Definition of Corporate Planning-
Corporate planning is creating a strategy for meeting business goals and improving your business. A corporate plan is a roadmap that lays out your business’s plan of action. It is imperative to write down goals and plan for how they will be achieved. Without planning, business operations can be haphazard, and employees are rarely on the same page. When you focus on corporate planning, you set achievable goals and bring your business one step closer to success.
Corporate Planning Definition
Corporate planning is the act of creating a long-term plan to improve your business. A corporate plan examines a business’s internal capabilities and lays out strategies for how to use those capabilities to improve the company and meet goals. Think of a corporate plan as a roadmap laying out everything you need to do to achieve your future goals and reach new levels of success. The plan looks at each sector of a business and makes sure that all parts are aligned, working towards similar goals. Corporate planning is often looked at through a SWOT analysis (strengths, weaknesses, opportunities, threats). Further, it usually starts with broad goals and works its way towards a much more detailed analysis, laying out exactly how objectives will be reached. The following elements tend to be in a corporate plan:
- Vision statement: You company’s vision statement broadly defines what goals you are working to achieve. This statement is where you hone in on your business’s focus and what you want to accomplish over the next three-to-five years. Think big, but remember that you will have to create a strategic plan to back these goals up. So always make sure that your goals can be defined as SMART goals (strategic, measurable, achievable, realistic and time-based).
- Mission statement: A good mission statement lays out how you will achieve your vision statement in a few sentences. It should illustrate what you plan to offer or sell, the market you are in, and what makes your company unique. A mission statement is like an elevator pitch for your entire strategy. It effectively communicates who you are and what you want to do in a few lines.
- Resources and scope: Part of corporate planning is taking stock of everything you currently have going on in your organization. You'll look at your systems, products, employees, assets, programs, divisions, accounting, finance and anything else that is critical to meeting your vision. This part is almost like making a map of your current organization. It gives you a bird’s eye view of everything your company has going on, which helps you create a plan for moving towards the future.
- Objectives: Next, you need to lay out your business objectives and how you plan to measure success. This is a good time to hone in on that SMART planning to ensure that your objectives are strategic, measurable, achievable, realistic and time-based. A vague goal such as “improve brand reputation” is meaningless without a solid measure of success in place. A SMART goal would instead be “improve brand reputation by placing the product in five positive media stories by the end of Q1.”
- Strategies: Now, it’s time to illustrate the strategies you plan to use to meet the objectives of your company. These strategies could be anything from introducing new products to reducing labor costs by 25 percent, depending on the goal. Your strategies should directly address the objectives you have laid out in your corporate plan, and include a plan of action for how you will implement them. These are the nitty-gritty plan details.
Why You Need Corporate Planning-
Every business needs to do corporate planning. Creating a strategic plan gives your company direction and actionable goals to see through. Without a plan, how will you know your priorities or where to place your resources? A business with a plan achieves better results than one that does not have any direction.
The first reason you need corporate planning is because it provides clear objectives for your organization. You wouldn’t leave for a road trip without mapping out your route. Similarly, it’s not advisable to run a business without mapping out your route. Corporate planning puts on paper your focus, and allows you to move forward with purpose. If your business is operating without a plan, you will not be able to achieve your goals. Goals must be written down and broken into parts to be efficiently achieved. Further, they must have clear timelines and deliverables. Corporate planning helps you create a roadmap for success by asking you to answer three crucial questions:
- What is the purpose of this business? (Mission)
- Where do we want to go and what do we hope to achieve? (Vision)
- How will we achieve our objectives? (Plan)
Another reason you need corporate planning is because it can help align your organization and its values. A corporate plan does more than simply keep your employees on a timeline for success. It also defines who you are as a company, and what you stand for. Likewise, when employees get a say in the direction of a business and its objectives, your company culture will improve. Planning for the future brings everyone to the table, promotes the exchange of ideas and creates effective solutions to organizational problems. Making and sticking to a plan ensures that everyone in the organization is on the same page. Small business owners especially will find that strategic planning is a great way to get feedback from employees and improve overall culture.
Finally, a corporate plan helps communicate your brand’s message to employees, shareholders, creditors, partners, investors and customers. Taking the time to hone your vision and mission statements is extremely important for messaging, which is essentially communicating what you are and what you want to be as a company. When your purpose as a company is boiled down to its bare bones and made widely available, the message sticks. Everyone immediately knows what your brand stands for and who it hopes to serve. A solid, clear corporate plan can be used to attract investors, customers and employees.
