In order for a business to be successful, there needs to be a roadmap for success. A strategic plan helps to provide direction and focus for all employees. It points to specific results that are to be achieved and establishes a course of action for achieving them. A strategic plan also helps the various work units within an organization to align themselves with common goals. And it defines what is important and what is not.
Arguably, the leading cause of business failure is not having a strategic plan in place that is being well implemented. If a business has little idea where it is headed, it will wander aimlessly with priorities changing constantly and employees often confused about the purpose of their jobs.
Building a strategic plan is not difficult. It will take some thought and some feedback from customers and others, but businesses should be routinely garnering feedback from appropriate constituent groups on an ongoing basis anyway so this should not be an extraordinary effort. The process of developing a strategic plan should be rewarding for all involved and if carried out correctly it should have a significant impact on the future success of the organization.
So, what exactly is strategic planning? The components of the strategic development process are relatively straightforward and the planning process should be kept simple. Essentially, these are the steps that will be followed in developing a sound strategic plan:
1. An internal analysis that encompasses assessing company strengths and weaknesses, financial performance, people, operational limitations, corporate culture, current positioning in the market(s), the overall characterization of the condition of the company and critical issues facing the organization.
2. An external analysis that focuses on analyzing competitors, assessing market opportunities and threats, evaluating changing technology that could impact the organization, analyzing regulatory or legislative concerns, changes and trends in the market(s) the company operates, in and other potential outside influences on the organization.
3. Summarizing the current situation or "state of the organization" based on the information and data gathered in steps one and two. This step is important because it brings together relevant and critical data and information and allows members of the planning team to more easily get a feel for what opportunities and obstacles lie ahead. Also, competitive advantage will be addressed in this step.
4. Development of a mission, vision or purpose statement. It really doesn't matter what it is called, but this step is important as much because of the process that the team will go through as the words that eventually end up on paper. In this step, the team is starting the process of focusing the organization and its people on what the organization is all about and what is important to the organization.
5. Goal setting. Every organization needs goals. Goals that address key elements within the organization provide focus and focus is a critical element in the success of any business.
6. Defining objectives that support the goals. Objectives are more specific in nature and are supportive of the goal. They bring into even greater focus the goals of the organization.
7. Development of strategies. Strategies begin defining how the goals and objectives are going to be achieved. Establishing appropriate and difference-making strategies is the heart and soul of your plan.
8. While not all strategic plans include tactics, we believe it is critical to include development of tactics in the planning process. Tactics are the specific tasks associated with carrying out strategies. In some cases, tactics are more formally defined after the strategic plan has been developed or, in some cases, some tactics are included in the strategic plan while others are developed later in consultation with the individuals responsible for carrying out the tactics.
Once developed, the keys to making the plan work are a commitment to seeing it through and sound implementation. Many businesses have developed strategic plans only to put them on a shelf to gather dust. Managers need a well developed strategic plan in order to effectively establish expectations for their employees.
Without a plan, expectations are developed in a void and there is little or no alignment with common goals. A good strategic plan looks out 2 to 5 years and describes clearly how the business will grow and prosper over that planning horizon.
Please understand that it becomes difficult to project much beyond a few years. But having a plan does not mean that it won't be changed. In fact, your strategic plan should be revisited regularly to ensure that it continues to make sense given changes in the environment your business operates within.
Take a look at your business. Does there seem to be a lack of focus on where the company is headed? Does everyone clearly understand the goals for the business? Strategically, how will the business achieve those goals? Is your current planning horizon longer than one year? Are you developing annual business/operating plans without a strategic plan in place? A strategic plan should drive operating plans. If you need detailed instructions about how to develop a strategic plan, click here for more information on The Strategic Planning Workbook.
Disclaimer: The information above is for informational and educational purposes only, It does not construe advice. Your use of the information is at your discretion and you assume the sole responsibility of relying on this information at your own risk.
