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Role of the Board in Strategic Planning

Not all organizations are still quite clearly aware that the problems of the present and the future can no longer be solved using the recipes of the past but with the help of board strategic planning.

Is it Important to Use Boards in Strategic Planning?

Among the phenomena of modern society, the board sector is of great importance, where the emphasis is not on the production of a specific product, but on the quality of service and customer orientation, in contrast to a manufacturing enterprise, where the emphasis is on product quality. Depending on how the interaction between the management and the work collective is established, what values are observed at the enterprise, what is the moral and psychological climate in the team, employees have a certain attitude towards visitors. This factor determines whether these visitors will become regular customers of the service company. In this regard, there is a need to create a corporate culture service at enterprises that create competitive advantages in modern conditions.

How do you engage your board in strategic planning? Board in strategic planning can:

  1. Analyze and question financial information, objectives, and performance indicators developed by management.
  2. Validate the feasibility of the plan overall and identify risks.
  3. Examine the strategic plan and approve the final version, as well as ensure support of the plan.

These contradictions are objectively capable of causing crisis phenomena of various levels in the company. Within the framework of this article, the crisis is understood as an extreme form of exacerbation of contradictions in the socio-economic system, threatening its life. Consequently, the contradictions caused by mistakes in strategy are nothing more than prerequisites for the emergence of an internal crisis in the company. On this basis, mistakes in strategy should be considered the subject of preventive anti-crisis management.

What Company is Faced with While Board Strategic Planning?

In particular, being at the initial stage of board strategic planning, the founders often mistakenly determine the capacity and potential of the selected market segment, incorrectly build relationships with potential customers, do not take into account economic and other external factors, that is, they choose a vector of business development that will certainly not bring the expected results. Therefore, the stage of emergence is characterized by a contradiction between the goals of the company and the conditions of its functioning.

At the stage of board strategy planning, the company faces an acute shortage of resources to expand its business, which generates contradictions between various departments in the struggle for the limited resources necessary to achieve the goals set out in the strategy. The company is growing so fast that the management does not have time to adjust the chosen strategy in accordance with the new realities of activity. Therefore, despite the difficult situation, the way out of the crisis must be started precisely according to the strategy.

Accordingly, an effective strategic planning system, as one of the basic elements of strategic management, allows you to make effective strategic decisions that: are future-oriented and lay the foundation for making operational management decisions; are characterized by significant uncertainty, since they take into account external factors that are not under control that affect the enterprise; are associated with significant resources and can have very serious, long-term consequences for the enterprise. At the same time, mistakes in the process of strategic planning affect the effectiveness of these decisions and the timeliness of their adoption, not allowing the desired development of the enterprise to be achieved.