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For many small and medium-sized businesses, strategic planning is somewhat of an obscure process. Who should be involved? How is the process initiated? Where does operational planning end and strategic planning begin? What is the scope and timeframe for the process? Should everything be brought into question?

The strategic planning process is like a pyramid, where you get a little closer to the real action with each step up. The first phases involve pure analysis. No strategic planning is possible without a relevant analysis of the industry (external analysis) and of the company (internal analysis). Strategic planning never takes the form of an extensive market study or a mere organizational review. In fact, strategic planning without an internal diagnosis results in the creation of unrealistic strategies in terms of feasibility, while strategic planning that does not include an external diagnosis runs the risk of being introspective while disregarding external constraints.

Following internal and external analysis, the strategic planning process will call on senior management’s capacity for insight. The major challenges that the company will face over the next three years will need to be determined. These challenges will help the company draw up winning strategies.

The strategic planning process begins with analysis before transitioning to synthesis and interpretation (challenges and directions). Once the directions have been established, the process calls upon planning skills, i.e. an action plan. This gradual transition from ideas to action is key to success.

Before starting the strategic planning process, it is crucial to have the general process in mind, as this will make it easier to keep the troops motivated throughout the endeavour.

From an intellectual standpoint, certain pitfalls should be avoided, such as:

Too many predictions and assumptions.

Prediction is a difficult exercise, particularly when it relates to the future!

– Pierre Dac

A profusion of figures and statistics.

Figures are to analysts what street lamps are to drunks: they provide more support than light.

– Jean Dion

And the opposite: a lack of quantitative, precise and concrete analysis.

Chance favours the prepared mind.

– Louis Pasteur

A justification of the status quo so that employees do not feel insecure.

Change has no constituency. People like the status quo, they like the way it was.

– Jack Welch

Overuse of very simple solutions in response to a complex environment.

For every complicated problem, there is a simple solution – and it is wrong

Essayist H.L. Mencken

Excessive determinism and certainty.

Believe those who are seeking the truth. Doubt those who find it.

– André Gide

Despite the many potential pitfalls, an efficient strategic planning process is crucial to modern-day corporate management.