Without a clear image of what you want the future of your business to look like, your actions will be more reactive than proactive

Why a clear strategy plays an important part of a company’s success?


Although creating and tracking progress against an annual operating plan is an essential management tool for any company. What is often missing is the link these plans have to the future. Often AOP’s are created from the rear-view mirror. What happened last year and where should we go in the coming year? These are all good intentions. However, without a clear image of what you want the future of your business to look like, it will always be more reactive than proactive. A well-articulated multiple year view of the business should serve to inform the AOP. As then an AOP becomes the stepping stone towards the achievement of your longer-term goals.Strengths & Weaknesses – At first sight this may seem obvious and you may think, “Of course we know our strengths and weaknesses!” We can’t disagree. No one knows your business better than you. Then let’s ask you: Are you leveraging competitive advantages (strengths) and do you have plans to close capability gaps in your organization (weaknesses)? Strategy creates a better awareness and gives stronger focus on activities that will make your business more successful.

Knowledge & Skills

If you know where you want to take your business over the longer term, you will have a better idea of the kinds of capabilities you’ll need to achieve your goals. Strategy defines and drives decisions in organizational design. By proactively pursuing new skills and knowledge, you prepare the organization for the intended future state and you enhance your chances of success.

Making trade-offs

Resources are finite in every organization. So, strategy is about making choices. What products, services and markets will be a part of the future and what should we not do? These types of decisions are critical to ensuring that limited resources are being deployed to the most promising initiatives that will provide the greatest return.

Truly know your environment 

Too many leaders don’t take the time to truly know the external environment that can have a positive or negative impact on performance. This is not to say that leaders are not in tune with their customers, or not aware of their competition. The question is, how thorough an analysis are you doing? Being aware and prepared for potential shifts in your market or industry provides the opportunity to take action before it happens.



Let us know what you think of these reasons why strategy is important.

We would love to hear your experiences!