The strategic planning process is defined as the list of steps that, once completed, will implement a business strategy. Generally, a strategic plan is made up of a few major components. The first component is usually a mission statement or vision statement that establishes a set goal.
The second component includes initiatives that the business will attempt to accomplish. The third component breaks down initiatives into financials in order to make sure budgets align with the strategy.
Strategic planning can occur on a team, department, or organizational level. A proper strategic planning process is crucial for accomplishing both short term and long term business goals. Strategic management ensures that employees and management professionals all know what is expected from them throughout the entire process.
Strategic planning helps employees to work together optimally and make progress towards set goals being accomplished. Another benefit of employees working together to make progress towards set goals is that they often are able to formulate novel ideas and solutions that would have otherwise not been possible.
Proper strategic planning is absolutely crucial to both short term and long term business success. When the strategic planning process is executed correctly businesses experience many benefits.
5 significant benefits of strategic planning include-
Both small business owners and large corporate CEOs know that change is the only constant. Whereas one year may bring sky high profits, the following three years could sink a company into deep debt or even force business closure.
Understanding how difficult it is for a company to stay in business is not pessimistic thinking, it is realistic. Studies have shown that one of every three companies that are industry leaders may not be in business anymore just five years into the future.
A strategic plan greatly increases the likelihood that a business will survive through both the short term and long term future.
A strategic plan supplies a roadmap for everything management process related. Management processes range from project management to strategic management initiatives.
Strategic plans also produce high level decision making skills which are crucial for planning meetings. Ultimately, operational efficiency is increased when board members can achieve set goals with optimal resource usage.
Obtaining a large portion of the market share is a competitive advantage that both small business and large corporation owners often aspire to achieve. Strategic plans supply organizations with valuable insights on both consumer segments and market trends.
Armed with this knowledge, companies can proactively anticipate strategic issues and make sure their moves work towards their vision. As a result, gaining a competitive advantage through obtaining a larger portion of the available market share is much more probable.
A great strategic plan can impress board members in the short term and in the long term can supply a competitive advantage through increased market share acquisition.
A proactive business is much more likely to be successful than a reactive one. Strategic planning helps businesses to be more proactive in decision making and long term goals accomplished.
Proactivity provides businesses with a competitive advantage and keeps them ahead of competitors.
Having a clear sense of direction can do wonders for a business. When long term goals are set, they will reflect that clear sense of direction that strategic planning helped to formulate.
From business strategy execution to high level decision making processes, virtually all aspects of business operations are enhanced by strong strategic planning intitiatives.
The steps that make up the strategic planning process include strategic position identification, information and people gathering, SWOT analysis performance, strategic plan formulation, strategic plan execution, and constant performance monitoring. Breaking down the strategic planning process into steps helps to make sure nothing important is overlooked.
The 6 steps of the strategic planning process include-
Defining both short term and long term set goals is the first step of this stage. For example, where does the company want to be in three months and three years down the line?
Once short and long term objectives are established, then board members should discuss how goals will be accomplished. Identifying a strategic position necessitates that set goals are measurable and realistic.
Both short term and long term goals should reflect the-
- Business plan and business model
- Mission statements and value statements
- Overall business strategy
Both excellent people and outstanding data are necessary to accomplish great things. All data collected for analysis should be checked for accuracy.
Board members and others involved in planning meetings should have high level decision making skills. Businesses must make sure that the people chosen will make progress towards strategic goals.
Another great source of information includes feedback from the people involved in the business including employees, partners, and customers.
SWOT is an acronym that stands for strengths, weaknesses, opportunities, and threats. A SWOT analysis is an invaluable tool for strategic planning process purposes.
A SWOT analysis will not only reveal the information contained within its acronym but also can help businesses evaluate set goals to make sure they align with the long term direction projected for the company.
A strategic plan can be developed once a strategic position and set goals are established. Whilst developing a strategic plan it is important to consider how best to gain a competitive advantage and achieve vision growth.
Another important part of strategic plan formulation is to prioritize initiatives in accordance with how they will make progress towards improving the overall business position. Additionally, methods and techniques to measure progress should be established at this stage.
Now that the strategic plan is formed it can be implemented. At this point, businesses must make sure that all plan participants understand the established strategy.
Task distribution should be as fair as possible to avoid any group or person burning out. Board members must make sure to check in with one another throughout the entire process.
Monitoring performance consistently should be a management process top priority. If strategic issues arise, corrective action should be swiftly undertaken.
The ultimate objective is continual progress towards strategic plan completion. Remember, if corrective action is unsuccessful, a new strategic planning process may need to be executed.
Advice-: With both proper accountability and corrective action, implementation plan progress will run much more smoothly.
There are different variations of strategic plans available for business professionals to consider. Remember, strategic plans can be developed on a team, department, or organizational level.
To better understand the variations of strategic plans it is helpful to analyze examples of specific types. 4 examples worth examining closely are corporate, education, marketing, and city strategic plans-
One example of strategic planning is a corporate strategy, which includes both objectives and a well formulated action plan that details how the set goals will be achieved. Often, corporate goals are SMART goals, an acronym that stands for smart, measurable, achievable, realistic, and timely.
Designating which board members are responsible for which tasks is an important part of the strategic planning process. Annotating the target completion date alongside the name of the responsible party is also advised.
Additionally, the corporate strategy must make sure to outline how progress will be measured. Measuring progress helps everyone involved in the strategic planning process to make sure that progress towards set goals is being achieved.
An education strategy plan may be formulated for a specific department, school board, or entire school. Generally, set goals will influence students and staff directly but they may also influence the larger surrounding communities. Education strategies can cover anything from affordability to infrastructure.
A marketing strategy plan may be formulated for a business unit, product, or the entire organization. Set goals may encompass a wide variety of topics, ranging from customer experience to product distribution.
A city strategic plan may be incredibly expansive, covering everything from environmental issues to the overall quality of life in the community. Unsurprisingly, these plans can go beyond the upcoming few years and may have long term horizons decades in the future.
The objective of city strategic planning is often to make sure progress towards long term set goals is occurring through short term actions. Another important consideration for city strategic planning is the city's budget, which can stall strategic plans.
As a result of the very long term scope of city strategic plans, plans are often abandoned or only partially implemented. This can occur due to changes in city priorities or even public backlash to proposed plans.
Tip-: Different strategic plan examples to consider include city, education, corporate, and marketing strategies.
Developing a strategic plan requires significant amounts of both time and energy. Even high level executives may wonder how to start developing a strategic plan for their business.
Thankfully, there are many best practice tips available for developing a strategic plan. Steps for building strategic plans include-
The strategic planning process consists of much decision making and anticipating strategic issues that may arise in the future. Businesses should consider some important questions before even beginning strategic plan development initiatives.
Questions to consider include evaluating resource availability and contemplating any strategic issues possible. Planning meetings may find upon answering these tough questions that they are not currently able to execute a strategic plan.
If that is the case, businesses must ask themselves what path they will alternatively pursue in lieu of strategic planning development.
Businesses must make sure that their strategic planning team is full of talent, experience, and expertise. A strategy director or chief strategy officer should be put in charge of the strategic planning team.
The planning team should consist of around 12 to 15 people. People included in the planning team should possess high level decision making and strategic thinking skills.
Data collection is crucial for proper strategic plan development. Important data to collect includes-
- Previous strategic plans
- Mission statement and vision statement
- Business plan and business model
- At least three years of financial records
- SWOT analysis results
Note-: Important documents ranging from SWOT analysis results to three years of financial records should be collected.
Once crucial data is collected, team members may begin to analyze it. Both the facilitator and strategy director should be involved in the data analysis process.
Data analysis should focus on any trends, strengths, weaknesses, opportunities, and threats observable.
- Strategic planning is a process that helps businesses achieve goals that are both short term and long term in nature.
- Proper strategy planning process execution can result in a variety of benefits ranging from higher efficiency to an increased market share portion.
- The 6 steps of the strategic planning process consist of strategic position identification, people and information gathering, SWOT analysis performance, strategic plan development, strategic plan execution, and consistent performance monitoring.
- Steps for building a strategic plan include ascertaining readiness, team development, data collection, and data analysis.