Strategic planning is an organizational process designed to define a company's overarching mission and vision, clearly identify measurable, actionable goals and implement control mechanisms to maximize the likelihood of achieving them.
When successfully leveraged, a strategic plan is an incredibly useful tool for guiding day-to-day, quarter-to-quarter and year-over-year decision making. Strategic planning can improve almost any part of an organization, making it one of the most powerful tools in a modern executive's tool belt.
Why is Strategic Planning Important?
Simply put, strategic planning is the best way to cultivate positive transformative change in an organization. Well-executed strategic action plans can help business leaders build a better culture, improve financial performance, increase sustainability, respond to a shifting competitive landscape and achieve many other goals.
A strategic plan accomplishes this by first clearly defining the management process and direction currently in place. From there, the focus shifts to identifying weaknesses, opportunities and threats, guiding key decision-makers through short-term and long-term goal planning and establishing a strategy implementation road map with clearly defined performance indicators to keep everyone accountable.
Beyond the obvious benefit of aligning a company-wide effort around a shared strategic vison, strategic planning helps the executive team evaluate progress, measure return on resources and modify strategy execution and process as a business grows and evolves.
In this article, we're going to look at the framework for strategic planning, the steps required to create such a plan and critical strategic issues and considerations to keep in mind when designing a strategic plan for your organization.
Who is responsible for a strategic plan?
Although everyone within the organization is responsible for contributing to a strategic plan, implementation is typically the responsibility of a chief strategy officer or another high-ranking executive, such as a CEO or COO.
Strategic plans intend to direct the whole company's mission and overall direction, with the lead executive ultimately accountable for the plan’s success or failure. Of course, this doesn't mean that other employees absolve their responsibility. All board members, key employees and managers will play a crucial role in implementing, executing and communicating the plan to their subordinates and teammates. If a strategic plan runs into significant issues or setbacks, the final responsibility lies with the executive project leaders to get things back on track.
The Five Stages of Strategic Planning
Because most organizations are at different development stages with varying needs and opportunities, a one-size-fits-all strategic planning template is impossible to put together. While there is no set blueprint available that outlines how to develop a strategic plan, most experts agree the strategic planning process should involve five stages.
Stage 1: Situational (SWOT) Analysis
Conducting a preliminary situational analysis is a crucial stage in the strategic planning process because the information gained will help determine the following two stages' shape and overall success potential.
When conducting your situational analysis, make sure to gather as much relevant information and data as possible. The primary focus of this analysis should be centered around:
- Understanding the sustainability needs of the business
- Analyzing and documenting the organization’s current strategic direction
- Identifying the best opportunities to move the business in the desired direction
While conducting this analysis, it's essential to examine any external and internal issues that could stand in the way of your goals and objectives. You should also take time to define your organization's strengths and weaknesses, along with any threats and opportunities that may arise along the way.
Stage 2: Define a Mission
Once you’ve spent some time looking at the current state of affairs, it’s time to dive into writing your organization’s strategic plan. Strategic planning starts with defining your company mission and vision. Your mission should be the by-product of conclusions from your situational analysis (SWOT) with consideration given to the current state of affairs and stakeholder needs.
Armed with a clear understanding your organization’s current threats, opportunities, strengths and weaknesses, it's time to start thinking about ways to improve your position. A good mission statement sets out to build on existing core competencies, fill capabilities gaps or satisfy an unmet market need. It’s recommended to put this mission statement on paper to develop a clear picture of overarching philosophies, culture and business goals before starting a plan.
A well thought out mission statement helps management and employees align their working processes and decision making with the organization’s vision and desired strategic direction. A mission statement should be both broad enough to unite all members of your organization under a shared cause and specific enough for individual employees to understand their part in making it a reality.
For example, while “feeding the world” may be too broad, “to feed our city's hungry population by connecting home gardeners with local food banks” is both actionable and achievable.
Stage 3: Setting Specific Strategic Goals
After crafting an actionable mission statement, it's time to turn your attention to setting goals aligned with that mission. Think of these goals as checkpoints for management to better define the path to fulfilling your vision statement and overarching business plan.
Using the example mission statement from the previous section as a starting point, some supporting goals might include:
- Survey the local low-income and homeless populations to develop a clear understanding of the current need.
- Identify and engage with leaders in the local gardening community and at the local food bank.
- Organize a task force with members of the local gardening community and local food bank.
- Co-develop a comprehensive strategic plan in support of the mission at large.
The purpose of goal-setting is to define the path and action steps required to fulfill your organizational vision. With this in mind, you should make sure your strategic planning team:
- Sets both short- and long-term objectives.
- Defines the processes required to accomplish these objectives.
- Defines specific tasks in support of these processes.
Strategic Planning Process
Once you’ve defined your business goals and processes, you'll need to start drawing a detailed road map. This stage of the strategic planning process is typically much more involved than the previous two stages for several reasons.
To start, an effective strategic plan must weigh all unique operational considerations and stakeholders. Essential considerations include, but certainly are not limited to:
- Key players
- Budget and resources
- Timeline for completion
- Current strengths, weaknesses, opportunities and threats
- KPIs and benchmarks
- Communication strategy
- Systems of measurement
As you can likely guess, each of these considerations requires careful thought and planning. With this in mind, it's essential to carve out enough time and include enough diverse mindsets on your strategic planning team to ensure the plan is fully developed.
Stage 4: Strategy Execution
While strategic planning sets the foundation for future success, mindful implementation and tactical strategic management weigh equally on an organization’s ability to succeed.
Proper execution of a strategic plan requires consistent communication and unified systems of measurement across the entire organization. To maximize the chances of realizing your vision, you'll need to design a communication strategy that effectively translates goals and expectations to your employees. As part of this communication strategy, you should also establish feedback channels for all stakeholders.
Stage 5: Monitor and Adjust
Establishing and maintaining these two-way communication channels will play a critical role in your success, as feedback from front line managers and employees can spell the difference between a strategic plan's success and failure. Once your plan is in action, the strategic planning team should consistently reevaluate and re-calibrate as new information surfaces.
As you move in the direction of achieving your shared vision, this team should also monitor progress using the benchmarks and KPIs you defined in the planning stages.
We hope this article has given you actionable information on developing a strategic plan for your organization. If you're new to strategic planning, it may be wise to start with a small project to keep things simple and manageable. Once you gain confidence in crafting a simple strategic plan and executing it successfully, you can move on to larger and more complicated undertakings.