5 steps of the strategic planning process
Lucid Content Team
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- Process improvement
Strategic planning process steps
- Determine your strategic position.
- Prioritize your objectives.
- Develop a strategic plan.
- Execute and manage your plan.
- Review and revise the plan.
Because so many businesses lack in these regards, you can get ahead of the game by using strategic planning. In this article, we will explain what the strategic planning process looks like and the steps involved.
What is the strategic planning process?
In the simplest terms, the strategic planning process is the method that organizations use to develop plans to achieve overall, long-term goals.
This process differs from the project planning process, which is used to scope and assign tasks for individual projects, or strategy mapping , which helps you determine your mission, vision, and goals.
The strategic planning process is broad—it helps you create a roadmap for which strategic objectives you should put effort into achieving and which initiatives would be less helpful to the business.
Before you begin the strategic planning process, it is important to review some steps to set you and your organization up for success.
1. Determine your strategic position
This preparation phase sets the foundation for all work going forward. You need to know where you are to determine where you need to go and how you will get there.
Involve the right stakeholders from the start, considering both internal and external sources. Identify key strategic issues by talking with executives at your company, pulling in customer insights, and collecting industry and market data. This will give you a clear picture of your position in the market and customer insight.
It can also be helpful to review—or create if you don’t have them already—your company’s mission and vision statements to give yourself and your team a clear image of what success looks like for your business. In addition, review your company’s core values to remind yourself about how your company plans to achieve these objectives.
To get started, use industry and market data, including customer insights and current/future demands, to identify the issues that need to be addressed. Document your organization's internal strengths and weaknesses, along with external opportunities (ways your organization can grow in order to fill needs that the market does not currently fill) and threats (your competition).
As a framework for your initial analysis, use a SWOT diagram. With input from executives, customers, and external market data, you can quickly categorize your findings as Strengths, Weaknesses, Opportunities, and Threats (SWOT) to clarify your current position.
An alternative to a SWOT is PEST analysis. Standing for Political, Economic, Socio-cultural, and Technological, PEST is a strategic tool used to clarify threats and opportunities for your business.
As you synthesize this information, your unique strategic position in the market will become clear, and you can start solidifying a few key strategic objectives. Often, these objectives are set with a three- to five-year horizon in mind.
Use PEST analysis for additional help with strategic planning.
2. Prioritize your objectives
Once you have identified your current position in the market, it is time to determine objectives that will help you achieve your goals. Your objectives should align with your company mission and vision.
Prioritize your objectives by asking important questions such as:
- Which of these initiatives will have the greatest impact on achieving our company mission/vision and improving our position in the market?
- What types of impact are most important (e.g. customer acquisition vs. revenue)?
- How will the competition react?
- Which initiatives are most urgent?
- What will we need to do to accomplish our goals?
- How will we measure our progress and determine whether we achieved our goals?
Objectives should be distinct and measurable to help you reach your long-term strategic goals and initiatives outlined in step one. Potential objectives can be updating website content, improving email open rates, and generating new leads in the pipeline.
3. Develop a plan
Now it's time to create a strategic plan to reach your goals successfully. This step requires determining the tactics necessary to attain your objectives and designating a timeline and clearly communicating responsibilities.
Strategy mapping is an effective tool to visualize your entire plan. Working from the top-down, strategy maps make it simple to view business processes and identify gaps for improvement.
Truly strategic choices usually involve a trade-off in opportunity cost. For example, your company may decide not to put as much funding behind customer support, so that it can put more funding into creating an intuitive user experience.
Be prepared to use your values, mission statement, and established priorities to say “no” to initiatives that won’t enhance your long-term strategic position.
4. Execute and manage the plan
Once you have the plan, you’re ready to implement it. First, communicate the plan to the organization by sharing relevant documentation. Then, the actual work begins.
Turn your broader strategy into a concrete plan by mapping your processes. Use key performance indicator (KPI) dashboards to communicate team responsibilities clearly. This granular approach illustrates the completion process and ownership for each step of the way.
Set up regular reviews with individual contributors and their managers and determine check-in points to ensure you’re on track.
5. Review and revise the plan
The final stage of the plan—to review and revise—gives you an opportunity to reevaluate your priorities and course-correct based on past successes or failures.
On a quarterly basis, determine which KPIs your team has met and how you can continue to meet them, adapting your plan as necessary. On an annual basis, it’s important to reevaluate your priorities and strategic position to ensure that you stay on track for success in the long run.
Track your progress using balanced scorecards to comprehensively understand of your business's performance and execute strategic goals.
Over time you may find that your mission and vision need to change — an annual evaluation is a good time to consider those changes, prepare a new plan, and implement again.
Achieve your goals and monitor your progress with balanced scorecards.
Master the strategic planning process steps
As you continue to implement the strategic planning process, repeating each step regularly, you will start to make measurable progress toward achieving your company’s vision.
Instead of constantly putting out fires, reacting to the competition, or focusing on the latest hot-button initiative, you’ll be able to maintain a long-term perspective and make decisions that will keep you on the path to success for years to come.
Use a strategy map to turn your organization's mission and vision into actionable objectives.
Lucidchart, a cloud-based intelligent diagramming application, is a core component of Lucid Software's Visual Collaboration Suite. This intuitive, cloud-based solution empowers teams to collaborate in real-time to build flowcharts, mockups, UML diagrams, customer journey maps, and more. Lucidchart propels teams forward to build the future faster. Lucid is proud to serve top businesses around the world, including customers such as Google, GE, and NBC Universal, and 99% of the Fortune 500. Lucid partners with industry leaders, including Google, Atlassian, and Microsoft. Since its founding, Lucid has received numerous awards for its products, business, and workplace culture. For more information, visit lucidchart.com.
Implement the strategic planning process to make measurable progress toward achieving your company’s vision and make decisions that will keep you on the path to success for years to come.
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What is strategic planning?
What is strategic plan management?
Benefits of robust strategic planning and management
10 steps in the strategic planning process.
Plans are worthless, but planning is everything. - Dwight D. Eisenhower
It’s that time again.
Every three to five years, most larger organizations periodically plan for the future. Many times strategic planning documents are shelved and forgotten until the next cycle begins. On the other hand, many smaller and newer organizations, propelled by urgency, may not devote the necessary time and energy to the strategic planning process.
Only 63% of businesses plan more than a year out. They fail to see that — contrary to Alice in Wonderland’s Cheshire cat — “any way” does not take you there.
For all organizations, a more rigorous annual planning process is critical for driving future success, profitability, value, and impact.
John Kotter, a former professor at Harvard Business School and noted expert on innovation says, “ Strategy should be viewed as a dynamic force that constantly seeks opportunities, identifies initiatives that will capitalize on them, and completes those initiatives swiftly and efficiently.”
There’s hardly a better case that can be made for dynamic planning than in the tech industry, where mergers and acquisitions are accelerating exponentially. Companies need to be nimble enough to navigate rapid change . In this case, planning should occur quarterly.
Strategic planning is an ongoing process by which an organization sets its forward course by bringing all of its stakeholders together to examine current realities and define its vision for the future.
It examines its strengths and weaknesses, resources available, and opportunities. Strategic planning seeks to anticipate future industry trends . During the process, the organization creates a vision, articulates its purpose, and sets strategic goals that are long-term and forward-focused.
Those strategic goals inform operational goals and incremental milestones that need to be reached. The operational plan has clear objectives and supporting initiatives tied to metrics to which everyone is accountable . The plan should be agile enough to allow for recalibrating when necessary and redistributing resources based on internal and external forces.
The output of the planning process is a document that is shared across the enterprise.
Strategic planning for individuals
Strategic planning isn’t just for companies. At BetterUp, strategic planning is one of the skills that we identify, track, and develop within the Whole Person Model . For individuals, strategic planning is the ability to think through ways to achieve desired outcomes. Just as strategic planning helps organizations realize their goals for the future, it helps individuals grow and achieve goals in a unified direction.
Working backward from the desired outcome, effective strategic planning consists of coming up with the steps we need to take today in order to get where we want to be tomorrow.
While no plan is infallible, people who develop this skill are good at checking to make sure that their actions are in alignment with the outcomes that they want to see in the future. Even when things don’t go according to plan, their long-term goals act as a “North star” to get them back on course. In addition, envisioning desired future states and figuring out how to turn them into reality enhances an individual’s sense of personal meaning and motivation.
Whether we’re talking about strategic planning for the company or the individual, strategic plans can go awry in a variety of ways including:
- Unrealistic goals and too many priorities
- Poor communication
- Using the wrong measures
- Lack of leadership
The extent to which that document is shelved until the next planning cycle or becomes a dynamic map of the future depends on the people responsible for overseeing the execution of the plan.
What is strategic plan management?
"Most people think of strategy as an event, but that’s not the way the world works," according to Harvard Business School Professor Clayton Christensen. "When we run into unanticipated opportunities and threats, we have to respond. Sometimes we respond successfully; sometimes we don’t. But most strategies develop through this process. More often than not, the strategy that leads to success emerges through a process that works 24/7 in almost every industry."
Strategic business management is the ongoing process by which an organization creates and sustains a successful roadmap that moves the company in the direction it needs to move, year after year, for long-term success. It spans from research and formulation to execution, evaluation, and adjustment. Given the pace of change, strategic management is more relevant and important than ever for assigning measurable goals and action steps
Many organizations fail because they don’t have the strategic management team at the table right from the beginning of the planning process. A strategic plan is only as good as its ability to be executed and sustained.
A strategic management initiative might be driven by an internal group — many companies have an internal strategy team — or an outside consulting firm. Ultimately company leaders need to own executing and sustaining the strategy.
Strategic management teams
In this Harvard Business Review article, Ron Carucci from consulting firm Navalent reports that 61% of executives in a 10-year longitudinal study felt they were not prepared for the strategic challenges they faced upon being appointed to senior leadership roles. Lack of commitment to the plan is also a contributing factor. In addition, leaders attending to quarterly targets, crisis management , and reconciling budgets often consider the execution of a long-term strategy a low priority.
A dedicated strategic management team works with those senior leaders and managers throughout the organization to communicate, coordinate and evaluate progress against goals. They tie strategic objectives to day-to-day operational metrics throughout the enterprise.
A good strategic management group can assist in creating a culture of empowerment and learning . It holds regular meetings with employees. It sets a clear agenda and expectations to make the strategic plan real and compelling to the organization through concrete objectives, results, and timelines.
Strategy development is a lot of work, but the benefits are lasting. After all, as the saying goes, "If you fail to plan, you plan to fail." Taking the time for review and planning activities has the following benefits:
- Organizations and people are set up to succeed
- Increased likelihood of staying on track
- Decreased likelihood of being distracted or derailed
- Progress through the plan is communicated throughout the organization
- Metrics facilitate course correction
- Budgets enterprise-wide are based on strategy
- Cross-organization alignment
- Robust employee performance and compensation plans
- Commitment to learning and training
- A robust strategic planning process gets everyone involved and invested in the organizations
- Employees inform management about what’s working or not working at the operational level
- Innovation is encouraged and rewarded
- Increased productivity
1. Define mission and vision
Begin by articulating the organization's vision for the future. Ask, "What would success look like in five years?" Create a mission statement describing organizational values and how you intend to reach the vision. What values inform and determine mission, vision, and purpose?
Purpose-driven strategic goals articulate the “why” of what the corporation is doing. It connects the vision statement to specific objectives, drawing a line between the larger goals and the work that teams and individuals do.
2. Conduct a comprehensive assessment
This stage includes identifying an organization’s strategic position.
Gathering data from internal and external environments and respective stakeholders takes place at this time. Involving employees and customers in the research.
The task is to gather market data through research. One of the most critical components of this stage is a comprehensive SWOT analysis that involves gathering people and bringing perspectives from all stakeholders to determine:
- W eaknesses
- O pportunities
Strengths and weaknesses — In this stage, planners identify the company’s assets that contribute to its current competitive advantage and/or the likelihood of a significant increase in the organization’s market share in the future. It should be an objective assessment rather than an inflated perspective of its strengths.
An accurate assessment of weaknesses requires looking outward at external forces that can reveal new opportunities as well as threats. Consider the massive shift in multiple industries whose strategy has been disrupted by the COVID-19 pandemic. While it was disastrous to the airline and restaurant industries’ business models , tech companies were able to seize the opportunity and address the demands of remote work.
Michael Porter’s book Competetive Strategy: Techniques for Analyzing Industries and Competitors claims that there are five forces at work in an industry that influence that industry’s ability to develop a competitive strategy. Since the book was published in 1979, organizations have turned to Porter’s theory to create their strategic framework.
Here are the 5 forces (and key questions) that determine the competitive strategy for most industries.
- Competitive rivalry : When considering the strengths of an organization’s competitors it’s important to ask: How do our products/services hold up to our competition? If the rivalry is intense, companies need to consider what capacity they have to gain leverage through price cuts or bold marketing strategies. If there is little competition, the organization has a substantial gain in the market.
- Supplier power: How might suppliers influence strategy? For example, what if suppliers raised their prices? To what extent would a company need a particular supplier for our product(s)? Is it possible to switch suppliers in a way that is more cost effective and efficient? The number of suppliers that exist will determine your ability to keep costs low.
- Buyer power: To what extent do buyers have the ability to shop around right into the hands of your competitors? How much power does your customer base have in determining price? A small number of well-informed buyers shifts the power in their direction while a large pool may give you the strategic advantage
- Threat of substitution: What is the threat of a company’s buyer substituting your services/products from the competition? What if the buyer figures out another way to access the services/products that it offers?
- Threat of new entry: How easy is it for newcomers to enter the organization’s market?
Considering the factors above, determine the company’s value through financial forecasting . While almost certainly to become a moving target influenced by the five forces, a forecast can assign initial anticipated measurable results expected in the plan or ROI: profits/cost of investment.
4. Set the organizational direction of the business
The above research and assessment will help an organization to set goals and priorities. Too often an organization’s strategic plan is too broad and over-ambitious. Planners need to ask, ”What kind of impact are we seeking to have, and in what time frame?” They need to drill down to objectives that will have the most impact.
5. Create strategic objectives
This next phase of operational planning consists of creating strategic objectives and initiatives. Kaplan and Norton posit in their balanced scorecard methodology that there are four perspectives for consideration in identifying the conditions for success. They are interrelated and must be evaluated simultaneously.
- Financial : Such considerations as growing shareholder value, increasing revenue, managing cost, profitability, or financial stability inform strategic initiatives.
- Customer-satisfaction: Objectives can be determined by identifying targets related to one or some of the following: value for the cost, best service, increased market share, or providing customers with solutions.
- Internal processes such as operational processes and efficiencies, investment in innovation, investment in total quality and performance management , cost reduction, improvement of workplace safety, or streamlining processes.
- Learning and growth: Organizations must ask: Are initiatives in place in terms of human capital and learning and growth to sustain change? Objectives may include employee retention, productivity, building high-performing teams, or creating a pipeline for future leaders .
6. Align with key stakeholders
It’s a team effort. The success of the plan is in direct proportion to the organization’s commitment to inform and engage the entire workforce in strategy execution. People will only be committed to strategy implementation when they're connected to the organization's goals. With everyone pulling in the same direction, cross-functional decision-making becomes easier and more aligned.
7. Begin strategy mapping
A strategy map is a powerful tool for illustrating the cause-effect of those perspectives and connecting them to between 12 and 18 strategic objectives. Since most people are visual learners, the map provides an easy-to-understand diagram for everyone in the organization creating shared knowledge at all levels.
8. Determine strategic initiatives
Following the development of strategic objectives, strategic initiatives are determined. These are the actions the organization will take to reach those objectives. They may relate initiatives related to factors such as scope, budget, raising brand awareness, product development, and employee training.
9. Benchmark performance measures and analysis
Strategic initiatives inform SMART goals to which metrics are assigned to evaluate performance. These measures cascade from senior management to management to front-line workers. At this stage, the task is to create goals that are specific, measurable, attainable, relevant, and time-based informing the operational plan.
Benchmarks are established against so that performance can be measures, and a time frame is created. Key performance indicators (KPI’s) are assigned based on organizational goals. These indicators align workers’ performance and productivity with long-term strategic objectives.
10. Performance evaluation
Assessment of whether the plan has been successful . It measures activities and progress toward objectives and allows for the creation of improved plans and objectives in order to improve overall performance .
Think of strategic planning as a circular process beginning and ending with evaluation. Adjust a plan as necessary. The pace at which review of the plan is necessary may be once a year for many organizations or quarterly for organizations in rapidly evolving industries.
Prioritizing the strategic planning process
The strategic planning meeting may have a reputation for being just another to-do, but it might be time to take a second look. With the right action plan and a little strategic thinking, you can reinvigorate your business environment and start planning for success.
It's that time to get excited about the future again.
Betterup Fellow Coach, M.S.Ed, M.S.O.D.
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- What is strategic planning? 5 steps and ...
What is strategic planning? 5 steps and processes
A strategic plan helps you define and share the direction your company will take in the next three to five years. It includes your company’s vision and mission statements, goals, and the actions you’ll take to achieve those goals. In this article we describe how a strategic plan compares to other project and business tools, plus four steps to create a successful strategic plan for your company.
Strategic planning is when business leaders map out their vision for the organization’s growth and how they’re going to get there. Strategic plans inform your organization’s decisions, growth, and goals. So if you work for a small company or startup, you could likely benefit from creating a strategic plan. When you have a clear sense of where your organization is going, you’re able to ensure your teams are working on projects that make the most impact.
The strategic planning process doesn’t just help you identify where you need to go—during the process, you’ll also create a document you can share with employees and stakeholders so they stay informed. In this article, we’ll walk you through how to get started developing a strategic plan.
What is a strategic plan?
A strategic plan is a tool to define your organization’s goals and what actions you will take to achieve them. Typically, a strategic plan will include your company’s vision and mission statements, your long-term goals (as well as short-term, yearly objectives), and an action plan of the steps you’re going to take to move in the right direction.
Your strategic plan document should include:
Your company’s mission statement
Your company’s goals
A plan of action to achieve those goals
Your approach to achieving your goals
The tactics you’ll use to meet your goals
An effective strategic plan can give your organization clarity and focus. This level of clarity isn’t always a given—according to our research, only 16% of knowledge workers say their company is effective at setting and communicating company goals. By investing time into strategy formulation, you can build out a three- to five-year vision for the future of your company. This strategy will then inform your yearly and quarterly company goals.
Do I need a strategic plan?
A strategic plan is one of many tools you can use to plan and hit your goals. It helps map out strategic objectives and growth metrics. Here’s how a strategic plan compares to other project management and business tools.
Strategic plan vs. business plan
A business plan can help you document your strategy as you’re getting started so every team member is on the same page about your core business priorities and goals. This tool can help you document and share your strategy with key investors or stakeholders as you get your business up and running.
You should create a business plan when you’re:
Just starting your business
Significantly restructuring your business
If your business is already established, consider creating a strategic plan instead of a business plan. Even if you’re working at a relatively young company, your strategic plan can build on your business plan to help you move in the right direction. During the strategic planning process, you’ll draw from a lot of the fundamental business elements you built early on to establish your strategy for the next three to five years.
Key takeaway: A business plan works for new businesses or large organizational overhauls. Strategic plans are better for established businesses.
Strategic plan vs. mission and vision statements
Your strategic plan, mission statement, and vision statements are all closely connected. In fact, during the strategic planning process, you will take inspiration from your mission and vision statements in order to build out your strategic plan.
As a result, you should already have your mission and vision statements drafted before you create a strategic plan. Ideally, this is something you created during the business planning phase or shortly after your company started. If you don’t have a mission or vision statement, take some time to create those now. A mission statement states your company’s purpose and it addresses what problem your organization is trying to solve. A vision statement states, in very broad strokes, how you’re going to get there.
A mission statement summarizes your company’s purpose
A vision statement broadly explains how you’ll reach your company’s purpose
A strategic plan should include your mission and vision statements, but it should also be more specific than that. Your mission and vision statements could, theoretically, remain the same throughout your company’s entire lifespan. A strategic plan pulls in inspiration from your mission and vision statements and outlines what actions you’re going to take to move in the right direction.
For example, if your company produces pet safety equipment, here’s how your mission statement, vision statement, and strategic plan might shake out:
Mission statement: “To ensure the safety of the world’s animals.”
Vision statement: “To create pet safety and tracking products that are effortless to use.”
Your strategic plan would outline the steps you’re going to take in the next few years to bring your company closer to your mission and vision. For example, you develop a new pet tracking smart collar or improve the microchipping experience for pet owners.
Key takeaway: A strategic plan draws inspiration from your mission and vision statements.
Strategic plan vs. company objectives
Company objectives are broad goals. You should set these on a yearly or quarterly basis (if your organization moves quickly). These objectives give your team a clear sense of what you intend to accomplish for a set period of time.
Your strategic plan is more forward-thinking than your company goals, and it should cover more than one year of work. Think of it this way: your company objectives will move the needle towards your overall strategy—but your strategic plan should be bigger than company objectives because it spans multiple years.
Key takeaway: Company objectives are broad, evergreen goals, while a strategic plan is a specific plan of action.
Strategic plan vs. business case
A business case is a document to help you pitch a significant investment or initiative for your company. When you create a business case, you’re outlining why this investment is a good idea, and how this large-scale project will positively impact the business.
You might end up building business cases for things on your strategic plan’s roadmap—but your strategic plan should be bigger than that. This tool should encompass multiple years of your roadmap, across your entire company—not just one initiative.
Key takeaway: A business case tackles one initiative or investment, while a strategic plan maps out years of overall growth for your company.
Strategic plan vs. project plan
A strategic plan is a company-wide, multi-year plan of what you want to accomplish in the next three to five years and how you plan to accomplish that. A project plan, on the other hand, outlines how you’re going to accomplish a specific project. This project could be one of many initiatives that contribute to a specific company objective which, in turn, is one of many objectives that contribute to your strategic plan.
A project plan has seven parts:
Stakeholders and roles
Scope and budget
Milestones and deliverables
Timeline and schedule
Key takeaway: You may build project plans to map out parts of your strategic plan.
When should I create a strategic plan?
You should aim to create a strategic plan every three to five years, depending on your organization’s growth speed. That being said, if your organization moves quickly, consider creating one every two to three years instead. Small businesses may need to create strategic plans more often, as their needs change.
Since the point of a strategic plan is to map out your long-term goals and how you’ll get there, you should create a strategic plan when you’ve met most or all of them. You should also create a strategic plan any time you’re going to make a large pivot in your organization’s mission or enter new markets.
What are the 5 steps in strategic planning?
The strategic planning process should be run by a small team of key stakeholders who will be in charge of building your strategic plan.
Your group of strategic planners, sometimes called the management committee, should be a small team of five to 10 key stakeholders and decision-makers for the company. They won’t be the only people involved—but they will be the people driving the work.
Once you’ve established your management committee, you can get to work on the strategic planning process.
Step 1: Determine where you are
Before you can get started with strategy development and define where you’re going, you first need to define where you are. To do this, your management committee should collect a variety of information from additional stakeholders—like employees and customers. In particular, plan to gather:
Relevant industry and market data to inform any market opportunities, as well as any potential upcoming threats in the near future
Customer insights to understand what your customers want from your company—like product improvements or additional services
Employee feedback that needs to be addressed—whether in the product, business practices, or company culture
A SWOT analysis to help you assess both current and future potential for the business (you’ll return to this analysis periodically during the strategic planning process).
To fill out each letter in the SWOT acronym, your management committee will answer a series of questions:
What does your organization currently do well?
What separates you from your competitors?
What are your most valuable internal resources?
What tangible assets do you have?
What is your biggest strength?
What does your organization do poorly?
What do you currently lack (whether that’s a product, resource, or process)?
What do your competitors do better than you?
What, if any, limitations are holding your organization back?
What processes or products need improvement?
What opportunities does your organization have?
How can you leverage your unique company strengths?
Are there any trends that you can take advantage of?
How can you capitalize on marketing or press opportunities?
Is there an emerging need for your product or service?
What emerging competitors should you keep an eye on?
Are there any weaknesses that expose your organization to risk?
Have you or could you experience negative press that could reduce market share?
Is there a chance of changing customer attitudes towards your company?
Step 2: Identify your goals and objectives
This is where the magic happens. To develop your strategy, take into account your current position, which is where you are now. Then, draw inspiration from your original business documents—these are your final destination.
To develop your strategy, you’re essentially pulling out your compass and asking, “Where are we going next?” This can help you figure out exactly which path you need to take.
During this phase of the planning process, take inspiration from important company documents to ensure your strategic plan is moving your company in the right direction like:
Your mission statement, to understand how you can continue moving towards your organization’s core purpose
Your vision statement, to clarify how your strategic plan fits into your long-term vision
Your company values, to guide you towards what matters most towards your company
Your competitive advantages, to understand what unique benefit you offer to the market
Your long-term goals, to track where you want to be in five or 10 years
Your financial forecast and projection, to understand where you expect your financials to be in the next three years, what your expected cash flow is, and what new opportunities you will likely be able to invest in
Step 3: Develop your plan
Now that you understand where you are and where you want to go, it’s time to put pen to paper. Your plan will take your position and strategy into account to define your organization-wide plan for the next three to five years. Keep in mind that even though you’re creating a long-term plan, parts of your strategic plan should be created as the quarters and years go on.
As you build your strategic plan, you should define:
Your company priorities for the next three to five years, based on your SWOT analysis and strategy.
Yearly objectives for the first year. You don’t need to define your objectives for every year of the strategic plan. As the years go on, create new yearly objectives that connect back to your overall strategic goals .
Related key results and KPIs for that first year. Some of these should be set by the management committee, and some should be set by specific teams that are closer to the work. Make sure your key results and KPIs are measurable and actionable.
Budget for the next year or few years. This should be based on your financial forecast as well as your direction. Do you need to spend aggressively to develop your product? Build your team? Make a dent with marketing? Clarify your most important initiatives and how you’ll budget for those.
A high-level project roadmap . A project roadmap is a tool in project management that helps you visualize the timeline of a complex initiative, but you can also create a very high-level project roadmap for your strategic plan. Outline what you expect to be working on in certain quarters or years to make the plan more actionable and understandable.
Step 4: Execute your plan
After all that buildup, it’s time to put your plan into action. New strategy execution involves clear communication across your entire organization to make sure everyone knows their responsibilities and how to measure the plan’s success.
Map your processes with key performance indicators, which will gauge the success of your plan. KPIs will establish which parts of your plan you want achieved in what time frame.
A few tips to make sure your plan will be executed without a hitch:
Align tasks with job descriptions to make sure people are equipped to get their jobs done
Communicate clearly to your entire organization throughout the implementation process
Fully commit to your plan
Step 5: Revise and restructure as needed
At this point, you should have created and implemented your new strategic framework. The final step of the planning process is to monitor and manage your plan.
Share your strategic plan —this isn’t a document to hide away. Make sure your team (especially senior leadership) has access to it so they can understand how their work contributes to company priorities and your overall strategic plan. We recommend sharing your plan in the same tool you use to manage and track work, so you can more easily connect high-level objectives to daily work. If you don’t already, consider using a work management tool .
Update your plan regularly (quarterly and annually). Make sure you’re using your strategic plan to inform your shorter-term goals. Your strategic plan also isn’t set in stone. You’ll likely need to update the plan if your company decides to change directions or make new investments. As new market opportunities and threats come up, you’ll likely want to tweak your strategic plan to ensure you’re building your organization in the best direction possible for the next few years.
Keep in mind that your plan won’t last forever—even if you do update it frequently. A successful strategic plan evolves with your company’s long-term goals. When you’ve achieved most of your strategic goals, or if your strategy has evolved significantly since you first made your plan, it might be time to create a new one.
The benefits of strategic planning
Strategic planning can help with goal-setting by allowing you to explain how your company will move towards your mission and vision statements in the next three to five years. If you think of your company trajectory as a line on a map, a strategic plan can help you better quantify how you’ll get from point A (where you are now) to point B (where you want to be in a few years).
When you create and share a clear strategic plan with your team, you can:
Align everyone around a shared purpose
Proactively set objectives to help you get where you want to go
Define long-term goals, and then set shorter-term goals to support them
Assess your current situation and any opportunities—or threats
Help your business be more durable because you’re thinking long-term
Increase motivation and engagement
Sticking to the strategic plan
To turn your company strategy into a plan—and ultimately, impact—make sure you’re proactively connecting company objectives to daily work. When you can clarify this connection, you’re giving your team members the context they need to get their best work done.
With clear priorities, team members can focus on the initiatives that are making the biggest impact for the company—and they’ll likely be more engaged while doing so.
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Strategic Planning Process: 7 Crucial Steps to Success
What to read next:
Playing chess without a strong opening is a guaranteed way to disadvantage yourself. Just like in chess, organizations without an adequate strategic planning process are unlikely to thrive and adapt long-term.
The strategic planning process is essential for aligning your organization on key priorities, goals, and initiatives, making it crucial for organizational success.
This article will empower you to craft and perfect your strategic planning process by exploring the following:
- What is strategic planning
- Why strategic planning is important for your business
- The seven steps of the strategic planning process
- Five best practices supporting the strategic planning process
By the end of this article, you’ll have the knowledge needed to perfect the key elements of strategic planning. Ready? Let’s begin.
What is strategic planning?
Strategic planning charts your business's course toward success. Using your organization’s vision, mission, and values — with internal and external information — each step of the strategic planning process helps you craft long-term objectives and attain your goals with strategic management.
The key elements of strategic planning includes a SWOT analysis, goal setting , stakeholder involvement, plus developing actionable strategies, approaches, and tactics aligned with primary objectives.
In short, the strategic planning process bridges the gap between your organization’s current and desired state, providing a clear and actionable framework that answers: Where are you now? Where do you want to be? How will you get there?
7 key elements of strategic planning
The following strategic planning components work together to create cohesive strategic plans for your business goals. Let’s take a close look at each of these:
- Vision : What your organization wants to achieve in the future, the long-term goal
- Mission : The driving force behind why your company exists, who it serves, and how it creates value
- Values : Fundamental beliefs guiding your company’s decision-making process
- Goals : Measurable objectives in alignment with your business mission, vision, and values
- Strategy : A long-term strategy map for achieving your objectives based on both internal and external factors
- Approach : How you execute strategy and achieve objectives using actions and initiatives
- Tactics : Granular short-term actions, programs, and activities
Why a concrete strategic planning is important
Just as a chess player needs a gameplan to reach checkmate, a company needs a solid strategic plan to achieve its goals.
Without a strategic plan, your business will waste precious time, energy, and resources on endeavors that won’t get your company closer to where it needs to be.
Successful strategic goals cover all key elements of strategic planning, course-correcting when necessary, and measuring your success as you go, ultimately enabling your company to stay future-proof.
Let’s dive deeper into why the steps of the strategic planning process.
What are the 7 stages of the strategic planning process?
You understand the overall value of implementing a strategic planning process — now let’s put it in practice. Our 7-step approach to strategic planning that ensures everyone is on the same page:
- Clarify your vision, mission, and values
- Conduct an environmental scan
- Define strategic priorities
- Develop goals and metrics
- Derive a strategic plan
- Write and communicate your strategic plan
- Implement, monitor, and revise
1. Clarify your vision, mission, and values
The first step of the strategic planning process is understanding your organization’s core elements: vision, mission, and values. Clarifying these will align your strategic plan with your company’s definition of success. Once established, these are the foundation for the rest of the strategic planning process.
Questions to ask:
- What do we aspire to achieve in the long term?
- What is our purpose or ultimate goal?
- What do we do to fulfill our vision?
- What key activities or services do we provide?
- What are our organization's ethics?
- What qualities or behaviors do we expect from employees?
Read more: What is Mission vs. Vision
2. Conduct an environmental scan
Once everyone on the same page about vision, mission, and values, it's time to scan your internal and external environment. This involves a long-term SWOT analysis, evaluating your organization’s strengths, weaknesses, opportunities, and threats.
Internal strengths and weaknesses help you understand where your organization excels and what it could improve. Strengths and weaknesses awareness helps make more informed decisions with your capabilities and resource allocation in mind.
Externally, opportunities and threats in the market help you understand the power of your industry’s customers, suppliers, and competitors. Additionally, consider how broader forces like technology, culture, politics, and regulation may impact your organization.
- What are our organization's key strengths or competitive advantages?
- What areas or functions within our organization need improvement?
- What emerging trends or opportunities can we leverage?
- How do changes in technology, regulations, or consumer behavior impact us?
3. Define strategic priorities
Prioritization puts the “strategic” in strategic planning process. Your organization’s mission, vision, values, and environmental scan serve as a lens to identify top priorities. Limiting priorities ensures your organization intentionally allocates resources.
These categories can help you rank your strategic priorities:
- Critical : Urgent tasks whose failure to complete will have severe consequences — financial losses, reputation damage, or legal consequences
- Important : Significant tasks which support organizational achievements and require timely completion
- Desirable : Valuable tasks not essential in the short-term, but can contribute to long-term success and growth
- How do these priorities align with our mission, vision, and values?
- Which tasks need to be completed quickly to ensure effective progress towards our desired outcomes?
- What resources and capabilities do we need to pursue these priorities effectively?
4. Develop goals and metrics
Next, you establish goals and metrics to reflect your strategic priorities. Purpose-driven, long-term, actionable strategic planning goals should flow down through the organization, with lower-level goals contributing to higher-level ones.
One approach that can help you set and measure your aligned goals is objectives and key results (OKRs). OKRs consist of objectives, qualitative statements of what you want to achieve, and key results, 3-5 supporting metrics that track progress toward your objective.
OKRs ensure alignment at every level of the organization, with tracking and accountability built into the framework to keep everyone engaged. With ambitious, intentional goals, OKRs can help you drive the strategic plan forward.
- What metrics can we use to track progress toward each objective?
- How can we ensure that lower-level goals and metrics support and contribute to higher-level ones?
- How will we track and measure progress towards key results?
- How will we ensure accountability?
Get an in-depth look at OKRs with our Ultimate OKR Playbook
5. Derive a strategic plan
The next step of the strategic planning process gets down to the nitty-gritty “how” — outlining a clear, practical plan for bridging the gap between now and the future.
To do this, you’ll need to brainstorm short- and long-term approaches to achieving the goals you’ve set, answering a couple of key questions along the way. You must evaluate ideas based on factors like:
- Feasibility : How realistic and achievable is it?
- Impact : How conducive is it to goal attainment?
- Cost : Can we fund this approach, and is it worth the investment?
- Alignment : Does it support our mission, vision, and values?
From your approaches, you can devise a detailed action plan, which covers things like:
- Timelines : When will we take each step, and what are the deadlines?
- Milestones : What key achievements will ensure consistent progress?
- Resource requirements : What’s needed to achieve each step?
- Responsibilities : Who's accountable in each step?
- Risks and challenges : What can affect our ability to execute our plan? How will we address these?
With a detailed action plan like this, you can move from abstract goals to concrete steps, bringing you closer to achieving your strategic objectives.
6. Write and communicate your strategic plan
Writing and communicating your strategic plan involves everyone, ensuring each team is on the same page. Here’s a clear, concise structure you can use to cover the most important strategic planning components:
- Executive summary : Highlights and priorities in your strategic overview
- Introduction : Background on your strategic plan
- Connection : How your strategic plan aligns with your organization’s mission, vision, and values
- Environmental scan : An overview of your SWOT analysis findings
- Strategic priorities and goals : Informed short and long-term organizational goals
- Strategic approach : An overview of your tactical plan
- Resource needs : How you'll deploy technology, funding, and employees
- Risk and challenges : How you’ll mitigate the unknowns if and when they arise
- Implementation plan : A step-by-step resource deployment plan for achieving your strategy
- Monitoring and evaluation : How you’ll keep your plan heading in the right direction
- Conclusion : A summary of the strategic plan and everything it entails
- What information or context do stakeholders need to understand the strategic plan?
- How can we emphasize the connection between the strategic plan and the overall purpose and direction of the organization?
- What initiatives or strategies will we implement to drive progress?
- How will we mitigate or address risks?
- What are the specific steps and actions we need to take to implement the strategic plan?
- Any additional information or next steps we need to communicate?
7. Implement, monitor, and revise performance
Finally, it’s time to implement your strategic plan. As you get the ball rolling, keep a close eye on your timelines, milestones, and performance targets.
Certain indicators like completions, issues, and delays maintain visibility into how your process is going. With any bottlenecks, inefficiencies, or misalignment, take corrective action promptly — adjust the plan, reallocate resources, or provide additional training to employees.
Externally, it’s important to monitor changes such as customer preferences, competitive pressures, economic shifts , and regulatory changes. These factors impact the success of your strategic action plan and may require tweaks along the way.
- Are there any bottlenecks, inefficiencies, or misalignments we need to address?
- Are we monitoring and analyzing external factors?
- Are we prepared to make necessary tweaks or adaptations along the way?
5 best practices during the strategic planning process
Simply going through the motions of each step in the strategic planning process is not enough — you must adopt a set of best practices along the way to be successful with strategy development.
We’ve compiled a list of five best practices to help you navigate the development and implementation of your strategic planning process.
Keep the planning process flexible
With ever-changing business environments, a one-and-done approach to strategic planning is insufficient. Your strategic plan needs to be adaptable to ensure its relevancy and its ability to weather the effects of changing circumstances.
Pull together a diverse group of stakeholders
By including voices from across the organization, you can account for varying thoughts, perspectives, and experiences at each step of the strategic planning process, ensuring cross-functional alignment .
Document the process
Continuous documentation of the strategic management process is crucial in capturing and communicating the key elements of strategic planning. This keeps everyone on the same page and your strategic plan up-to-date and relevant.
Make data-driven decisions
Root your decisions in evidence and facts rather than assumptions or opinions. This cultivates accurate insights, improves prioritization, and reduces biased (flawed) decisions.
Align your company culture with the strategic plan
Your strategic plan can only be successful if everyone is on board with it — company culture supports what you’re trying to achieve. Behaviors, rules, and attitudes optimize the execution of your strategic plan.
The strategic planning process in a nutshell
Careful strategy mapping is crucial for any organization looking to achieve its long-term goals while staying true to its mission, vision, and values. The seven steps in the strategic planning process outlined in this article provide a solid framework your organization can follow — from clarifying your organization’s purpose and developing a strategic plan, to implementing, monitoring, and revising performance. These steps will help your company meet goal measurements such as key performance indicators and OKRs.
Yet, it’s important to remember that strategic planning is not a one-time event. To stay effective and relevant, you must continuously monitor and adapt your strategy in response to changing circumstances. This ongoing process of improvement keeps your organization competitive and demonstrates your commitment to achieving your goals.
Quantive is your bridge between strategy and execution. Founded on the objectives and key results (OKR) methodology, our Strategy Execution Platform is where businesses plan successful strategy, focus and align teams to it, and stay on the leading edge of progress.
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🎯 Finish your 2024 OKRs in 60 days
The strategic planning process in 4 steps, to assist you throughout your planning process, we have created a how-to guide on the basics of strategic planning which will take you through the planning process step-by-step..
Free Strategic Planning Guide
What is Strategic Planning?
Strategic Planning is a process where organizations define a bold vision and create a plan with objectives and goals to reach that future. A great strategic plan defines where your organization is going, how you’ll win, who must do what, and how you’ll review and adapt your strategy.
Overview of the complete strategic planning process:
Getting started: strategic planning introduction.
The strategic management process is about getting from Point A to Point B more effectively, efficiently, and enjoying the journey and learning from it. Part of that journey is the strategy and part of it is execution. Having a good strategy dictates “how” you travel the road you have selected and effective execution makes sure you are checking in along the way. On average, this process can take between three and four months. However no one organization is alike and you may decide to fast track your process or slow it down. Move at a pace that works best for you and your team and leverage this as a resource. For more of a deep dive look into each part of the planning phase, you will see a link to the detailed How-To Guide at the top of each phase.
1-2 weeks (1 hr meeting with Owner/CEO, Strategy Director and Facilitator (if necessary) to discuss information collected and direction for continued planning.)
Questions to Ask:
- Who is on your Planning Team?
- Who will be the business process owner (Strategy Director) of planning in your organization?
- Fast forward 12 months from now, what do you want to see differently in your organization as a result of embarking on this initiative?
- Planning team members are informed of their roles and responsibilities.
- Planning schedule is established.
- Existing planning information and secondary data collected.
Step 1: Determine Organizational Readiness
Set up your planning process for success – questions to ask:.
- Are the conditions and criteria for successful planning in place at the current time? Can certain pitfalls be avoided?
- Is this the appropriate time for your organization to initiate a planning process? Yes or no? If no, where do you go from here?
Step 2: Develop Your Team & Schedule
Who is going to be on your planning team? You need to choose someone to oversee the implementation (Chief Strategy Officer or Strategy Director) and then you need some of the key individuals and decision makers for this team. It should be a small group of approximately 12-15 persons.
OnStrategy is the leader in strategic planning and performance management. Our cloud-based software and hands-on services closes the gap between strategy and execution. Learn more about OnStrategy here .
Step 3: Collect Current Data
Collect the following information on your organization:
- The last strategic plan, even if it is not current
- Mission statement, vision statement, values statement
- Business plan
- Financial records for the last few years
- Marketing plan
- Other information, such as last year’s SWOT, sales figures and projections
Step 4:Review collected data:
Review the data collected in the last action with your strategy director and facilitator.
- What trends do you see?
- Are there areas of obvious weakness or strengths?
- Have you been following a plan or have you just been going along with the market?
Strategic Planning Phase 1: Determine Your Strategic Position
Want More? Deep Dive Into the “ Evaluate Your Strategic Position ” How-To Guide.
Step 1: identify strategic issues.
Strategic issues are critical unknowns that are driving you to embark on a strategic planning process now. These issues can be problems, opportunities, market shifts or anything else that is keeping you awake at night and begging for a solution or decision.
- How will we grow, stabilize, or retrench in order to sustain our organization into the future?
- How will we diversify our revenue to reduce our dependence on a major customer?
- What must we do to improve our cost structure and stay competitive?
- How and where must we innovate our products and services?
Step 2: Conduct an Environmental Scan
Conducting an environmental scan will help you understand your operating environment. An environmental scan is also referred to as a PEST analysis, which is an acronym for Political, Economic, Social and Technological trends. Sometimes it is helpful to also include Ecological and Legal trends as well. All of these trends play a part in determining the overall business environment.
Step 3: Conduct a Competitive Analysis
The reason to do a competitive analysis is to assess the opportunities and threats that may occur from those organizations competing for the same business you are. You need to have an understanding of what your competitors are or aren’t offering your potential customers. Here are a few other key ways a competitive analysis fits into strategic planning:
- To help you assess whether your competitive advantage is really an advantage.
- To understand what your competitors’ current and future strategies are so you can plan accordingly.
- To provide information that will help you evaluate your strategic decisions against what your competitors may or may not be doing.
Step 4: Identify Opportunities and Threats
Opportunities are situations that exist but must be acted on if the business is to benefit from them.
What do you want to capitalize on?
- What new needs of customers could you meet?
- What are the economic trends that benefit you?
- What are the emerging political and social opportunities?
- What niches have your competitors missed?
Threats refer to external conditions or barriers that may prevent a company from reaching its objectives.
What do you need to mitigate?
Questions to answer:.
- What are the negative economic trends?
- What are the negative political and social trends?
- Where are competitors about to bite you?
- Where are you vulnerable?
Step 5: Identify Strengths and Weaknesses
Strengths refer to what your company does well.
What do you want to build on?
- What do you do well (in sales, marketing, operations, management)?
- What are your core competencies?
- What differentiates you from your competitors?
- Why do your customers buy from you?
Weaknesses refer to any limitations a company faces in developing or implementing a strategy.
What do you need to shore up?
- Where do you lack resources?
- What can you do better?
- Where are you losing money?
- In what areas do your competitors have an edge?
Step 6: Customer Segments
Customer segmentation defines the different groups of people or organizations a company aims to reach or serve.
Who are we providing value to?
- What needs or wants define your ideal customer?
- What characteristics describe your typical customer?
- Can you sort your customers into different profiles using their needs, wants and characteristics?
- Can you reach this segment through clear communication channels?
Step 7: Develop Your SWOT
A SWOT analysis is a quick way of examining your organization by looking at the internal strengths and weaknesses in relation to the external opportunities and threats. By creating a SWOT analysis, you can see all the important factors affecting your organization together in one place. It’s easy to read, easy to communicate, and easy to create. Take the Strengths, Weaknesses, Opportunities and Threats you developed earlier, review, prioritize and combine like terms. The SWOT analysis helps you ask, and answer, the following questions: “How do you….”
- Build on your strengths
- Shore up your weaknesses
- Capitalize on your opportunities
- Manage your threats
Strategic Planning Process Phase 2: Developing Strategy
Want More? Deep Dive Into the “Developing Your Strategy” How-To Guide.
Step 1: Develop Your Mission Statement
The mission statement describes an organization’s purpose or reason for existing.
What is our purpose? Why do we exist? What do we do?
- What does your organization intend to accomplish?
- Why do you work here? Why is it special to work here?
- What would happen if we were not here?
Outcome: A short, concise, concrete statement that clearly defines the scope of the organization.
Step 2: discover your values.
Your values statement clarifies what your organization stands for, believes in and the behaviors you expect to see as a result.
How will we behave?
- What are the key non-negotiables that are critical to the success of the company?
- What are the guiding principles that are core to how we operate in this organization?
- What behaviors do you expect to see?
- If the circumstances changed and penalized us for holding this core value, would we still keep it?
Outcome: Short list of 5-7 core values.
Step 3: casting your vision statement.
A Vision Statement defines your desired future state and provides direction for where we are going as an organization.
Where are we going?
- What will our organization look like 5–10 years from now?
- What does success look like?
- What are we aspiring to achieve?
- What mountain are you climbing and why?
Outcome: A picture of the future.
Step 4: identify your competitive advantages.
A Competitive Advantage is a characteristic(s) of an organization that allows it to meet their customer’s need(s) better than their competition can.
What are we best at?
- What are your unique strengths?
- What are you best at in your market?
- Do your customers still value what is being delivered? Ask them.
- How do your value propositions stack up in the marketplace?
Outcome: A list of 2 or 3 items that honestly express the organization’s foundation for winning.
Step 5: crafting your organization-wide strategies.
Your strategies are the general methods you intend to use to reach your vision. No matter what the level, a strategy answers the question “how.”
How will we succeed?
- Broad: market scope; a relatively wide market emphasis.
- Narrow: limited to only one or few segments in the market
- Does your competitive position focus on lowest total cost or product/service differentiation or both?
Outcome: Establish the general, umbrella methods you intend to use to reach your vision.
Phase 3: Strategic Plan Development
Want More? Deep Dive Into the “Build Your Plan” How-To Guide.
Strategic Planning Process Step 1: Use Your SWOT to Set Priorities
If your team wants to take the next step in the SWOT analysis, apply the TOWS Strategic Alternatives Matrix to help you think about the options that you could pursue. To do this, match external opportunities and threats with your internal strengths and weaknesses, as illustrated in the matrix below:
TOWS Strategic Alternatives Matrix
Evaluate the options you’ve generated, and identify the ones that give the greatest benefit, and that best achieve the mission and vision of your organization. Add these to the other strategic options that you’re considering.
Step 2: Define Long-Term Strategic Objectives
Long-Term Strategic Objectives are long-term, broad, continuous statements that holistically address all areas of your organization. What must we focus on to achieve our vision? What are the “big rocks”?
Questions to ask:
- What are our shareholders or stakeholders expectations for our financial performance or social outcomes?
- To reach our outcomes, what value must we provide to our customers? What is our value proposition?
- To provide value, what process must we excel at to deliver our products and services?
- To drive our processes, what skills, capabilities and organizational structure must we have?
Outcome: Framework for your plan – no more than 6
Step 3: Setting Organization-Wide Goals and Measures
Once you have formulated your strategic objectives, you should translate them into goals and measures that can be clearly communicated to your planning team (team leaders and/or team members). You want to set goals that convert the strategic objectives into specific performance targets. Effective goals clearly state what, when, how, and who, and they are specifically measurable. They should address what you need to do in the short-term (think 1-3 years) to achieve your strategic objectives. Organization-wide goals are annual statements that are specific, measurable, attainable, responsible and time bound. These are outcome statements expressing a result expected in the organization.
What is most important right now to reach our long-term objectives?
Outcome: clear outcomes for the current year..
Step 4: Select KPIs
Key Performance Indicators (KPI) are the key measures that will have the most impact in moving your organization forward. We recommend you guide your organization with measures that matter.
How will we measure our success?
Outcome: 5-7 measures that help you keep the pulse on your performance. When selecting your Key Performance Indicators, begin by asking “What are the key performance measures we need to track in order to monitor if we are achieving our goals?” These KPIs include the key goals that you want to measure that will have the most impact in moving your organization forward.
Step 5: Cascade Your Strategies to Operations
Cascading action items and to-dos for each short-term goal is where the rubber meets the road – literally. Moving from big ideas to action happens when strategy is translated from the organizational level to the individual. Here we widen the circle of the people who are involved in the planning as functional area managers and individual contributors develop their short-term goals and actions to support the organizational direction. But before you take that action, determine if you are going to develop a set of plans that cascade directly from the strategic plan, or instead if you have existing operational, business or account plans that should be synced up with organizational goals. A pitfall is to develop multiple sets of goals and actions for directors and staff to manage. Fundamentally, at this point you have moved from planning the strategy to planning the operations; from strategic planning to annual planning. That said, the only way strategy gets executed is to align resources and actions from the bottom to the top to drive your vision.
Questions to Ask
- How are we going to get there at a functional level?
- Who must do what by when to accomplish and drive the organizational goals?
- What strategic questions still remain and need to be solved?
Department/functional goals, actions, measures and targets for the next 12-24 months
Step 6: Cascading Goals to Departments and Team Members
Now in your Departments / Teams, you need to create goals to support the organization-wide goals. These goals should still be SMART and are generally (short-term) something to be done in the next 12-18 months. Finally, you should develop an action plan for each goal. Keep the acronym SMART in mind again when setting action items, and make sure they include start and end dates and have someone assigned their responsibility. Since these action items support your previously established goals, it may be helpful to consider action items your immediate plans on the way to achieving your (short-term) goals. In other words, identify all the actions that need to occur in the next 90 days and continue this same process every 90 days until the goal is achieved.
Examples of Cascading Goals:
Phase 4: Executing Strategy and Managing Performance
Want More? Deep Dive Into the “Managing Performance” How-To Guide.
Step 1: Strategic Plan Implementation Schedule
Implementation is the process that turns strategies and plans into actions in order to accomplish strategic objectives and goals.
How will we use the plan as a management tool?
- Communication Schedule: How and when will you roll-out your plan to your staff? How frequently will you send out updates?
- Process Leader: Who is your strategy director?
- Structure: What are the dates for your strategy reviews (we recommend at least quarterly)?
- System & Reports: What are you expecting each staff member to come prepared with to those strategy review sessions?
Outcome: Syncing your plan into the “rhythm of your business.”
Once your resources are in place, you can set your implementation schedule. Use the following steps as your base implementation plan:
- Establish your performance management and reward system.
- Set up monthly and quarterly strategy meetings with established reporting procedures.
- Set up annual strategic review dates including new assessments and a large group meeting for an annual plan review.
Now you’re ready to start plan roll-out. Below are sample implementation schedules, which double for a full strategic management process timeline.
Step 2: Tracking Goals & Actions
Monthly strategy meetings don’t need to take a lot of time – 30 to 60 minutes should suffice. But it is important that key team members report on their progress toward the goals they are responsible for – including reporting on metrics in the scorecard they have been assigned. By using the measurements already established, it’s easy to make course corrections if necessary. You should also commit to reviewing your Key Performance Indicators (KPIs) during these regular meetings.
Your Bi-Annual Checklist
Never lose sight of the fact that strategic plans are guidelines, not rules. Every six months or so, you should evaluate your strategy execution and plan implementation by asking these key questions:
- Will your goals be achieved within the time frame of the plan? If not, why?
- Should the deadlines be modified? (Before you modify deadlines, figure out why you’re behind schedule.)
- Are your goals and action items still realistic?
- Should the organization’s focus be changed to put more emphasis on achieving your goals?
- Should your goals be changed? (Be careful about making these changes – know why efforts aren’t achieving the goals before changing the goals.)
- What can be gathered from an adaptation to improve future planning activities?
Why Track Your Goals?
- Ownership: Having a stake and responsibility in the plan makes you feel part of it and leads you to drive your goals forward.
- Culture: Successful plans tie tracking and updating goals into organizational culture.
- Implementation: If you don’t review and update your goaFls, they are just good intentions
- Accountability: Accountability and high visibility help drive change. This means that each measure, objective, data source and initiative must have an owner.
- Empowerment: Changing goals from In Progress to Complete just feels good!
Step 3: Review & Adapt
Guidelines for your strategy review.
Restricting the meeting to reporting on measurements can help you stay on task and keep the meeting within 30 minutes, but if you can commit to a full hour, the meeting agenda should also include some time devoted to working on one specific topic or on one of the quarter’s priorities where decisions need to be made. Once agreed upon, this topic should be developed to conclusion. Holding meetings helps focus your goals on accomplishing top priorities and accelerating growth of the organization. Although the meeting structure is relatively simple, it does require a high degree of discipline.
Strategy Review Session Questions:
- What were our three most important strategic accomplishments of the last 90 days – how have we changed our field of play in the past 90 days?
- What are the three most important ways we fell short of our strategic potential?
- In the last 90 days, what are the three most important things that we have learned about our strategy? (NOTE: We are looking for insight to decision to action observations.)
Step 4: Annual Updates The three words strategic planning off-site provoke reactions anywhere from sheer exuberance to ducking for cover. In many organizations, retreats have a bad reputation because stepping into one of the many planning pitfalls is so easy. Holding effective meetings can be tough, and if you add a lot of brainpower mixed with personal agendas, you can have a recipe for disaster. That’s why so many strategic planning meetings are unsuccessful. Executing your strategic plan is as important, or even more important, than your strategy. Critical actions move a strategic plan from a document that sits on the shelf to actions that drive organizational growth. The sad reality is that the majority of organizations who have strategic plans fail to implement. Don’t be part of the majority! In fact, research has shown that 70% of organizations that have a formal execution process out-perform their peers. (Kaplan & Norton) Guiding your work in this stage of the planning process is a schedule for the next 12 months that spells out when the quarterly strategy reviews are, who is involved, what participants need to bring to the meetings and how you will adapt the plan based on the outcomes of the reviews. You remain in this phase of the strategic management process until you embark on the next formal planning sessions where you start back at the beginning. Remember that successful execution of your plan relies on appointing a strategy director, training your team to use OnStrategy (or any other planning tool), effectively driving accountability, and gaining organizational commitment to the process.
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Strategic planning frequently asked questions
Read our frequently asked questions about strategic planning to learn how to build a great strategic plan..
Business Strategic Planning is a process where your business defines a bold vision of the future and creates a plan to reach that future. It helps your business define where you’re going, how you’ll get there, how you’ll grow, and what you must do to reach your desired future.
A great strategic plan determines where your organization is going, how you’ll win, what roles each team member has in the execution, and your game plan for reviewing and adapting your strategy. Elements include a current state analysis, SWOT, mission, vision, values, competitive advantages, growth strategy, growth enablers, a 3-year roadmap, and annual plan with goals, KPIs, and OKRs.
Typically, the average strategic planning process takes about 3-4 months, but depending on your organization, it could take more or less time. Every organization is different, so you should work at a pace that works for you.
There are four overarching phases to the strategic planning process that include: determining position, developing your strategy, building your plan, and managing performance. Each phase plays a unique but distinctly crucial role in the strategic planning process.
Prior to starting your strategic plan, you must go through this pre-planning process to determine your organization’s readiness by following these steps:
Ask yourself these questions: Are the conditions and criteria for successful planning in place now? Can we foresee any pitfalls that we can avoid? Is there an appropriate time for our organization to initiate this process?
Develop your team and schedule. Who will oversee the implementation as Chief Strategy Officer or Director? Do we have at least 12-15 other key individuals on our team?
Research and Collect Current Data. Find the following resources that your organization may have used in the past to assist you with your new plan: last strategic plan, mission, vision, and values statement, business plan, financial records, marketing plan, SWOT, sales figures, or projections.
Finally, review the data with your strategy director and facilitator and ask these questions: What trends do we see? Any obvious strengths or weaknesses? Have we been following a plan or just going along with the market?
Determining your positioning entails conducting a scan of macro and micro trends in your environment and industry, identifying marketing and competitive opportunities and threats, clarifying target customers and value propositions, gathering and reviewing staff and partner feedback for strengths and weaknesses, synthesizing the data into a SWOT, and solidifying your competitive advantages.
Developing your strategy includes determining your primary business model and organizational purpose, identifying your corporate values, creating an image of what success would look like in 3-5 years, solidifying your competitive advantages, formulating organization wide-strategies that explain your base, and agreeing on strategic issues you need to address in the planning process. .
Once you get to the strategic plan development process in the planning process, you must begin developing your strategic framework and defining long-term strategic objectives, set short-term SMART organizational goals, and select the measure that will be your KPIs (key performance indicators.)
The last phase of strategic planning is implementation, execution, and ongoing refreshes. This step entails establishing an implementation schedule, rolling out your plan, executing against your key results, and reviewing process and refreshing your plan quarterly. p>
The ideal execution schedule for your strategic plan will differ from team to team or organization to organization, but generally, you should try to set 4 quarterly reviews, a mid-year executive survey, 12 monthly check-ins, and a year-end plan review and annual refresh.
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Strategic Planning in Diversified Companies
- Richard F. Vancil
- Peter Lorange
The widely accepted theory of corporate strategic planning is simple: using a time horizon of several years, top management reassesses its current strategy by looking for opportunities and threats in the environment and by analyzing the company’s resources to identify its strengths and weaknesses. Management may draw up several alternative strategic scenarios and appraise them […]
The widely accepted theory of corporate strategic planning is simple: using a time horizon of several years, top management reassesses its current strategy by looking for opportunities and threats in the environment and by analyzing the company’s resources to identify its strengths and weaknesses. Management may draw up several alternative strategic scenarios and appraise them against the long-term objectives of the organization. To begin implementing the selected strategy (or continue a revalidated one), management fleshes it out in terms of the actions to be taken in the near future.
- RV Mr. Vancil is professor of business administration at the Harvard Business School and chairman of its Control Area faculty. His most recent HBR article was “Inflation Accounting—The Great Controversy” (March–April 1976). His book, Strategic Planning Systems, will be published next January by Prentice-Hall.
- PL Peter Lorange is the president of IMD International in Lausanne, Switzerland, where he is also a professor of strategy and holds the Nestlé Chair.