The art of formulating business strategies, implementing them, and evaluating their impact based on organizational objectives
What is Strategic Planning?
Strategic planning is the art of creating specific business strategies, implementing them, and evaluating the results of executing the plan, in regard to a company’s overall long-term goals or desires. It is a concept that focuses on integrating various departments (such as accounting and finance, marketing, and human resources) within a company to accomplish its strategic goals. The term strategic planning is essentially synonymous with strategic management.
The concept of strategic planning originally became popular in the 1950s and 1960s, and enjoyed favor in the corporate world up until the 1980s, when it somewhat fell out of favor. However, enthusiasm for strategic business planning was revived in the 1990s and strategic planning remains relevant in modern business.
CFI’s Course on Corporate & Business Strategy is an elective course for the FMVA Program.
Strategic Planning Process
The strategic planning process requires considerable thought and planning on the part of a company’s upper-level management. Before settling on a plan of action and then determining how to strategically implement it, executives may consider many possible options. In the end, a company’s management will, hopefully, settle on a strategy that is most likely to produce positive results (usually defined as improving the company’s bottom line) and that can be executed in a cost-efficient manner with a high likelihood of success, while avoiding undue financial risk.
The development and execution of strategic planning are typically viewed as consisting of being performed in three critical steps:
1. Strategy Formulation
In the process of formulating a strategy, a company will first assess its current situation by performing an internal and external audit. The purpose of this is to help identify the organization’s strengths and weaknesses, as well as opportunities and threats ( SWOT Analysis ). As a result of the analysis, managers decide on which plans or markets they should focus on or abandon, how to best allocate the company’s resources, and whether to take actions such as expanding operations through a joint venture or merger.
Business strategies have long-term effects on organizational success. Only upper management executives are usually authorized to assign the resources necessary for their implementation.
2. Strategy Implementation
After a strategy is formulated, the company needs to establish specific targets or goals related to putting the strategy into action, and allocate resources for the strategy’s execution. The success of the implementation stage is often determined by how good a job upper management does in regard to clearly communicating the chosen strategy throughout the company and getting all of its employees to “buy into” the desire to put the strategy into action.
Effective strategy implementation involves developing a solid structure, or framework, for implementing the strategy, maximizing the utilization of relevant resources, and redirecting marketing efforts in line with the strategy’s goals and objectives.
3. Strategy Evaluation
Any savvy business person knows that success today does not guarantee success tomorrow. As such, it is important for managers to evaluate the performance of a chosen strategy after the implementation phase.
Strategy evaluation involves three crucial activities: reviewing the internal and external factors affecting the implementation of the strategy, measuring performance, and taking corrective steps to make the strategy more effective. For example, after implementing a strategy to improve customer service, a company may discover that it needs to adopt a new customer relationship management (CRM) software program in order to attain the desired improvements in customer relations.
All three steps in strategic planning occur within three hierarchical levels: upper management, middle management, and operational levels. Thus, it is imperative to foster communication and interaction among employees and managers at all levels, so as to help the firm to operate as a more functional and effective team.
Benefits of Strategic Planning
The volatility of the business environment causes many firms to adopt reactive strategies rather than proactive ones. However, reactive strategies are typically only viable for the short-term, even though they may require spending a significant amount of resources and time to execute. Strategic planning helps firms prepare proactively and address issues with a more long-term view. They enable a company to initiate influence instead of just responding to situations.
Among the primary benefits derived from strategic planning are the following:
1. Helps formulate better strategies using a logical, systematic approach
This is often the most important benefit. Some studies show that the strategic planning process itself makes a significant contribution to improving a company’s overall performance, regardless of the success of a specific strategy.
2. Enhanced communication between employers and employees
Communication is crucial to the success of the strategic planning process. It is initiated through participation and dialogue among the managers and employees, which shows their commitment to achieving organizational goals.
Strategic planning also helps managers and employees show commitment to the organization’s goals. This is because they know what the company is doing and the reasons behind it. Strategic planning makes organizational goals and objectives real, and employees can more readily understand the relationship between their performance, the company’s success, and compensation. As a result, both employees and managers tend to become more innovative and creative, which fosters further growth of the company.
3. Empowers individuals working in the organization
The increased dialogue and communication across all stages of the process strengthens employees’ sense of effectiveness and importance in the company’s overall success. For this reason, it is important for companies to decentralize the strategic planning process by involving lower-level managers and employees throughout the organization. A good example is that of the Walt Disney Co., which dissolved its separate strategic planning department, in favor of assigning the planning roles to individual Disney business divisions.
An increasing number of companies use strategic planning to formulate and implement effective decisions. While planning requires a significant amount of time, effort, and money, a well-thought-out strategic plan efficiently fosters company growth, goal achievement, and employee satisfaction.
Thank you for reading CFI’s guide to Strategic Planning. To keep learning and advancing your career, the additional CFI resources below will be useful:
- Broad Factors Analysis
- Systems Thinking
- See all management & strategy resources
- Share this article
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What is strategic planning.
What is a strategic plan? Strategic planning in management is the process of documenting and establishing the direction of your small business—by assessing both where you are and where you’re going . So, what is the purpose of a strategic plan? And what does an effective strategic plan consist of? A company’s strategic plan consists of it’s:
- Long-term goals
- Action plans
A well-written strategic business plan can play a pivotal role in your small business’s growth and success because it tells you and your employees how best to respond to opportunities and challenges.
In recent years, many small business owners have been focusing on long-term planning. In fact, in 2020, there were three business areas that small businesses focused on strategy for, including:
- 46% in sales
- 41% in advertising
- 36% in customer service
If you haven’t been focusing on a long-term business planning process, it’s not too late to think differently. Your future success depends on effective organizational strategic planning. It’s also important to remember that a strategic planning process model involves your entire business. The discussions that result can lead to meaningful changes in your business. The purpose of strategic planning is to also analyze your business and set realistic goals and objectives. This leads to the creation of a formal document that lays out the company’s views and strategic goals for the future.
Ready to learn more about strategic management and planning? Keep reading through the next sections.
The 3 Step Strategic Planning Process
What are the 3 steps in strategic planning? When it comes to the strategic planning process, think of it as having three phases:
- Review and updating
The goal of developing a strategic plan is to ensure everyone in the business is aligned when it comes to your small business’s goals and objectives, as well as to create a formal strategic plan document.
1. Discussion Phase
The discussion phase is meant to gather as much information, opinions, and input as possible. Set up a regularly scheduled meeting with the employees and any other staff in your business who will be involved with strategic planning. Make sure you have an agenda and clear expectations of what you want to accomplish in each meeting. This will keep discussions on track and help prevent distractions. In the first few meetings, try to answer questions that will help you define the business’s current status, such as, “Where are we now?” and “Where are our competitors?” Once you have a good idea of where the business is, you can focus in on specific details in future meetings.
In addition to regular meetings with your employees at your business, you can also gather information from people outside your company, like:
External people will have a unique perspective on not only your business, but also the industry you’re operating in. Getting their opinions on where they think the industry is going and what they think will change in the future can help you put together your strategic plan and determine where you want your business to be down the road.
You can also conduct a SWOT analysis. SWOT stands for strengths, weaknesses, opportunities and threats.
When you’re conducting a SWOT analysis, you and your employees will examine what your business does well, where it can improve, any future opportunities to pursue that could help facilitate growth and success, and any competitors or external factors that could prevent the business from succeeding.
Your strengths should be pretty easy to identify. When you’re discussing your business’s weaknesses, don’t be afraid to be candid. Every business has weaknesses and things to work on. Any weakness you and your employees note means it’s something you’ll aim to improve on in the future with a detailed initiative outlined in the strategic plan.
Opportunities available to your business may be pretty clear, while identifying threats to your business can be more difficult. Speaking with people outside of the company should give you a good idea of where the industry could be heading and if there are any major competitors or challenges coming. If you can identify a number of threats and challenges to your business early on, it puts you in a better position to address them if and when you encounter them down the road.
2. Development Phase
After you’ve collected all of the information, it’s time for the development phase. This is when you’ll start putting together your business’s strategic plan. A strategic plan consists of five key components:
- A vision statement
- A mission statement
- Goals and objectives
- An action plan
- Details on how often the strategic plan will be reviewed and updated
Decide with your employees what you will use to create the strategic plan. Are you going to purchase software to help you create and house the plan? Or are you going to create the plan yourself and save it in the cloud for easier access?
When you’re creating goals and objectives for your business, make sure they’re realistic and measurable. Work with your employees to create goals and objectives for at least the next one to three years. And discuss how these goals and objectives will be measured and tracked.
For example, if you have a goal of increasing sales by 10% in the next year, you can track this by measuring sale numbers. Equally important is having an action plan to achieve these goals and objectives. If you’re trying to increase your sales by 10% in a year, you can pursue more marketing and social media outreach as part of your action plan. If an action plan doesn’t help your business achieve its goals, the plan needs to be rewritten.
3. Review and Updating Phase
A critical part of the strategic plan should address how often it will be reviewed and updated. Designate someone to be responsible for reviewing, updating, and sharing any changes with the rest of the company. Whether it’s you or another employee, you’ll want to make sure everyone in the business is aware of the changes and how they affect the overall strategic plan.
The strategic plan is meant to be a fluid document; don’t fall into the trap of creating the document and letting it sit on a shelf for years. If you developed meaningful objectives and action plans, they should help with regularly checking the strategic plan. For example, if your action plan requires you to put in sales numbers every quarter to track revenue, you could take that time to review the rest of the plan.
You can also set an alert to check the strategic plan on a regular basis. Whether it’s every few months, every quarter, or every year, a recurring alert can help you review and update the document.
When you’re reviewing your strategic plan, you may find that you’re not on track to meet an objective or goal that you previously set up. Don’t panic. Reassess the situation and, if you need to, discuss the issues with your employees. Figure out what went wrong and why your business isn’t on pace; maybe the goal was too ambitious or not realistic. Change the goal or objective and update the action plan to help you get back on track.
You also may find that your small business has met a goal or objective earlier than you thought you would. If so, you can create a new goal or objective to work toward, or try to maintain the progress you’ve already made. Discuss the ideas with your employees to see what they think is possible.
Strategic Plan Examples
Strategic plans can vary, depending on the type of business you operate or the industry you’re in. Here are a few examples of different strategic plans:
Strategic Planning Examples for Business
A strategic plan for a business will include the company’s mission and vision statement, as well as its goals and objectives and the action plans to achieve them.
The strategic plan is different from a business plan. The business plan is typically used to help start the business and acquire the necessary funds to open the doors. A strategic plan outlines the strategy for growth and success in the future by using existing resources.
The Canadian Soccer Association’s strategic plan for 2014 to 2018 is full of information and details. It includes an examination of the organization’s current status and what the focus in the future will be. It includes the goals and objectives of the Canadian Soccer Association, as well as the strategies it’ll use to achieve them.
According to a recent report, the top challenges for small businesses in 2021 are:
- 23% said a lack of capital and/or cash flow
- 15% said they anticipate marketing and advertising struggles
- 19% said they expect challenges with recruiting and retaining employees
Nonprofit Strategic Plan Examples
A strategic plan for a nonprofit organization will include the same key components. A nonprofit strategic plan may focus more on the internal and external factors that can pose any threats or challenges to the organization. Because the structure of a nonprofit organization can change rapidly due to different factors, the strategic plan takes this into account and aims to address possible changes ahead of time.
The Minnesota Council of Nonprofits’ strategic plan for 2010 through 2014 outlines the organization’s:
- Community it serves
- Goals for the four-year period
Each goal includes an in-depth description of why it’s important to the Minnesota Council of Nonprofits, as well as the strategies involved to achieve those goals. The plan also lists the people responsible for working on the strategic plan.
IT Strategic Plans
The IT industry is constantly changing. This means a strategic plan for an IT business should identify and address the changes in the future as well as possible. While other business strategic plans may focus on the next three to four years, it’s not uncommon for an IT strategic plan to look at the next year to year-and-a-half.
When it comes to developing, reviewing, and updating your IT strategic plan, it’s important to involve your business’s Chief Information Officer. This person’s knowledge and skill set is useful in putting together a strategic plan for your tech business. In addition to the Chief Information Officer, you and your employees can look at whether you need to upgrade any part of your infrastructure to meet the goals and objectives you’ve outlined in your strategic plan.
Because of the rapidly changing circumstances, you may be reviewing your IT strategic plan more frequently than with other businesses. Adjust your plan as necessary to put your business on the best path to success. The plan also should include details on how to make a decision when it comes to investing in new equipment or technology.
Marketing Strategic Plans
A marketing strategic plan’s goal should be to generate sales for the business. Whether it’s increasing sales numbers by 15% or increasing the number of customers in the next quarter, a marketing strategic plan helps businesses generate more revenue and increase their customer base.
A marketing strategic plan can include marketing technology, software, or web-based platforms to help track your business’s progress toward its goals. The plan also could address the specific types of marketing the business will pursue—for example, whether your business will pursue traditional print advertising or digital ads.
Because a marketing strategic plan aims to increase your business’s exposure and numbers through different techniques and methods, it’s a good idea to include the budget in the document. This way, you and your employees will work toward the marketing goals and objectives you want to achieve without spending too much money.
Strategic Planning Template Checklist
Should you use strategic planning models or templates? Yes, in fact, a good strategic plan template, sometimes called a strategy mapping template is like a checklist. The template will include different sections for you to complete and help you cover a variety of topics. Using a thorough template will help ensure you have a comprehensive strategic plan for your business.
You can use computer software for your strategic planning template, or you can create your own with Microsoft Word or Excel. You can also download our Strategic Plan Example Template to use.
- What does a strategic plan include? At the top of your template, label it “Executive Summary” and provide an overview of your business. Include the time period you’re looking at for your business’s strategic plan; for example, if the strategic plan provides a three- to five-year outlook.
- Underneath this section would be information on “Your Company.” This is where you’ll put in your mission statement, vision, values, and information on leadership.
- A section on “Research” will include information on your clients and customers, competitors and the industry.
- You can also create a section on “Products and Services,” which will detail any products you sell, pricing strategy, delivery systems and capabilities, and suppliers.
- A section of your template should focus on “Measurable Goals.” These should be realistic goals or objectives that you want your business to achieve within the time period you set. Don’t forget to include details on how the progress of each goal or objective will be measured.
- Whether you include it within the Measurable Goals section or as a stand-alone group in the template, don’t forget about your “Action Plans.” This provides an overview of how you and your employees are going to achieve your business goals and operational plans.
- You also can put your SWOT analysis into the template. List the identified strengths, weaknesses, opportunities, and threats with your business. Remember to be honest and candid. When you are reviewing your strategic plan in the future, you can reference the initial SWOT analysis and check to see what has changed.
- The last section should detail “Reviews and Updating.” Explain how often the plan should be checked (every few months, quarterly, annually, etc.). Provide a list of people who should be responsible for reviewing and updating the strategic plan, as well as communicating any changes with the broader business.
Why Is Strategic Planning Important?
The strategic planning process can take some time, but it’s beneficial for everyone involved. As the small business owner, you’ll have a better idea of the organizational goals and objectives you’ll want to accomplish and a path to do that. For your employees, the process can foster an increase in productivity—contributing to the success of the business.
Communicating Your Strategic Plan
In a business environment, strategic planning requires you to involve your employees. Your employees are involved in the day-to-day operations and can provide you with a unique view of the company. Employees can share with you what they think is and isn’t working with the business today, which can inform your planning for the future.
In addition to your employees, it’s beneficial to reach out to people outside of your company to get their opinions. Like your employees, vendors have a unique perspective on your industry. Talk to them about the business, and get their thoughts on how they think the business landscape can change in the future.
The U.S. Small Business Administration recommends that the strategic planning process be a flexible one. When you meet with your employees and any people outside of the company, remember that the discussions should encourage new ideas and thoughts.
Involving your employees in the strategic planning process also means they receive a sense of accountability that can increase productivity. Whether they contributed in the process or were informed of the business’s long-term goals and objectives after the strategic plan was created, they’ll be more likely to want to help you achieve those targets.
Identifying Strengths and Weaknesses
As part of the strategic planning process model, you’ll examine and analyze your entire business. You’ll take a look at what your business does well and the areas where it still needs to improve. By identifying your business’s current strengths and weaknesses, the process gives you and your employees an opportunity to improve in the future and become a durable business by minimizing risks.
Although you may have a good idea about what your business excels at and areas that need to be improved upon, don’t forget to involve your employees. They may tell you something you didn’t think of.
Setting the Direction of the Business and Fostering a Proactive Environment
By the end of the strategic planning process, you and your employees should have a clear direction of where you want the business to go in the future. These discussions and the planning process itself help put the business in the best position to succeed in the future.
Strategic planning gives you and your business time to figure out how to grow over the next few years and how to address new opportunities and challenges. Think about the challenges or issues your business may face in four or five years and plan accordingly, so your business doesn’t stumble down the road.
Strategic Planning Misconceptions
There are many strategic planning misconceptions. From not having enough time or thinking it only benefits larger businesses, to fearing you’ll put your business on the wrong path, there are a variety of reasons why business owners may be wary of strategic planning. But don’t be alarmed; strategic planning can help your business—big or small—and the benefits far outweigh any perceived negatives.
Regardless of the size of your business, a strategic plan is beneficial. Whether you are a small business or a large corporation with hundreds or thousands of employees, strategic planning helps you make sure the company is headed in the right direction.
But how do you know if you’re steering the company in the right direction? The beginning phases of strategic planning focus on research and discussions. The decisions you make during strategic planning aren’t based on assumptions; they’re based on research and information you’ve gathered while talking with your employees and people outside of your company.
The strategic planning process may seem daunting at first, but when you understand what’s involved and how to do it, it’s not that complicated. It takes time, but the amount you invest in the process pays off when everyone in your company works toward accomplishing the goals and objectives you’ve laid out.
The process doesn’t stymie creativity either. When you meet with your employees for strategic planning, you’re asking everyone to have a discussion and brainstorm ideas. The strategic planning process puts everyone’s minds together to think of creative ideas.
If you go through the strategic planning process once, don’t think you won’t have to do it again. The strategic plan is a living document; it should change over time. It’s not uncommon for business owners to create a strategic plan with their employees and rarely—or never—revisit the document. Reviewing and evaluating your strategic plan regularly will help keep you accountable and on track to achieve your goals and objectives.
What Makes Strategic Planning Successful?
Successful strategic planning involves a team effort among you and your employees, as well as among you and your vendors and other outside people. The more you engage your employees with strategic planning, the better they’ll understand the strategy you want to have for your business.
Strategic planning concepts also need to be flexible. While it’s necessary to have goals and objectives for your business, you also have to be able to adapt to changes. For instance, 44% of small businesses without a website, plan to create one in 2021 to adapt to the growing online shopping trend brought on by COVID-19.
When strategic planning is successful, everyone in your business is on the same page with the business’s direction and goals. Each individual understands what makes the business stronger and what needs to be worked on. And it’s more likely that each person wants to contribute to the business’s growth and success.
When Should Strategic Planning Be Done?
When it comes to strategic planning, you want to start it sooner rather than later . It doesn’t necessarily have to be done in the first few days or weeks of the company’s life—you may want to be in business for a few months to give yourself a better idea of what is and isn’t working.
But even if you’ve owned your business for a long time, it’s not too late to get started on strategic planning. It’s never a bad time to sit down and think about the current status of your company and where you want to be in the next five to 10 years. When you’re ready, gather your team together and schedule regular meetings dedicated to strategic planning.
Where Do Strategic Plans Go Wrong?
Strategic planning is an ongoing commitment. Even if you go through an initial round of strategic planning and it leads to the development of your business’s first strategic plan, it’s still not finished. The plan has to be implemented.
Strategic plans also can go wrong if the goals and objectives you set are unrealistic. Every business owner wants to see their business grow and succeed, but if you set an overly ambitious growth rate, it could discourage you and your employees.
A successful strategic plan requires commitment. Your entire team needs to be focused on the business and carrying out the strategic plan. If the strategic plan isn’t being used regularly or as the foundation of the business, you and your employees can lose sight of the company’s direction and goals.
The top three reasons strategy implementation fails:
- Poor communication
- Lack of leadership
- Using wrong measures
Reviewing and Updating Your Strategic Plan
A strategic plan is a living document. Don’t spend the time to create a strategic plan and then put it on the shelf to collect dust. Live by it. And regularly update your strategic plan. How often you should update your strategic plan depends on how your business works.
If your business works in a fast-paced industry and can be affected by changing outside factors, you should review and update your strategic plan on a more frequent basis. For example, if your business operates within the ever-evolving tech industry, you will probably want to check on your strategic plan after each quarter.
At the very least, you should review your strategic plan every year. When you review your strategic plan, you’re looking at the assumptions made and checking to see where your business stands in relation to those assumptions. What you thought would be challenges and threats to your business a year ago may not be the same now.
Don’t be afraid to change any part of the strategic plan. In fact, only 77% of small business owners are somewhat or very confident in their ability to execute their strategy but 95% still fall short of meeting all their goals. Updating your plan can help you stay on track with your goals. And if outside factors are having a bigger impact on your business than you initially thought, you may have to change your objectives or goals.
The regular review is a good opportunity to check back in with your employees. Your employees helped you create the business’s strategic plan and they’re as invested in the success of it as you are. Give them a summary of where the business currently stands. Talk with them to see if things have improved or if they still have concerns with the business—or if any of their initial concerns have changed.
After you review the strategic plan, share any changes with your team. Even if you didn’t make any changes, it’s a good opportunity to give the rest of your company your thoughts on the business’s status and confirm that things are on the right track. You also can encourage your employees to continue working hard to achieve the goals and objectives in the strategic plan.
Focusing on the long-term strategy of your business is also essential. Long-term strategic planning is as important as having a business plan and can lead to the success of your business. You and your employees will understand the current status of the company, productivity will increase as everyone works toward achieving the business goals, and you’ll put yourself in a better position to address any potential issues that may come up in the future.
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This was helpful and have grown to work better as a manager.
That’s great to hear, Samuel! Thanks for commenting!
I gained great knowledge. Thanks for teaching us about strategic planning and its benefit.
You’re welcome! We’re glad you found the article helpful.
I really needed this.
We’re glad the article was helpful!
Hi, the article is well written and worth reading. Thank you for sharing the valuable information. Please keep sharing more.
We’re glad you liked it, John! You can read more about Strategic Planning in the articles below:
https://sba.thehartford.com/business-management/strategic-planning-process/ https://sba.thehartford.com/business-management/key-components-of-strategic-plan/ https://sba.thehartford.com/business-management/develop-a-strategic-plan/
Very innovative and thought provoking…..interesting read….
Thanks for commenting, Reena! We’re glad you found the article interesting.
Thoroughly enjoyed this…
That’s great to hear, Melanie! You can also check out our other strategic planning articles, here:
Loved it all
That’s great to hear, Jean!
I really enjoyed this notice. Be blessed.
We’re glad you enjoyed it!
I’m very much interested in your support with the information. Thank you very much as it will help me develop my organization.
Thank you for reaching out, John! You can learn more about strategic planning with these articles from SBA: https://sba.thehartford.com/business-management/strategic-planning-process/ https://sba.thehartford.com/business-management/develop-a-strategic-plan/ https://sba.thehartford.com/business-management/why-is-strategic-planning-necessary/
Thanks for commenting!
Very good notes. Easy to understand.
That’s great to hear, Samuel! Check out our other strategic planning articles to learn more:
lnterested in learning more about this subject.
That’s great to hear, Linnet! You can learn more by checking out these other SBA articles on strategic planning:
https://sba.thehartford.com/business-management/strategic-planning-process/ https://sba.thehartford.com/business-management/why-is-strategic-planning-necessary/ https://sba.thehartford.com/business-management/develop-a-strategic-plan/
Good write up, very informative.
Thank you! We’re glad you enjoyed it.
Really liking this website!
That’s great to hear, Lise!
I really enjoyed reading the article about the strategy planning. There are many things I was not aware before.
We’re so glad you enjoyed it! Thank you for the nice comment!
Good stuff. Straight forward.
We’re glad you liked it!
Great article. keep it up.
Will do, thank you for the nice comment and for reading SBA!
Thank you, Stella!
Fantastic article!! Done with clarity. But my question has always been, at what point does the goals and objectives come in the strategic Planning process? Do we establish the goals and objectives after defining the Mission and Vision statements or do we develop goals and objectives after the analytic tool is utilized (SWOT, PEST,)? etc
Thanks for reaching out! This can depend on the business owner. While some business owners may have initial goals and objectives early on, it can also make sense to this after doing the analysis (SWOT, PEST). The information from these analyses can help create meaningful goals and objectives. The idea behind goals and objectives (both short- and long-term) is that they’re supposed to support/ladder up to the mission and vision statements.
Good article and very interesting.
Thanks for the comment! We’re happy to hear you found it interesting.
Thank you, this is a great article!
You’re welcome, Muhammad!
It was a great. Very helpful.
We’re glad you found it helpful! Thank you for the comment!
Great article. I really enjoyed reading it.
We’re glad you enjoyed reading it! Thanks for leaving a comment, Samana!
I need your coaching.
Thanks for reaching out! Check out this SBA article: https://sba.thehartford.com/business-management/small-biz-owner/build-stronger-mindset/
Under #8 in the article, you can sign up for a free 1-hour consultation!
Excellent piece of information on strategic planning!
We’re so glad you liked it! Thanks!
I appreciate this greatly. It’s helpful for small businesses especially for new initiatives and those at the mature business stage. Thank you!
We’re glad you liked it. Thank you for commenting, Adolf!
It is better to make some terms like vision, goal and mission clear.
We’re glad you liked it. Thanks for commenting!
Very informative! It helps me a lot as a student. Thank you 😊
You’re welcome, Joice! We’re always happy to help and glad to hear you find our articles informative.
I enjoyed reading the article. Thank you for providing the overview about the topic. Examples and links are very useful too.
That’s great to hear! Thank you!
Any discussion on Strategic Planning is good discussion – it is such a critical element of any organisation that aspires to be good and dares to be great.
Great point, Steve!
A very interesting article.
We’re glad you liked it! Thanks for commenting!
Informative article! You have made strategic planning so easy to understand. But how do i reference this article in an academic paper?
One way to cite this article in an academic paper is like this:
Vo, Eric. “What Is Strategic Planning.” Small Biz Ahead Blog , 2 Sept. 2020, sba.thehartford.com/business-management/what-is-strategic-planning/
I fully agree with you. The article is useful, but mostly for beginners and students. But it is informative and I liked it as well.
Thank you for sharing this very informative article. It will definitely guide me in conducting our own Strategic Planning at our office.
Thanks for the comment. We’re glad the article could help!
I definitely enjoyed every little bit of it. It is a great website and nice share. I want to thank you. Good job! You guys do a great blog and have some great content. Keep up the good work. SEO canada
That’s great to hear! Thanks for the comment!
This is helpful. Thank you.
Thanks for the comment, Patricia!
Really helpful… thanks alot.
Glad you enjoyed the article!
What is the difference between Policy development & Strategic planning?
Companies first come up with strategic plan to establish their long term goals and objectives along with general actions to be taken to support those goals and objectives. You then establish policies to ensure that your team is staying within those actions. For example, your strategic plan may say you want to increase revenues 20 percent next year in the aerospace market. Your actions will include marketing campaigns and outreach events. Your policies will then ensure that your team are not undertaking actions that are not included in these campaigns and events.
Thanks for your educative explanation on the preparation of strategic business plan.
Thank you for this article. It helped me to understand the strategic planning process, which is something I am studying and this was straightforward and to the point.
Thank you Emily!
This article is a good basic overview. Something that must be emphasized is translating the strategic plan into specific actions with measurable outcomes. If you go into work on Monday after completing your plan and do your work the way you did before the plan, then the plan has already failed. I see this frequently in the businesses with which I work. Another key is to clearly tie individual staff roles and performance expectations and goals to the strategic goals. When effectively done, you begin to harness the very real power of employees’ intimate knowledge of their work and how to do it better.
Thanks for sharing. This is very helpful to business owners and managers. As it is said, the strategic plan need to be flexible, same applies to getting knowledge of strategic plan as business environments keep changing.
Glad to hear this was helpful. Thanks for reading!
Thanks for so much for the this exciting read. I can’t wait to start doing the stuff with my team
Strategic planning is important to an organization because it provides a sense of direction and outlines measurable goals. Strategic planning is a tool that is useful for guiding day-to-day decisions and also for evaluating progress and changing approaches when moving forward. Found an another website Evolvetraining.ac.nz it has lots of valuable information for everyone
Thanks for sharing such an informative blog.
I really enjoyed reading the article.it motivates and gives direction in the business Thanks
I thank you for this platform because it is updating my knowledge on Strategic Planning
I really enjoyed reading the article. It was written in simple language and in a manner that helped me identify key points under each subtitle. I am going to use this as a guide to some strategic plans am working on, thanks.
This teaching is educative.
That’s good to hear. Glad you liked it!
This is a good and educative article. It’s very informative. Thanks.
I actually appreciate this piece. The writing is incredibly beneficial. my start up manufacturering business seems to be in better position with articles like this! My gratitude to the masterminds behind this program, Cheers.
Your article is helpful if you have employees, but how does this work if you have sub-contractors? Do you get them involved?
Now i have an insight of what strategic planning is. So what can be the sub-topics to include when writing an essay?
Great article. Thanks for the detailed information. Your blog is by far the best source I’ve found. Thanks!
Thank you, Victoria!
This is a comprehensive Strategic Planning manual.
Very interesting and valuable document. Enjoyed reading the participatory role of employees. Thanks a lot.
Thank you for the comment, Gemechu.
Love this article!! Thanks.
We are so glad you enjoyed this article! Thank you for the comment, Vanessa!
I send it to Beby.
Thank you Bert!
Very practical article- thankyou very much
Thank you for reading!
Howdy! Great article on strategic planning for small businesses. I agree with the statistic you quote from Constant Contact. In my work, I find that most business owners can only think and plan about a year out. There are a couple of contributing factors to that ‘limited’ sight. For many business owners, this is the first time they have ever been where they are. They are suffering from ‘not knowing what they do not know.’ They are smart enough to recognize it, but they are cautious about the outlook because of it. The second is the rate of change in the economy, which only speeds up each year; it is just that very few businesses have the tools and expertise to keep pace with the change. Both factors lead to a general hesitation to look out too far or to dream too big.
I love the fact that you see that strategic planning needs to flexible and inclusive. It’s crucial to have a framework but to be flexible to incorporate learnings and shifts along the way. When you involve all the people who work in and on your business, there is more engagement, better ideas and a higher rate of success.
Great insights. Thank you, Leslie!
Thanks a lot for this wonderful article, Eric. You have resolved my problem of trying to know what strategic planning really is. I look forward to more up building articles. Thank you!
Thank you for the comment, Melvin!
Your question about involving subcontractors is an interesting one. To me, a plan should involve as many of those that are strategic to your business and getting as much feedback as possible – as long at it’s relevant – should be the goal. So if you have a few good contractors (like my company does) that you think could contribute some value to the formation of your plan I say go for it.
Your article is helpful if you have employees, but how does this work if you have sub-contractors. Do you get them involved.
Hi Cristyne- please see the response below from Gene Marks.
Great job. This was very helpful.
Thank you for your feedback, John!
You have the BEST newsletter! This article was another great one. I shared it on all my social media platforms. I offer strategic planning services and this article is helpful in promoting my services. As well, most people think a strategic plan is ONLY for nonprofits. Thank you!
Hi Leslie, thanks so much for sharing!
Great summary “how-to” article for busy business owners. I often encourage our clients to start simple and achieve! This road map is an excellent way to jump in to real-life strategy setting!
Thank you, Patti!
This is an explicit, yet simple, post on strategic planning.
Thanks deeply for sharing this!
You’re welcome! We’re so glad you liked it and found it informative.
Great article, thanks for spelling this out in such easy-to-read terms.
Thanks for your feedback, Wende!
It’s a great eye opener into strategic planning process. Thank you for the great efforts.
Glad you liked the article! Thanks for the comment!
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Why Is Strategic Planning Important?
- 06 Oct 2020
Do you know what your organization’s strategy is? How much time do you dedicate to developing that strategy each month?
If your answers are on the low side, you’re not alone. According to research from Bridges Business Consultancy , 48 percent of leaders spend less than one day per month discussing strategy.
It’s no wonder, then, that 48 percent of all organizations fail to meet at least half of their strategic targets. Before an organization can reap the rewards of its business strategy, planning must take place to ensure its strategy remains agile and executable .
Here’s a look at what strategic planning is and how it can benefit your organization.
Access your free e-book today.
What Is Strategic Planning?
Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees on the organization’s goals, and ensure those goals are backed by data and sound reasoning.
It’s important to highlight that strategic planning is an ongoing process—not a one-time meeting. In the online course Disruptive Strategy , Harvard Business School Professor Clayton Christensen notes that in a study of HBS graduates who started businesses, 93 percent of those with successful strategies evolved and pivoted away from their original strategic plans.
“Most people think of strategy as an event, but that’s not the way the world works,” Christensen says. “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’s at work 24/7 in almost every industry.”
Strategic planning requires time, effort, and continual reassessment. Given the proper attention, it can set your business on the right track. Here are three benefits of strategic planning.
Related: 4 Ways to Develop Your Strategic Thinking Skills
Benefits of Strategic Planning
1. create one, forward-focused vision.
Strategy touches every employee and serves as an actionable way to reach your company’s goals.
One significant benefit of strategic planning is that it creates a single, forward-focused vision that can align your company and its shareholders. By making everyone aware of your company’s goals, how and why those goals were chosen, and what they can do to help reach them, you can create an increased sense of responsibility throughout your organization.
This can also have trickle-down effects. For instance, if a manager isn’t clear on your organization’s strategy or the reasoning used to craft it, they could make decisions on a team level that counteract its efforts. With one vision to unite around, everyone at your organization can act with a broader strategy in mind.
2. Draw Attention to Biases and Flaws in Reasoning
The decisions you make come with inherent bias. Taking part in the strategic planning process forces you to examine and explain why you’re making each decision and back it up with data, projections, or case studies, thus combatting your cognitive biases.
A few examples of cognitive biases are:
- The recency effect: The tendency to select the option presented most recently because it’s fresh in your mind
- Occam’s razor bias: The tendency to assume the most obvious decision to be the best decision
- Inertia bias: The tendency to select options that allow you to think, feel, and act in familiar ways
One cognitive bias that may be more difficult to catch in the act is confirmation bias . When seeking to validate a particular viewpoint, it's the tendency to only pay attention to information that supports that viewpoint.
If you’re crafting a strategic plan for your organization and know which strategy you prefer, enlist others with differing views and opinions to help look for information that either proves or disproves the idea.
Combating biases in strategic decision-making requires effort and dedication from your entire team, and it can make your organization’s strategy that much stronger.
Related: 3 Group Decision-Making Techniques for Success
3. Track Progress Based on Strategic Goals
Having a strategic plan in place can enable you to track progress toward goals. When each department and team understands your company’s larger strategy, their progress can directly impact its success, creating a top-down approach to tracking key performance indicators (KPIs) .
By planning your company’s strategy and defining its goals, KPIs can be determined at the organizational level. These goals can then be extended to business units, departments, teams, and individuals. This ensures that every level of your organization is aligned and can positively impact your business’s KPIs and performance.
It’s important to remember that even though your strategy might be far-reaching and structured, it must remain agile. As Christensen asserts in Disruptive Strategy , a business’s strategy needs to evolve with the challenges and opportunities it encounters. Be prepared to pivot your KPIs as goals shift and communicate the reasons for change to your organization.
Improve Your Strategic Planning Skills
Strategic planning can benefit your organization’s vision, execution, and progress toward goals. If strategic planning is a skill you’d like to improve, online courses can provide the knowledge and techniques needed to lead your team and organization.
Strategy courses can range from primers on key concepts (such as Economics for Managers ), to deep-dives on strategy frameworks (such as Disruptive Strategy ), to coursework designed to help you strategize for a specific organizational goal (such as Sustainable Business Strategy ).
Learning how to craft an effective, compelling strategic plan can enable you to not only invest in your career but provide lasting value to your organization.
Do you want to formulate winning strategies for your organization? Explore our portfolio of online strategy courses and download the free flowchart to determine which is the best fit for you and your goals.
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Strategic Planning in Business
Table of Contents
What is business strategic planning, the strategic planning process in 3 steps, what is a business strategic plan, key components of a business strategic plan, business strategic plan example, strategic plan vs. business plan.
Strategic planning is key for success in business. By planning strategically for the future, a business can achieve its goals. It’s easier said than done, but the more you know about strategic planning, the better chance you have at succeeding.
Business strategic planning is the process of creating a business strategy and an accompanying business strategic plan to implement a company’s vision and achieve its goals over time. The main goal of strategic planning is to take a company from its current state to its desired state through a series of business actions.
The business strategic planning process usually consists of defining business goals, doing a SWOT analysis to assess the company’s business environment and developing a business strategy. The leadership team is in charge of business strategic planning, as it has a very important impact on the overall direction of a company.
To oversee the execution of a business strategic plan, managers need to manage time, costs and tasks. ProjectManager is a project planning tool that allows managers to plan, schedule and manage their team’s work. Plan your work with professional tools such as Gantt charts, kanban boards, task lists and calendars. Then track your progress in real time to stick to your strategic plan. Get started for free.
Strategic planning is very important, but it doesn’t need to be overly complex. Let’s simplify this process by breaking it down into three simple steps.
1. Set Business Goals
A business goal is simply an accomplishment that a company wants to achieve in the short, medium or long term. Business goals can take many forms such as increasing sales, revenue, customer satisfaction levels and brand positioning, among many other things.
2. Conduct a SWOT Analysis
The goal of a business strategy is to leverage the strengths of a business and minimize the impact of its weaknesses. Those two things are internal factors. The strengths of a company can become competitive advantages that can lead to business growth. There are many types of business strengths and weaknesses such as scale, speed, or R&D, just to name a few.
Threats and opportunities refer to external factors such as competitors or an untapped market. A successful business strategy considers all of these factors to define how a product or service will be created, marketed and sold, and a SWOT analysis is a great starting point.
3. Develop a Business Strategy & Strategic Plan
Once you’ve completed your SWOT analysis, you can create a business strategy that’s designed to help position your company in the market. Your business strategy guides how you produce, market and sell your product or service based on internal and external analysis.
Then, you’ll need a strategic plan to explain how you plan to execute that business strategy.
A business strategic plan is an implementation plan that’s meant to turn a business strategy into action items that can be executed over time. Business strategic plans are usually executed over the course of 3-5 years.
How to Develop a Strategic Plan
To develop a strategic plan, you should ask yourself the following three questions.
- Where Is the Business Now? Gather as much information on your business as possible including internal operations and what drives its profitability. Compare the business to competitors and note the similarities and differences in detail. This isn’t a day-to-day operational study, but a broader look at the business in context to itself and its environment. But don’t go crazy; stay realistic in terms of your business goals. Be detached and critical in your analysis.
- Where Do You Want to Go? Now it’s time to decide what your top-level objectives are for the future. Start with a vision statement , objectives, values, techniques and goals. Look forward to five years or more to forecast where you want the business to be at that time. This means figuring out what the focus of the business will be in the future. Will that focus differ from what it is now, and what competitive advantages do have you in the marketplace? This is where you build the foundation and initiate changes.
- How Can You Get There? Once you know where you are and where you want to go, it’s time to plan. What are the changes to the structure, financing, etc., necessary for the business to get there? Decide on the best way to implement those changes, the timeframe with deadlines and how to finance it. Remember, this is looking at the business at large, so consider major endeavors such as diversification, existing growth, acquisition and other functional matters. A gap analysis can be a big help here.
Once you’ve answered the above questions and have a way to achieve the long-term goals laid out in the strategic plan, the next step is making sure you have the right person to manage all of its moving parts. They must be analytical, a creative thinker and able to grasp operational detail.
That doesn’t mean the strategic plan is led by one person. It’s best to not do it alone; seek other opinions. The people in your organization, from bottom to top, are all great resources to offer perspectives from their standpoints. Don’t forget to take in the advice of stakeholders, including customers, clients, advisors and consultants.
To create a strong strategic plan, one must first have a strong understanding of the business that is to expand. How does the business work? Where does the business stand in relation to competitors in the marketplace? A strategic plan is built on the bones of the following foundational elements:
- Mission Statement: The mission statement describes what your company does.
- Vision Statement: The vision statement explains where your company expects to be in the future.
- Core Values: Guiding principles that shape your company’s organizational culture.
- Business Objectives: Consider using the SMART goal-setting technique . This simply means setting up specific, measurable, attainable, relevant and time-bound objectives that your company wants to achieve.
- SWOT Analysis: External and internal factors that make up your company’s business competitive environment.
- Action Plan: A plan outlining steps that will be taken to achieve the business objectives of your organization.
- Financials: A section that shows the financial performance expectations and the resources that will be required to implement the action plan.
- Performance Measurements: Performance indicators that will be used to measure the effectiveness of the action plan.
Never forget to check your strategic plan against reality. In addition to being achievable, it must be practical for your business environment, resources and marketplace.
Now let’s look at a simple business strategic plan example. This is a strategic plan for a small construction company.
1. Mission, Vision & Core Values
- Mission Statement: To build residential spaces that provide wellbeing for our clients.
- Vision Statement: To offer the best construction experience for our clients and expand our brand throughout the globe.
- Core Values: Sustainable innovation and respect for the environment.
2. Business Objectives
- Business Objective 1: Grow operating margin from 15% to 20% over the next year.
- Business Objective 2: Reduce operating costs by 5% over the next quarter
- Business Objective 3: Increase the number of new contracts generated by 10% over the next year
3. SWOT Analysis
- Strengths: Available financing, brand visibility and know-how.
- Weaknesses: Lack of PPE, human capital and expertise in construction areas such as plumbing, electrical work and masonry, which requires subcontractors.
- Opportunities: Lack of environmentally-friendly construction companies in the market.
- Threats: Larger construction companies compete for contracts in the area.
4. Action Plan
- Business Objective 1: To grow operating margin, new employees with plumbing, electrical work and masonry experience will be hired to cut down subcontractor costs. This must be done by the end of the first quarter.
- Business Objective 2: To reduce operating costs, the company will acquire property, plant and equipment. By doing this, the company will no longer rent equipment from third parties, which will reduce operating costs significantly in the medium and long term.
- Business Objective 3: To increase the number of new contracts generated, the leadership team will invest more in the PR, marketing and advertising departments. The company will also invest in key positions for the construction bidding process such as contract estimators.
- Financials: This section will explain in detail what are the costs associated with the work items in the action plan as well as the expected financial benefits for the company.
Strategic Plan Template
Our free strategic plan template helps leadership teams gather important information about their business strategy, which makes it the perfect tool to start shaping a strategic plan for your business or project.
A strategic plan is a type of business plan, but there are distinctions between the two. Whereas a strategic plan is for implementing and managing the strategic direction of a business, a business plan is more often the document that starts a business.
A business plan is used primarily to get funding for the venture or direct the operation, and the two plans target different timeframes in business history. A strategic plan is used to investigate a future period, usually between three-to-five years. A business plan is more routinely a year out.
A Different Intent
A strategic plan offers a business focus, direction and action to help the business grow from the point it presently resides to a greater market share in the future. A business plan, on the other hand, is more focused on offering a structure to capture and implement ideas that initially define a business.
With a strategic plan, existing resources are prioritized to increase revenue and return on investment. The business plan is different in that it’s seeking funding for a venture that doesn’t yet exist. Where a strategic plan is building a sustainable competitive advantage in the future, a business plan is designed to take advantage of a current business opportunity.
So, a strategic plan is communicating direction to teams and stakeholders in order to achieve future goals. A business plan isn’t talking to staff, which is likely nonexistent or minimal at this point. It’s speaking to banks and other financial supporters.
Strategic planning, like any planning, requires keeping a lot of balls in the air. That means having the right tool to plan, monitor and report on all the various tasks and resources. ProjectManager is online project management software that gives you control over every aspect of creating and implementing a strategic plan. Try it today with this free 30-day trial.
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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.
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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How to improve strategic planning
In conference rooms everywhere, corporate planners are in the midst of the annual strategic-planning process. For the better part of a year, they collect financial and operational data, make forecasts, and prepare lengthy presentations with the CEO and other senior managers about the future direction of the business. But at the end of this expensive and time-consuming process, many participants say they are frustrated by its lack of impact on either their own actions or the strategic direction of the company.
This sense of disappointment was captured in a recent McKinsey Quarterly survey of nearly 800 executives: just 45 percent of the respondents said they were satisfied with the strategic-planning process. 1 1. “ Improving strategic planning: A McKinsey Survey ,” The McKinsey Quarterly , Web exclusive, September 2006. The survey, conducted in late July and early August 2006, received 796 responses from a panel of executives from around the world. All panelists have mostly financial or strategic responsibilities and work in a wide range of industries for organizations with revenues of at least $500 million. Moreover, only 23 percent indicated that major strategic decisions were made within its confines. Given these results, managers might well be tempted to jettison the planning process altogether.
But for those working in the overwhelming majority of corporations, the annual planning process plays an essential role. In addition to formulating at least some elements of a company’s strategy, the process results in a budget, which establishes the resource allocation map for the coming 12 to 18 months; sets financial and operating targets, often used to determine compensation metrics and to provide guidance for financial markets; and aligns the management team on its strategic priorities. The operative question for chief executives is how to make the planning process more effective—not whether it is the sole mechanism used to design strategy. CEOs know that strategy is often formulated through ad hoc meetings or brand reviews, or as a result of decisions about mergers and acquisitions.
Our research shows that formal strategic-planning processes play an important role in improving overall satisfaction with strategy development. That role can be seen in the responses of the 79 percent of managers who claimed that the formal planning process played a significant role in developing strategies and were satisfied with the approach of their companies, compared with only 21 percent of the respondents who felt that the process did not play a significant role. Looked at another way, 51 percent of the respondents whose companies had no formal process were dissatisfied with their approach to the development of strategy, against only 20 percent of those at companies with a formal process.
So what can managers do to improve the process? There are many ways to conduct strategic planning, but determining the ideal method goes beyond the scope of this article. Instead we offer, from our research, five emergent ideas that executives can employ immediately to make existing processes run better. The changes we discuss here (such as a focus on important strategic issues or a connection to core-management processes) are the elements most linked with the satisfaction of employees and their perceptions of the significance of the process. These steps cannot guarantee that the right strategic decisions will be made or that strategy will be better executed, but by enhancing the planning process—and thus increasing satisfaction with the development of strategy—they will improve the odds for success.
Start with the issues
Ask CEOs what they think strategic planning should involve and they will talk about anticipating big challenges and spotting important trends. At many companies, however, this noble purpose has taken a backseat to rigid, data-driven processes dominated by the production of budgets and financial forecasts. If the calendar-based process is to play a more valuable role in a company’s overall strategy efforts, it must complement budgeting with a focus on strategic issues. In our experience, the first liberating change managers can make to improve the quality of the planning process is to begin it by deliberately and thoughtfully identifying and discussing the strategic issues that will have the greatest impact on future business performance.
Granted, an approach based on issues will not necessarily yield better strategic results. The music business, for instance, has discussed the threat posed by digital-file sharing for years without finding an effective way of dealing with the problem. But as a first step, identifying the key issues will ensure that management does not waste time and energy on less important topics.
We found a variety of practical ways in which companies can impose a fresh strategic perspective. For instance, the CEO of one large health care company asks the leaders of each business unit to imagine how a set of specific economic, social, and business trends will affect their businesses, as well as ways to capture the opportunities—or counter the threats—that these trends pose. Only after such an analysis and discussion do the leaders settle into the more typical planning exercises of financial forecasting and identifying strategic initiatives.
One consumer goods organization takes a more directed approach. The CEO, supported by the corporate-strategy function, compiles a list of three to six priorities for the coming year. Distributed to the managers responsible for functions, geographies, and brands, the list then becomes the basis for an offsite strategy-alignment meeting, where managers debate the implications of the priorities for their particular organizations. The corporate-strategy function summarizes the results, adds appropriate corporate targets, and shares them with the organization in the form of a strategy memo, which serves as the basis for more detailed strategic planning at the division and business-unit levels.
A packaged-goods company offers an even more tailored example. Every December the corporate senior-management team produces a list of ten strategic questions tailored to each of the three business units. The leaders of these businesses have six months to explore and debate the questions internally and to come up with answers. In June each unit convenes with the senior-management team in a one-day meeting to discuss proposed actions and reach decisions.
Some companies prefer to use a bottom-up rather than top-down process. We recently worked with a sales company to design a strategic-planning process that begins with in-depth interviews (involving all of the senior managers and selected corporate and business executives) to generate a list of the most important strategic issues facing the company. The senior-management team prioritizes the list and assigns managers to explore each issue and report back in four to six weeks. Such an approach can be especially valuable in companies where internal consensus building is an imperative.
Bring together the right people
An issues-based approach won’t do much good unless the most relevant people are involved in the debate. We found that survey respondents who were satisfied with the strategic-planning process rated it highly on dimensions such as including the most knowledgeable and influential participants, stimulating and challenging the participants’ thinking, and having honest, open discussions about difficult issues. In contrast, 27 percent of the dissatisfied respondents reported that their company’s strategic planning had not a single one of these virtues. Such results suggest that too many companies focus on the data-gathering and packaging elements of strategic planning and neglect the crucial interactive components.
Strategic conversations will have little impact if they involve only strategic planners from both the business unit and the corporate levels. One of our core beliefs is that those who carry out strategy should also develop it. The key strategy conversation should take place among corporate decision makers, business unit leaders, and people with expertise essential to the discussion. In addition to leading the corporate review, the CEO, aided by members of the executive team, should as a rule lead the strategy review for business units as well. The head of a business unit, supported by four to six people, should direct the discussion from its side of the table (see sidebar, "Things to ask in any business unit review").
Things to ask in any business unit review
Are major trends and changes in your business unit’s environment affecting your strategic plan? Specifically, what potential developments in customer demand, technology, or the regulatory environment could have enough impact on the industry to change the entire plan?
How and why is this plan different from last year’s?
What were your forecasts for market growth, sales, and profitability last year, two years ago, and three years ago? How right or wrong were they? What did the business unit learn from those experiences?
What would it take to double your business unit’s growth rate and profits? Where will growth come from: expansion or gains in market share?
If your business unit plans to take market share from competitors, how will it do so, and how will they respond? Are you counting on a strategic advantage or superior execution?
What are your business unit’s distinctive competitive strengths, and how does the plan build on them?
How different is the strategy from those of competitors, and why? Is that a good or a bad thing?
Beyond the immediate planning cycle, what are the key issues, risks, and opportunities that we should discuss today?
What would a private-equity owner do with this business?
How will the business unit monitor the execution of this strategy?
One pharmaceutical company invites business unit leaders to take part in the strategy reviews of their peers in other units. This approach can help build a better understanding of the entire company and, especially, of the issues that span business units. The risk is that such interactions might constrain the honesty and vigor of the dialogue and put executives at the focus of the discussion on the defensive.
Corporate senior-management teams can dedicate only a few hours or at most a few days to a business unit under review. So team members should spend this time in challenging yet collaborative discussions with business unit leaders rather than trying to absorb many facts during the review itself. To provide some context for the discussion, best-practice companies disseminate important operational and financial information to the corporate review team well in advance of such sessions. This reading material should also tee up the most important issues facing the business and outline the proposed strategy, ensuring that the review team is prepared with well-thought-out questions. In our experience, the right 10 pages provide ample fuel to fire a vigorous discussion, but more than 25 pages will likely douse the level of energy or engagement in the room.
Adapt planning cycles to the needs of each business
Managers are justifiably concerned about the resources and time required to implement an issues-based strategic-planning approach. One easy—yet rarely adopted—solution is to free business units from the need to conduct this rigorous process every single year. In all but the most volatile, high-velocity industries, it is hard to imagine that a major strategic redirection will be necessary every planning cycle. In fact, forcing businesses to undertake this exercise annually is distracting and may even be detrimental. Managers need to focus on executing the last plan’s major initiatives, many of which can take 18 to 36 months to implement fully.
Some companies alternate the business units that undergo the complete strategic-planning process (as opposed to abbreviated annual updates of the existing plan). One media company, for example, requires individual business units to undertake strategic planning only every two or three years. This cadence enables the corporate senior-management team and its strategy group to devote more energy to the business units that are “at bat.” More important, it frees the corporate-strategy group to work directly with the senior team on critical issues that affect the entire company—issues such as developing an integrated digitization strategy and addressing unforeseen changes in the fast-moving digital-media landscape.
Other companies use trigger mechanisms to decide which business units will undergo a full strategic-planning exercise in a given year. One industrial company assigns each business unit a color-coded grade—green, yellow, or red—based on the unit’s success in executing the existing strategic plan. “Code red,” for example, would slate a business unit for a strategy review. Although many of the metrics that determine the grade are financial, some may be operational to provide a more complete assessment of the unit’s performance.
Freeing business units from participating in the strategic-planning process every year raises a caveat, however. When important changes in the external environment occur, senior managers must be able to engage with business units that are not under review and make major strategic decisions on an ad hoc basis. For instance, a major merger in any industry would prompt competitors in it to revisit their strategies. Indeed, one advantage of a tailored planning cycle is that it builds slack into the strategic-review system, enabling management to address unforeseen but pressing strategic issues as they arise.
Implement a strategic-performance-management system
In the end, many companies fail to execute the chosen strategy. More than a quarter of our survey respondents said that their companies had plans but no execution path. Forty-five percent reported that planning processes failed to track the execution of strategic initiatives. All this suggests that putting in place a system to measure and monitor their progress can greatly enhance the impact of the planning process.
Most companies believe that their existing control systems and performance-management processes (including budgets and operating reviews) are the sole way to monitor progress on strategy. As a result, managers attempt to translate the decisions made during the planning process into budget targets or other financial goals. Although this practice is sensible and necessary, it is not enough. We estimate that a significant portion of the strategic decisions we recommend to companies can’t be tracked solely through financial targets. A company undertaking a major strategic initiative to enhance its innovation and product-development capabilities, for example, should measure a variety of input metrics, such as the quality of available talent and the number of ideas and projects at each stage in development, in addition to pure output metrics such as revenues from new-product sales. One information technology company, for instance, carefully tracks the number and skill levels of people posted to important strategic projects.
Strategic-performance-management systems, which should assign accountability for initiatives and make their progress more transparent, can take many forms. One industrial corporation tracks major strategic initiatives that will have the greatest impact, across a portfolio of a dozen businesses, on its financial and strategic goals. Transparency is achieved through regular reviews and the use of financial as well as nonfinancial metrics. The corporate-strategy team assumes responsibility for reviews (chaired by the CEO and involving the relevant business-unit leaders) that use an array of milestones and metrics to assess the top ten initiatives. One to expand operations in China and India, for example, would entail regular reviews of interim metrics such as the quality and number of local employees recruited and the pace at which alliances are formed with channel partners or suppliers. Each business unit, in turn, is accountable for adopting the same performance-management approach for its own, lower-tier top-ten list of initiatives.
When designed well, strategic-performance-management systems can give an early warning of problems with strategic initiatives, whereas financial targets alone at best provide lagging indicators. An effective system enables management to step in and correct, redirect, or even abandon an initiative that is failing to perform as expected. The strategy of a pharmaceutical company that embarked on a major expansion of its sales force to drive revenue growth, for example, presupposed that rapid growth in the number of sales representatives would lead to a corresponding increase in revenues. The company also recognized, however, that expansion was in turn contingent on several factors, including the ability to recruit and train the right people. It therefore put in place a regular review of the key strategic metrics against its actual performance to alert managers to any emerging problems.
Integrate human-resources systems into the strategic plan
Simply monitoring the execution of strategic initiatives is not sufficient: their successful implementation also depends on how managers are evaluated and compensated. Yet only 36 percent of the executives we surveyed said that their companies’ strategic-planning processes were integrated with HR processes. One way to create a more valuable strategic-planning process would be to tie the evaluation and compensation of managers to the progress of new initiatives.
Although the development of strategy is ostensibly a long-term endeavor, companies traditionally emphasize short-term, purely financial targets—such as annual revenue growth or improved margins—as the sole metrics to gauge the performance of managers and employees. This approach is gradually changing. Deferred-compensation models for boards, CEOs, and some senior managers are now widely used. What’s more, several companies have added longer-term performance targets to complement the short-term ones. A major pharmaceutical company, for example, recently revamped its managerial-compensation structure to include a basket of short-term financial and operating targets as well as longer-term, innovation-based growth targets.
Although these changes help persuade managers to adopt both short- and long-term approaches to the development of strategy, they don’t address the need to link evaluation and compensation to specific strategic initiatives. One way of doing so is to craft a mix of performance targets that more appropriately reflect a company’s strategy. For example, one North American services business that launched strategic initiatives to improve its customer retention and increase sales also adjusted the evaluation and compensation targets for its managers. Rather than measuring senior managers only by revenue and margin targets, as it had done before, it tied 20 percent of their compensation to achieving its retention and cross-selling goals. By introducing metrics for these specific initiatives and linking their success closely to bonus packages, the company motivated managers to make the strategy succeed.
An advantage of this approach is that it motivates managers to flag any problems early in the implementation of a strategic initiative (which determines the size of bonuses) so that the company can solve them. Otherwise, managers all too often sweep the debris of a failing strategy under the operating rug until the spring-cleaning ritual of next year’s annual planning process.
Some business leaders have found ways to give strategic planning a more valuable role in the formulation as well as the execution of strategy. Companies that emulate their methods might find satisfaction instead of frustration at the end of the annual process.
Renée Dye is a consultant in McKinsey’s Atlanta office, and Olivier Sibony is a director in the Paris office.
This article was first published in the Autumn 2007 issue of McKinsey on Finance . Visit McKinsey’s corporate finance site to view the full issue.
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Strategic Planning is a comprehensive process for determining what a business should become and how it can best achieve that goal.
- April 02, 2018
Strategic Planning is a comprehensive process for determining what a business should become and how it can best achieve that goal. It appraises the full potential of a business and explicitly links the business’s objectives to the actions and resources required to achieve them. Strategic Planning offers a systematic process to ask and answer the most critical questions confronting a management team—especially large, irrevocable resource commitment decisions.
Usage and satisfaction among survey respondents
How Strategic Planning works:
A successful Strategic Planning process should:
- Describe the organization’s mission, vision and fundamental values
- Target potential business arenas and explore each market for emerging threats and opportunities
- Understand the current and future priorities of targeted customer segments
- Analyze the company’s strengths and weaknesses relative to competitors and determine which elements of the value chain the company should make vs. buy
- Identify and evaluate alternative strategies
- Develop an advantageous business model that will profitably differentiate the company from its competitors
- Define stakeholder expectations and establish clear and compelling objectives for the business
- Prepare programs, policies and plans to implement the strategy
- Establish supportive organizational structures, decision processes, information and control systems, and hiring and training systems
- Allocate resources to develop critical capabilities
- Plan for and respond to contingencies or environmental changes
- Monitor performance
Companies use Strategic Planning to:
- Change the direction and performance of a business
- Encourage fact-based discussions of politically sensitive issues
- Create a common framework for decision making in the organization
- Set a proper context for budget decisions and performance evaluations
- Train managers to develop better information to make better decisions
- Increase confidence in the business’s direction
- Management Tools & Trends
Five key trends emerged from Bain's survey of 1,268 managers.
Collis, Daniel J., and Michael G. Rukstad. “Can You Say What Your Strategy Is?” Harvard Business Review , April 2008, pp. 82–90.
Drucker, Peter F. Managing in a Time of Great Change . Harvard Business Press, 2009.
Gottfredson, Mark, and Steve Schaubert. The Breakthrough Imperative: How the Best Managers Get Outstanding Results . HarperBusiness, 2008.
Hamel, Gary, and C. K. Prahalad. Competing for the Future . Harvard Business School Press, 1994.
Mankins, Michael C. “ Stop Wasting Valuable Time .” Harvard Business Review , September 2004, pp. 58–65.
Mintzberg, Henry. The Rise and Fall of Strategic Planning: Reconceiving Roles for Planning, Plans, Planners . Free Press, 1994.
Mintzberg, Henry, Joseph Lampel, and Bruce Ahlstrand. Strategy Safari: A Guided Tour Through the Wilds of Strategic Management . Free Press, 1998.
Porter, Michael E. Competitive Strategy: Techniques for Analyzing Industries and Competitors . Free Press, 1998.
Porter, Michael E. “What Is Strategy?” Harvard Business Review , November/December 1996, pp. 61–78.
Zook, Chris, and James Allen. The Founder’s Mentality: How to Overcome the Predictable Crises of Growth . Harvard Business Review Press, 2016.
Zook, Chris, and James Allen. Repeatability: Build Enduring Businesses for a World of Constant Change . Harvard Business Review Press, 2012.
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- 65 strategic goals for your company (wi ...
65 strategic goals for your company (with examples)
Strategic goals are a critical part of your strategic plan. In order to achieve your long-term goals, you need a clear sense of where you want to go—and an easy way to share those goals with your team. In this article, we take a look at the difference between strategic goals and other goal setting methodologies, then offer 65 example metrics and strategic goals you can use to get started.
Goal-setting is a critical part of your business strategy. You want to make sure your team is cohesively moving in the right direction—and goals are a great way to do that.
But in order for goals to be effective, they need to be measurable. The important thing isn’t just to create goals, but to create strategic goals that help you accomplish your overall company mission.
In this article, we’ll walk you through when to set strategic goals—vs. other types of goals—and how to do so.
What is a strategic goal?
Because strategic goals are closely connected to strategic planning, they tend to be three to five year goals. But the most important part of setting a strategic goal is to identify where you want to go, and what goals you need to achieve to get there.
How strategic goals compare to other business processes
There are a lot of different strategy and goal setting frameworks you can use. Here’s how strategic goals differ from other types of goals.
Strategic goals vs. strategic planning
Strategic planning is the process of defining the direction your company wants to go in the next three to five years. A strategic plan includes longer term goals, strategic goals, and shorter-term goals that describe how you’ll achieve your strategic goals. The strategic planning process is typically run by decision-makers and stakeholders.
Part of defining your strategic plan is coming up with strategic goals. Your strategic plan should also include customer insights, a SWOT analysis , your company values , your organization’s competitive advantages, specific goals on a quarterly or yearly timeline, and a high-level project roadmap if you have one.
Strategic goals vs. strategic management
Strategic management is the organization and execution of business resources in order to achieve your company goals. These usually help you implement your overall organizational strategy.
Strategic goals, on the other hand, are generally three to five year objectives that tie closely to your strategic plan.
Think of strategic goals as the specific things you want to achieve in three to five years. These strategic goals are part of your strategic plan, which provides more context and direction for why your company wants to move in that direction. Your strategic plan fuels your strategic management process, which is how you’ll actually achieve those goals.
Strategic goals vs. strategic objectives
The difference between strategic goals and strategic objectives is somewhat subjective. In general, objectives tend to be more specific than goals—some people argue that objectives are always quantitative, while goals can be either qualitative or quantitative.
Whether you use the terminology strategic goals vs. objectives , it’s critical to make sure your goals are specific, measurable, and actionable.
Strategic goals vs. big hairy audacious goals (BHAGs)
Big Hairy Audacious Goals (BHAGs) are long-term goals that typically take between 10 and 25 years to complete. These are industry-defining goals, like Microsoft’s famous goal to put "a computer on every desk and in every home."
Not every organization has—or needs—BHAGs. Depending on your business strategy, a vision statement might be enough. Whether or not you set BHAGs, strategic goals are shorter-term goals that help you accomplish these bigger, ambitious goals.
Strategic goals vs. OKRs
OKRs , which stands for Objectives and Key Results, is a goal setting methodology developed by Andy Grove that follows a simple but flexible framework:
I will [objective] as measured by [key result] .
OKRs can span multiple years, but most commonly these are one to two year objectives that help your company accomplish your larger strategic plan. In a typical OKR structure, your OKRs feed into your broader strategic goals.
Strategic goals vs. KPIs
KPIs, or key performance indicators , are qualitative measures of how you’re progressing. Like OKRs, KPIs tend to be shorter in time frame than strategic goals. This is partially due to the fact that KPIs are nearly always quantitative. Achieving several long-term KPIs helps you achieve your broader three to five year strategic goals.
Strategic goals vs. business goals
Business goals are predetermined targets that organizations plan to achieve in a specific amount of time. Technically, strategic goals—along with BHAGs, OKRs, and KPIs—are a type of business goal.
65 example strategic metrics and goals
If you’ve never written a strategic goal before, it’s helpful to check out common goals. Though your strategic goals are unique to your strategic plan, use these examples as templates to create measurable, actionable goals with clear success metrics.
Set strategic goals that are:
Easy to track
For more tips on what constitutes a good goal, read our article on how to write SMART goals .
Keep in mind that these goals should be achievable in three to five years. For shorter goals, consider setting OKRs or KPIs instead. For longer goals, check out vision statements and BHAGs .
Strategic goals: finance
Financial strategic goals typically center around a few different important financial metrics, including:
1. Increasing revenue
2. Attaining or maintaining profitability
3. Growing shareholder value
4. Diversifying your revenue streams
5. Becoming a financially sustainable company
6. Reducing production costs
7. Increasing profit margin
8. Setting revenue targets for new products
9. Reducing department-specific budgets
10. Influencing the percentage of local vs. international sales
Examples of financial strategic goals
These examples do not represent Asana’s goals, and are merely included here for educational purposes.
11. Increase total revenue by $10M in the next three years.
12. Reduce cost by 12% to become a profitable company by 2024.
13. Grow a specific product’s revenue to 30% of overall business revenue within the next five years.
14. Reduce marketing budget by 10% in the next three years.
15. Update our sales profile so 50% of our sales are international by 2026.
Strategic goals: customer-focused
Strategic goals that focus on your customers can help you break into a new market or further develop a trustworthy brand. These metrics can include:
16. Reducing customer churn
17. Measurably increasing customer satisfaction
18. Increasing the number of new customers
19. Increasing customer retention
20. Offering great customer value
21. Boosting customer outreach
22. Increasing customer conversion rates
23. Breaking into new customer segments
24. Increasing the number of returning customers
25. Decreasing the percentage of returned products
Examples of strategic goals focused on customer metrics
26. Increase net promoter score (NPS) by three points in the next year, and 10 points in the next five years.
27. Capture 23% market share by 2025.
28. Provide the best customer experience in the market—measured based on reaction time, customer sentiment, and brand tracking.
29. Increase customer retention by 3% every year.
30. Reduce the percentage of returned products to 2% by 2023.
Strategic goals: growth
On an organizational level, growth refers to how your company expands and develops. Growth metrics include:
31. Increasing market share
32. Breaking into new markets
33. Developing new products, features, or services
34. Increasing operational reliability and/or compliance
35. Increasing company velocity
36. Opening new locations
37. Building your brand on social media
38. Increasing website traffic
39. Acquiring a new company
Examples of strategic goals about growth
40. Open 12 new locations within the next four years.
41. Increase market share to 8% by 2026.
42. Reach 5M followers on social media (including Instagram and Twitter).
43. Increase web traffic to 300K visitors per year by 2024.
44. Start three new product streams by 2027.
Strategic goals: internal
You can also set strategic goals focusing on your internal company goals. Example employee-centric metrics can include:
45. Increasing employee retention
46. Adding new team members
47. Building a healthy organizational culture
48. Implementing a performance review cycle
49. Standardizing titles and/or levels
50. Improving cross-functional productivity
51. Spinning up a project management office (PMO) to standardize processes
52. Attracting the best talent
53. Building high-performing teams
54. Investing in personal and professional development
55. Reducing burnout and impostor syndrome
56. Building employee-focused training programs
57. Reducing employee turnover
58. Improving workplace safety
59. Building better facilities management
Examples of internal strategic goals
60. Add 20 new team members within the next four years.
61. Increase overall engagement scores by 7% based on yearly surveys.
62. Increase new hire referrals to 5,000 team members per year by 2026.
63. Develop and circulate new company values by 2023.
64. Implement a biannual performance review cycle within the next three years.
65. Attain maximum workplace safety score rating within the next three years.
Achieve your goals with goal tracking technology
Once you develop your goals, you need a clear way to track, measure, and communicate those goals. Too often, teams set great goals and then don’t know how to track those goals over time.
Instead of letting your goals collect dust in a slide deck or spreadsheet somewhere, use goal tracking technology to connect your strategic goals to your team’s daily work. With Asana , you can track long-term goals, as well as the shorter-term objectives that feed into those goals.
How to create an action plan that drives results
Annual planning template
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How to build a strategic plan for your nonprofit
Strategic Planning: A What is and How to Guide
Mastery of your strategic planning can transform your business action-plan from reactive to proactive. Businesses are prone to reactive thinking. As opportunities and challenges arise, organizations react to what’s right in front of them. And while every company needs to be responsive to current reality, strategic vision often suffers as a result.
This dynamic is understandable. When your team is immersed in immediate priorities, it’s easy to neglect overarching goals. But what’s the process for becoming proactive, rather than reactive?
Table of Contents
A guide to the strategic planning process.
Strategic planning: key definitions and concepts., what is strategic planning, why is strategic planning effective for a business, what are the advantages of strategic planning for business, who does strategic planning involve, when should strategic planning be done, the strategic planning process: 4 essential stages., 1. how should i prepare for strategic planning, 2. how do i create a strategic plan, 3. strategic planning and execution., 4. evaluating the strategic plan execution., strategic planning deployment., frequently asked questions..
For many of the world’s most powerful organizations, the answer lies in strategic planning, a deliberate approach to analyzing the present and charting a path forward. In contrast to reactive management, this method empowers companies to assert their own values and goals.
This guide unpacks the core concepts of strategic planning, including its potential benefits and possible risks. You’ll learn if and when strategic planning makes sense for your business and how to effectively engage your team in the process.
From there, we’ll present four specific phases of strategic planning , from preparation to execution to constructive evaluation. This four-step process makes it easier to plan strategically with your team and helps you avoid common pitfalls that might hinder your efforts.
To understand and implement strategic planning for your organization, start by familiarizing yourself with its core concepts and characteristics.
In the language of modern business, the terms “strategic” and “planning” are used so widely that their meanings can become unclear.
So, when we discuss the strategic planning process, what are we talking about exactly? How does it differ from other forms of planning that businesses and individuals engage in every day? Who should be involved and how?
To answer these questions and avoid potential confusion, the following section describes strategic planning in more detail.
The strategic planning process defines your business’s direction, outlining a path from your present toward a preferred future. A strategic plan captures an organization’s mission and core principles, envisioning the fulfillment of these ideals. Strategic planning is both conceptual and practical, presenting the big-picture goals and specific ways to achieve them.
While strategic plans can be shaped to suit each organization’s needs, they typically include the following elements:
- Comprehensive assessment of the organization’s present, including current successes and struggles
- Clear articulation of the organization’s core purpose and values
- Specific vision of how the organization can change for the better in the future
- A practical plan for achieving change and overcoming potential obstacles
In essence, a strategic plan provides a coherent set of targets with which to align your organization’s efforts. In moments of difficulty or indecision, it can be a guiding light.
Without a strategic plan, an organization cannot proceed collectively toward a shared set of goals. This limitation can impede morale, productivity, and innovation, among other key aspects of organizational success.
In the absence of strategic clarity, teams may focus on individual indicators, such as revenue, profit, or market share. But none of these metrics are inherently motivating on their own, and colleagues may clash over how to prioritize them.
Strategic planning provides a common vision, enabling team members to separate themselves from their daily duties and consider larger questions. When workers get bogged down in the minutia of their roles, the risk of burnout increases.
Strategic discussions help each person contextualize their work within a larger purpose, helping make mundane tasks more meaningful .
In addition, strategic planning entails a thorough assessment of strengths and weaknesses. Rather than continuing ineffective tactics out of habit, teams that engage in strategic planning can pivot toward what actually works.
But perhaps the most important benefit of strategic planning is your organization’s chance to determine its destiny. By candidly assessing its present and collectively embracing a different vision, a company can chart its own course. The alternative is a strategy determined by default — your organization will be shaped by external forces, not its own aims and principles.
If the benefits above sound appealing, you’ll be glad to know that strategic planning can work in any industry, for companies large and small. The advantages of a strategic plan can be equally evident at a Fortune 500 company and a recently founded startup.
That being said, strategic planning requires certain conditions and levels of commitment to succeed. Moreover, certain misconceptions can cloud the process from the beginning, and counterproductive team dynamics can undermine its results. Here’s how to set your team up for success.
How to start strategic planning.
To successfully engage in strategic planning, you’ll need to create the following dynamics within your team:
- Dedicated time and space – Expect your strategic planning session to take several hours of undivided attention from multiple (if not all) team members.
- Respectful and transparent communication – Encourage team members to openly voice constructive criticism and truthfully discuss strengths and weaknesses. If respectful but honest communication patterns aren’t in place, this dialogue can be derailed by hard feelings or pulled punches.
- Accountability and acceptance – Your teams will need to assess their own shortcomings and identify room for improvement. Accordingly, participants must be willing to take accountability for what is not working and listen to others’ struggles without shaming or blaming them.
- Inclusive approach – A strategy determined by a small cohort within your company may not resonate with the larger group. Incorporate perspectives from all corners of your organization to enhance the scope and efficacy of your strategy.
- Data and fact-finding – Much of the strategic planning process revolves around analyzing shared information to draw new conclusions. To inform your strategic planning, develop key metrics and make them accessible to all involved.
Potential risks in the strategic planning process.
If the conditions above can help strategic planning succeed, the following misconceptions or liabilities can hinder its positive impacts. Before beginning strategic planning, consider how to mitigate or prevent these challenges.
- Rigid planning – Expect to revisit and update your strategic plans over time. Remind participants that strategic plans aren’t binding commitments, but flexible documents that can be adapted down the road.
- One-and-done thinking – On a similar note, team members shouldn’t think of strategic planning as a one-time deal. Set the expectation that strategic plans and reviews will happen periodically.
- Unrealistic goals – Strategic planning should produce a vision for change, but not one so lofty that it can never actually happen. Root your goals firmly in reality.
- Unmeasurable goals – Likewise, choose goals that are concrete enough to be measured through clear metrics. Avoid intangible ambitions (such as “become an industry leader”) by tying each goal to specific outcome measures.
- Lack of trust – To honestly assess assets and liabilities, team members can’t be jockeying for promotions or throwing each other under the bus. Help the team focus on collective success, not individual advancement.
- Lack of leadership commitment – For strategic planning to produce real change, company leaders must commit to the process and its conclusions. Gain buy-in from leaders at various levels, or your strategic planning will largely be a theoretical exercise.
The strategic planning process benefits from inclusivity. When varied perspectives are represented, new insights and possibilities emerge. However, in larger organizations, it may not be feasible or practical for all team members to participate in strategic planning discussions.
In cases where a set of company leaders will compose a strategic plan, gather the unvarnished opinions from your broader team by other means, such as surveys or interviews. In a later section, we’ll discuss the importance of this data in more detail.
Additionally, you may wish to look beyond your full-time team to inform your strategy. The experiences of clients, customers, and collaborators can shed new light on an organization’s strengths and weaknesses.
As you consider all potential sources of input, make sure your core strategic planning team includes leaders from across your organizational structure. These stakeholders could include:
- Department heads, directors, or team leads
- Executives at the VP or C-level
- Founders, board members, and major investors
Clearly, there’s no universal playbook. The form and degree of involvement from all these different parties will vary from company to company, depending on your structure and needs.
Strategic planning is not a close-ended exercise. A strategic plan is meant to evolve continually, and strategic thinking can be valuable in a company’s daily activities. Moreover, the stages of implementation and evaluation can keep your team constantly engaged in forward-thinking dialogue.
However, because creating a strategic plan requires significant organizational commitment, most teams find it helpful to conduct formal strategic planning at specific intervals. Consistently scheduling strategic planning also helps resist the urge to put it off.
For many companies, conducting strategic planning at a set time every year is a natural scheduling cadence. The annual planning approach lends itself to reassessing the last year before moving forward into the next one.
It’s important to preserve the distinct emphasis and elements of strategic planning, separating it from other annual reviews. If your team conducts financial reviews or performance evaluations annually, for example, your strategic planning should be separated from these undertakings.
Considering the rapid pace of modern businesses, many companies find it helpful to conduct strategic planning on a quarterly basis, rather than just once a year. A more frequent planning cadence can help ensure continuous alignment with identified goals and surface new areas of opportunity.
Another option is to use quarterly planning meetings to evaluate the status of the initiatives described in your strategic plan. In this approach, a strategic plan is developed once a year and assessed or updated in each subsequent quarter.
Now that we’ve covered general aspects of strategic planning, we can discuss its specific stages more thoroughly. The strategic planning process is best understood in terms of four specific phases, each with important constituent elements.
The sections below provide detailed guidance on generating, implementing, and evaluating a strategic plan.
In the strategic planning process, plotting future successes requires an accurate understanding of your present. You can’t plan a journey without knowing where you’re starting from.
Preparation is crucial and can set the tone for all your subsequent discussions. To analyze your organization’s present, you’ll need data. As much of it as possible, including statistical, anecdotal, and historical information.
Experts call these kinds of data “inputs”— information sources that shed light on some dimension of the strategic planning process. To figure out which inputs might help you prepare for strategy planning, look inside your organization as well as beyond it.
Use internal inputs.
Internal inputs are data sources that describe some aspect of your organization’s performance. Generally, these measures are generated by your team during the course of their typical duties or in a special effort to prepare for strategic planning.
Internal inputs might be qualitative or quantitative, although some combination of these types will probably provide a richer picture. If you suspect that you lack insight into key aspects of your team, consider taking the time to generate new metrics. Internal inputs might include:
- Surveys of the team regarding successes, challenges, frustrations, and hopes
- Customer satisfaction surveys
- Interviews with executives and other key team members
- Financial performance data and current projections
- Other key internal metrics (e.g., customer growth, client retention)
Consider external inputs.
External inputs refer to data pertaining to factors outside of your organization , such as the competitive landscape or broader economic trends. They describe the circumstances in which your organization is striving to succeed, contextualizing your efforts in important ways. External inputs might include:
- Information about competitors and their activities
- Demographic data pertaining to your target audience
- Technological advances pertinent to your work
- Legal and regulatory factors that may affect your business
- Relevant cultural attitudes and trends
Organizing your inputs – SWOT and PESTLE methods.
Once you’ve gathered internal and external inputs to inform your strategic planning, it’s helpful to assess them through structured frameworks, which can identify overarching themes within a bunch of diverse data points, separating the signal from the noise.
The SWOT and PESTLE methods are two approaches that teams regularly use in preparing for strategic planning. These techniques allow organizations to evaluate where they stand and clarify areas of emphasis for their subsequent strategic plans.
SWOT is an acronym for strengths, weaknesses, opportunities, and threats, the four elements of this method of analysis. As a team, you’ll be asked to identify inclusions for each category. For purposes of discussion and visual clarity, these can be arrayed in a table format.
The SWOT method can be applied to your organization as a whole or to specific aspects of your work. And while it can be a helpful tool for organizing your data, it may also help you draw important conclusions.
For example, you may identify four or five separate problem areas, as evidenced by your internal inputs. However, when you consider these together, which organizational weaknesses do they indicate? Asking these kinds of questions can lead to important higher-level analysis.
PESTLE is also an acronym, focused mainly on external factors that shape the context in which your organization does business. To conduct a PESTLE analysis, examine the following elements with your team:
- Political factors – Which aspects of legislation, policy, or the political climate might affect your business at the federal, state, or local level?
- Economic factors – From interest and exchange rates to unemployment figures, how might macroeconomic trends affect your business?
- Sociocultural factors – Which demographic factors define your target audience? Consider how their views, preferences, and priorities evolve.
- Technology – Which new technologies are redefining your industry?
- Legal factors – From potential legal disputes to regulations governing your activities, how do legal concerns shape your work?
- Environmental factors – How do issues such as climate change or pollution currently impact your business or threaten to shape its future?
PESTLE is an excellent means to pull back and consider how your organization can adapt to broader forces. Additionally, it bridges an important gap between assessing where you stand and anticipating future changes. By identifying current trends, PESTLE positions your team to begin strategic planning in earnest.
With the right data at your disposal and valuable insights about where you stand, your team is ready to craft its strategic plan. While the format of strategic plans can differ somewhat, most include a few key elements: a vision, mission, goals, and contingency plans for what may lie ahead.
Create a mission statement.
A strategic plan should capture the very heart of a business, articulating its distinct character. Accordingly, a mission statement is a crucial inclusion in any strategic plan.
Simply put, a mission statement describes what your organization does and how it differs from competitors. A strong mission statement can also convey a business’s reason for being and the distinct value it provides. While there are several ways to express an organization’s mission, it’s best not to overcomplicate the concept.
Most mission statements are concise , efficiently characterizing a company in a paragraph or less. This clarity is helpful both internally and externally. Team members can align their efforts with this mission, and the public can quickly comprehend what you’re all about.
Questions to ask when creating a strategic plan.
In developing a mission statement, consider the following questions with your team:
- What is the purpose of the business?
- What problems do we solve?
- What value do we provide?
- How are we different from our competitors?
- What do we do particularly well?
- What motivates us to keep the business going?
Create a vision statement.
A vision statement describes your organization’s preferred future — a state of affairs you seek to achieve in time. A vision statement may reflect a continuation of current strategies or a reimagined sense of what your company can be.
Your vision statement should be bold but firmly rooted in the realm of reality. It should be possible, if not immediately so. In creating a vision statement, you’re presenting specific aspirations and pointing the way forward. This vision must be attainable, rather than an abstract fantasy no one takes seriously.
Create a vision statement: What to ask yourself.
In creating a vision statement, consider the following questions with your team:
- Where would we like our company to be in five years? Or ten?
- How can we do more of what we do well?
- What is holding us back? What would our future look like without those problems?
- What seeds of success have we planted, and how can we nourish them?
- What areas of opportunity are we overlooking?
- Where can we match or outdo our competitors?
What’s the difference between a mission statement and a vision statement?
As you create or refine your mission and vision statements, it’s important to make a clear distinction between them. Confusing the two will detract from the value they provide.
One common mistake is confusing a specific vision of the company for a mission statement. These concepts are closely linked but not interchangeable. For example, “To become one of the highest-selling car dealerships in Los Angeles County” is not a mission, but a vision of what a car dealership can be.
On the other hand, “To deliver a trustworthy car-buying experience by providing affordable, high-quality automobiles and unparalleled service” is an actual mission statement, capturing the business’s purpose. Crucially, by honoring its mission, this theoretical dealership could achieve its vision of sales success.
Set strategic goals.
With your mission statement and vision statements in hand, you’ll have a clear view of your company’s character and preferred future. So how do you get from your present circumstances (revealed by the SWOT analysis) to the vision you’ve created—while honoring your mission?
The key is creating strategic, well-formed goals. By translating your vision into specific metrics and milestones, you can create a practical path to change. Goal-setting is arguably the most important component of strategic planning, as it transforms abstract aspirations into specific actions your team can take.
In order to hit ambitious targets, your entire organization needs to be pulling in the same direction, with each individual contributing to a broader vision through their specific roles. Cascading goals is one way to help align your team’s efforts.
This term refers to translating a company’s overarching goals into smaller component objectives for specific departments and even smaller objectives for specific teams, with yet smaller objectives assigned to individuals.
In this approach, each contributor delivers some piece of a larger plan, “cascading” from top-level goals.
This is the meat and potatoes of strategic planning — identifying the cascading goals to help a company achieve its vision. When done successfully, cascading goals ensure alignment between an organization’s actions and its ambitions.
Ways to set strategic planning goals.
In developing business goals for your organization, for specific teams, or for individual workers, you may find it helpful to use one or more specific techniques. Here are some popular approaches to goal setting.
- OKR goals – OKR (Objectives and Key Results) is a popular approach among Silicon Valley’s tech giants. It involves setting broad objectives (e.g., “increase customer satisfaction to the highest level we’ve ever recorded”) and specific “key results” that will indicate progress toward those objectives. Key results are measurable metrics, such as “respond to 100% of customer support tickets within one hour of the time they were submitted” or “reduce customer complaints by 25% this quarter.”
- SMART goals – SMART goals are specific, measurable, attainable, realistic, and time-bound. These criteria keep an organization’s aims rooted in reality and promote accountability through easy assessment. “Improve customer satisfaction,” for example, isn’t SMART. “Increase the average score on our customer satisfaction survey to 8.5 by March 31” certainly is. Note that the OKR and SMART approaches are complementary: Key results should meet SMART criteria.
- MBO – Management by Objectives has much in common with the concept of cascading goals. You use the company’s top-level goals to set specific benchmarks for teams and individuals. These specific objectives are quantitative, promoting accountability and clarifying expectations for each employee.
- BHAG – A “ big hairy audacious goal ” is a bold vision of what a company can achieve, not a modest, interim benchmark. A BHAG is intended to foreground big-picture possibilities, rather than daily concerns. Because of their ambitious nature, BHAGs can be useful in creating a company vision or mission.
Project for the future.
You’re not setting goals in a vacuum. As you develop plans for your team, acknowledge the full array of possibilities that the future might hold. If your PESTLE analysis turned up potential barriers, or your SWOT analysis generated possible threats, account for these contingencies in your strategic planning.
You can’t anticipate every possible outcome. But there are some smart ways to ensure that your strategic plan is strong enough to endure potential setbacks.
Scenario planning is the process of identifying multiple possible outcomes and developing appropriate response plans to each one. This approach is especially helpful in cases where external factors present considerable uncertainty.
As part of your strategic planning, consider how you would continue to pursue your vision if various events unfolded. Develop your plan with the flexibility necessary to adapt if undesirable outcomes come to pass.
Using a tool like Workfront Scenario Planner can help you plan effectively and respond to market shifts with speed.
“What if” questions to ask when strategic planning.
Similar to scenario planning for external circumstances, don’t be afraid to imagine possible challenges or opportunities within your team. Ask “ what if ” questions about how you might encounter difficulty in translating your strategy to reality.
What if your marketing and product teams have misaligned timelines? What if an important team member takes a new job elsewhere? By asking these questions in advance, you can anticipate and avert many setbacks.
Strategic planning and budgeting.
It should come as no surprise that an effective strategy requires real investment. You can’t expect your team to embrace new initiatives if you don’t give them the necessary resources and support to execute their new duties. And if they’re so strapped for time that they can barely keep up, don’t expect them to do much innovating.
Back your strategic plan up with a real budget, whether it’s used for hiring new team members or investing in new tools. When it comes to strategic commitment, money talks.
Strategic planning isn’t an academic exercise. You do it to generate real results. Once you’re comfortable with your strategic plan, it’s time to put it into action.
Execution is never perfect. Even the most talented teams encounter roadblocks when implementing strategic plans. In fact, if your organization can enact your strategic plan flawlessly, you probably weren’t ambitious enough.
So, take a different view of execution: In the daily Scrum of getting work done, how do you keep strategic goals in view?
When it comes to executing a strategic plan successfully, here are some key ideas to keep in mind:
Tracking strategic planning goals.
You can’t set cascading goals and simply hope they’ll be accomplished within specified time frames. For purposes of collaboration and accountability, you need to track progress toward identified goals as well as times when your team falls short. Without this insight, you’ll be flying blind.
A huge component of goal-tracking is utilizing appropriate platforms to monitor and coordinate the activities of your team. With the right tools, your entire workforce can seamlessly report what they’ve accomplished to their colleagues and managers. For those in leadership roles, identifying successes and roadblocks becomes far simpler, as well.
As the world’s leader in enterprise work management, Workfront builds strategic planning software like Workfront Goals for precisely this purpose. We help companies track their efforts in real time, offering both big-picture insights and granular detail. If you need the perfect platform for tracking your team’s goals, we have a customizable solution ready to suit your organization’s needs.
Communication and alignment.
As you execute your strategic plan, ongoing communication will be critical. Don’t let strategic thinking stop once your plan is complete. Actively discuss how the implementation is unfolding with stakeholders.
Communication issues can arise between individuals or whole departments, jeopardizing the teamwork necessary to achieve an ambitious vision. To avoid miscues, create recurring opportunities to check in on strategic priorities, such as a regular meeting or chat channel.
By building communication opportunities into the work experience, you’ll keep your team members aligned and moving toward shared goals.
Internal vs. external communication in strategic planning.
Often, businesses are thoughtful about communicating their strategies to those outside their teams, such as:
- Industry experts
This external communication aims to project a positive image publicly, with the assumption that favorable impressions will yield desirable business outcomes.
Yet, internally communicating your strategy is at least as important as conveying it to outsiders. When discussing your strategic plan with your team members, communicate how their duties and roles relate to your organization’s larger mission and vision. Doing this will not only ensure that everyone is on the same page, it can also be highly motivating .
Common roadblocks to execution success.
If you’re consistently encountering problems in executing your strategic plan , here are some common culprits to consider in terms of when project plans fail . Look over the following issues and consider which would be most likely to occur within your organization.
- Unaddressed organizational issues – Did your strategic plan overlook barriers to success, such as training shortcomings, poor morale, or mistrust between colleagues? Take a step back, diagnose these problems, and incorporate solutions into an updated strategic plan.
- Leadership challenges – Maybe the executives at your company are thrilled about your strategic plan, but leaders in each department don’t quite get it. Or perhaps they like the strategy, but don’t know how to rally their team around it. Equip leaders at all levels with the information and training to resolve these issues.
- Lack of buy-in – In addition to those in leadership roles, your whole team needs to buy into your strategic plan. A lack of buy-in can result from poor internal communication, but it might also reflect some missing input at the preparation stage. Did your strategic planning process neglect to incorporate key perspectives from your team? If so, you might need to gather this information retroactively.
- Lack of time/resources – Once again, a strategy must be matched by real investment. If you’re not giving your team the tools or time to implement meaningful improvements, no strategic plan can be expected to succeed.
The final stage of the strategic planning process involves evaluating the execution of your strategic plan in retrospect. This kind of post-mortem assessment can be extremely informative and help shape future strategic planning. After all, the results of your last strategic planning make great inputs for your next one.
In fact, evaluation could be considered part of a continuous process, in which the execution triumphs and failures show the way to a better strategy. To make the most of your evaluation process, keep the following ideas in mind.
As mentioned earlier, many companies revisit their strategic plans on a quarterly basis, checking progress toward identified goals. This cadence is valuable in keeping strategic priorities fresh and making adjustments to achieve important benchmarks.
Whether or not quarterly reviews sound right for your company, regularly revisiting goals is a good idea. When you do, create space for a real discussion about what’s been going well and what hasn’t, rather than just noting where you stand.
If a department is falling short, interview key members to gather insights about their challenges. If a team member is excelling, explore the factors that account for their success.
Importantly, separate these conversations from other performance reviews so that other topics don’t overshadow strategic considerations.
Revisit strategic planning goals and reassess.
When you set concrete goals using the processes outlined above, you can easily assess whether they’ve been met. Review which cascading goals for your team have been completed, which are still in progress, and which seem to be totally stuck. This approach increases accountability and signals the importance of these goals to your entire team.
This doesn’t require an all-or-nothing mindset. Where partial success occurs, celebrate it. And don’t presume that someone who’s offering context is really trying to make excuses. If a team member’s goals were truly impacted by external factors, adjust your plan accordingly.
The point of revisiting these goals is to prompt further constructive discussion and find ways to improve outcomes going forward.
Utilize the right strategic planning tools and techniques.
In order to review your team’s progress toward established goals, you’ll need the right technological tools to track their results. Otherwise, following up on even basic performance metrics can be a time-consuming process.
With flexible and customizable tools that integrate directly with the applications you already use, Workfront is your ideal partner for monitoring progress and performance. Check out our offerings to see just how simple generating these insights can be.
As you use this high-level overview of the strategic planning process to guide your organization’s efforts, remember that there’s no one-size-fits-all approach for such an important undertaking. Be sure to tailor each element to the nature of your business and your particular team.
The power of strategic planning lies in its universal applicability and adaptability. No matter your obstacles and opportunities, these principles and practices can help move your company forward.
Want to know more about making your business run more efficiently and planning for success? Check out our guides to:
- SMART goals
- Agile marketing
What are the steps of strategic planning?
The steps of strategic planning include:
- Setting your strategic aims
- Sorting your goals in order of priority
- Defining tactics
- Performing a SWOT analysis
- Creating a strategy map
- Executing your plan
- Monitoring, controlling and revision
The number of steps in each strategic planning process will differ in line with project complexity. You might need three steps or seven, depending on the depth of your planning needs.
While no single step of strategic planning is the most important, the post-execution steps are often overlooked. Monitoring and controlling helps you to revise plans while a project is in progress and plan better next time.
How do you write a five-year strategic plan?
To write a five-year strategic plan, consider your goals and the metrics you’ll measure success by. These should be SMART – specific, measurable, attainable, relevant and time-bound.
You’ll also need to write a mission statement, defining your broad visions. This should feed into all subsequent sections and underpin all decisions.
Strategic planning can be used for business projects or to ground your wider company’s aims for the years ahead. For a wider strategic plan, you might wish to include an industry analysis stage and a standalone marketing plan. For both, consider risks and threats, including in any financial modelling.
What’s the difference between a strategic framework and strategic plan?
A strategic framework is similar to a strategic plan but has a wider reach. There’s less focus on short-term, actionable tasks and more emphasis on factors such as global industry trends, supply chain information, policy changes and marketplace shifts.
It may be more flexible than a strategic plan and a good place to start, as they can act as an umbrella for all departments, projects and plans. At the same time, strategic plans offer the precision for project managers and business leaders to drive results.
What is Strategic Planning & How to Improve It
Long-term goals are essential for the sustained success of any organization. However, many struggle to excel without a solid strategy to achieve those goals.
But even once you’ve decided on your organization’s strategy, executing it is an entirely different task. 74% of executives don’t have faith that their company’s transformative strategies will succeed – likely because they don’t have a strategic plan in place.
This is where strategic planning comes in. Strategic planning allows businesses of all sizes to meet their most ambitious objectives – whether that might be refocusing branding efforts, increasing social impact, or driving profitability.
Having a plan of action makes it easier to accelerate team performance, enhance communication, and empower employees, all while driving profitability and moving your organization forward.
So, what exactly is strategic planning, and how can your organization improve it?
What is strategic planning?
Strategic planning is the process of defining a vision for the future of an organization and identifying relevant goals and objectives before crafting a plan of action for achieving them.
When creating a strategic plan, leaders and key stakeholders typically come together to evaluate the current state of the business and may define or redefine the organization’s mission as part of the strategic planning cycle.
A strategic plan is usually meant to guide achieving organizational goals over a long period. All objectives should be clear and measurable so that progress can be tracked efficiently.
A successful strategic plan should also include how goals should be achieved to maximize impact. These mid- to long-term goals should focus on transformational changes rather than short-term profits.
Strategic planning in project management
Although you might associate strategic planning with C-suite executives and high-level stakeholders, developing and implementing a strategic plan is also an important task for project managers looking to successfully manage their projects through to completion.
It’s worth noting that strategic planning is different than business planning, which focuses on short-term objectives. A robust strategic plan is crucial for ensuring that improvements and transformational changes occur within an organization, which is also the objective of many projects.
Having a solid strategic plan is beneficial to project managers for several reasons, including:
- Better communication: Discussing project strategy with team members helps to ensure that employees feel involved and understood. Not to mention, a strong flow of dialogue helps to ensure that departmental strategies are aligned with overall organizational strategies.
- Improved resource management: A strategic plan helps project managers determine the available resources for a project and how to best delegate responsibilities to optimize project success.
- Team engagement: With a comprehensive strategic plan in place, employees are more likely to remain engaged with their work throughout the duration of the project. Because the plan has been clearly defined, team members know what’s expected of them or the next step in the process, which can help accelerate team performance .
How often should strategic planning be performed?
While you should certainly start your strategic plan during the planning phase of your project, there’s no real requirement for how often your team should review and update your strategic plan. The frequency depends on the nature of the business and the particular components of the strategic plan.
That said, there are generally two main times that a strategic plan should be reevaluated:
- Quarterly: Most competitive organizations conduct quarterly reviews of their strategic plans. Integrating an evaluation of your strategic planning system into quarterly reviews is a great way to track progress and ensure that objectives are being achieved.
- Annually: While quarterly reviews can provide insights into monthly progress, annual reviews let senior leadership, key stakeholders, and business leaders see the bigger picture. The combined metrics from all four quarters may reveal trends and insights not visible in quarterly reviews.
The maturity of a business can also dictate the frequency of the strategic planning cycle. A small startup in a competitive industry may need to reevaluate its plan on a monthly basis, while a more established business may only need to revisit plans once every few years.
It's also important to note that a strategic plan is meant to be ongoing. In his Harvard Business School Online course, Professor Clayton Christensen points out that most businesses with successful long-term strategies tend to change their plans as time goes on. Unforeseen threats and opportunities arise and organizations must adapt their plans accordingly – which may also mean frequently revisiting and revising existing strategic plans.
The different types of strategic plans
Every method has its particular pros and cons, but the real magic of strategic planning is that different types can be combined.
Let’s take a closer look at some of the most common types of strategic planning.
A strategic plan that is the most effective is also the most straightforward. In a SWOT Analysis, an organization evaluates its current Strengths, Weaknesses, Opportunities, and Threats. These components are fairly simple to understand but may be quite comprehensive depending on the size and nature of the organization.
SWOT Analysis is a great way to gain a new perspective on current operations. And best of all, SWOT is highly cost-effective and doesn’t usually require the expertise of a consultant or business analyst. Really, any experienced member of an organization can conduct a SWOT analysis.
However, this strategic plan approach does have its limits. Biases and preconceived notions can influence the analysis and result in inaccurate data or poor recommendations.
When businesses want to understand the external market in which they operate, they turn to the PEST Model. Using PEST, a business examines the external Political, Economic, Social, and Technological factors that influence its market segment. Although applying PEST to domestic markets is not necessarily uncommon, it’s usually most useful when implemented before entering a foreign market.
The PEST Model only considers outside factors and doesn’t include internal variables. It’s best used in combination with another strategic plan.
Objectives and Key Results is another fairly straightforward method. A specific objective is chosen with three to five corresponding key results. The objective needs to be clearly defined and results must be accurately measured to determine success.
Setting OKRs is a great way to help push an organization forward but setting too many OKRs can lead to difficulties in prioritization and workload balance.
Porter’s Five Forces
Organizations seeking to increase their competitive advantage can look to Porter’s Five Forces to understand their position in the market and the factors impacting their profitability. The Five Forces include:
- Competition in the industry
- The potential of new market entrants
- The power of suppliers
- The power of customers
- The threat of substitute products
While Porter’s Five Forces can help to identify opportunities, these factors may not be completely comprehensive, depending on the particular business. For example, there are usually more than just five forces at play in a given industry. Governmental regulations and technological disruption also influence an organization’s competitive advantage but aren’t included in Porter’s model.
The VRIO Framework is based on Value, Rarity, Imitability, and Organization. This type of strategic plan helps organizations to evaluate their competitive potential by considering each of the four aspects of VRIO and leveraging their unique advantages.
The VRIO Framework is similar to SWOT but is more focused on an organization's particular value rather than broad strengths and weaknesses.
Balanced Scorecard (BSC)
The Balanced Scorecard is used to communicate goals, ensure that daily tasks and responsibilities align with those goals, and accurately measure progress and performance . The BSC combines a mixture of perspectives, including:
- Financial Stewardship
- Internal process
- Organizational capacity
The BSC approach to the strategic planning process is great for ensuring that employees are working toward achieving organizational goals. However, this method requires collecting and analyzing large amounts of data and can become complicated.
Blue Ocean Strategy
The Blue Ocean Strategy focuses on untapped opportunities and uncontested spaces, delineating the boundaries between known markets and new markets as a “red ocean” or “blue ocean,” respectively.
In a red ocean, businesses in the same industry clamor to gain and retain customers, resulting in high competition. Conversely, the blue ocean represents emerging markets with no competition, only the need to establish demand.
The Blue Ocean Strategy includes six main components that organizations must examine:
- Alternative industries
- Strategic groups within your industry
- Buyer groups
- Complementary product and service offerings
- Functional-emotional orientation of an industry
- Historical trends
What does the strategic planning process look like?
As we’ve seen, there are many different approaches to and benefits of strategic planning. Some of these methods work well on their own, while others can be combined with other robust strategic techniques.
Regardless of the specific framework or methodology an organization uses as the basis of its strategic action plan, creating a strategic plan can generally be summarized in a few steps.
Let's use a fictitious educational business called LearnSMRT as an example.
Identify your current market position
When the strategic planning process starts, senior leadership and key stakeholders at LearnSMRT must examine their current position in the market and identify all necessary improvements that must be made in order to reach long-term strategic goals.
Maybe LearnSMRT is being outpaced by educational software offerings provided by competitors in their niche. Maybe they're suffering from a recruitment and retention problem.
Whatever the current issues facing the business are, this stage of the process is best for implementing a SWOT Analysis or similar assessment to gauge the state of the organization and determine the appropriate path forward. An existing mission statement or previous long-term goals are often helpful in assessing the current state of the organization and providing necessary recommendations.
Determine your priorities and objectives
Following a thorough evaluation of the organization, the next step in the strategic planning process is to set specific objectives. It’s rare that a business will have just one objective, so it’s crucial to prioritize which goals and objectives are most important.
Factors like available resources and project timelines can influence how strategic planners at LearnSMRT will prioritize their organization's objectives.
Develop a plan of action
In this stage of the strategic planning process, LearnSMRT stakeholders dive into the specific steps required to achieve their long-term goals. This may involve the development of many short-term business plans that support the overall strategic plan. Tools like a business strategy map may be used to help visualize and plot the connections between strategic objectives on the path to your organization's goals of their fictitious educational business.
Implement your plans
After the strategic action plan has been completely developed, it needs to be implemented. This stage of strategic planning brings in team members from across the LearnSMRT organization to determine responsibilities, make operational adjustments, and establish the specific metrics for measuring success.
Communication is indispensable at this stage, and all employees should know what they are doing to achieve strategic objectives and why they are doing it. Aligning strategic plans with company culture can help employees feel a sense of purpose when long-term plans are implemented.
Update your strategic plan accordingly
No plan is perfect, and regular reviews and revisions are often necessary to ensure that the strategy remains strong. Changes in the market can happen unexpectedly, putting established plans in peril. Reevaluate strategic goals as the business environment evolves. Regular metrics reviews are important, and the Balanced Scorecard method can be hugely useful in identifying any shortcomings and making updates accordingly.
5 ways to improve your strategic planning
We’ve looked at the different types of strategic plans and the broad steps involved in executing most strategic plans. But what about improving your strategic planning? Here are a few key steps to consider:
1. Put planning first
Make sure that your organization devotes enough time to map out your path to achieving long-term goals. This includes everything from resource allocation to consulting with stakeholders.
2. Include employees
Including employees in the strategic planning system is more than just playing nice, it’s a practical step to improve internal operations. Involving employees can help to ensure that strategies are achievable and potential obstacles can be avoided. Issues regarding recruitment, retention, equipment, and technology are often best understood on the shop floor rather than the C-suite.
After all, 30% of people surveyed cited failure to coordinate across units as the main challenge to executing their company’s strategy. Including everyone in your strategic planning process can help better facilitate this coordination.
3. Encourage collaboration
To give your organization the best chance of success when implementing your strategic plans, it’s important to encourage close collaboration between teams. This is usually easier said than done, but broad adoption of strategic plans depends on the participation of all employees across departments.
4. Recognize achievement
Your strategic plan won’t get very far without recognizing and rewarding those responsible for implementing them every day. As your long-term plans are set into motion, be sure to give employees and teams the credit they deserve for driving success. This can be anything from a company meeting with an informal award ceremony to a gift card or cash bonus.
5. Always evaluate
Be sure to evaluate progress toward your strategic goals on a regular basis. Without continuous monitoring of key metrics, you won’t know if your teams are actually achieving their intended objectives.
Get additional help with Rodeo
If you’re interested in robust strategic planning as part of your strategic management efforts, see what Rodeo can do for you.
Rodeo is an all-in-one tool that equips creative professionals with the features you need to make managing projects easy. Our robust software can support your projects at every stage, meaning you can spend more time creating and less time on annoying administrative work.
Rodeo can streamline your project management workflows by helping you:
- Easily plan and assign tasks to your team members
- Track time spent on projects
- Build in-depth budgets that update in real-time as your project progresses
- Create custom invoices and estimates and send them to clients directly from the Rodeo platform
- Access a rich set of reports on metrics like project profitability, employee productivity, time registration, and more
With budgeting, estimating, invoicing, planning, time-tracking, and reporting all combined in one user-friendly tool, Rodeo gives you a truly comprehensive strategic management solution. No need to invest in additional third-party software to make your team more productive and your projects more profitable.
Frequently Asked Questions (FAQs)
What are the 5 steps in strategic planning.
The 5 steps in strategic planning are identification, prioritization, development, implementation, and updating.
What are 3 types of strategic plans?
Three key types of strategic plans include SWOT Analysis, Balanced Scorecard, and Blue Ocean Strategy.
What is the main purpose of strategic planning?
Strategic planning sets organizational goals and implements a plan to achieve those goals in order to improve profitability and productivity.
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5 Reasons Why Strategic Planning is Vital for Entrepreneurs
Envisioning a framework for the future helps to ensure that everyone's on the same page, among other success essentials.
By Aytekin Tank • Mar 2, 2023
Opinions expressed by Entrepreneur contributors are their own.
I have a good friend who detests making plans. Our small circle of colleagues jokingly refers to him as "Houdini," as he'll seemingly go to any lengths to get out preparing. When it's time to detail our yearly group vacation, for example, he'll come up with the unlikeliest excuses to avoid participating. "I prefer to go with the flow," is the reliable response.
I'm sure we all have someone in our lives like this — a person who leaves much for the last minute. And I can understand that desire for spontaneity. Back in 2006, when I founded my startup, Jotform , I promised to never get so caught up in strategic planning that I forgot how to live without it. Of course, I was then a newly minted entrepreneur and had many untested ideas about running a business. Now I know better and have grasped that, as leaders, it's not simply planning that's key to success, but doing so strategically.
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Home » What Is Strategic Planning? (Process and Examples)
What Is Strategic Planning? (Process and Examples)
July 1, 2022 max 7min read.
This Article Covers :-
What Is Strategic Planning?
What are the elements of strategic planning, why is strategic planning important, what are the examples of strategic planning, definition of strategic planning.
Strategic planning refers to developing specific business plans, putting them into action, and analyzing the results regarding a company’s overarching long-term goals or objectives.
Strategic planning is another buzzword that businesses and startups revolve around. However, most of them are only stuck on strategic thinking.
There’s a difference between strategic thinking and strategic planning . The latter gets things done.
But what is strategic planning, and what does it involve?
Strategic planning is the process of developing a defined business strategy that helps your company’s direction.
It involves prioritization , efficient resource capacity planning , the optimization of operations, and the assurance that all employees and stakeholders align towards the same goals.
It reaffirms a company’s direction and how it will measure its success.
What Are the Types of Strategic Planning?
There are three main types of strategic planning:
Annual planning is a process that takes place over one year. It involves setting goals and objectives for the year and developing strategies to achieve those goals.
Annual planning is best suited for stable businesses with a predictable sales cycle.
Rolling planning involves setting goals and objectives on a rolling basis and developing strategies to achieve those goals.
Rolling planning is best suited for businesses in a growth phase or an unpredictable sales cycle.
Crisis planning is a process in response to a specific crisis.
It involves developing a plan to address the crisis and implementing that plan.
In addition to these, there are specific strategic planning models that you can adopt while approaching your strategic plan.
Some of the strategic planning models are as follows:
The SWOT analysis is a rising model that companies frequently employ at the start of the strategic planning process.
It highlights the internal and external factors that help or hinder the achievement of a corporate goal.
Strengths – Factors of the company that can assist in achieving the goal.
Weaknesses – Factors of the business that may obstruct the achievement of the goal
Opportunities – External variables that could assist in achieving the goal.
Threats – External variables that may obstruct the achievement of the goal.
SWOT analysis might assist you in figuring out what you’re good at and where you could improve.
Take a look at our SWOT analysis guide .
PESTLE divides the business environment into four categories:
Political – Changes in taxation, trading agreements, or grant support for enterprises are examples of political factors.
Economic – Interest rates, inflation, and changes in consumer demand are all economic factors.
Social – Factors such as altering lifestyle patterns or demographic trends
Technological – Emerging technology or equipment that boosts productivity are examples of technological advancements.
Legal – Changes in employment law or the way your industry is controlled are examples of legal changes.
Environmental – Customers, regulators, and employees’ expectations of sustainable development evolve.
Now that you know how to approach your strategic planning process, look at the elements of strategic planning.
There are four essential elements of strategic planning that you must pay attention to. They are as follows:
Strategic planning begins with a mission statement that gives a business a feeling of direction and purpose.
An organization’s mission statement describes who it is, what it does, and where it wants to go. Mission statements are usually broad but specific.
A company in the education field, for example, might aim to be the market leader in online virtual instructional tools and services.
Selecting goals is an integral part of strategic planning. Most teams use SMART goals or other objectively quantifiable goals.
Measurable goals are vital because they allow business leaders to assess how well the company meets its objectives and achieves its overall mission.
You can begin your SMART goal-setting journey by reading our guide on it.
Alignment is a crucial yet often neglected element of strategic planning. Here are some things to keep in mind:
- Do your short-term goals align with your long-term goals?
- How do you plan on aligning your cross-functional teams ?
- How will you manage your stakeholder expectations ?
You can always get started with your internal team alignment and make your way up. At Chisel , we use the Team Radar feature to grasp which page each team is on.
The strategic planning process is essential for several reasons.
It helps you take a step back, assess your business or organization’s current situation, and identify areas that need improvement.
Furthermore, it gives you a roadmap to follow as you work to achieve your goals.
Good strategic planning will keep you focused and help ensure that you make decisions aligned with your overall goals.
If you’re unsure where to start, there are many product and business strategy templates and tools we discuss in our blogs .
What Are the Steps in the Strategic Planning Process?
You can carry out strategic planning through the following steps:
The first step in strategic planning is identifying a company’s present strategic position.
This is where stakeholders examine the organization and its environment using the existing strategic plan, including the mission statement and long-term strategic goals.
The strategic planners then develop targets and objectives that align with the organization’s mission and goals to help the company achieve them.
There could be a lot of potential goals; thus, prioritizing the most important, relevant, and immediate ones is crucial.
You may employ any prioritization matrix or establish OKRs in this step.
This is the crux of strategic planning, in which stakeholders work together to develop the stages or strategies required to achieve a specified strategic goal.
This may entail developing short-term tactical business strategies that align with the overall strategy.
Stakeholders participating in the development use tools like a mind-map to visualize and alter the plan.
It’s time to put the strategic plan into action after being prepared.
To set roles, make investments, alter policies and processes, and develop measurement and reporting, you must communicate well across the business.
Strategic management and regular strategic reviews are usually part of the implementation process to ensure that objectives stay on track.
As company conditions change and new possibilities arise, you should regularly evaluate and update your strategic planning to alter priorities and reconsider goals.
Quarterly evaluations of KPIs are possible, as are annual revisions to the strategic plan.
Stakeholders can review performance against goals using balanced scorecards and other tools.
Now you know the fundamental steps involved in the strategic planning process. However, you can take it one step forward by instilling some best practices.
What Are the Best Practices for Strategic Planning?
A few best practices for strategic planning can help businesses get the most out of this process.
The first best practice for strategic planning is ensuring that the entire team is involved.
From the CEO to the entry-level employees, everyone should have a say in the company’s goals and how you can achieve them. This ensures everyone is on the same page and working towards the same objectives.
Using product roadmap software’s that align all teams and stakeholders in one place can come in handy.
Another best practice for strategic planning is reviewing and adjusting the plan as needed.
The business landscape is constantly competitive , so it’s essential to ensure that the strategic plan is still relevant and achievable.
Adjusting the plan as needed will help keep the business on track and ensure that the goals are still realistic.
Finally, one of the most essential best practices for strategic planning is communicating the plan to everyone in the company.
Employees need to know the goals and how they can help achieve them. By communicating the plan clearly, businesses can ensure that everyone is working towards the same objectives.
By following these best practices for strategic planning, businesses can ensure that they get the most out of this essential process.
Some of the most popular companies globally are known for their strategic planning.
Nike, for example, has a well-defined strategic plan that has helped them become one of the most successful companies in the world.
Another great example is Google, which has a clear strategic plan that has helped them become a global powerhouse.
Regarding social media giants, Facebook is one of the top dogs. With over 2.23 billion monthly active users, the platform boasts incredible reach.
Given its size and scope, it’s no surprise that Facebook takes a very strategic approach to its planning. The company has a whole team dedicated to strategic planning and execution.
Well, now you have everything you need. Let’s embark on your strategic planning journey with Chisel’s free-forever all-rounder product management tools !
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Strategic committee usually leads the strategic planning. This committee may include stakeholders, corporate executives, product owners and managers , and other strategic consultants.
Goals and objectives are two critical components of strategic planning. Goals are the broad, long-term aspirations that an organization hopes to achieve. Objectives are the specific, measurable steps an organization will take to achieve its goals.
Crafting great product requires great tools. Try Chisel today, it's free forever.
How to Use Strategic Planning Frameworks and Models
Smartsheet Contributor Joe Weller
April 12, 2019 (updated July 26, 2021)
Strategic planning models and frameworks can help guide you through the strategic planning process. In this article, seasoned industry experts explain the models and frameworks to help you identify which is best for you.
Included on this page, you'll find different types of models and frameworks , tools to help you decide which models and frameworks to use , and details on how to use strategic planning models .
Strategic Planning Basics
Strategic planning is a team process that sets up how your company will accomplish its goals. When you deploy it correctly, strategic planning highlights problems, helps find solutions, and monitors progress. To learn more about the basics of strategic planning, read this article.
A strategic plan includes many sections. When done well, a strategic plan can help you prioritize your company’s functions and stay in line with your mission and vision.
There are different ways to present a strategic plan — for example, it can be a written document, a spreadsheet, or an animated presentation. To learn how to write a strategic plan, read this article.
Strategic Planning Frameworks and Models
Just as there are many approaches to presenting a strategic plan, you have several ways to frame or model your plan.
The terms strategic planning framework and strategic framing models are often used interchangeably, but some say they are different.
“Think of models as a way of ideating strategy. [A model is] a template: You use it at the beginning of the planning process. The idea behind a model is to tease out the ideas,” says Tom Wright, CEO and Co-Founder of Cascade Strategy , a software company based in Sydney, Australia, with offices all over the world. “Frameworks are like a lens to help you see different perspectives, whereas the model is a process you would use from the beginning. You add a framework on top of the [strategic plan] to slice and dice the model.”
There are many strategic planning models and frameworks — some are tried and true, others are newer and more adaptive, and planners and managers may be more familiar with some methods than others. There is no one right or wrong way to create a strategic plan, and you can modify models and frameworks based on your company culture, your current situation, and the purpose behind your planning.
“The major driver [for picking a model or framework] is what type of business you are and what you want to accomplish,” Wright explains.
Strategic planners often utilize different frameworks or customize particular models as they move through the planning process. But be careful; customizing models or frameworks too much might confuse people who are familiar with a particular planning process.
Below is a list of some of the most common frameworks and models:
Alignment Model: This model helps align your mission statement with available resources. It is particularly effective for businesses facing internal struggles.
Balanced Scorecard (BSC): The balanced scorecard system strives to connect big-picture elements with operational elements. BSC is well-known and works for companies of varying sizes.
The Basic Model: Sometimes called a simple strategic planning model , the basic model involves creating a mission statement, goals, and strategies.
Blue Ocean Strategy: This framework emphasizes new markets and uncontested space.
Gap Planning: A strategy gap is the distance between how a company is currently performing and its desired goal. Gap planning is the analysis and evaluation of that difference.
Inspirational Model: This is a somewhat quick method of strategic planning that begins by coming up with a highly inspirational vision for the organization and the goals to match.
Issue-Based or Goal-Based Model: A step up from the basic model, this model is better for more established businesses. It incorporates SWOT or other types of assessments to determine goals, mission statements, action plans, and other steps.
Organic Model: As the name implies, this model does not necessarily follow a set plan, instead evolving and changing as conditions warrant.
PEST Model: The PEST (political, economic, social, and technological) approach looks at elements of the external environment, including the forces in its name.
Porter’s Five Forces: This model looks at five competitive forces that are present in every industry and helps to determine strengths and weaknesses: competition in the industry, the potential of new entrants into the industry, the power of suppliers, the power of customers, and the threat of substitute products.
Real-Time Model: This a fluid process that works best for companies that operate in a rapidly changing environment.
Scenario Model: When used in conjunction with other models, the scenario model can help you identify goals, as well as issues around them, by using scenarios that might arise. Some experts say this is more of a technique than a model.
Strategy Mapping: This approach helps organizations design and communicate their strategies. Strategy mapping often falls under the umbrella of a BSC, but strategy maps can also stand alone.
SWOT Analysis or SWOT Matrix: SWOT (strengths, weaknesses, opportunities, and threats) offers a way to examine both internal and external forces impacting your company.
VRIO Framework: This approach looks at the questions of value, rarity, imitability, and organization concerning the competitive potential of a company.
Using Strategic Planning Models
In this section, you’ll learn the specifics of the different strategic planning models and frameworks. Sometimes, models can serve as a visual guide. In contrast, frameworks function as an overlay to a model that helps clarify particular items, such as goals.
The Basic Model
The basic model of strategic planning is the most common and simplistic approach. The basic model works well for companies that are small, do not have much time to plan, don’t need to address many serious issues, or operate in stable external environments. It also works for companies that are new to strategic planning.
The basic model is not meant for organizations with significant resources to pursue ambitious visions and goals.
The basic model centers on the mission and vision statements. The vision statement identifies your company’s purpose on a higher level, and the mission statement outlines what happens within the organization to achieve that vision. It makes sense to build the rest of your plan from these statements.
The next step is to come up with goals you must achieve to live up to your mission and make it a reality, then outline what must happen to achieve those goals. Next, list the specific activities you must implement and who will participate in those activities. Lastly, create a simple monitoring plan to make sure your organization stays on track.
The Issue-Based or Goal-Based Model
The issue- or goal-based model evolves from the basic model and results in a more comprehensive plan. The steps vary.
This approach is dynamic and fluid, and it works well for businesses that want to go deeper into strategic planning but have the following concerns:
Limited resources for planning
Several issues to address
Limited past success reaching ambitious goals
No buy-in for the strategic planning process
The issue-based model requires organizations to identify their most important current issues, suggest action plans to address those issues, and include that information in the strategic plan.
The goal-based model often includes the following:
A way to monitor and amend the plan
Action plans, including objectives, resources, and implementation roles
Major issues and goals, along with ways to address them
Yearly operating plan, including a budget
The Alignment Model
The alignment model focuses on making sure an organization’s actions align with its vision. In the plan, you outline the mission, resources, programs, and support your organization needs to ensure it fulfills its vision.
The alignment model works well for organizations that are trying to figure out what is and isn’t working well, along with what needs adjusting. The process can help identify issues, such as internal inefficiencies and productivity problems. However, some critics of this model say it functions more like an internal development plan than a strategic plan.
The Scenario Model
The scenario model looks at what is happening outside of an organization, including regulatory, demographic, or political forces, to determine how they can impact what is happening inside of a company.
The scenario model works best when used in combination with other models and is more of a technique than a model.
For each change in an external force, discuss how it could impact the future of your organization in the following three ways:
A best-case scenario
A worst-case scenario
A reasonable-case scenario
After looking at the three potential impacts, figure out how to best respond to each. Then pick the most likely scenario and discuss strategies to address it.
The scenario model works well for businesses that need help planning for several potential situations.
The Organic Model
If your company wants to stay away from strict and formal strategic planning, the organic model might be a good fit. As the name implies, the organic model of strategic planning is more of a free-spirited conversation, rather than a set process. It emphasizes the journey over the destination.
The organic model relies on everyone having a shared vision and being willing to openly discuss how to get there using common values. This less systematic model requires patience since it involves constant dialogue and is never really finished.
The organic model works well for organizations where traditional methods feel static and obsolete. If you are looking for a set plan outlining steps to follow, the organic model is not for you.
Storyboarding techniques and open dialogue are often a part of the organic model, and everyone is encouraged to participate openly. The focus is more on learning and less about the method of strategic planning.
Real-Time Strategic Planning
The real-time method of strategic planning is even more fluid than the organic model. It helps articulate an organization’s mission and, sometimes, its vision and values. Real-time strategic planning often involves presenting lists to board members or management for further discussion.
Like the organic model, real-time strategic planning is a continuous process and works best for rapidly changing organizations that might not have the need for set, detailed, or traditional strategic planning.
Like the name implies, the inspirational model can be energizing to participants, but also have less of a strategic impact on an organization than other, more formal models.
The process works by gathering people to talk about a highly inspirational vision for the company. Leaders encourage participants to brainstorm exciting and far-reaching goals, then capture the details using powerful and poignant wording.
The inspirational model works well for organizations looking to lift the spirits of a staff or to quickly produce a plan.
Strategic Planning Frameworks
Like models, strategic planning frameworks help an organization through the strategic planning process. Most frameworks cover the basics of strategic planning (mission, vision, goals), but include additional sections and have more specific focus areas.
Balanced Scorecard Framework
One of the more popular strategic planning frameworks is the balanced scorecard. It functions as both a strategic planning and management system, and it helps connect a company’s plan to the operational elements that make it happen. The balanced scorecard takes more than financial profits into account when measuring success.
Companies use the balanced scorecard to do the following:
Align the daily work to the longer-term strategy.
Communicate where they are doing and why.
Monitor progress and measure success.
When Drs. Robert Kaplan and David Norton created the balanced scorecard in the 1990s, it changed the way many companies do their strategic planning because it focused on more than one performance metric.
Companies that use the balanced scorecard try to look at themselves using four unique perspectives to get a better understanding of their planning:
Stakeholders and customers the company is serving
An internal review of how the company is operating
Learning and growth (including capacity, infrastructure, technology, and culture)
The key to the balanced scorecard is that a business should be a balance of the four quadrants.
Cascade’s Wright says the balanced scorecard works well for medium and large companies that don’t change very quickly or don’t need to make radical changes.
To learn more about the balanced scorecard and find free templates and examples, read this article .
Strategy mapping can help an organization reach its goals by providing a visual tool to communicate a strategic plan. Strategy mapping is often part of (but is not exclusive to) the balanced scorecard framework.
Because the graphic is visual and simple, it is an easy way to show how one objective impacts others.
Strategy mapping helps you identify key goals and unify those goals into strategies. People can refer back to it in order to stick to the overall plan when working on tasks or making decisions.
The map shows how different items interact with each other in various ways, including a cause-and-effect relationship.
Strategy maps are often set up in the following manner:
List the four perspectives (financial, customer, process and learning, and growth) horizontally.
Place objectives within those perspectives.
Write sets of linked objectives across different perspectives (these are called strategic themes ).
Show cause-and-effect impacts between objectives and across perspectives.
Image credit: Clearpoint Strategy
Use this template to help you organize your thoughts visually. By thinking of how different perspectives relate to each other, you can come up with your objectives.
Download Strategy Map Template
Excel | Smartsheet
Porter’s Five Forces
Porter’s Five Forces approach helps companies assess the competitiveness of the market. Introduced in 1979, it is one of the oldest strategic planning frameworks.
This approach focuses on the five forces that can impact the profitability of an organization:
The Threat of Entry: Can new companies enter the market?
The Threat of Other Substitute Products or Services: Is there a competitor on the market that your customers could use instead of your product or service?
Customers’ Bargaining Power: Can customers pressure you to react to their demands?
Suppliers’ Bargaining Power: Can suppliers apply pressure to your company?
Competitive Rivalry Among Companies: If a rival company changes its strategy, will it impact yours?
The key is to look at the amount of pressure each force applies to a company in order to determine that company’s future.
Download Five Forces Model Template
Excel | PDF
Most strategic planning processes include a SWOT analysis. Many companies perform a SWOT analysis at the beginning of the strategic planning process, as it offers them a look at what they are doing well and where they can improve.
A SWOT analysis examines the following:
Strengths: What the business does well to achieve its objectives
Weaknesses: What activities could keep a business from achieving its objectives
Opportunities: The external factors that could help achieve its objectives
Threats: Possible external factors that could keep the company from achieving its objectives
Strengths and weaknesses are internal characteristics, while opportunities and threats are external.
You've seen how the four quadrants of a SWOT analysis work. Use this template to write down each factor, so you can view your strengths, weaknesses, opportunities, and threats.
Download SWOT Analysis Strategy
Excel | Word | PDF | Smartsheet
PEST stands for political, economic, sociocultural, and technological factors. There are several variations based on the idea, including PESTEL or PESTLE (when you also consider environmental and legal factors) or STEEPLED, where you consider sociocultural, technological, economic, environmental, political, legal, education, and demographic information.
These frameworks look at an industry or business environment and see what factors could impact an organization’s overall health and well-being. These do not stand alone and often go along with a SWOT analysis and other frameworks.
Below are some possible examples of these factors:
Political: Changes in tax laws, trading relationships, grant changes
Economic: Interest rate changes, inflation, consumer demand
Social: Changing lifestyle trends, demographic shifts
Technological: Competing technologies, productivity changes
Legal: Changes in regulations, employment laws
Environmental: Changes in customer expectations or regulations
Download PEST Analysis Template
Gap planning allows you to compare an organization’s current position to its goal, then identify ways to bridge that gap. Gap planning can also help you identify internal deficiencies. Gap planning is sometimes known as gap analysis, needs assessment, or a strategic planning gap.
For a more detailed look at gap planning, read this article .
Blue Ocean Strategy
Created by professors W. Chan Kim and Renee Mauborgne in 2005, the blue ocean strategy is a relatively new planning framework. The idea of a blue ocean is to create an uncontested market space for your company. By contrast, a red ocean is a market space that is already developed and saturated.
A blue ocean is the unknown. A company creates demand for a product or service instead of fighting over it, so there is plenty of opportunity for everyone. The idea is to pursue differentiation, thereby creating market share instead of trying to beat competitors.
A red ocean is the known market space. Industries in that space define and accept the boundaries that exist, and they play by the rules. The only way to get ahead is to outperform rivals to claim a bigger share of the market. The competition can be bloody, which leads to the term red ocean .
An example of an organization that found a blue ocean is Cirque du Soleil. Instead of operating as a typical circus, it found and expanded on a niche. The key to the blue ocean strategy is to make the competition irrelevant because you are doing something the others are not.
VRIO (value, rarity, imitability, and organization) is a framework that deals primarily with the vision statement, rather than the entire strategy for a company. By answering four main questions, an organization should be able to create a vision statement to take it through the rest of the planning process. This results in a competitive advantage in your marketplace.
Below are the four main questions:
Value: Using a particular resource, can you exploit an opportunity or get rid of a threat?
Rarity: Is there a lot of competition in your market, or do a few entities control most of the market?
Imitability: Can anyone else do what you do?
Organization: Are you organized enough as a company to adequately exploit your product or service?
Companies can use the VRIO framework to evaluate its resources and capabilities as part of the overall strategic planning process. VRIO comes into play after a company creates a vision statement, but before the rest of the planning process. The advantages you identify help determine what you need to do in order to achieve them.
McKinsey’s Strategic Horizons
McKinsey’s Strategic Horizons framework focuses on growth and innovation by categorizing goals into three categories: the core business, emerging opportunities, and new business.
Image credit: CASCADE
“McKinsey’s is one of my favorites because it applies to businesses small to large and generates excitement,” says Wright. He adds that it is an easy model because it does not involve much jargon and focuses on the future.
The first horizon deals mostly with core activities in which a company is already engaged. Existing revenue is placed here, so goals mostly deal with improving margins and processes, as well as maintaining incoming cash flow. The second horizon involves taking what is already happening and expanding it into new areas. The third horizon involves new directions, possibly including research and new programs. Wright recommends a 70/20/10 split between the three horizons.
Fast-growing and startup organizations might find McKinsey’s framework helpful.
The Ansoff Matrix
Sometimes called the product-market matrix , the Ansoff matrix looks at market penetration and potential future growth. It helps companies that want to try to grow sales volumes or have it as a major focus area.
In this matrix, market development concerns selling more of an existing product or service to a new group of people. Market penetration focuses on selling even more of a current product or service to the same people. Product development focuses on developing new products for current customers. Diversification is all about new products and services and new markets; this carries the most risk, but potentially offers large gains.
Wright says this framework helps companies think deeply about how they will achieve growth instead of merely saying they want to grow.
The Bryson Model or Strategy Change Cycle
John M. Bryson, McKnight Presidential Professor of Planning and Public Affairs at the Hubert H. Humphrey School of Public Affairs, University of Minnesota and author of Strategic Planning for Public and Nonprofit Organizations: A Guide to Strengthening and Sustaining Organizational Achievement , created the Bryson model. Some people, himself included, call it the Strategy Change Cycle.
“It’s a framework, not a recipe. It’s a reference point, the logic does not go step by step from one to 10,” Bryson says. “You start with purposes in mind and then figure out how to get there.”
There are 10 standard steps in the cycle, but Bryson stresses they are not sequential and often happen simultaneously.
Initiate and agree on a strategic planning process
Identify organizational mandates
Clarify organizational mission and values
Assess the external and internal environment to identify strengths, weaknesses, opportunities, and threats (SWOT)
Identify the issues facing the organization
Formulate strategies to manage the issues
Review and adopt the strategies or strategic plan
Establish an effective organizational vision
Develop an effective implementation process
Reassess the strategies and the strategic planning process
Using this cycle, changes to the norm often happen. “You might think you know what your mission and goals are, and after you go through the process, you might need to change your mission and goals,” Bryson explains. “We try to let the mission and goals emerge from the conversations rather than starting there.”
Other Planning Models and Frameworks
In addition to the models and frameworks listed above, there are several other types, including the following:
The Stakeholder Theory: This approach focuses on adding value to specific groups of people, including employees, customers, the community, shareholders, and society. Organizations can add groups as necessary since the model is very flexible.
Kaufman Model: Also called mega planning, the Kaufman Model relies on a needs assessment. This model focuses on the impact an organization can have on society and clients.
Global Model: As the name implies, global strategic planning includes what is necessary to compete in an international marketplace. It involves looking at both the internal and external environments of multinational organizations.
Maturity Model: The maturity model assesses how strategic management is working within an organization and how it stands up to other organizations.
Diamond-E Framework: The Diamond-E framework helps identify possible gaps in an organization to decide whether or not to pursue an opportunity.
Value Migration: This model helps companies plan ahead of the competition. Its creator, Adrian Slywotzky, defines value migration as the shifting of forces that create value, and that shift goes from an outdated business model to a better-designed model that satisfies customers.
Value Disciplines: This flexible framework focuses on what an organization is already good at and builds on it. Three areas of focus are operational excellence, customer intimacy, and product leadership.
Agile Strategic Planning Model: The flexibility of Agile planning allows for growth and change in strategic planning. The cornerstone of Agile is being able to respond quickly to change, which seems like the antithesis of strategic planning. The Agile approach to strategic planning involves reviewing and adapting your strategic plan at regular intervals and whenever conditions warrant it.
General Electric Model: Also known as the McKinsey Matrix, this model looks at the industry externally versus the internal forces. Since it helps to identify the attractiveness of an industry and a firm’s strengths, the grid can help evaluate market share and identify areas for development.
How to Decide Which Strategic Planning Model or Framework to Use
Though strategic planning has changed over the years, the need remains for organizations to have some kind of vision and mission, as well as an outline about how to achieve them.
There is no right or wrong way to decide which model or framework to use for your strategic planning process. The key is to figure out which one best applies to your company and its needs — for example, VRIO can help you create a vision statement, and BSC can help keep plans on track. Additionally, some methods work well together.
“The perfect plan is the one that actually gets done,” says Wright. “A poor plan well executed is worth more than a great plan that never gets off the ground. Most people know what they need to do; it’s getting the traction and about democratizing the process. Constantly, people undervalue the role of buy-in with strategic planning. People need to be involved.”
“The framework you choose would have to deal with the sophistication of your business,” says Ted Jackson, founder and managing partner of ClearPoint Strategy . He recommends adapting a model or framework to meet your needs, rather than attempting to stick to hard and fast rules that might come from a book or a similar source. “I think if you read a book and try to implement it exactly [as the book outlines it] to your organization, you will fail,” he says.
Jackson advises simplifying some frameworks and adapting them, but he has some cautionary advice about trying to combine parts of different frameworks. “One mistake is not picking one framework. You can’t be so flexible that you’re implementing multiple frameworks together. People within an organization get really confused,” Jackson says, adding that people who have some knowledge of specific models or frameworks will not understand different terms and ideas, and they’ll probably be afraid to ask.
Some organizations might not get to choose the framework they use. For example, governmental organizations or companies that receive grant funding might need to produce a strategic plan that fits into a formula the government dictates.
Even though you should not use a strategic plan solely because a similar company does, it might help to look at their preferred framework to pick the one that is right for you.
Below are other criteria to help you decide:
Check the size of your organization and the resources you can devote to planning.
If your organization is in trouble, you might want to focus on a framework or model that addresses immediate issues rather than tackles the longer term.
Look at the health of your organization and its developmental stage.
See who is excited about the planning process.
“If you have a cultural challenge in your organization about getting excited about planning, the model you pick is important. Some models are sexier than others,” Wright explains.
Wright does not recommend changing models during the planning process. “[The model] is a template you use to get your ideas on paper. The model is just a vehicle. If you’re struggling with the model, it might be you.”
It isn’t the same for frameworks, according to Wright. “There is a ton of value in changing frameworks and using multiple frameworks at the same time [to view things differently],” he says. Though Wright encourages using different frameworks, he echoes Jackson’s warning to not use different models at the same time.
In certain cases, strategic planning is not an immediate need — for instance, when a company is failing financially or is autocratic, or when a major upheaval is occurring.
Strategic Planning for Specific Areas
Strategic planning for specific departments is a bit different than planning for a company as a whole. In this section, we’ll explain the basics of how some departments typically approach strategic planning.
IT Strategic Planning
A strategic plan for the IT department details how technology will help a company succeed in reaching its goals and objectives. You can think of it as a technology roadmap that outlines where IT can do its part to implement a company’s strategies.
The IT plan must align with the company’s overall mission and vision statements, but it has a secondary mission statement that states how the IT strategy relates to the overall plans for the organization.
The IT plan should also include a SWOT analysis, goals, and objectives. The plan will help make sure you purchase the right assets and work with existing technology effectively. Use the template below to draft a strong, comprehensive IT strategic plan.
Download IT Strategic Planning Template - Excel
Strategic Human Capital Planning
Strategic human capital planning refers to when a company looks at how people — and how to manage them — go along with the organization’s strategic goals. The end result is a plan to help attract and maintain the talent necessary to achieve the company’s mission and vision.
You can use the following HR strategic plan to list, assess, and plan for future program strategies.
Download HR Strategic Planning Template - Excel
At its core, succession planning relies on developing and identifying new leaders. Because employees move on or retire, a company needs to have a plan in place to assume new and important roles.
Often, succession planning happens as a part of the overarching strategic planning process — for example, when you look at the resources available to a company and their productivity.
Note that available human resources can be both strengths and weaknesses. The planning process can help companies identify specific hiring needs.
For more about human resources management, this article can help. Additionally, you can find templates for succession planning here .
Healthcare Strategic Planning
The world of healthcare is changing, and healthcare organizations have to adapt. Still, the following general ideas persist:
There will be a continued need to provide quality patient care.
Operating costs and government regulations will impact the bottom line.
The volume and demographics of patients will change.
There will be a change in the labor supply, especially in the number of primary care physicians available.
Wellness and prevention will gain importance.
New technologies will continue to emerge.
Even with the ever-changing healthcare industry, strategic plans will continue to help organizations stay focused on their goals and objectives. By having a structured planning process, rather than following models that are more organic and reactionary, healthcare entities can survive and succeed.
But be careful with metrics that only consider financial success — there is much more to healthcare than profit.
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A really helpful strategic planning example, if you need some help understanding strategic planning, read this article—it breaks down a fictitious strategic plan example, step by step..
In the normal course of operations, it can be easy to lose your grasp on what a strategic plan is (or should be). The best examples of good strategic plans all set clear priorities for an organization and focus employees and resources on established goals. While a strategic plan does share common elements with a business plan, or even execution plan, it is very distinct from both of those things.
If you’re still feeling a bit murky on strategic planning, here’s how to launch a sample strategic plan step by step. Click To Tweet
If you’re still feeling a bit murky on strategic planning, here’s how to launch a sample strategic plan step by step. Meet Upward Airlines, our fictitious company that’s about to launch its strategic planning process.
Upward Airlines Strategic Plan Example
Let’s imagine Upward Airlines has a 2017-2022 strategic plan that’s coming to a close. Now’s the time to create a new strategy for 2023-2028. The airline’s strategic plan needs to include goals and the general plan of action on how to achieve them. Think of a strategic plan like a flight plan. Just like an airline has a final destination, like Hong Kong, and predetermined routes to get there, including departure times, direction, connecting airports, etc. Your business has the same kind of plan for its future growth.
But for Upward Air, it takes more than just one flight to get where the company wants to go. The strategic plan is a five-year outlook on its operations, fleet, pilots, customers, and more. The airline can’t simply take the old plan and change the dates —it needs to complete the full planning process, which includes two phases: 1) an assessment of the company’s current situation in preparation for plotting a new strategy, and 2) the implementation of a strategic planning framework that will guide the plan’s management and execution. (Upward Air would also benefit from strategy software to help with execution—more on that below!)
Let’s take a look at both these phases in a bit more detail.
Using an old, out-of-date strategic plan? This guide will show you how to do a review and refresh.
Phase 1: first, prepare for a new strategy..
A company’s mission and vision determine in large part the direction it is headed, but there are numerous ways to get where you want to go. Upward Airlines needs to develop a strategic plan that has the best chance of success given the company’s current strengths and weaknesses and external factors that could impact its course of action.
So before diving into plan-building, Upward Airlines will assess the relevant situational aspects using one or more of the analysis frameworks below.
An environmental scan is the process of collecting, analyzing, and interpreting data about a company’s external opportunities and threats. These range from political and economic factors to competitor developments. One of the most popular methods used to perform an environmental scan is the PESTEL analysis.
When Upward Airlines conducted its environmental scan in this imaginary strategic plan outline, it found several things to inform its 2023-2028 strategy:
- Several new low-cost airlines have emerged and increased competition for routes to major cities.
- Bigger, established airlines have added perks like free WiFi and additional seat upgrades.
- Pricing for flights has changed dramatically across the industry in the past five years.
- Upward Air has saturated its current geographic footprint since its last plan.
Using the data from the environmental scan, Upward Airlines next performs a SWOT (strengths, weaknesses, opportunities, and threats) analysis. This high-level analysis helps organizations identify where they’re leading and where they’re lagging , so they can shape their strategic goals accordingly. Upward Air’s SWOT analysis revealed:
- Strengths— A consistent marketing message about no charges for checked luggage and a standardized in-flight experience.
- Weaknesses —An aging fleet that was falling behind on technology.
- Opportunities —Allow people to bring their own devices (no programming overhead), and possibly modernize the fleet with new seats that allow for more people on the same planes.
- Threats— Competitors have copied the low-cost marketing message but added last-minute, hidden costs and confused the market.
Other Analysis Frameworks
SWOT and PESTEL are the most common ways to assess the internal and external landscape, but there are other approaches you can also take to help you better understand your company and identify the right path forward. These include:
- The Blue Ocean Strategy
- The Valuable, Rare, Inimitable, and Organized (VRIO) Framework
- The McKinsey 7S Framework
Using the results of the environmental scan, SWOT, or other methodology, the final piece of the preparation phase is to identify key changes your organization needs to make, which can then be plotted out on a shift slide.
A shift slide defines a spectrum of where a company sits for a strategic area and how it can “shift” along that spectrum to reach where it actually needs to be. (If you need to take a step back and reevaluate your goals prior to plotting them on a spectrum, here are examples of strategic planning goals and objectives. ) Sometimes shift slides involve big changes, such as modernizing an aircraft fleet, and sometimes it’s simply a change in brand positioning.
Continuing with our strategic plan example, Upward Airlines decided it needed a customer perception shift slide to evolve the way flyers saw its brand. Its spectrum was to move from being thought of as a “no-frills airline” to “freedom in the skies.” A marketing shift was also needed, positioning Upward Airlines as “one cost,” instead of just “low cost,” and focusing on standardizing expectations for customers.
Phase 2: Implement a strategic planning framework to guide the plan’s management and execution.
Once you’ve identified a path forward, you’ll need a framework in place to help carry it out. (This is a necessity, because strategy execution is a lot more challenging than it might seem.) Similar to the first phase, there are multiple frameworks for organizations to choose from. There’s no “right” one—only the one that best matches your company’s way of doing things, or perhaps reflects a change you’d like to make with regard to improving strategy execution.
Also, keep in mind that you can combine strategic planning frameworks. Some organizations use elements of two or more frameworks to create a custom approach. Great! Every organization manages differently; your planning model should reflect your approach.
Below is a roundup of some commonly used strategic management frameworks.
A Balanced Scorecard (BSC) forces you to take a balanced view of strategy because it incorporates four different perspectives: financial, customer, internal processes, and learning and growth. It also helps you achieve high-level goals (objectives) through its structure, which uses measures (key metrics) and initiatives (projects) to align business actions with goals. The Balanced Scorecard remains a popular choice since its inception in the early 1990s. You can read more about it here.
Below is Upward Airlines’ Balanced Scorecard as it would appear in ClearPoint strategy software, showing three categories and their associated objectives, measures, and initiatives.
Associated with the Balanced Scorecard framework, a strategy map is a visual representation of the four perspectives. Creating one is beneficial because it forces you to think through what you’re trying to accomplish and how you’ll get there. It also serves as an excellent way of communicating your strategy to employees.
Upward Airlines’ strategy map showed some of the key learnings:
- Setting new financial goals with a differentiated model based on very low ticket prices
- Making low prices possible with a low-frills experience and high utilization of their standard fleet
- Improving operational efficiency by accelerating ground turnaround and focusing on direct routes
- Investing in personnel through higher compensation and flexible union contracts
Objectives & Key Results (OKRs)
The OKR framework is a simple way to set, track, and measure goals on a repetitive (usually quarterly) basis. Everyone knows their direction and aim, and works at a fast, consistent pace to get there. In short, objectives are what you want to accomplish; key results define how you’ll get them done. Key results are aggressive but always measurable, time-bound, and limited in number.
The Hoshin Planning approach aligns strategic goals with projects and tasks to ensure that efforts are coordinated. This strategic management model is less focused on measures and more on goals and initiatives.
This McKinsey framework requires the categorization of growth goals into three different “time horizons”:
- Core business—focuses on immediate revenue-making activities
- Emerging opportunities—focuses on extending existing activities into new areas
- Blue sky—focuses on taking your business in new directions
The idea is that in order to grow, organizations must allocate their resources across all three horizons, a scenario that allows you to maintain your core business while continuously striving to innovate.
This is by no means a complete list of strategic management frameworks; you can read about even more here. It’s also important to realize that you may change frameworks as your business grows.
For even more guidance on what a strategic plan should look like, check out our strategic planning templates.
Make sure your plan succeeds with the help of strategy reporting software..
No strategic planning example is complete without mention of strategy reporting software.
The strategy execution phase is where most plans fail. Why? Because your plan alone doesn’t include crucial elements that coordinate and sustain your activities over the long term, like monitoring and reporting on progress. Maintaining focus and directing activities over a period of three to five years is an ongoing exercise that requires dedicated leadership and a systematic approach.
That’s where strategy management frameworks— and strategy reporting software like ClearPoint —come in.
ClearPoint helps organizations follow through with their activities, allowing them to adapt when internal or external conditions change, work as a unified team, and identify and react to performance problems. It also helps combat strategy fatigue by keeping your goals front and center for employees at all levels.
Interested in learning more? Here’s a great summary of how ClearPoint boosts your chances of success; you can also schedule a demo of ClearPoint to see it in action.
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VTA provides bus, light rail, and paratransit services, as well as participates as a funding partner in regional rail service including Caltrain, Capital Corridor, and the Altamont Corridor Express.
As the county’s congestion management agency , VTA is responsible for countywide transportation planning, including congestion management, design and construction of specific highway, pedestrian, and bicycle improvement projects, as well as promotion of transit oriented development.
VTA provides these services throughout the county, including Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Milpitas, Monte Sereno, Morgan Hill, Mountain View, Palo Alto, San Jose, Santa Clara, Saratoga and Sunnyvale. VTA continually builds partnerships to deliver transportation solutions that meet the evolving mobility needs of Santa Clara County.
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Organizational chart, annual report, strategic plan.
The Valley Transportation Authority (VTA) Strategic Plan will take VTA to the next level—and beyond.
This plan is the result of an analysis of the agency’s strengths, weaknesses, opportunities, and threats, as well as the input, observations, and ideas from VTA employees, customers, and members of VTA’s advisory committees and Board of Directors.
It addresses our current situation and provides a framework to build an exciting future. This plan asks everyone involved with VTA—beginning with the Board of Directors and including all employees—to embrace this approach and work to implement its philosophy. This clear and visionary Plan will guide us along the path of further establishing VTA as an industry leader, innovator, and a transportation organization worthy of serving Silicon Valley.
The Plan establishes our Mission, Vision, and Values, and ties everyday work into the overall direction and priorities of the agency. The Strategic Plan guides the development and implementation of VTA’s Business Plans, which outline the strategies necessary to reach our goals. This Plan will also serve to guide our budgeting process and allocation of resources.
This high-level Plan will provide direction and actively foster creativity, collaboration, and leadership. Ultimately, it is designed to be transformative; that is, to create a dynamic work environment that carries us boldly and confidently into the future. Our environment will simplify and stabilize decision making,
VTA employees will be encouraged to take strategic risks, and proactive action will be encouraged while excuses for inaction are discouraged.
Action Values operationalize our core values and all aspects of VTA's Strategic Plan. They are intended to be transformative, they envelop the core values, help them transcend their written definition, and help them evolve and improve in application over time.
Please visit our Headways blog for the latest news about VTA projects, programs, services and initiatives.
VTA's award-winning Sustainability Program conserves resources and reduces greenhouse gases.
Find information about the VTA budget, sales tax measures, audited financial statements and disclosures.
Please visit our Open Data Portal for access to VTA's open data, including transit, active transportation, congestion management and more.
VTA was created in 1972 by the Santa Clara County Transit District Act.
On December 1, 1994, VTA became the Congestion Management Agency in Santa Clara County, responsible for countywide transportation planning and funding and for managing the county’s blueprint to reduce congestion and improve air quality.
Prior to January 1, 1995, the County Board of Supervisors served as the Board of Directors of VTA. Since January 1, 1995 VTA has operated under a separate Board of Directors composed of County and city representatives, under state legislation.
On January 1, 2000, state legislation changed VTA’s name.
The VTA Administrative Code is the rulebook established by the Board defining how VTA is structured and how it conducts its business.
It covers the governance, administrative and financial aspects of VTA including:
- The powers and duties of officers
- The method of appointment of its governing board, committees and employees
- The methods, procedures, and systems for the operation and management of the organization
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9 Strategic Planning Models and Tools for the Customer-Focused Business
Updated: September 06, 2022
Published: June 23, 2021
What's a plan without a strategy?
As the economist and business strategy guru, Michael Porter, says, "The essence of strategy is choosing what not to do."
With strategic planning , businesses identify their strengths and weaknesses, choose what not to do, and determine which opportunities should be pursued. In sales operations, having a clearly defined strategy will help your organization plan for the future, set viable goals, and achieve them.
So, how do you get started with strategic planning? You'll begin with strategic planning models and tools. Let's take a look at nine of the most prominent ones here.
Strategic Planning Models
Strategic planning is used to set up long-term goals and priorities for an organization. A strategic plan is a written document that outlines these goals.
Don't confuse strategic planning and tactical planning . Strategic planning is focused on long-term goals, while tactical planning is focused on the short-term.
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Here are a few strategic planning models you can use to get started.
1. The Balanced Scorecard
The Balanced Scorecard is one of the most prominent strategic planning models, tailored to give managers a comprehensive overview of their companies' operations on tight timelines. It considers both financial and operational metrics to provide valuable context about how a business has performed previously, is currently performing, and is likely to perform in the future.
The model plays on four concerns: time, quality, performance and service, and cost. The sum of those components amount to four specific reference points for goal-setting and performance measurement:
- Customer — how customers view your business
- Internal Process — how you can improve your internal processes
- Organizational Capacity — how you can grow, adapt, and improve
- Financial — your potential profitability
Those four categories can inform more thoughtful, focused goals and the most appropriate metrics you can use to track them. But the elements you choose to pursue and measure are ultimately up to you. They will vary from organization to organization — there's no definitive list.
That being said, there's a universally applicable technique you can use when leveraging the model — creating a literal scorecard. It's a document that keeps track of your goals and how you apply them. Here's an example of what that might look like:
Image Source: IntraFocus
The Balanced Scorecard is ideal for businesses looking to break up higher-level goals into more specific, measurable objectives. If you're interested in translating your big-picture ambitions into actionable projects, consider looking into it.
Example of the Balanced Scorecard
Let's imagine a B2B SaaS company that sells a construction management solution. It's been running into trouble from virtually all angles. It's struggling with customer retention and, in turn, is hemorrhaging revenue. The company's sales reps are working with very few qualified leads and the organization's tech stack is limiting growth and innovation.
The business decides to leverage a Balanced Scorecard approach to remedy its various issues. In this case, the full strategic plan — developed according to this model — might look like this:
- The company sets a broad financial goal of boosting revenue by 10% year over year.
- To help get there, it aims to improve its customer retention rate by 5% annually by investing in a more robust customer service infrastructure.
- Internally, leadership looks to improve the company's lead generation figures by 20% year over year by revamping its onboarding process for its presales team.
- Finally, the business decides to move on from its legacy tech stack in favor of a virtualized operating system — making for at least 50% faster software delivery for consistent improvements to its product.
The elements listed above address key flaws in the company's customer perception, internal processes, financial situation, and organizational capacity. Every improvement the business is hoping to make involves a concrete goal with clearly outlined metrics and definitive figures to gauge each one's success. Taken together, the organization's plan abides by the Balanced Scorecard model.
2. Objectives and Key Results
As its name implies, this model revolves around translating broader organizational goals into objectives and tracking their key results. The framework rests on identifying three to five attainable objectives and three to five results that should stem from each of them. Once you have those in place, you plan initiatives around those results.
After you've figured out those reference points, you determine the most appropriate metrics for measuring their success. And once you've carried out the projects informed by those ideal results, you gauge their success by giving a score on a scale from 0 to 1 or 0%-100%.
For instance, your goal might be developing relationships with 100 new targets or named accounts in a specific region. If you only were able to develop 95, you would have a score of .95 or 95%. Here's an example of what an OKR model might look like:
Image Source: Perdoo
It's recommended that you structure your targets to land at a score of around 70% — taking some strain off workers while offering them a definitive ideal outcome. The OKR model is relatively straightforward and near-universally applicable. If your business is interested in a way to work towards firmly established, readily visible standards this model could work for you.
Example of the Objectives and Key Results
Let's consider a hypothetical company that makes educational curriculum and schedule planning for higher-education institutions. The company decides it would like to expand its presence in the community college system in California — something that constitutes an objective.
But what will it take to accomplish that? And how will the company know if it's successful? Well, in this instance, leadership at the business would get there by establishing three to five results they would like to see. Those could be:
- Generating qualified leads from 30 institutions
- Conducting demos at 10 colleges
- Closing deals at 5 campuses
Those results would lead to initiatives like setting standards for lead qualification and training reps at the top of the funnel on how to use them appropriately, revamping sales messaging for discovery calls, and conducting research to better tailor the demo process to the needs of community colleges.
Leveraging this model generally entails repeating that process between two and four more times — ultimately leading to a sizable crop of thorough, actionable, ambitious, measurable, realistic plans.
3. Theory of Change (TOC)
The Theory of Change (TOC) model revolves around organizations establishing long-term goals and essentially "working backward" to accomplish them. When leveraging the strategy, you start by setting a larger, big-picture goal.
Then, you identify the intermediate-term adjustments and plans you need to make to achieve your desired outcome. Finally, you work down a level and plan the various short-term changes you need to make to realize the intermediate ones. More specifically, you need to take these strides:
- Identify your long-term goals.
- Backward map the preconditions necessary to achieve your goal, and explain why they're necessary.
- Identify your basic assumptions about the situation.
- Determine the interventions your initiative will fulfill to achieve your goals.
- Come up with indicators to evaluate the performance of your initiative.
- Write an explanation of the logic behind your initiative.
Here's another visualization of what that looks like.
Image Source: Wageningen University and Research
This planning model works best for organizations interested in taking on endeavors like building a team, planning an initiative, or developing an action plan. It's distinct from other models in its ability to help you differentiate between desired and actual outcomes. It also makes stakeholders more actively involved in the planning process by making them model exactly what they want out of a project.
It relies on more pointed detail than similar models. Stakeholders generally need to lay out several specifics, including information related to the company's target population, how success will be identified, and a definitive timeline for every action and intervention planned. Again, virtually any organization — be it public, corporate, nonprofit, or anything else — can get a lot out of this strategy model.
Example of the Theory of Change
For the sake of this example, imagine a business that makes HR Payroll Software — one that's not doing too well as of late. Leadership at the company feels directionless. They think it's time to buckle down and put some firm plans in motion, but as of right now, they have some big picture outcomes in mind for the company without a feel for how they're going to get there.
In this case, the business might benefit from leveraging the Theory of Change model. Let's say its ultimate goal is to expand its market share. Leadership would then consider the preconditions that would ultimately lead to that goal and why they're relevant.
For instance, one of those preconditions might be tapping into a new customer base without alienating its current one. The company could make an assumption like, "We currently cater to mid-size businesses almost exclusively, and we lack the resources to expand up-market to enterprise-level prospects. We need to find a way to more effectively appeal to small businesses."
Now, the company can start looking into the specific initiatives it can take to remedy its overarching problem. Let's say it only sells its product at a fixed price point — one that suits midsize businesses much more than smaller ones. So the company decides that it should leverage a tiered pricing structure that offers a limited suite of features at a price that small businesses and startups can afford.
The factors the company elects to use as reference points for the plan's success are customer retention and new user acquisition. Once those have been established, leadership would explain why the goals, plans, and metrics it has outlined make sense.
If you track the process I've just plotted, you'll see the Theory of Change in motion — it starts with a big-picture goal and works its way down to specific initiatives and ways to gauge their effectiveness.
4. Hoshin Planning
The Hoshin Planning model is a process that aims to reduce friction and inefficiency by promoting active and open communication throughout an organization. In this model, everyone within an organization — regardless of department or seniority — is made aware of the company's goals.
Hoshin Planning rests on the notion that thorough communication creates cohesion, but that takes more than contributions from leadership. This model requires that results from every level be shared with management — from the shop floor up.
The ideal outcomes set according to this model are also conceived of by committee — to a certain extent. Hoshin Planning involves management hearing and considering feedback from subordinates to come up with reasonable, realistic, and mutually understood goals.
Image Source: i-nexus
The model is typically partitioned into seven steps: establishing a vision, developing breakthrough objectives, developing annual objectives, deploying annual objectives, implementing annual objectives, conducting monthly and quarterly reviews, and conducting an annual review.
The first three steps are referred to as the "catchball process." It's where company leadership sets goals and establishes strategic plans to send down the food chain for feedback and new ideas. That stage is what really separates Hoshin Planning from other models.
Example of Hoshin Planning
For this example, let's imagine a company that manufactures commercial screen printing machines. The business has seen success with smaller-scale, retail printing operations — but it's realized that selling almost exclusively to that market won't make for long-term, sustainable growth.
Leadership at the company decides that it's interested in making an aggressive push to move up-market towards larger enterprise companies — but before they can establish that vision, they want to ensure that the entire company is willing and able to work with them to reach those goals.
Once they've set a tentative vision, they begin to establish more concrete objectives and send them down the management hierarchy. One of the most pressing activities they're interested in pursuing is a near-comprehensive product redesign to make their machines better suited for higher volume orders.
They communicate those goals throughout the organization and ask for feedback along the way. After the product team hears their ideal plans, it relays that the product overhaul that leadership is looking into isn't viable within the timeframe they've provided. Leadership hears this and adjusts their expectations before doling out any sort of demands for the redesign.
Once both parties agree on a feasible timeline, they begin to set more definitive objectives that suit both the company's ambitions and the product team's capabilities.
Strategic Planning Tools
There are additional resources you can use to support whatever strategic planning model you put in place. Here are some of those:
1. SWOT Analysis
SWOT analysis is a strategic planning tool and acronym for s trengths, w eaknesses, o pportunities, and t hreats. It's used to identify each of these elements in relation to your business.
This strategic planning tool allows you to determine new opportunities and which areas of your business need improvement. You'll also identify any factors or threats that might negatively impact your business or success.
Image Source: HubSpot
2. Porter's Five Forces
Use Porter's Five Forces as a strategic planning tool to identify the economic forces that impact your industry and determine your business' competitive position. The five forces include:
- Competition in the industry
- Potential of new entrants into the industry
- Power of suppliers
- Power of customers
- Threat of substitute products
To learn more, check out this comprehensive guide to using Porter's Five Forces .
3. PESTLE Analysis
The PESTLE analysis is another strategic planning tool you can use. It stands for:
- P: Political
- E: Economic
- T: Technological
- E: Environmental
Each of these elements allow an organization to take stock of the business environment they're operating in, which helps them develop a strategy for success. Use a PESTLE Analysis template to help you get started.
Visioning is a goal-setting strategy used in strategic planning. It helps your organization develop a vision for the future and the outcomes you'd like to achieve.
Once you reflect on the goals you'd like to reach within the next five years or more, you and your team can identify the steps you need to take to get where you'd like to be. From there, you can create your strategic plan.
5. VRIO Framework
The VRIO framework is another strategic planning tool that's used to identify the competitive advantages of your product or service. It's composed of four different elements:
- Value : Does it provide value to customers?
- Rarity : Do you have control over a rare resource or piece of technology?
- Imitability : Can it easily be copied by competitors?
- Organization : Does your business have the operations and systems in place to capitalize on its resources?
By analyzing each of these areas in your business, you'll be able to create a strategic plan that helps you cater to the needs of your customer.
With these strategic planning models and tools, you'll be able to create a comprehensive and effective strategic plan. To learn more, check out the ultimate guide to strategic planning next.
Editor's note: This post was originally published on May 17, 2019 and has been updated for comprehensiveness.
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The Aaron's Company, Inc. Reports Fourth Quarter & Full Year 2022 Financial Results, Announces 2023 Outlook, and Updates Multi-Year Strategic Plan
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ATLANTA , March 1, 2023 /PRNewswire/ -- The Aaron's Company, Inc. (NYSE: AAN) today released its fourth quarter and full year 2022 financial results. Complete financial results are available at investor.aarons.com . Highlights of those results, the 2023 outlook, and the updated multi-year strategic plan are included below and in the attached supplement.
Fourth Quarter 2022 Consolidated Results:
Revenues were $589.6 million , an increase of 32.5%, benefiting from the BrandsMart acquisition
Net loss was $5.9 million , a decrease of 135.9%; Non-GAAP net earnings 1 were $2.8 million
Adjusted EBITDA 1 was $27.7 million , a decrease of 33.0%
Diluted loss per share was $0.19 ; Non-GAAP Diluted EPS 1 was $0.09
Full Year 2022 Consolidated Results:
Revenues were $2.25 billion , an increase of 21.9%, benefiting from the BrandsMart acquisition
Net loss was $5.3 million , a decrease of 104.8%; Non-GAAP net earnings 1 were $64.8 million
Adjusted EBITDA 1 was $165.8 million , a decrease of 29.2%
Diluted loss per share was $0.17 ; Non-GAAP Diluted EPS 1 was $2.07
Full Year 2023 Consolidated Outlook:
Revenues of $2.20 billion to $2.30 billion
Adjusted EBITDA (excluding stock-based compensation) 1,2 of $140.0 million to $160.0 million
Non-GAAP Diluted EPS 1 of $0.70 to $1.10
Multi-Year Strategic Plan:
Information regarding the Company's updated multi-year strategic plan is available in the Q4 earnings presentation posted on the Company's investor relations website
The Company will host an earnings conference call tomorrow, March 2, 2023, at 8:30 a.m. ET . Chief Executive Officer Douglas A. Lindsay will host the call along with President Steve Olsen and Chief Financial Officer C. Kelly Wall . A live audio webcast of the conference call and presentation slides may be accessed at investor.aarons.com and the hosting website at https://events.q4inc.com/attendee/576928281 . A transcript of the webcast will also be available at investor.aarons.com .
About The Aaron's Company, Inc.
Headquartered in Atlanta , The Aaron's Company, Inc. (NYSE: AAN) is a leading, technology-enabled, omnichannel provider of lease-to-own and retail purchase solutions of appliances, electronics, furniture, and other home goods across its brands: Aaron's, BrandsMart U.S.A. , BrandsMart Leasing, and Woodhaven. Aaron's offers a direct-to-consumer lease-to-own solution through its approximately 1,275 Company-operated and franchised stores in 47 states and Canada , as well as its e-commerce platform. BrandsMart U.S.A. is one of the leading appliance retailers in the country with ten retail stores in Florida and Georgia , as well as its e-commerce platform. BrandsMart Leasing offers lease-to-own solutions to customers of BrandsMart U.S.A. Woodhaven is the Company's furniture manufacturing division. For more information, visit investor.aarons.com , aarons.com , and brandsmartusa.com .
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SOURCE The Aaron's Company, Inc.
Global polyether amine market research report [2023-2028] | strategic planning for global business expansion, polyether amine market report scrutinizes the market by key industry peers, describe to define and analyses opportunities, trends and key challenges, trend, and growth value..
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Mar 02, 2023 (The Expresswire) -- Global Polyether Amine Market Latest Research Report (2023-2028) | In today's highly competitive marketplace, businesses need to stay ahead of the curve to succeed. This is why market research is a critical component for businesses of all sizes. By understanding the latest trends, market demands, and consumer behavior, businesses can make informed decisions that drive growth and profitability. That's why we are presenting our 2023 Polyether Amine Market Research Report, a comprehensive analysis of the latest trends, data, and statistics in the industry. This data provides a comprehensive understanding of the financial performance of the industry and helps businesses to identify areas for improvement and growth. By understanding the financial performance of the industry, businesses can make informed decisions that support their financial goals and objectives. | 92 Pages New Report
Our Polyether Amine Market research report provides an in-depth analysis of the market, including data on unit sales by region, product sales by type [Batch Method, Continuous Method] and application [Chemical and Material, Construction, Others] , product size, share, growth, and revenue in USD. The report covers the latest market trends, future growth opportunities, and the competitive landscape, so businesses can make informed decisions that support their growth and success.
Get a Sample PDF of the report - https://www.businessgrowthreports.com/enquiry/request-sample/21164752
List of Top Key Players of the Polyether Amine Market:
● Huntsman ● BASF ● Clariant ● Iro Group ● Yantai Minsheng Chemicals ● Yangzhou Chenhua New Material ● Qingdao Iro Surfactant ● Wuxi Acryl Technology Co., Ltd ● Zibo Dexin Lianbang Chemical Industry Co., Ltd ● Yantai Dasteck Chemicals
Get a Sample Copy of the Polyether Amine Market Report 2023-2028
Market Analysis and Insights: Global Polyether Amine Market
Due to the COVID-19 pandemic, the global Polyether Amine market size is estimated to be worth USD 731.3 million in 2022 and is forecast to a readjusted size of USD 1122.3 million by 2028 with a CAGR of 7.4% during the forecast period 2022-2028. Fully considering the economic change by this health crisis, Batch Method accounting for Percent of the Polyether Amine global market in 2021, is projected to value USD million by 2028, growing at a revised Percent CAGR from 2022 to 2028. While Chemical and Material segment is altered to an Percent CAGR throughout this forecast period.
North America Polyether Amine market is estimated at USD million in 2021, while Europe is forecast to reach USD million by 2028. The proportion of the North America is Percent in 2021, while Europe percentage is Percent, and it is predicted that Europe share will reach Percent in 2028, trailing a CAGR of Percent through the analysis period 2022-2028. As for the Asia, the notable markets are Japan and South Korea, CAGR is Percent and Percent respectively for the next 6-year period.
The global major manufacturers of Polyether Amine include Huntsman, BASF, Clariant, Iro Group, Yantai Minsheng Chemicals, Yangzhou Chenhua New Material, Qingdao Iro Surfactant, Wuxi Acryl Technology Co., Ltd and Zibo Dexin Lianbang Chemical Industry Co., Ltd and etc. In terms of revenue, the global 3 largest players have a Percent market share of Polyether Amine in 2021.
Global Polyether Amine Market: Drivers and Restrains
The research report has incorporated the analysis of different factors that augment the marketâs growth. It constitutes trends, restraints, and drivers that transform the market in either a positive or negative manner. This section also provides the scope of different segments and applications that can potentially influence the market in the future. The detailed information is based on current trends and historic milestones. This section also provides an analysis of the volume of production about the global market and about each type from 2017 to 2028. This section mentions the volume of production by region from 2017 to 2028. Pricing analysis is included in the report according to each type from the year 2017 to 2028, manufacturer from 2017 to 2022, region from 2017 to 2022, and global price from 2017 to 2028.
A thorough evaluation of the restrains included in the report portrays the contrast to drivers and gives room for strategic planning. Factors that overshadow the market growth are pivotal as they can be understood to devise different bends for getting hold of the lucrative opportunities that are present in the ever-growing market. Additionally, insights into market expertâs opinions have been taken to understand the market better.
Global Polyether Amine Market: Segment Analysis
The research report includes specific segments by region (country), by manufacturers, by Type and by Application. Each type provides information about the production during the forecast period of 2017 to 2028. by Application segment also provides consumption during the forecast period of 2017 to 2028. Understanding the segments helps in identifying the importance of different factors that aid the market growth.
In conclusion, our 2023 Market Research Report is a valuable resource for businesses looking to maximize their market potential. The report provides comprehensive data, insights, and analysis that can help businesses make informed decisions that drive growth and success. Whether you are an established business, our report is an essential tool that can help you stay ahead of the curve in the highly competitive marketplace.
Global Polyether Amine Market: Drivers and Restraints
The Polyether Amine market contains a rating of unique factors that drive market growth. It represents the trends, constraints, and drivers that are changing the market, for better or for worse. This part also provides a range of different segments and objectives that may impact the market in the future. Accurate statistics are entirely based on modern developments and ancient milestones. This part also provides an assessment of the global market and the size of each type of production. This area refers to the scope of manufacturing throughout the region. Pricing is recorded in the dataset according to all types, manufacturers, regions, and international prices.
The Polyether Amine Market Size report focuses on the top countries' data and highlights the key regions driving growth in the industry. By understanding the trends and demands in each region, businesses can tailor their strategies to meet the unique needs of their target markets. The report also provides valuable insights into product sales by type and application, helping businesses to understand which products are driving growth and where they should focus their efforts.
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Our market research reports provide a comprehensive analysis of the Polyether Amine Market, including segmentation by region (country), manufacturers, type, and application. Through market segmentation, subsets of a market are created based on various factors such as product type, end-user or application, and geography. This allows decision-makers to tailor their product, sales, and marketing strategies to specific market segments, providing a more targeted approach to their business. By leveraging market segments, businesses can optimize their product development cycles and create customized offerings that cater to the unique needs of different market segments.
On the basis of product type, the Polyether Amine market is primarily split into
On the basis of end users/applications, this report covers the following segments
Regional Segment of Polyether Amine Market:
Geographically, the report includes research on production, consumption, revenue, market share, and growth rate, and forecast (2016-2028) of the following regions:
COVID-19 AND RUSSIA-UKRAINE WAR INFLUENCE ANALYSIS:
Despite the challenges faced by the world economy, including bankruptcies and declining turnovers, many companies are now recovering from the destabilizing shocks caused by the COVID-19 outbreak. However, in 2022, the global economy was once again hit by another major event - the Russian Federation's invasion of Ukraine. This event had a profound impact on commodity markets, supply chains, inflation, and financial conditions, further slowing down global growth. The conflict in Ukraine has caused a surge in energy prices and volatility in energy markets, with some economies facing headwinds while energy exporters experience improvements. Furthermore, the invasion has also led to a significant increase in agricultural commodity prices, exacerbating food insecurity and extreme poverty in many emerging markets and developing economies. We closely monitor global events and provide insights on how they impact various industries, including the Polyether Amine market.
TO KNOW HOW COVID-19 PANDEMIC AND RUSSIA UKRAINE WAR WILL IMPACT THIS MARKET - REQUEST A SAMPLE
Global Polyether Amine Market report answers the following questions:
Key Benefits of This Market Research:
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Detailed TOC of Global Polyether Amine Market Report 2023 -
1 Polyether Amine Market Overview 1.1 Product Overview and Scope of Polyether Amine 1.2 Polyether Amine Segment by Type 1.2.1 Global Polyether Amine Market Size Growth Rate Analysis by Type 2022 VS 2028 1.2.2 Batch Method 1.2.3 Continuous Method 1.3 Polyether Amine Segment by Application 1.3.1 Global Polyether Amine Consumption Comparison by Application: 2022 VS 2028 1.3.2 Chemical and Material 1.3.3 Construction 1.3.4 Others 1.4 Global Market Growth Prospects 1.4.1 Global Polyether Amine Revenue Estimates and Forecasts (2017-2028) 1.4.2 Global Polyether Amine Production Capacity Estimates and Forecasts (2017-2028) 1.4.3 Global Polyether Amine Production Estimates and Forecasts (2017-2028) 1.5 Global Market Size by Region 1.5.1 Global Polyether Amine Market Size Estimates and Forecasts by Region: 2017 VS 2021 VS 2028 1.5.2 North America Polyether Amine Estimates and Forecasts (2017-2028) 1.5.3 Europe Polyether Amine Estimates and Forecasts (2017-2028) 1.5.4 China Polyether Amine Estimates and Forecasts (2017-2028) 1.5.5 Japan Polyether Amine Estimates and Forecasts (2017-2028) 2 Market Competition by Manufacturers 2.1 Global Polyether Amine Production Capacity Market Share by Manufacturers (2017-2022) 2.2 Global Polyether Amine Revenue Market Share by Manufacturers (2017-2022) 2.3 Polyether Amine Market Share by Company Type (Tier 1, Tier 2 and Tier 3) 2.4 Global Polyether Amine Average Price by Manufacturers (2017-2022) 2.5 Manufacturers Polyether Amine Production Sites, Area Served, Product Types 2.6 Polyether Amine Market Competitive Situation and Trends 2.6.1 Polyether Amine Market Concentration Rate 2.6.2 Global 5 and 10 Largest Polyether Amine Players Market Share by Revenue 2.6.3 Mergers and Acquisitions, Expansion 3 Production Capacity by Region 3.1 Global Production Capacity of Polyether Amine Market Share by Region (2017-2022) 3.2 Global Polyether Amine Revenue Market Share by Region (2017-2022) 3.3 Global Polyether Amine Production Capacity, Revenue, Price and Gross Margin (2017-2022) 3.4 North America Polyether Amine Production 3.4.1 North America Polyether Amine Production Growth Rate (2017-2022) 3.4.2 North America Polyether Amine Production Capacity, Revenue, Price and Gross Margin (2017-2022) 3.5 Europe Polyether Amine Production 3.5.1 Europe Polyether Amine Production Growth Rate (2017-2022) 3.5.2 Europe Polyether Amine Production Capacity, Revenue, Price and Gross Margin (2017-2022) 3.6 China Polyether Amine Production 3.6.1 China Polyether Amine Production Growth Rate (2017-2022) 3.6.2 China Polyether Amine Production Capacity, Revenue, Price and Gross Margin (2017-2022) 3.7 Japan Polyether Amine Production 3.7.1 Japan Polyether Amine Production Growth Rate (2017-2022) 3.7.2 Japan Polyether Amine Production Capacity, Revenue, Price and Gross Margin (2017-2022) 4 Global Polyether Amine Consumption by Region 4.1 Global Polyether Amine Consumption by Region 4.1.1 Global Polyether Amine Consumption by Region 4.1.2 Global Polyether Amine Consumption Market Share by Region 4.2 North America 4.2.1 North America Polyether Amine Consumption by Country 4.2.2 U.S. 4.2.3 Canada 4.3 Europe 4.3.1 Europe Polyether Amine Consumption by Country 4.3.2 Germany 4.3.3 France 4.3.4 U.K. 4.3.5 Italy 4.3.6 Russia 4.4 Asia Pacific 4.4.1 Asia Pacific Polyether Amine Consumption by Region 4.4.2 China 4.4.3 Japan 4.4.4 South Korea 4.4.5 China Taiwan 4.4.6 Southeast Asia 4.4.7 India 4.4.8 Australia 4.5 Latin America 4.5.1 Latin America Polyether Amine Consumption by Country 4.5.2 Mexico 4.5.3 Brazil 5 Segment by Type 5.1 Global Polyether Amine Production Market Share by Type (2017-2022) 5.2 Global Polyether Amine Revenue Market Share by Type (2017-2022) 5.3 Global Polyether Amine Price by Type (2017-2022) 6 Segment by Application 6.1 Global Polyether Amine Production Market Share by Application (2017-2022) 6.2 Global Polyether Amine Revenue Market Share by Application (2017-2022) 6.3 Global Polyether Amine Price by Application (2017-2022)
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