What is Strategic Planning?
Strategic planning is a form of organizational management that helps an organization define what it is, what it does, why it does what it does with a large focus on determining what the future of the organization should be. Strategic planning helps set priorities so that energy and resources are put towards the projects with the most ROI. It helps to strengthen operations by making sure that all stakeholders involved are working towards common goals, having some agreement on what they intend for the outcomes, and so that they can assess and adjust organizational direction when conditions change. Effective strategic planning should include a desired end-state or what success looks like for that organization.
What is a Strategic Plan?
A strategic plan is the outcome of the strategic planning process and is used to communicate organizational goals, the steps to reach those goals, and the critical resources the organization needs to use to reach those goals.
How do you Define Strategic Management? What does Strategy Execution Mean?
Strategic management is the systematic implementation of a strategy. It is comprised of ongoing activities and processes that organizations use to coordinate and align their resources and actions with their mission, vision, and strategy organization-wide. Strategic management creates a system from the plan that provides feedback on strategic performance to decision-making. It allows the plan to evolve and change as requirements and conditions change. Strategy Management is often referred to as Strategy Execution.
However, many organizations do not focus on long-term strategies. A 2018 Constant Contact survey found that 63% of small business owners plan for just a year or less in advance.
An organization's future success depends on effective strategic planning. Taking a look ahead further into the future as an organization can lead to meaningful improvements and changes. When you are doing strategic planning, you must first analyze your organization and set realistic goals and objectives. Then these findings and decisions are written up into a document that describes what you want your organization to be in the future.
When Should Organizations do Strategic Planning?
Strategic planning should start ideally within a few months of your organization's inception, but if it has not been done, or done well in the past, sooner rather than later is a good idea. Think about where your organization is now, and where you want it to be in the next five to 10 years, then gather your team to begin dedicating time to strategic planning.
What are the Benefits of Strategic Planning?
Though it can be time-consuming, strategic planning is beneficial to your entire organization. It lets leaders know what you want to accomplish and helps establish a roadmap for reaching your goals and objectives. Gaining buy-in from others in your organization by including them in the planning process can help your organization to become more productive, further increasing the likelihood that you will reach your vision for the organization.
Generate more Productivity
When organizations involve their employees in the strategic planning process, it gives them a sense of accountability and makes them want to help achieve your objectives. This can help increase productivity.
Find Your Strengths and Weaknesses
When you are examining and analyzing your organization you are identifying where it does well and where it can improve. Identifying strengths and weaknesses helps minimize risk and helps to map out steps to reach future improvements. Including employees in this process can help you identify some strengths or weaknesses that leadership may not think of.
Determine Direction and Fostering Proactivity
At the end of the strategic planning process, your organization should know its future direction. Strategic planning will help you build in time for growth in the areas you desire and will help you to foresee new opportunities and challenges before they arise, allowing you to plan for how you might face them.
Strategic Planning and Management Step-by-Step
There are many ways to develop a strategic planning framework, and a variety of methodologies for planning and management. However, many strategic planning frameworks follow a similar pattern, common attributes, and go through some variation of a few key phases: 1) analysis/assessment of the current external/internal environments; 2) high-level strategy formulation and basic organizational strategic plan; 3) Strategy execution to derive action items and fit the strategy into the operational plan; and 4) evaluation/ sustainment/ management phase to continuously refine and evaluate performance, culture, communications, data reporting, and other strategic management issues.
Start with a Strategy Map and a Good Planning Framework
A strategy map shows cause and effect connections between your strategic objectives using a graphic. It is designed to quickly communicate how an organization creates value. It is considered very important if using the balanced scorecard methodology. Many people learn visually, thus strategy maps can help you communicate your strategy more efficiently and in a way that many more of your employees will understand more easily than a written document. Strategy maps also force your organization to simplify the terms used to describe your objectives, which necessitates agreement amongst your planning team. Good strategy maps help every employee see their part in achieving your organization's objectives.
What Should be Included in a Good Planning Framework?
The Association for Strategic Planning (ASP), a U.S.-based, non-profit professional association dedicated to sharing best practices in creating and executing strategies, created a Lead-Think-Plan-Act rubric and accompanying Body of Knowledge to show and share best practices for strategic planning and management. ASP has criteria that assesses strategic planning and management frameworks versus the Body of Knowledge. Many strategic planning and management frameworks meet the ASP criteria including BSI's Nine Steps to Success. You can learn more on the ASP website.
To be successful, strategic planning needs to be an internal and external team network that includes your employees, vendors, and other relevant stakeholders. Your employees need to understand your organization's strategy to see their part and to have some buy-in on the outcomes.
Though objectives and goals are necessary to your organization, strategic planning requires flexibility for when changes occur. Some goals may take longer than expected to achieve or may change over time. You can adapt to setbacks and changes and put your organization in an even better position to succeed.
Your strategic plan is successful when everyone has buy-in and understands the organization's direction and goals. Understanding what will make the organization stronger makes it more likely that each individual will want to be part of that growth and success.
What are the Phases of the Strategic Planning Process?
The strategic planning process is made up of three phases: discussion, development, and reviewing/updating. The process makes sure everyone is aligned and allows for documentation of the strategic plan.
Strategic Planning Phase 1: Discussion
In this phase, your organization will gather as much information, opinions, and input as possible. There should be a regularly scheduled meeting with staff who will be involved in the strategic planning. Each meeting should have an agenda and clear expectations of what will be accomplished to limit distractions. The first few meetings should help define the organization’s current status. Once this is established, subsequent meetings can focus more on specific details.
It is also a good idea to reach out to vendors, investors, analysts and other pertinent stakeholders outside of your organization to gather more information. These external people will have a unique perspective on your industry and organization. They may be able to tell you trends they foresee that can help you compile your strategic plan and determine the future of your organization.
The discussion phase is a great time to conduct a SWOT analysis that examines your organization's strengths, weaknesses, opportunities, and threats. Strengths are what your organization is doing well. Weaknesses are where your organization may be underperforming. Be candid in mentioning weaknesses because they must be identified to initiate change through your strategic plan. Opportunities are places where your organization could grow or do new business. Threats can be difficult to identify, but talking to those outside your organization can help you see the landscape of industry trends and potential competitors or challenges. Identifying threats at the beginning of the process helps to address them if and when you encounter them.
Strategic Planning Phase 2: Development
The development phase comes after you've collected all necessary information and are beginning to create your strategic plan. Strategic plans have five parts: a vision statement, a mission statement, goals and objectives, a plan for action, and a plan for review and updates to the plan.
During development you must determine whether you will use software to create and keep the plan or if you will make it yourself and save it in a cloud. Work as a team to develop objectives for the next one to three years. Ensure your goals and objectives are realistic and measurable, as well as the methods for measuring and tracking towards achievement.
You should also have an action plan to help you achieve your goals and objectives. Make sure the actions you are planning are directly tied to your organization's goals.
Strategic Planning Phase 3: Review/Update
Strategic plans need continuous reviews and updates. Choose someone responsible for reviewing, updating, and sharing changes with your organization. Everyone should be made aware of the changes and how they will affect the plan moving forward.
Strategic plans are meant to be living documents. Your action plans and progress towards meeting your objectives should be tracked and checked from time to time. While checking progress towards one goal, it is a good idea to check the rest of the document to ensure your objectives and goals still have relevancy and are being worked on.
Calendar alerts can help remind you to regularly review and update the strategic plan whether you choose a cadence of once a month, once a quarter, or once a year.
Don't panic if you are not on track to meet an objective or goal. Reassess and communicate with your organization if needed. Try to find what went wrong, such as an overly ambitious goal. You can edit the goal or objective and update the action plan to help you get back on track. Sometimes you may even meet an objective sooner than planned. This is an opportunity to create a new goal or objective, or to put more time and resources towards another goal or objective. Be sure to include your team in changes to see what they think is possible.
What can go wrong with Strategic Plans?
There are three top reasons strategy implementation fails: poor communication, lack of leadership, and using the wrong measures for success.
That being said, strategic planning is continuous. Once the initial round is completed, the plan must still be implemented and adjusted as you go. If goals are unrealistic, such as an overly ambitious growth rate, then it could lower morale for you and your team.
Successful strategic plans require commitment and focus. If the strategic plan is not the foundation of how your organization operates, then you could lose sight of your direction and goals.
Sharing your Strategic Plan
Employees are involved in the day-to-day inner workings of your organization and have a unique understanding of your organizations strengths and challenges. This makes including them vital to the strategic planning process and informing future planning.
Talking to those outside of your organization can also be beneficial. Outsiders, such as vendors may have unique insights into your industry and how it might change in the future.
In the private sector, the U.S. Small Business Administration recommends flexibility in the strategic planning process. Discussions should encourage open sharing of new ideas and thoughts.
Mistaken Beliefs about Strategic Planning
Because strategic planning takes time, some might think that it is not worth the cost. Others may be afraid that they will choose the wrong direction for their organization. However, the benefits of strategic planning are far greater than the perceived risks.
Regardless of whether your organization is large or small, strategic plans are beneficial and help ensure your organization is headed on the right path.
But how can you know whether your strategic plan is taking you in the right direction? During the first stages of strategic plan, your organization will be conducting research and discussions both on your specific organization and on your industry that will allow you to make data-driven rather than emotion-based decisions.
Though the strategic planning may seem daunting and a large time commitment, the investment in the process pays off when you have a clear path forward and everyone on board to help you achieve your goals and objectives. This buy-in is in part generated by everyone coming together to brainstorm creative ideas of what your organization might be in the future.
Strategic planning is not a one-and-done process. It creates a living document that will change over time. Effective strategic plans are regularly reviewed, evaluated, and updated regularly to keep you accountable and track your progress towards your goals and objectives.
Modernizing Your Strategic Planning Process: How Decision Lens Can Help
Decision Lens can help organizations with the strategic planning process from intake of information to prioritizing which projects should be completed first to achieve your organization's objectives. Learn more.