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What is the Cost of Not Having a Strategic Plan

Written by: Leanne Hoagland-Smith

Article Overview: Strategic planning is a necessary element for business success. What is the cost to your business by not having a strategic plan?

What is the Cost of Not Having a Strategic Plan

What is the cost to not having a strategic plan? To honestly answer this question requires proactive behavior, but most business owners and executives are in reactive behavior. And reactive behavior is a symptom of stress.

According to a report by the Center for Disease Control suggests workplace stress is costing the U.S. economy $300 billion each year or $7,500 per employee. The question is how much of this stress can be directly tied to not having a strategic business plan or seeking affordable business coaching?

When business owners are so busy working in the business and not on the business, they are in 100% reactive behavior. This behavior drives the behavior of all the other employees. People are working harder because they are in reactive mode instead of smarter which is a proactive mode.

For example, the president or CEO states that the goal is to increase bottom line revenue by 10%. The VP of sales quickly convenes a meeting of all sales people and tells them to sell more of existing products. The VP of Marketing decides to launch that new product. The VP of Finances cuts the budget for Marketing and Sales. From the top down everyone is working to increase sales and reduce costs and their actions are counter productive. Stress quickly surfaces.

However, if an executable strategic plan had been created including clearly articulated and measurable goals, then everyone would be more in a proactive behavior instead of reactive behavior. Additionally, if all employees knew how to consistently set and achieve their own personal goals. Unfortunately, many strategic plans are not executable and contribute to employees’ stress.

Using the annual figure of $7,500 and estimating that 25% of the stress in your organization is because of a lack of a strategic action plan and goal achievement, then what would happen if you reinvested $1,875 per employee into affordable business coaching and employee development? Of course, you may believe that you don’t have the dollars to invest, but how much is stress costing your bottom line specific to:

Poor attendance?
Sick days?
Wasted time or mistakes in overall performance from selling to shipping?
Increase in health insurance premiums?
Employee turnover?
Non-returning clients?

And, remember, that your stress can be directly tied to being in a reactive mode instead of a proactive one.

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