Operating without a strategic plan is like sitting in the passenger seat of your own business. You see it accelerate into overdrive and pass one milestone after another. Eventually, however, you helplessly watch as it swerves aimlessly or, worse, crashes and burns. Strategic planning puts you behind the steering wheel. It serves as a roadmap that defines the direction a company must travel, and that helps leaders prepare for potential roadblocks. Companies and markets without this foundation and foresight are far more likely to get lost, stuck, or wrecked.
What is Strategic Business Planning?
Strategic planning is a systematic process for developing an organization’s direction. It also articulates the objectives and actions required to achieve that future vision, and outlines metrics for measuring success.
By helping you refocus on your foundational purpose, your goals, development and your opportunities, strategic planning reintroduces you to “the big picture.” It’s the basis for business owners to achieve their vision, which they communicate to stakeholders in a strategic business plan and program.
It’s common to confuse a strategic plan with a business plan, which is used to start a business, obtain funding, or direct operations and generally short-term based.
A strategic plan, on the other hand, is about high-level thinking and generally long-term based. It can be created at any time and should be regularly revisited. Key points to review the plan include whenever a company begins a new venture (like launching a new product), if the economy or competitive landscape changes, or when new regulations or trends affect the business environment.
The importance of business strategic Planning
Taking the time to identify exactly where your business and your executive team are headed (and how you’ll get there) can help mitigate the risks associated with business growth. In fact, the strategic planning process can fuel long-term success by bolstering these five key areas:
Focus and Direction
Operational Effiency
Competitive Environment
Employee Morale
Six Strategic Planning Examples
SWOT is perhaps the most common tool used in the strategic planning process, but it’s not right for everyone. Some critics think it’s too limited in scope and doesn’t encourage deep analysis. That’s why business advisors have created several alternatives, each with its own structure.
- A SOAR analysis is a common, more positive twist on SWOT. It stands for Strengths, Opportunities, Aspirations, and Results, and the goal is to use appreciative inquiry to focus on what works, rather than perceived weaknesses or potential threats.
- NOISE stands for Needs, Opportunities, Improvements, Strengths, and Exceptions. This solution-focused process looks at what works and what should improve, and also encourages you to explore opportunities you didn’t realize existed.
- The Five Forces framework examines competitive rivalry, supplier power, buyer power, threat of substitution, and threat of new entry. It can help companies assess industry attractiveness, how trends will affect industry competition, which industries a company should compete in, and how companies can position themselves for success.
- Hambrick and Fredrickson’s Strategy Diamond framework consists of five essential parts that together should form a unified whole: Arenas, Vehicles, Differentiators, Staging, and Economic Logic. It’s intended to serve as a concise way to show how the parts of an organization’s strategy fit together.
- STEEPLE is an acronym for Social, Technological, Economic, Environmental, Political, Legal, and Ethical—and each is an external factor you’ll judge using this tool. (There are several similar variations on this external-focused model, including PEST and STEEP).
- A CORE assessment uses a strictly financial perspective to craft a business strategy and long-term plan. It looks at a company’s capital investment, site, ownership involvement, risk factors, and exit strategy.
Strategic Planning Process
Before you decide on the destination you strong desire, you must define where you are currently positioned.
Its now time to do a rigorous assessment of both current and future potentials.
Before you decide on the destination you strong desire, you must define where you are currently positioned.
Its now time to do a rigorous assessment of both current and future potentials.
Elements of Strategic Planning Implementation
A strategic plan is useless if it sits on a shelf-collecting dust. That’s why implementation is perhaps the most critical step of the planning process. It’s what turns strategies and plans into actions and successes. The plan is the what and why, but implementation is the equally important who, where, when, and how.
Strategic plans fail for many reasons, including lack of ownership or confusion about the plan among stakeholders, lack of accountability or empowerment, not tying strategy to budgeting, not linking employee incentives to strategy.
Success hinges on a quality implementation plan. It starts with the top brass, who should take responsibility for spearheading execution. It’s essential, however, that all stakeholders are involved.
Start by assessing whether you have the appropriate and sufficient budget, people, resources, content and systems in place to execute on the plan. Share any weaknesses before trying to put the plan in motion.
As with most things, communication is key. Educate stakeholders about why the company participated in strategic planning, how the plan and specific objectives support the company’s mission and values, and how employees’ day-to-day work affects the company’s success.
Establish responsibility for tasks to the appropriate parties, a scorecard for tracking and monitoring progress, and a performance management and reward system.
Educate managers on how employee work translates into meeting goals, and regularly check in with them on progress. In fact, it should become the norm to hold structured performance conversations throughout the entire company.
Hold quarterly strategic reviews to monitor progress and make small or big adjustments as needed. During annual reviews, revisit all elements of the plan. Conduct new assessments and adjust objectives and KPIs accordingly.
