Every company should have a strategic plan, but you might be surprised by the number of companies that try to operate without one (or at least one that is well expressed). According to research, 86 percent of executive teams spend less than one hour per month discussing strategy, and 95 percent of the average worker has no idea what their company’s strategy is.
Because so many firms fail in these areas, strategic planning can help you get ahead of the game.
What is the process of strategic planning?
The strategic planning process, in its most basic form, is the mechanism by which companies make plans to attain broad, long-term objectives.
This method is distinct from project planning, which is used to scope and allocate work for particular projects, and strategy mapping, which aids in the identification of your purpose, vision, and goals.
The strategic planning process is more comprehensive; it aids in the creation of a roadmap for which strategic objectives you should focus on and which projects will be less beneficial to the company. Ensure you are including the crucial business strategy frameworks in your strategy. The steps of the strategic planning process are listed below.
Steps in the strategic planning process
1. Establish a strategic position.
This phase of preparation sets the tone for the rest of the project. To figure out where you need to go and how you’ll get there, you must first figure out where you are.
Include the appropriate stakeholders from the start, taking into account both internal and external sources. Identify significant strategic concerns by speaking with corporate management, gathering consumer feedback, and gathering industry and market data to acquire a comprehensive picture of your position in the market and in the thoughts of your customers.
It’s also a good idea to examine — or write if you don’t already have them — your company’s purpose and vision statements to offer yourself and your team a clear picture of what success looks like. Additionally, you should analyse your firm’s basic principles to remind yourself of how your organisation will achieve these goals.
To begin, identify the issues that need to be solved using industry and market data, including customer insights and current/future requests. Create a list of your company’s internal strengths and weaknesses, as well as external opportunities (ways your company can grow to meet requirements that the market doesn’t currently meet) and threats (your competition).
Use a SWOT diagram as a foundation for your initial analysis. You may easily categorise your findings as Strengths, Weaknesses, Opportunities, and Threats (SWOT) to define your present position with input from executives, customers, and external market data.
PEST analysis is an alternative to a SWOT analysis. PEST (Political, Economic, Socio-cultural, and Technological) is a strategic technique for identifying dangers and possibilities for your company.
Your unique strategic position in the market will become evident as you integrate this knowledge, and you can begin to clarify a few key strategic objectives. These goals are frequently set with a three- to five-year horizon in mind.
2. Set your goals in order of importance.
After you’ve determined your present market position, you’ll need to set targets to help you reach your objectives. Your goals should be in sync with the mission and vision of your firm.
Ask crucial questions to help you prioritise your goals, such as:
- Which of these measures will have the biggest impact on attaining our company’s mission/vision and strengthening our market position?
- What are the most critical sorts of impact (e.g., client acquisition vs. revenue)?
- What will the competition’s response be?
- Which projects are the most critical?
- What will we have to do to achieve our objectives?
- How will we track our progress and see if we’ve met our objectives?
To assist you achieve your long-term strategic goals and activities stated in step one, objectives should be unique and measurable. Updated website content, improved email open rates, and new leads in the pipeline are all possible goals.
SMART goals can help you set a schedule and identify the resources you’ll need to reach your objectives, as well as track your progress with key performance indicators (KPIs).
3. Make a strategy
Now is the time to develop a strategic plan for achieving your objectives. This step entails deciding the techniques required to achieve your goals, as well as establishing a timeframe and clearly communicating responsibilities.
Strategy mapping is a useful tool for visualising your overall strategy. Strategy maps, which work from the top down, make it straightforward to see company processes and find areas for development.
True strategic decisions usually entail a cost-of-opportunity trade-off. For example, your organisation might opt to put less money into customer service in order to put more money into producing an intuitive user experience.
Prepare to say “no” to efforts that will not improve your long-term strategic position, based on your values, mission statement, and defined priorities.
4. Carry out and oversee the strategy
You’re now ready to put your plan into action. To begin, share necessary material with the organisation to communicate the plan. After then, the real job begins.
By mapping your processes, you can turn your overall strategy into a tangible plan. To clearly communicate team roles, use KPI dashboards. The completion process and ownership for each step of the journey are depicted in this detailed method.
Establish regular evaluations with individual contributors and their superiors, as well as check-in points, to ensure you stay on track.
5. Go over the plan again and make any necessary changes.
The plan’s last stage, review and revision, allows you to reevaluate your goals; and make course corrections based on past successes and failures.
Determine which KPIs your team has met and how you can continue to fulfil them on a quarterly basis; changing your plan as needed. It’s critical to reevaluate your priorities and strategic position on a yearly basis; to ensure that you stay on course for long-term success.
Balanced scorecards can help you keep track of your progress and achieve strategic goals; by giving you a complete picture of your company’s performance.
Your goal and vision may need to evolve over time; an annual evaluation is an excellent chance to think about those changes, draught a new plan, and implement it again.
