What is strategic planning?
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In spite of some overexposure in the business press, strategic planning still seems like an obscure concept to many entrepreneurs. Beyond the hype, however, strategic planning can bring real value to an organization that takes the process seriously.
What is strategic planning? Simply put, strategic planning determines exactly where your organization is going over the next few years and how it's going to get there. A strategic plan is a coordinated and systematic way to develop a course and direction for your company.
Basically, not having a strategic plan is akin to navigating unknown territory without a map. And without a map, you're lost in a highly competitive business environment that will inevitably throw challenges your way. A rule of thumb is that if there's uncertainty on the horizon, then you need a strategic plan.
What does it generally include?
Your strategic plan outlines where your company is going, so that everybody in your business is working with the same information. Ultimately, strategic planning helps to gauge what your organization is, exactly what it does, and why it does it, with a focus on optimizing your future potential.
A strategic plan will generally include:
- An executive summary, which is usually written at the end of the process
- A company description
- Your mission, vision and value statements
- A strategic analysis that can be in the form of a SWOT analysis (strengths, weaknesses, opportunities and threats)
- An explanation of your strategies and tactics
- An action plan
- Budget and operating plans
- Detailed monitoring and evaluation methods
If you're a small firm, for example, a brief strategic plan might be appropriate. But a more detailed plan on various aspects of your organization may be more effective if you're a bigger company.
It's not a business plan
In other words, a business plan is much more of an aspirational document, covering what your business is about and why it has value in the market. The strategic plan, in contrast, contains an action plan with specific objectives and due dates as well as setting out who is responsible for what
Who carries it out?
Your strategic planning should be carried out in a team environment that involves key players in your business.
Generally, it's headed by the president of the company, who gets input from employees or a specific team. The team identifies key factors for the strategic analysis and participates in that diagnosis through, for example, interviews. The team is also involved in the formulation of the strategic direction and action plans.
When is the best time?
Scheduling the strategic planning process depends largely on the nature and needs of your organization. For example, if your business environment changes rapidly, strategic planning is essential to keep afloat and should be carried out at least once a year.
Generally, it should happen:
- When you start a business
- If you're preparing for a new venture such as a product launch
- When markets are changing
- If the business environment (laws, regulations, business practices) is changing
How will it benefit you?
Strategic planning will help you to achieve the following objectives.
- Prepare and define the scope of your activities—Review your motivation, costs and means.
- Analyze your strengths, weaknesses, opportunities and threats—Review your company's internal and external environment to maximize on your strengths, protect against weaknesses and take advantage of business opportunities.
- Formulate strategies—Look at exactly what strategies and tactics you should take as a result of the above factors.
- Implement your strategies—Assess your resources and get your plan on paper.
- Get all your employees on the same page—Build consensus in your company by getting your message out to your key players.
- Measure your success—Track your progress and motivate your employees to keep up their efforts.
- Increase productivity—Ensure employees know where they’re going and that they optimize their use of resources.