ROI).
A strategic plan focuses on building a sustainable competitive advantage and by its very nature is forward-looking. In contrast, a business plan is typically used to assess the viability of a business and is more tactical in nature.
Well governed organisations
As part of a good governance framework, it is important that well governed organisations have both a strategic and business plan.
Bridgehouse Company Secretaries can help by supplying experienced business coaches to work with the board in developing the vision and values statement and formulating the strategic plan.