Strategic issues are critical unknowns driving you to embark on a robust strategic planning process. These issues can be problems, opportunities, market shifts, or anything else that keeps you awake at night and begging for a solution or decision. The best strategic plans address your strategic issues head-on.
Conducting an environmental scan will help you understand your operating environment. An environmental scan is called a PEST analysis, an acronym for Political, Economic, Social, and Technological trends. Sometimes, it is helpful to include Ecological and Legal trends as well. All of these trends play a part in determining the overall business environment.
The reason to do a competitive analysis is to assess the opportunities and threats that may occur from those organizations competing for the same business you are. You need to understand what your competitors are or aren’t offering your potential customers. Here are a few other key ways a competitive analysis fits into strategic planning:
Learn more on how to conduct a competitive analysis here .
Opportunities are situations that exist but must be acted on if the business is to benefit from them.
What do you want to capitalize on?
Threats refer to external conditions or barriers preventing a company from reaching its objectives.
What do you need to mitigate? What external driving force do you need to anticipate?
Strengths refer to what your company does well.
What do you want to build on?
Weaknesses refer to any limitations a company faces in developing or implementing a strategy.
What do you need to shore up?
Customer segmentation defines the different groups of people or organizations a company aims to reach or serve.
A SWOT analysis is a quick way of examining your organization by looking at the internal strengths and weaknesses in relation to the external opportunities and threats. Creating a SWOT analysis lets you see all the important factors affecting your organization together in one place.
It’s easy to read, easy to communicate, and easy to create. Take the Strengths, Weaknesses, Opportunities, and Threats you developed earlier, review, prioritize, and combine like terms. The SWOT analysis helps you ask and answer the following questions: “How do you….”
Want More? Deep Dive Into the “Developing Your Strategy” How-To Guide.
Determine your primary business, business model and organizational purpose (mission) | Planning Team (All staff if doing a survey) | 2 weeks (gather data, review and hold a mini-retreat with Planning Team) | |
Identify your corporate values (values) | Planning Team (All staff if doing a survey) | 2 weeks (gather data, review and hold a mini-retreat with Planning Team) | |
Create an image of what success would look like in 3-5 years (vision) | Planning Team (All staff if doing a survey) | 2 weeks (gather data, review and hold a mini-retreat with Planning Team) | |
Solidify your competitive advantages based on your key strengths | Planning Team (All staff if doing a survey) | 2 weeks (gather data, review and hold a mini-retreat with Planning Team) | |
Formulate organization-wide strategies that explain your base for competing | Planning Team (All staff if doing a survey) | 2 weeks (gather data, review and hold a mini-retreat with Planning Team) | |
Agree on the strategic issues you need to address in the planning process | Planning Team | 2 weeks (gather data, review and hold a mini-retreat with Planning Team) |
The mission statement describes an organization’s purpose or reason for existing.
What is our purpose? Why do we exist? What do we do?
Step 2: discover your values.
Your values statement clarifies what your organization stands for, believes in and the behaviors you expect to see as a result. Check our the post on great what are core values and examples of core values .
How will we behave?
Step 3: casting your vision statement.
A Vision Statement defines your desired future state and directs where we are going as an organization.
Where are we going?
Step 4: identify your competitive advantages.
A competitive advantage is a characteristic of an organization that allows it to meet its customer’s need(s) better than its competition can. It’s important to consider your competitive advantages when creating your competitive strategy.
What are we best at?
Step 5: crafting your organization-wide strategies.
Your competitive strategy is the general methods you intend to use to reach your vision. Regardless of the level, a strategy answers the question “how.”
How will we succeed?
Want More? Deep Dive Into the “Build Your Plan” How-To Guide.
Action | Who is Involved | Tools & Techniques | Estimated Duration |
---|---|---|---|
Develop your strategic framework and define long-term strategic objectives/priorities | Executive Team Planning Team | Strategy Comparison Chart Strategy Map | Leadership Offsite: 1 – 2 days |
Set short-term SMART organizational goals and measures | Executive Team Planning Team | Strategy Comparison Chart Strategy Map | Leadership Offsite: 1 – 2 days |
Select which measures will be your key performance indicators | Executive Team and Strategic Director | Strategy Map | Follow Up Offsite Meeting: 2-4 hours |
If your team wants to take the next step in the SWOT analysis, apply the TOWS Strategic Alternatives Matrix to your strategy map to help you think about the options you could pursue. To do this, match external opportunities and threats with your internal strengths and weaknesses, as illustrated in the matrix below:
External Opportunities (O) | External Threats (T) | |
---|---|---|
Internal Strengths (S) | SO Strategies that use strengths to maximize opportunities. | ST Strategies that use strengths to minimize threats. |
Internal Weaknesses (W) | WO Strategies that minimize weaknesses by taking advantage of opportunities. | WT Strategies that minimize weaknesses and avoid threats. |
Evaluate the options you’ve generated, and identify the ones that give the greatest benefit, and that best achieve the mission and vision of your organization. Add these to the other strategic options that you’re considering.
Long-Term Strategic Objectives are long-term, broad, continuous statements that holistically address all areas of your organization. What must we focus on to achieve our vision? Check out examples of strategic objectives here. What are the “big rocks”?
Outcome: Framework for your plan – no more than 6. You can use the balanced scorecard framework, OKRs, or whatever methodology works best for you. Just don’t exceed 6 long-term objectives.
Once you have formulated your strategic objectives, you should translate them into goals and measures that can be communicated to your strategic planning team (team of business leaders and/or team members).
You want to set goals that convert the strategic objectives into specific performance targets. Effective strategic goals clearly state what, when, how, and who, and they are specifically measurable. They should address what you must do in the short term (think 1-3 years) to achieve your strategic objectives.
Organization-wide goals are annual statements that are SMART – specific, measurable, attainable, responsible, and time-bound. These are outcome statements expressing a result to achieve the desired outcomes expected in the organization.
Outcome: clear outcomes for the current year..
Key Performance Indicators (KPI) are the key measures that will have the most impact in moving your organization forward. We recommend you guide your organization with measures that matter. See examples of KPIs here.
Outcome: 5-7 measures that help you keep the pulse on your performance. When selecting your Key Performance Indicators (KPIs), ask, “What are the key performance measures we need to track to monitor if we are achieving our goals?” These KPIs include the key goals you want to measure that will have the most impact on moving your organization forward.
To move from big ideas to action, creating action items and to-dos for short-term goals is crucial. This involves translating strategy from the organizational level to individuals. Functional area managers and contributors play a role in developing short-term goals to support the organization.
Before taking action, decide whether to create plans directly derived from the strategic plan or sync existing operational, business, or account plans with organizational goals. Avoid the pitfall of managing multiple sets of goals and actions, as this shifts from strategic planning to annual planning.
Department/functional goals, actions, measures and targets for the next 12-24 months
Now in your Departments / Teams, you need to create goals to support the organization-wide goals. These goals should still be SMART and are generally (short-term) something to be done in the next 12-18 months. Finally, you should develop an action plan for each goal.
Keep the acronym SMART in mind again when setting action items, and make sure they include start and end dates and have someone assigned their responsibility. Since these action items support your previously established goals, it may be helpful to consider action items your immediate plans on the way to achieving your (short-term) goals. In other words, identify all the actions that need to occur in the next 90 days and continue this same process every 90 days until the goal is achieved.
1 Increase new customer base. |
1.1 Reach a 15% annual increase in new customers. (Due annually for 2 years) |
1.1.1 Implement marketing campaign to draw in new markets. (Marketing, due in 12 months) |
1.1.1.1 Research the opportunities in new markets that we could expand into. (Doug) (Marketing, due in 6 months) |
1.1.1.1.1 Complete a competitive analysis study of our current and prospective markets. (Doug) (Marketing, due in 60 days) |
1.1.1.2 Develop campaign material for new markets. (Mary) (Marketing, due in 10 months) |
1.1.1.2.1 Research marketing methods best for reaching the new markets. (Mary) (Marketing,due in 8 months) |
Want more? Dive Into the “Managing Performance” How-To Guide.
Action | Who is Involved | Tools & Techniques | Estimated Duration |
---|---|---|---|
Establish implementation schedule | Planning Team | 1-2 hours | |
Train your team to use OnStrategy to manage their part of the plan | HR Team, Department Managers & Teams | 1 hr per team member | |
Review progress and adapt the plan at Quarterly Strategy Reviews (QBR) | Department Teams + Executive Team | Department QBR: 2 hrs Organizational QBR: 4 hrs |
Implementation is the process that turns strategies and plans into actions in order to accomplish strategic objectives and goals.
Once your resources are in place, you can set your implementation schedule. Use the following steps as your base implementation plan:
Monthly strategy meetings don’t need to take a lot of time – 30 to 60 minutes should suffice. But it is important that key team members report on their progress toward the goals they are responsible for – including reporting on metrics in the scorecard they have been assigned.
By using the measurements already established, it’s easy to make course corrections if necessary. You should also commit to reviewing your Key Performance Indicators (KPIs) during these regular meetings. Need help comparing strategic planning software ? Check out our guide.
Never lose sight of the fact that strategic plans are guidelines, not rules. Every six months or so, you should evaluate your strategy execution and strategic plan implementation by asking these key questions:
Guidelines for your strategy review.
The most important part of this meeting is a 70/30 review. 30% is about reviewing performance, and 70% should be spent on making decisions to move the company’s strategy forward in the next quarter.
The best strategic planners spend about 60-90 minutes in the sessions. Holding meetings helps focus your goals on accomplishing top priorities and accelerating the organization’s growth. Although the meeting structure is relatively simple, it does require a high degree of discipline.
Strategic planning frequently asked questions, read our frequently asked questions about strategic planning to learn how to build a great strategic plan..
Strategic planning is when organizations define a bold vision and create a plan with objectives and goals to reach that future. A great strategic plan defines where your organization is going, how you’ll win, who must do what, and how you’ll review and adapt your strategy..
Your strategic plan needs to include an assessment of your current state, a SWOT analysis, mission, vision, values, competitive advantages, growth strategy, growth enablers, a 3-year roadmap, and annual plan with strategic goals, OKRs, and KPIs.
A strategic planning process should take no longer than 90 days to complete from start to finish! Any longer could fatigue your organization and team.
There are four overarching phases to the strategic planning process that include: determining position, developing your strategy, building your plan, and managing performance. Each phase plays a unique but distinctly crucial role in the strategic planning process.
Prior to starting your strategic plan, you must go through this pre-planning process to determine your organization’s readiness by following these steps:
Ask yourself these questions: Are the conditions and criteria for successful planning in place now? Can we foresee any pitfalls that we can avoid? Is there an appropriate time for our organization to initiate this process?
Develop your team and schedule. Who will oversee the implementation as Chief Strategy Officer or Director? Do we have at least 12-15 other key individuals on our team?
Research and Collect Current Data. Find the following resources that your organization may have used in the past to assist you with your new plan: last strategic plan, mission, vision, and values statement, business plan, financial records, marketing plan, SWOT, sales figures, or projections.
Finally, review the data with your strategy director and facilitator and ask these questions: What trends do we see? Any obvious strengths or weaknesses? Have we been following a plan or just going along with the market?
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What is strategic plan management?
10 steps in the strategic planning process.
Plans are worthless, but planning is everything. - Dwight D. Eisenhower
It’s that time again.
Every three to five years, most larger organizations periodically plan for the future. Many times strategic planning documents are shelved and forgotten until the next cycle begins. On the other hand, many smaller and newer organizations, propelled by urgency, may not devote the necessary time and energy to the strategic planning process.
Only 63% of businesses plan more than a year out. They fail to see that — contrary to Alice in Wonderland’s Cheshire cat — “any way” does not take you there.
For all organizations, a more rigorous annual planning process is critical for driving future success, profitability, value, and impact.
John Kotter, a former professor at Harvard Business School and noted expert on innovation says, “ Strategy should be viewed as a dynamic force that constantly seeks opportunities, identifies initiatives that will capitalize on them, and completes those initiatives swiftly and efficiently.”
There’s hardly a better case that can be made for dynamic planning than in the tech industry, where mergers and acquisitions are accelerating exponentially. Companies need to be nimble enough to navigate rapid change . In this case, planning should occur quarterly.
Strategic planning is an ongoing process by which an organization sets its forward course by bringing all of its stakeholders together to examine current realities and define its vision for the future.
It examines its strengths and weaknesses, resources available, and opportunities. Strategic planning seeks to anticipate future industry trends . During the process, the organization creates a vision, articulates its purpose, and sets strategic goals that are long-term and forward-focused.
Those strategic goals inform operational goals and incremental milestones that need to be reached. The operational plan has clear objectives and supporting initiatives tied to metrics to which everyone is accountable . The plan should be agile enough to allow for recalibrating when necessary and redistributing resources based on internal and external forces.
The output of the planning process is a document that is shared across the enterprise.
Strategic planning isn’t just for companies. At BetterUp, strategic planning is one of the skills that we identify, track, and develop within the Whole Person Model . For individuals, strategic planning is the ability to think through ways to achieve desired outcomes. Just as strategic planning helps organizations realize their goals for the future, it helps individuals grow and achieve goals in a unified direction.
Working backward from the desired outcome, effective strategic planning consists of coming up with the steps we need to take today in order to get where we want to be tomorrow.
While no plan is infallible, people who develop this skill are good at checking to make sure that their actions are in alignment with the outcomes that they want to see in the future. Even when things don’t go according to plan, their long-term goals act as a “North star” to get them back on course. In addition, envisioning desired future states and figuring out how to turn them into reality enhances an individual’s sense of personal meaning and motivation.
Whether we’re talking about strategic planning for the company or the individual, strategic plans can go awry in a variety of ways including:
The extent to which that document is shelved until the next planning cycle or becomes a dynamic map of the future depends on the people responsible for overseeing the execution of the plan.
"Most people think of strategy as an event, but that’s not the way the world works," according to Harvard Business School Professor Clayton Christensen. "When we run into unanticipated opportunities and threats, we have to respond. Sometimes we respond successfully; sometimes we don’t. But most strategies develop through this process. More often than not, the strategy that leads to success emerges through a process that works 24/7 in almost every industry."
Strategic business management is the ongoing process by which an organization creates and sustains a successful roadmap that moves the company in the direction it needs to move, year after year, for long-term success. It spans from research and formulation to execution, evaluation, and adjustment. Given the pace of change, strategic management is more relevant and important than ever for assigning measurable goals and action steps
Many organizations fail because they don’t have the strategic management team at the table right from the beginning of the planning process. A strategic plan is only as good as its ability to be executed and sustained.
A strategic management initiative might be driven by an internal group — many companies have an internal strategy team — or an outside consulting firm. Ultimately company leaders need to own executing and sustaining the strategy.
In this Harvard Business Review article, Ron Carucci from consulting firm Navalent reports that 61% of executives in a 10-year longitudinal study felt they were not prepared for the strategic challenges they faced upon being appointed to senior leadership roles. Lack of commitment to the plan is also a contributing factor. In addition, leaders attending to quarterly targets, crisis management , and reconciling budgets often consider the execution of a long-term strategy a low priority.
A dedicated strategic management team works with those senior leaders and managers throughout the organization to communicate, coordinate and evaluate progress against goals. They tie strategic objectives to day-to-day operational metrics throughout the enterprise.
A good strategic management group can assist in creating a culture of empowerment and learning . It holds regular meetings with employees. It sets a clear agenda and expectations to make the strategic plan real and compelling to the organization through concrete objectives, results, and timelines.
Strategy development is a lot of work, but the benefits are lasting. After all, as the saying goes, "If you fail to plan, you plan to fail." Taking the time for review and planning activities has the following benefits:
Begin by articulating the organization's vision for the future. Ask, "What would success look like in five years?" Create a mission statement describing organizational values and how you intend to reach the vision. What values inform and determine mission, vision, and purpose?
Purpose-driven strategic goals articulate the “why” of what the corporation is doing. It connects the vision statement to specific objectives, drawing a line between the larger goals and the work that teams and individuals do.
This stage includes identifying an organization’s strategic position.
Gathering data from internal and external environments and respective stakeholders takes place at this time. Involving employees and customers in the research.
The task is to gather market data through research. One of the most critical components of this stage is a comprehensive SWOT analysis that involves gathering people and bringing perspectives from all stakeholders to determine:
Strengths and weaknesses — In this stage, planners identify the company’s assets that contribute to its current competitive advantage and/or the likelihood of a significant increase in the organization’s market share in the future. It should be an objective assessment rather than an inflated perspective of its strengths.
An accurate assessment of weaknesses requires looking outward at external forces that can reveal new opportunities as well as threats. Consider the massive shift in multiple industries whose strategy has been disrupted by the COVID-19 pandemic. While it was disastrous to the airline and restaurant industries’ business models , tech companies were able to seize the opportunity and address the demands of remote work.
Michael Porter’s book Competetive Strategy: Techniques for Analyzing Industries and Competitors claims that there are five forces at work in an industry that influence that industry’s ability to develop a competitive strategy. Since the book was published in 1979, organizations have turned to Porter’s theory to create their strategic framework.
Here are the 5 forces (and key questions) that determine the competitive strategy for most industries.
Considering the factors above, determine the company’s value through financial forecasting . While almost certainly to become a moving target influenced by the five forces, a forecast can assign initial anticipated measurable results expected in the plan or ROI: profits/cost of investment.
The above research and assessment will help an organization to set goals and priorities. Too often an organization’s strategic plan is too broad and over-ambitious. Planners need to ask, ”What kind of impact are we seeking to have, and in what time frame?” They need to drill down to objectives that will have the most impact.
This next phase of operational planning consists of creating strategic objectives and initiatives. Kaplan and Norton posit in their balanced scorecard methodology that there are four perspectives for consideration in identifying the conditions for success. They are interrelated and must be evaluated simultaneously.
It’s a team effort. The success of the plan is in direct proportion to the organization’s commitment to inform and engage the entire workforce in strategy execution. People will only be committed to strategy implementation when they're connected to the organization's goals. With everyone pulling in the same direction, cross-functional decision-making becomes easier and more aligned.
A strategy map is a powerful tool for illustrating the cause-effect of those perspectives and connecting them to between 12 and 18 strategic objectives. Since most people are visual learners, the map provides an easy-to-understand diagram for everyone in the organization creating shared knowledge at all levels.
Following the development of strategic objectives, strategic initiatives are determined. These are the actions the organization will take to reach those objectives. They may relate initiatives related to factors such as scope, budget, raising brand awareness, product development, and employee training.
Strategic initiatives inform SMART goals to which metrics are assigned to evaluate performance. These measures cascade from senior management to management to front-line workers. At this stage, the task is to create goals that are specific, measurable, attainable, relevant, and time-based informing the operational plan.
Benchmarks are established against so that performance can be measures, and a time frame is created. Key performance indicators (KPI’s) are assigned based on organizational goals. These indicators align workers’ performance and productivity with long-term strategic objectives.
Assessment of whether the plan has been successful . It measures activities and progress toward objectives and allows for the creation of improved plans and objectives in order to improve overall performance .
Think of strategic planning as a circular process beginning and ending with evaluation. Adjust a plan as necessary. The pace at which review of the plan is necessary may be once a year for many organizations or quarterly for organizations in rapidly evolving industries.
The strategic planning meeting may have a reputation for being just another to-do, but it might be time to take a second look. With the right action plan and a little strategic thinking, you can reinvigorate your business environment and start planning for success.
It's that time to get excited about the future again.
Discover how targeted coaching can enhance your strategic insight and execution across all levels of your organization.
Meredith Betz is a Betterup Fellow Coach. As an organizational consultant and Executive Coach, Meredith's work focuses on leaders, teams, and the dynamics in the systems in which they live and work. She helps people become more influential and exhibit executive presence. Meredith is a certified Conscious Business Coach who helps leaders to exercise empathy and lead in a way that is consistent with their values. She gives them the tools to communicate and negotiate effectively with their stakeholders. Meredith recently co-wrote a memoir with a 103-year-old Estonian man who lived through the Nazi and Soviet occupations of Estonia in the 1940s. It was a profound experience. A seminal book for her is Man's Search for Meaning by Viktor Frankl, an Austrian Holocaust survivor and psychiatrist.
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Because so many businesses lack in these regards, you can get ahead of the game by using strategic planning. In this article, we will explain what the strategic planning process looks like and the steps involved.
In the simplest terms, the strategic planning process is the method that organizations use to develop plans to achieve overall, long-term goals.
This process differs from the project planning process, which is used to scope and assign tasks for individual projects, or strategy mapping , which helps you determine your mission, vision, and goals.
The strategic planning process is broad—it helps you create a roadmap for which strategic objectives you should put effort into achieving and which initiatives would be less helpful to the business.
Before you begin the strategic planning process, it is important to review some steps to set you and your organization up for success.
This preparation phase sets the foundation for all work going forward. You need to know where you are to determine where you need to go and how you will get there.
Involve the right stakeholders from the start, considering both internal and external sources. Identify key strategic issues by talking with executives at your company, pulling in customer insights, and collecting industry and market data. This will give you a clear picture of your position in the market and customer insight.
It can also be helpful to review—or create if you don’t have them already—your company’s mission and vision statements to give yourself and your team a clear image of what success looks like for your business. In addition, review your company’s core values to remind yourself about how your company plans to achieve these objectives.
To get started, use industry and market data, including customer insights and current/future demands, to identify the issues that need to be addressed. Document your organization's internal strengths and weaknesses, along with external opportunities (ways your organization can grow in order to fill needs that the market does not currently fill) and threats (your competition).
As a framework for your initial analysis, use a SWOT diagram. With input from executives, customers, and external market data, you can quickly categorize your findings as Strengths, Weaknesses, Opportunities, and Threats (SWOT) to clarify your current position.
An alternative to a SWOT is PEST analysis. Standing for Political, Economic, Socio-cultural, and Technological, PEST is a strategic tool used to clarify threats and opportunities for your business.
As you synthesize this information, your unique strategic position in the market will become clear, and you can start solidifying a few key strategic objectives. Often, these objectives are set with a three- to five-year horizon in mind.
Use PEST analysis for additional help with strategic planning.
Once you have identified your current position in the market, it is time to determine objectives that will help you achieve your goals. Your objectives should align with your company mission and vision.
Prioritize your objectives by asking important questions such as:
Objectives should be distinct and measurable to help you reach your long-term strategic goals and initiatives outlined in step one. Potential objectives can be updating website content, improving email open rates, and generating new leads in the pipeline.
Now it's time to create a strategic plan to reach your goals successfully. This step requires determining the tactics necessary to attain your objectives and designating a timeline and clearly communicating responsibilities.
Strategy mapping is an effective tool to visualize your entire plan. Working from the top-down, strategy maps make it simple to view business processes and identify gaps for improvement.
Truly strategic choices usually involve a trade-off in opportunity cost. For example, your company may decide not to put as much funding behind customer support, so that it can put more funding into creating an intuitive user experience.
Be prepared to use your values, mission statement, and established priorities to say “no” to initiatives that won’t enhance your long-term strategic position.
Once you have the plan, you’re ready to implement it. First, communicate the plan to the organization by sharing relevant documentation. Then, the actual work begins.
Turn your broader strategy into a concrete plan by mapping your processes. Use key performance indicator (KPI) dashboards to communicate team responsibilities clearly. This granular approach illustrates the completion process and ownership for each step of the way.
Set up regular reviews with individual contributors and their managers and determine check-in points to ensure you’re on track.
The final stage of the plan—to review and revise—gives you an opportunity to reevaluate your priorities and course-correct based on past successes or failures.
On a quarterly basis, determine which KPIs your team has met and how you can continue to meet them, adapting your plan as necessary. On an annual basis, it’s important to reevaluate your priorities and strategic position to ensure that you stay on track for success in the long run.
Track your progress using balanced scorecards to comprehensively understand of your business's performance and execute strategic goals.
Over time you may find that your mission and vision need to change — an annual evaluation is a good time to consider those changes, prepare a new plan, and implement again.
Achieve your goals and monitor your progress with balanced scorecards.
As you continue to implement the strategic planning process, repeating each step regularly, you will start to make measurable progress toward achieving your company’s vision.
Instead of constantly putting out fires, reacting to the competition, or focusing on the latest hot-button initiative, you’ll be able to maintain a long-term perspective and make decisions that will keep you on the path to success for years to come.
Use a strategy map to turn your organization's mission and vision into actionable objectives.
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Implement the strategic planning process to make measurable progress toward achieving your company’s vision and make decisions that will keep you on the path to success for years to come.
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Strategic planning is the art of creating specific business strategies, implementing them, and evaluating the results of executing the plan, in regard to a company’s overall long-term goals or desires. It is a concept that focuses on integrating various departments (such as accounting and finance, marketing, and human resources) within a company to accomplish its strategic goals. The term strategic planning is essentially synonymous with strategic management.
The concept of strategic planning originally became popular in the 1950s and 1960s, and enjoyed favor in the corporate world up until the 1980s, when it somewhat fell out of favor. However, enthusiasm for strategic business planning was revived in the 1990s and strategic planning remains relevant in modern business.
CFI’s Course on Corporate & Business Strategy is an elective course for the FMVA Program.
The strategic planning process requires considerable thought and planning on the part of a company’s upper-level management. Before settling on a plan of action and then determining how to strategically implement it, executives may consider many possible options. In the end, a company’s management will, hopefully, settle on a strategy that is most likely to produce positive results (usually defined as improving the company’s bottom line) and that can be executed in a cost-efficient manner with a high likelihood of success, while avoiding undue financial risk.
The development and execution of strategic planning are typically viewed as consisting of being performed in three critical steps:
In the process of formulating a strategy, a company will first assess its current situation by performing an internal and external audit. The purpose of this is to help identify the organization’s strengths and weaknesses, as well as opportunities and threats ( SWOT Analysis ). As a result of the analysis, managers decide on which plans or markets they should focus on or abandon, how to best allocate the company’s resources, and whether to take actions such as expanding operations through a joint venture or merger.
Business strategies have long-term effects on organizational success. Only upper management executives are usually authorized to assign the resources necessary for their implementation.
After a strategy is formulated, the company needs to establish specific targets or goals related to putting the strategy into action, and allocate resources for the strategy’s execution. The success of the implementation stage is often determined by how good a job upper management does in regard to clearly communicating the chosen strategy throughout the company and getting all of its employees to “buy into” the desire to put the strategy into action.
Effective strategy implementation involves developing a solid structure, or framework, for implementing the strategy, maximizing the utilization of relevant resources, and redirecting marketing efforts in line with the strategy’s goals and objectives.
Any savvy business person knows that success today does not guarantee success tomorrow. As such, it is important for managers to evaluate the performance of a chosen strategy after the implementation phase.
Strategy evaluation involves three crucial activities: reviewing the internal and external factors affecting the implementation of the strategy, measuring performance, and taking corrective steps to make the strategy more effective. For example, after implementing a strategy to improve customer service, a company may discover that it needs to adopt a new customer relationship management (CRM) software program in order to attain the desired improvements in customer relations.
All three steps in strategic planning occur within three hierarchical levels: upper management, middle management, and operational levels. Thus, it is imperative to foster communication and interaction among employees and managers at all levels, so as to help the firm to operate as a more functional and effective team.
The volatility of the business environment causes many firms to adopt reactive strategies rather than proactive ones. However, reactive strategies are typically only viable for the short-term, even though they may require spending a significant amount of resources and time to execute. Strategic planning helps firms prepare proactively and address issues with a more long-term view. They enable a company to initiate influence instead of just responding to situations.
Among the primary benefits derived from strategic planning are the following:
This is often the most important benefit. Some studies show that the strategic planning process itself makes a significant contribution to improving a company’s overall performance, regardless of the success of a specific strategy.
Communication is crucial to the success of the strategic planning process. It is initiated through participation and dialogue among the managers and employees, which shows their commitment to achieving organizational goals.
Strategic planning also helps managers and employees show commitment to the organization’s goals. This is because they know what the company is doing and the reasons behind it. Strategic planning makes organizational goals and objectives real, and employees can more readily understand the relationship between their performance, the company’s success, and compensation. As a result, both employees and managers tend to become more innovative and creative, which fosters further growth of the company.
The increased dialogue and communication across all stages of the process strengthens employees’ sense of effectiveness and importance in the company’s overall success. For this reason, it is important for companies to decentralize the strategic planning process by involving lower-level managers and employees throughout the organization. A good example is that of the Walt Disney Co., which dissolved its separate strategic planning department, in favor of assigning the planning roles to individual Disney business divisions.
An increasing number of companies use strategic planning to formulate and implement effective decisions. While planning requires a significant amount of time, effort, and money, a well-thought-out strategic plan efficiently fosters company growth, goal achievement, and employee satisfaction.
Thank you for reading CFI’s guide to Strategic Planning. To keep learning and advancing your career, the additional CFI resources below will be useful:
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You don’t need dozens of strategic goals.
Many strategic plans aren’t strategic, or even plans. To fix that, try a six step process: first, identify key stakeholders. Second, identify a specific, very important key stakeholder: your target customer. Third, figure out what these stakeholders want from you. Fourth, figure out what you want from them. Fifth, design your strategy around these requirements. Sixth, focus on continuously improving this plan.
Why is it that when a group of managers gets together for a strategic planning session they often emerge with a document that’s devoid of “strategy”, and often not even a plan ?
Published: 03 January, 2024
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Table of Contents
Organizations use Strategic Planning to gather all their stakeholders to evaluate the collection of current circumstances and decide upon their ongoing goals and benchmarks. They decide upon long-term objectives and establish a vision for the company’s future.
The efforts behind an organization’s Strategic Planning Processes are vital to its success, and yet, while many organizations acknowledge they need to do this kind of planning, they often don’t understand how to make it a reality. In this article, we explain the reasons behind Strategic Planning and how to make your Strategic Planning Process as powerful as possible.
Strategic planning is a systematic process wherein the leaders of an organization articulate their vision for the future and delineate the goals and objectives that will guide the trajectory of the organization.
Strategic planning is a process of defining an organization’s direction and making decisions on allocating its resources to pursue this direction . It involves creating a long-term plan that outlines the organization’s vision, mission, values, and objectives, as well as the strategies and tactics that will be used to achieve them.
Strategy is often misunderstood, which is surprising because fundamentally it’s a pretty basic concept. Strategy is a clearly expressed direction and a verified plan on how to get there. Your Strategic Planning Process formalizes the steps you’ll take to decide on your plan. The Strategic Planning Process facilitates using a Strategic Execution Framework that articulates where you’ll invest in innovation and where you can cut costs.
As far as business development planning is concerned, your Strategic Execution Framework is a vital tool for driving innovation, but first you must define the process you’ll undertake to determine how you and your team see the future of your organization. In this article, we discuss how to create your Strategic Plan and define its relationship to other concepts and documents that direct your business and its activities.
While it’s true that every business is different and must develop their own processes, we believe there are some process of strategic planning stepsthat benefit all organizations.
Below are our recommendations for the steps to take when undergoing your Strategic Planning Process, along with the questions we suggest you answer during each specific step.
Related: Strategic Goals: Examples, Importance, Definitions and How to Set Them
1) apple strategic plan process.
These examples demonstrate how strategic planning is a dynamic and integral part of the business processes of leading companies. They highlight the importance of a well-defined vision, rigorous analysis, adaptability, and innovation in the strategic planning process.
An easy way to distinguish your company’s Tactical Planning from your Strategic Planning is to separate your wants from your HOWs.
In your Strategic Planning, you identify what you WANT for the company. These are big-picture dreams (achievable, but big ) that are your definition of success. In your Tactical Planning, you identify the HOW for reaching those dreams, including the smaller necessary steps.
Inspire specific actions | Identify general concerns and interests | |
Short term | Long term | |
Specific results to achieve | Broad but realistic goals |
Each kind of planning is vital for securing the organization’s future, but they require different sorts of attention and philosophy, and teams that are good at planning one way may not necessarily be good at the other kind of planning.
Your Strategic Planning Process will of course be deeply connected to your Business Purpose .
We like to think of Business Purpose in broad terms, choosing especially to think of a business’s role in massive transformation. Embedded within a Business Purpose is the Business Plan that directs operations and how a company delivers value to its customers.
What is the relationship between your Strategic Planning and your Business Purpose? One feeds into the other. Your Business Purpose must point to a larger impact you’ll have on the people who purchase your goods and services, and your Strategic Planning takes into account how you’ll grow and expand that Purpose as you reach more customers more successfully.
Strategic planning and business planning are two distinct processes that are often used interchangeably, but they have some key differences.
Strategic planning is a top-level process that focuses on determining the direction of an organization over the long term. It involves setting goals, determining the key resources and actions necessary to achieve those goals, and allocating those resources in a way that best serves the organization’s future. The outcome of strategic planning is typically a long-term strategic plan that outlines the organization’s vision, mission, values, and objectives.
Business planning , on the other hand, is a more tactical process that focuses on the implementation of specific initiatives and projects to support the organization’s long-term goals. Business plans typically outline the steps necessary to launch a new product, enter a new market, or achieve a specific objective. They may also include budgets, marketing plans, and other operational details.
In short, strategic planning is about setting the direction for an organization, while business planning is about implementing specific initiatives to support that direction. Both processes are important for the success of an organization and should be used in conjunction to ensure that resources are allocated effectively and that the organization is moving in the right direction.
Imagine this scenario: A warehouse full of goods sits, unsold and unmoved. A collection of brilliant people languishes at desks all day. Outside, the world spins and changes. It’s ready for what these people could do, can do, and yet nothing happens. Needs remain unmet. Progress is halted. Everyday life takes several backwards steps. This is what your business will look like without proper Strategic Planning.
Strategic Planning forces you to consider your Strategic Objectives and critically compare them to the resources you have available. As you continuously evaluate the circumstances of your business and your customers, your Strategic Plan evolves to match your goals and business capabilities.
The process involved pushes decision-makers to practice Strategic Thinking . It limits wasteful spending, especially when upper-level managers are willing to forgo pet projects in favor of operations with a broader use and appeal.
Strategic Planning is important because it directs your resources to efficiently meet your overall Business Goals. Without Strategic Planning, you are likely to waste resources, make conflicting decisions, or fail to grow your business to its greatest potential.
Most businesses find value in reviewing their Strategic Plan every three years. This allows enough time to pass that you can evaluate the success of previous plans, reflect on the achievement of your Strategic Goals, consider developments outside your organization that affect your business, and begin formulating new goals that will become the next version of your plans.
When businesses first begin, they often have too many fires burning at once. They remain focused on existing today rather than planning for tomorrow. Most entrepreneurs remember those stressful early days of starting their businesses and can understand why formalities like Strategic Plans can fall by the wayside. We believe if your business lasts longer than a year it’s important to develop a plan for the future. Think of Strategic Planning as a celebration of a first anniversary—a sign that you’re poised to continue moving forward for years to come.
However, Strategic Planning is not a one-off event that is over once the cookies are all gone and the room clears. Your Strategic Planning team should meet regularly to measure how effective the plans are at helping you reach your Strategic Goals. Ad hoc subcommittees can play a role in gathering evidence to ensure that your plans remain appropriate, especially if conditions change.
For example, we recommended a close review of Strategic Plans and Strategic Goals once the COVID-19 pandemic made it clear that business was going to be affected at least short- to mid-term. We continue to recommend teams regularly revisit their Strategic Plans with global circumstances in mind to recognize opportunities and prepare for challenges.
As we’ve mentioned, there are many benefits of Strategic Planning . Some of those benefits include:
What is a business without Strategic Planning? In most cases, it’s not much, nor is it long for the world. While it’s possible to accidentally find success without much planning, most successful businesses are a result of careful thought mixed with the urge to pounce on the opportunity.
What prepares you to pounce?
Your Strategic Planning and the processes that make it possible.
A key objective of any business strategy is to improve operational efficiencies...
Understanding the intricate levels of strategy is crucial for any organization aiming...
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Master these 20 strategic frameworks and models to build a robust strategy foundation for your business's success. Contact us for more information!
Strategic frameworks are designed to help organizations develop an action plan to achieve their goals. There are a lot of strategic planning models out there, which is why we pulled together a list of 20 of the most popular ones and describe the scenario that they are most useful.
ClearPoint Strategy offers an innovative platform that simplifies the process of implementing these models, ensuring that your organization can effectively plan, execute, and monitor its strategies.
What is the definition of strategic framework.
A strategic framework is a structure designed to help organizations develop an action plan to achieve their goals. This entails using various strategic planning models to guide the organization toward effective strategy implementation and goal realization, tailored to specific scenarios where they are most effective.
Essentially, it serves as a blueprint that organizations follow to map out their strategic direction and actions required to achieve their objectives.
Do any of these situations sound familiar?
If you can identify with one of these scenarios, this article is for you!
Read through each of the models or find the ones you're looking for from the list below and jump right to them. Then stick around for some insight on how you can make the most of whatever strategic framework you choose—and increase the likelihood of its success. (Hint: It’s all about performance tracking.)
1. the balanced scorecard.
The Balanced Scorecard is a strategy management framework created by Drs. Robert Kaplan and David Norton.
It takes into account your:
There are many ways you can create a Balanced Scorecard, including using a program like Excel , Google Sheets, or PowerPoint or using reporting software. For the sake of example, the screenshot below is from ClearPoint’s reporting software.
This is just one of the many “views” you’d be able to see in scorecard software once your BSC was complete. It gives you high-level details into your measures and initiatives and allows you to drill down into each by clicking on them.
At a glance, you can tell what the RAG status of each objective, measure, or initiative is. (Green indicates everything is going as planned, while yellow and red indicate that there are various degrees of trouble with whatever is being looked at.)
All in all, a Balanced Scorecard is an effective, proven way to get your team on the same page with your strategy.
Read our blog on A Full & Exhaustive Balanced Scorecard Example.
A strategy map is a visual tool designed to clearly communicate a strategic plan and achieve high-level business goals.
Strategy mapping is a major part of the Balanced Scorecard (though it isn’t exclusive to the BSC) and offers an excellent way to communicate the high-level information across your organization in an easily-digestible format.
A strategy map offers a host of benefits:
Read our blog on A Strategy Map Template For Medium-Sized Companies.
A SWOT analysis (or SWOT matrix) is a high-level model used at the beginning of an organization’s strategic planning. It is an acronym for “strengths, weaknesses, opportunities, and threats.” Strengths and weaknesses are considered internal factors , and opportunities and threats are considered external factors .
Below is an example SWOT analysis from the Queensland, Australia, government:
Using a SWOT analysis as part of your strategic business model helps an organization identify where they’re doing well and in what areas they can improve.
If you’re interested in reading more, this Business News Daily article offers some additional details about each area of the SWOT analysis and what to look for when you create one.
With ClearPoint Strategy , you can use AI to perform a SWOT analysis on your company. Try our SWOT AI tool here.
4. the pest model.
Like SWOT, PEST is also an acronym—it stands for “political, economic, sociocultural, and technological.” Each of these factors is used to look at an industry or business environment, and determine what could affect an organization’s health.
The PEST model is often used in conjunction with the external factors of a SWOT analysis. You may also run into Porter’s Five Forces (see #7 below), which is a similar take on examining your business from various angles.
You’ll occasionally see the PEST model with a few extra letters added on. For example, PESTEL (or PESTLE) indicates an organization is also considering “environmental” and “legal” factors. STEEPLED is another variation, which stands for “sociocultural, technological economic, environmental, political, legal, education, and demographic.”
5. gap planning.
Gap planning is also referred to as a “Need-Gap Analysis,” “Need Assessment,” or “the Strategic-Planning Gap.” It is used to compare where an organization is now, where it wants to be, and how to bridge the gap between. It is primarily used to identify specific internal deficiencies.
In your gap planning research, you may also hear about a “change agenda” or “shift chart.” These are similar to gap planning, as they both take into consideration the difference between where you are now and where you want to be along various axes. From there, your planning process is about how to ‘close the gap.’
The chart below, for example, demonstrates the difference between the projected and desired sales of a mock company:
Blue Ocean Strategy is a strategic planning model that emerged in a book by the same name in 2005. The book—titled “Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant”—was written by W. Chan Kim and Renée Mauborgne, professors at the European Institute of Business Administration (INSEAD).
The idea behind Blue Ocean Strategy is for organizations to develop in “uncontested market space” (e.g. a blue ocean) instead of a market space that is either developed or saturated (e.g. a red ocean). If your organization is able to create a blue ocean, it can mean a massive value boost for your company, its buyers, and its employees.
For example, Kim and Mauborgne explain via their 2004 Harvard Business Review article how Cirque du Soleil didn’t attempt to operate as a normal circus, and instead carved out a niche for itself that no other circus had ever tried.
Below is a simple comparison chart from the Blue Ocean Strategy website that will help you understand if you’re working in a blue ocean or a red ocean:
Porter’s Five Forces is an older strategy execution framework (created by Michael Porter in 1979) built around the forces that impact the profitability of an industry or a market. The five forces it examines are:
The amount of pressure on each of these forces can help you determine how future events will impact the future of your company.
The VRIO framework is an acronym for “ v alue, r arity, i mitability, o rganization.” This strategic planning process relates more to your vision statement than your overall strategy. The ultimate goal in implementing the VRIO model is that it will result in a competitive advantage in the marketplace.
Here’s how to think of each of the four VRIO components:
Once you answer these four questions, you’ll be able to formulate a more precise vision statement to help carry you through all the additional strategic elements in your plan.
The Malcolm Baldrige National Quality Award is “the highest level of national recognition for performance excellence that a U.S. organization can receive.” Created in 1987, the goal of Baldrige is to help organizations innovate and improve, while achieving their mission and vision.
The award is currently open to manufacturing, service, small business, nonprofit, government, education, and healthcare sectors.
When applying to win the Baldrige award at the national level, organizations undergo a competitive process that involves the implementation of the Baldrige framework.
The framework outlines the “Baldrige Criteria For Performance Excellence,” where organizations must demonstrate achievement and improvement to an independent board of examiners in these seven areas:
To implement the Baldrige framework in your organization, start with two questionnaires that help you self-assess based on the seven Baldrige Criteria categories, and get a snapshot of your strengths and opportunities for improvement.
The strategic planning model of choice for Google, Intel, Spotify, Twitter, LinkedIn, and many other Silicon Valley successes, the OKR framework , is one of the more straightforward strategic planning tools. It’s designed to create alignment and engagement around measurable goals by clearly defining:
The strategic planning model of choice for many businesses—including Google, Intel, Spotify, Twitter, LinkedIn, and many other Silicon Valley successes— the OKR framework is also effective because goals are continually set, tracked, and re-evaluated so organizations can quickly adapt when needed. This is a fast-paced, iterative approach that flips the traditional top-down strategic models. The RACI matrix is a helpful visual for defining the role each person in your organization has for projects and processes, ensuring it aligns with their OKRs.
11. hoshin planning.
The Hoshin Planning approach aligns your strategic goals with your projects and tasks to ensure that efforts are coordinated. This strategic management model is less focused on measures and more on goals and initiatives.
Some sources cite up to seven steps in the Hoshin Planning model, but the four most critical are:
You visualize your objectives, measures and targets, measure programs, and action items in a Hoshin Planning matrix. Four directional quadrants (north, south, east, west) inform each other and demonstrate alignment.
The issue-based strategic model is oriented in the present and projects into the future. It aims to identify the major challenges your organization faces now —in other words, you start with the problems to iron out issues before expanding, shifting your strategy, etc.
This is typically a short-term (6-12 months), internally-focused process. Issue-based planning is ideal for young or resource-restricted organizations.
The leadership team or stakeholders identify the major issues and goals as a first step. Next, your organization will create action plans to address the issues, including budget allocation.
From there, you will execute and track progress. After an issues-based plan has been implemented and the major issues you identified are resolved, then your organization might consider shifting to a broader, more complex strategic management model.
Goal-based strategic planning is the reverse of issue-based. This approach works backward from the future to the present. It all starts with your organization’s vision.
By nature, vision statements are aspirational and forward-thinking, but they need specifics in order to be realized. Goal-based planning tackles that challenge by setting measurable goals that align with your vision and strategic plan.
Next, you define time frames for goal achievement. This is a long-term strategic planning tool, so goal time frames are typically about three to five years.
From there, stakeholders will create action plans for each goal and begin tracking and measuring progress.
14. alignment strategic planning model.
Similar to issue-based planning, the alignment model focuses on first looking internally to develop a strategy. This model is designed to sync the organization’s internal operations with its strategic goals.
Your strategic planning will start by identifying a goal and analyzing which operations or resources need to be aligned with that goal.
Then you’ll identify which parts of operations are working well and which are not, brainstorming ideas from the successful aspects on how to address problems.
Finally, you’ll create a series of proposed changes to operations or processes to achieve goals that will create the desired strategic alignment.
The alignment strategic planning model is particularly useful when a company needs to refine its objectives or address ongoing challenges or inefficiencies that are blocking progress.
The organic model takes an unconventional approach because it focuses on the organization’s vision and values, versus plans and processes. With this model, a company uses “natural,” self-organizing systems that originate from its values and then leverages its own resources to achieve goals, conserve funds, and operate effectively.
In the simplest form, there are three basic steps to follow when implementing the organic model of strategic planning:
What type of company would the organic strategic planning model work best for? If your organization has a large, diverse group of stakeholders that need to find common ground, a vision that will take a long time to achieve, and a strong strategic emphasis on vision and values (instead of structure and procedures), this may be the right model for you.
It would also be beneficial for younger organizations that need to gain funding without presenting a formal strategic plan.
Similar to the organic model, real-time strategic planning is a fluid, nontraditional system. It’s primarily used by organizations that need to be more reactive, and perform strategic planning in “real time.”
For these companies, detailed, long-term plans tend to become irrelevant within the typical three- to five-year planning cycle because the environment they operate in rapidly changes. Many nonprofits use this model—for example, a disaster relief agency needs the ability to respond quickly and adapt its strategy to immediately address a crisis.
Real-time strategic planning involves three levels of strategy: organizational, programmatic, and operational. For the first level, you’ll define the organization’s mission, vision, market position, competitors, trends, etc. Then, the programmatic strategy requires research into the external environment to identify approaches and offerings that would help the organization achieve its mission.
The research should cover opportunities, threats, competitive advantages, and other points to spur strategic brainstorming.
The final operational level analyzes internal processes, systems, and personnel to develop a strategy that addresses “in-house” strengths and weaknesses. Looking at all three levels as a whole, strategy leaders can form criteria for developing, testing, implementing, and adapting strategies on an ongoing basis, allowing for quick and thoughtful responses when needed.
In planning for their own future, too few organizations take the time to consider the multitude of external changes that could take place that would impact their plans.
A healthcare company that fails to anticipate certain regulatory actions, an energy company that ignores the possibility of rising oil prices, and a global organization that hasn’t examined the potential for supply chain disruptions may all be impacted by those changes to some degree if they happened. And it isn’t just about mitigating the possible risks; it’s also about pursuing potential opportunities.
Scenario planning involves examining the variable elements of your environment, evaluating them for plausibility and impact, and factoring those scenarios that are most relevant into your decision-making. Two to five scenarios is the ideal number—this lets you explore a variety of themes without getting mired down in too many possibilities.
Other frameworks (like SWOT or PESTLE ) can be useful in developing those scenarios.
You can use scenario planning at the individual and departmental levels, but it is especially useful for organizational strategy planning. If your company is part of an industry that tends to be volatile or your organization itself has had to navigate costly, unexpected changes in the past, scenario planning is an excellent tool for developing your strategic vision.
It can also be used to foster managerial thinking, encouraging leaders to consider the broadest range of future possibilities, and provide guidance when evaluating new projects or investment proposals.
The Ansoff Matrix was developed to help organizations plan their strategies for growth. It is a 2x2 matrix with product on one axis and markets on the other axis. Depending on the box you are in, you may choose a different strategy for growth:
The level of risk increases with each strategy, with market penetration being the least risky and diversification being the most risky.
The Ansoff Matrix is useful for organizations that are actively trying to grow. Not only does it help you analyze and clarify your current strategy, but it also helps evaluate the risks associated with moving to a new strategy.
SWOT and PEST are often used in combination with the Ansoff Matrix; business strengths and weaknesses as well as external factors should all play into your choice of growth strategy.
Developed by McKinsey consultants, this strategic business planning model emphasizes the importance of aligning an organization’s key internal elements to achieve strategy. Those key elements are:
The first step in applying the 7S model is to examine the current interconnectedness of these elements within your own organization; are there areas of weakness or inconsistencies? For example, you might discover that your skills training for employees is hindered by antiquated workflows and technology.
Once you understand the relationships between these elements, you can work toward creating synergies that better support your strategy, whatever it may be.
The 7S model is best used during a strategy change, or whenever a major shift is occurring in any one of the seven areas.
Constraints analysis is predicated on the idea that there are clear obstacles to strategy execution within your organization. Eliminating the weak link (or at least improving performance in that area) is the key to better results.
To apply constraints analysis correctly, you must first identify the constraint, or the main factor that limits your success. Process bottlenecks, faulty thinking, labor shortages, an unhealthy company culture, market conditions, or any number of other issues could be the culprit.
While you might identify more than one problem area, constraints analysis focuses on improving one area at a time to achieve quick, impactful results.
That’s a great question—and the answer isn’t cut and dried. Some of these frameworks have been around longer than others, or have been used in various case studies in different ways. And sometimes managers are more comfortable with one over another, for any number of reasons.
We recommend determining which of these strategic planning models applies most to your organization’s way of thinking. For example, if you still need to work out your vision statement, it may be wise to begin with the VRIO framework and then move to something like the Balanced Scorecard to track and manage your ongoing strategy.
If you are set on pitching a particular strategic planning model to management, be prepared to give your boss or board of directors an example of another successful company that has utilized that particular model. An actual demonstration of success will make a somewhat abstract concept become more concrete.
If you are evaluating different approaches, I would recommend thinking about both creating your strategic plan and also executing on your plan. It doesn’t do you any good to have a strategic plan and not put it to use.
Is there ever a need to switch strategic planning models.
Yes. As your organization grows and changes, the frameworks you use to manage your strategy will change too.
There are a lot of options out there—even more than the 20 we’ve explored above! It’s reasonable to expect that the framework you use today won't necessarily match your organization’s needs 10 or even five years from now.
The added complexities of a growing business may make it necessary to rethink your approach to strategy planning. For example, the Balanced Scorecard might work well for tracking organizational and departmental plans, but you may eventually want a system that easily extends to the individual level. For that, you might add OKRs to your management framework.
You can also combine strategic planning models. Some organizations use elements of two or more frameworks to create a custom approach. Great! Every organization manages differently; your planning model should reflect your approach. But it’s always easier to have a starting point, which is why these frameworks exist in the first place.
Framework choices—and even strategies themselves—are flexible, but what’s not flexible is the need for software to track your performance.
Tracking is the only way to know if your strategic plan is working—if the data shows your actions aren’t making an impact, you need to make a change. While most organizations understand that tracking itself is a necessity, they’re using the wrong tools to do it.
The most common alternative to strategy software is Excel. Excel may be a familiar and affordable tool, but it’s costing your organization dearly in ways you may not have thought of:
For decision-makers, Excel-based reports are difficult to digest, which negatively impacts decision-making. Excel was built for numbers but it wasn’t built to easily show analysis and recommendations or real-time data, all of which are essential components of tracking. On top of that, spreadsheets simply make it harder to understand performance data. As a result, your leadership team isn’t getting all the information they need to make strategic decisions.
For the strategy and reporting teams, the use of spreadsheets and the manual collection and updating they require is a tremendous waste of time and a constant headache. There is also inherent risk—even with the most meticulous and careful management—in manual updating and version control across large and elaborate spreadsheets.
No doubt about it, Excel is, in fact, a somewhat costly tool. There is a better way—software exists that automates data updating and collects everything in one place for faster, safer, and better reporting.
Strategy software like ClearPoint was built exclusively for strategy performance reporting. So not only does it solve the above issues but it actually improves the likelihood of executing your strategy successfully.
Here’s why:
Another important benefit: ClearPoint will improve your strategy team’s productivity by simplifying the strategy reporting process. (One ClearPoint customer was able to reduce the cost of its monthly management board reporting by 70%!) To learn more about how ClearPoint addresses the day-to-day challenges of strategy reporting, read our Ultimate Guide on the subject.
You’ve probably already invested in some type of specialized software for your finance team, HR, marketing, and other departments—all of which are likely using the software to good effect. But if an investment in strategy software has the potential to improve your organization’s overall performance even slightly, imagine the impact it would have on your effectiveness or profitability. Isn’t that an idea worth exploring?
If you’d like to learn more about ClearPoint, we’d love to talk with you! ClearPoint works with any and all of the strategic planning models mentioned above (the same can’t be said for other strategy software tools), so no matter which direction you’re planning to go, we can go with you. See how ClearPoint can help you achieve more— reach out to us today !
Ted is a Founder and Managing Partner of ClearPoint Strategy and leads the sales and marketing teams.
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Do you know what your organization’s strategy is? How much time do you dedicate to developing that strategy each month?
If your answers are on the low side, you’re not alone. According to research from Bridges Business Consultancy , 48 percent of leaders spend less than one day per month discussing strategy.
It’s no wonder, then, that 48 percent of all organizations fail to meet at least half of their strategic targets. Before an organization can reap the rewards of its business strategy, planning must take place to ensure its strategy remains agile and executable .
Here’s a look at what strategic planning is and how it can benefit your organization.
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Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees on the organization’s goals, and ensure those goals are backed by data and sound reasoning.
It’s important to highlight that strategic planning is an ongoing process—not a one-time meeting. In the online course Disruptive Strategy , Harvard Business School Professor Clayton Christensen notes that in a study of HBS graduates who started businesses, 93 percent of those with successful strategies evolved and pivoted away from their original strategic plans.
“Most people think of strategy as an event, but that’s not the way the world works,” Christensen says. “When we run into unanticipated opportunities and threats, we have to respond. Sometimes we respond successfully; sometimes we don’t. But most strategies develop through this process. More often than not, the strategy that leads to success emerges through a process that’s at work 24/7 in almost every industry.”
Strategic planning requires time, effort, and continual reassessment. Given the proper attention, it can set your business on the right track. Here are three benefits of strategic planning.
Related: 4 Ways to Develop Your Strategic Thinking Skills
1. create one, forward-focused vision.
Strategy touches every employee and serves as an actionable way to reach your company’s goals.
One significant benefit of strategic planning is that it creates a single, forward-focused vision that can align your company and its shareholders. By making everyone aware of your company’s goals, how and why those goals were chosen, and what they can do to help reach them, you can create an increased sense of responsibility throughout your organization.
This can also have trickle-down effects. For instance, if a manager isn’t clear on your organization’s strategy or the reasoning used to craft it, they could make decisions on a team level that counteract its efforts. With one vision to unite around, everyone at your organization can act with a broader strategy in mind.
The decisions you make come with inherent bias. Taking part in the strategic planning process forces you to examine and explain why you’re making each decision and back it up with data, projections, or case studies, thus combatting your cognitive biases.
A few examples of cognitive biases are:
One cognitive bias that may be more difficult to catch in the act is confirmation bias . When seeking to validate a particular viewpoint, it's the tendency to only pay attention to information that supports that viewpoint.
If you’re crafting a strategic plan for your organization and know which strategy you prefer, enlist others with differing views and opinions to help look for information that either proves or disproves the idea.
Combating biases in strategic decision-making requires effort and dedication from your entire team, and it can make your organization’s strategy that much stronger.
Related: 3 Group Decision-Making Techniques for Success
Having a strategic plan in place can enable you to track progress toward goals. When each department and team understands your company’s larger strategy, their progress can directly impact its success, creating a top-down approach to tracking key performance indicators (KPIs) .
By planning your company’s strategy and defining its goals, KPIs can be determined at the organizational level. These goals can then be extended to business units, departments, teams, and individuals. This ensures that every level of your organization is aligned and can positively impact your business’s KPIs and performance.
It’s important to remember that even though your strategy might be far-reaching and structured, it must remain agile. As Christensen asserts in Disruptive Strategy , a business’s strategy needs to evolve with the challenges and opportunities it encounters. Be prepared to pivot your KPIs as goals shift and communicate the reasons for change to your organization.
Strategic planning can benefit your organization’s vision, execution, and progress toward goals. If strategic planning is a skill you’d like to improve, online courses can provide the knowledge and techniques needed to lead your team and organization.
Strategy courses can range from primers on key concepts (such as Economics for Managers ), to deep-dives on strategy frameworks (such as Disruptive Strategy ), to coursework designed to help you strategize for a specific organizational goal (such as Sustainable Business Strategy ).
Learning how to craft an effective, compelling strategic plan can enable you to not only invest in your career but provide lasting value to your organization.
Do you want to formulate winning strategies for your organization? Explore our portfolio of online strategy courses and download the free flowchart to determine which is the best fit for you and your goals.
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Organizations are always looking for ways to improve. It’s how they stay relevant and, more importantly, profitable. But you don’t get better just by desiring it. It takes strategy, and then a model to implement that strategy.
No surprise, there are models to accomplish this called strategic planning models. They’re great for businesses, big and small, and assist in project planning and implementing organizational goals in a thorough and structured manner. Once you have decided on an objective, then you must plan a model that will execute it successfully.
There are quite a few strategic planning models, and they can be very different from one another. Often the type of organization will dictate which strategic planning model is used. After a brief explanation, we’ll dig into five of the more popular ones. You’re sure to find a strategic planning model among them that works for you.
It’s easy to define what a strategic planning model is because the definition is embedded in its name! A strategic planning model is how an organization takes its strategy and creates a plan to implement it to improve operations and better meet its goals.
How they get to this point requires identifying what the company wants, and how it hopes to achieve those goals in the near term. Once they have that target clearly defined, then it’s a matter of working backward to figure out how to get there.
This, of course, is easy to say and extremely difficult to do. Sometimes the complexity involved in trying to put together a plan to strategically meet your goals can feel like it needs a strategic planning model all its own! That’s why there are classic models already in place to help you accomplish your goals.
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If all this sounds like a fancy way of saying you need a plan to achieve your goals, well, you’re right. But that doesn’t dismiss its usefulness in achieving those objectives. No matter if you’re a startup or an established, market-dominant brand, if you don’t have a plan to reach your goals, you’re bound to fail. That could be losing market share or shuttering, neither of which is a path forward for a viable enterprise.
The benefits of having a strategic planning model are manyfold. For one, it provides a clear path that the organization uses for operational planning which determines what work will be done by everyone on the staff. Having all departments work together for a common goal is powerful. The opposite is disastrous. You can’t hit your target, whether it’s a year or five or 10 years in the future if everyone doesn’t know what it is and how you plan to get there.
Think of it as being focused. There are a lot of distractions that occur every day in every business. Knowing what your topline is helps you prioritize and keep your energies directed on the overall strategy for the company and the right strategic initiatives .
Another positive of having a strategic planning model is that it improves your knowledge of what works best in the organization. You know your strengths and weaknesses, as well as get a clear picture of where you are in the marketplace. It even helps you get a clear idea of who your competition is and how you can differentiate yourself from them.
We’ll get to the examples in a moment, but regardless of which you choose as most appropriate for your needs, there are best practices to make sure you succeed. When doing the research, assemble a group that is diverse but also appropriate for the goal. Diversity brings more ideas to the table. You’ll want between six and 10 people.
Once you start, give it time. The team needs to come up with creative solutions, and then season them, to make sure they’re the right course of action. You might want to remove the team from the work site. A change of environment, without the distractions of the office, can help them settle into a more contemplative state where they can come up with better ideas.
Of course, you need to get buy-in from the team or else your hard work will be for naught. Once you have them fully on board, build trust. You want everyone to participate, and to do so in a free and open discussion. That means from the boss on down. It might help to hire an outside facilitator to manage the process.
When you have a plan, it must be realistic. If you can’t execute it, then you’ve not done your job. Therefore, it must be actionable, with clearly defined goals , tasks, responsibilities outlined, accountability, deadlines—and all this must be clear to everyone involved. But that doesn’t mean you can’t be flexible. Plans change, so it’s best to not be rigid about it.
Finally, don’t think of creating a strategic planning model for your business as a one-and-done process. Not only must your plan be open to editing as internal and external forces demand, but these meetings should be regularly scheduled. Think of it as a process. Meet monthly if you can, or at least quarterly. You can discuss how the plan is being executed and hold people accountable for what they’ve been tasked to execute. This is how you ensure your plan becomes a reality.
As we said, there are many models that we encourage you to explore. You never know what you might find. For our purposes, let’s narrow the scope down to five with proven results.
This strategic alignment model (SAM) is among the most used. It’s made up of two parts—strategic fit and functional integration. What that means is that the model aligns business and IT strategies . To do this requires identifying the key goals of an organization and then what the steps are to reach those goals. The plan must maximize the process to best achieve those goals.
There are four perspectives to guide you in this model:
Here, business strategy is important, but only the launching pad.
The balanced scorecard (BSC) is made up of clear communications on what is being accomplished. It aligns the work with the overall strategy and prioritizes, measures and monitors progress. The idea is that the model balances strategy with financial measurements. One of the reasons to use BSC is that it helps you see the connections between various parts of your strategic management and planning .
Using BSC means exploring four different aspects of your organization.
We’ve created a free balanced scorecard template for Excel to help you get started with this tool.
Also called the simple model, this is often used by newer organizations that don’t have a history of strategic planning to help guide them in making decisions. But it’s also a fine model for any organization that doesn’t have the time or resources to spend on deep and extensive strategic planning .
First, you establish the mission statement for your organization, if you don’t already have one. That is a summary of your goals that are created to inspire and transform the organization. Next, you want to figure out what goals must be achieved to fulfill the mission statement. From that, break down the tasks that will reach those goals. Schedule, monitor and report on your progress.
The blue ocean strategy is designed to take your product to a market where there is no or little competition. Therefore, the research is heavily tilted towards finding a niche that can be exploited for profit, such as where few businesses are offering a product people have expressed an interest in, and there is little to no pricing pressure.
Unlike red ocean strategy, which describes a market that is saturated and products are threatened by pricing pressure that could threaten the business, blue ocean strategy looks for markets where there’s room to grow. You’re looking to capture new demand, where your product is either unique or so much better as to make competition irrelevant.
The issue-based model (also called goal-based) is the next step up from the basic strategic planning model. It builds on the basic model and is intended for businesses that are more established. Thus, it’s more in-depth and possibly the most popular of all the models we’ve highlighted.
To begin, use a SWOT analysis, which is an acronym standing for strengths, weaknesses, opportunities and threats. It helps you identify and analyze internal and external factors that impact your business, product or service. Next comes the mission statement, then planning, creating a budget and a schedule to implement it. After a year, you’ll want to monitor the results and report on its progress , making adjustments as needed.
A PEST analysis consists of identifying any political, economic, social and technological factors that can affect a business. It’s especially useful for larger organizations, such as multinational companies whose strategic project management initiatives are the most affected by these types of issues.
It’s important to conduct a PEST analysis before or as you create a strategic plan, so you don’t fail to acknowledge any significant political, economic, social or technological risk that could affect your organization and its ability to achieve its goals.
This is a strategic planning model that ensures that all levels within an organization understand what the organization’s strategic objectives are. Then those strategic objectives are broken down into specific goals and action plans for employees at all levels of the organization, from executives to production floor employees.
Another important aspect of this strategic planning model is that it involves constant performance tracking and communication between employees and their supervisor which helps track the completion of strategic goals and evaluate their feasibility. This strategic planning model is mostly used by manufacturers who implement lean manufacturing best practices, but it can be used by any type of business.
This is a fundamental strategic planning model that should be used by any business. It allows business owners, executives and other decision-makers to understand the competitive forces that shape an industry and what they mean for a business.
This model analyzes the rivalry among existing companies, the threat of substitute products, the threat of new competitors, the bargaining power of suppliers and the bargaining power of buyers. Together, these five variables create the business environment to which your organization’s strategy should adapt.
Now, here’s a quick overview of some tools that can help you as you go through the process of planning your organizational strategy.
A strategic plan is a document that describes the strategic direction of an organization by outlining its vision, mission and long-term strategic objectives. It’s a fundamental tool when defining the strategy of your organization for the next three to five years.
The main purpose of a strategic plan is to provide high-level goals for the organization as a whole, known as strategic objectives, which will guide the efforts of the various departments within the organization.
This free strategic plan template for Word helps you capture some of the most important elements of your strategic plan such as your business goals, mission and vision statements, a SWOT analysis, and the operational actions that will be taken to achieve your objectives.
A strategy map is a tool that can help you visualize the strategic objectives of your organization and the relationship between them and group them into the four balanced scorecard perspectives: financial, customer, internal business processes and learning and growth.
These four categories help you establish the relationship between strategic objectives. For example, a strategic objective that’s related to improving your internal business processes will have a positive impact on the customer and financial areas.
A strategic roadmap is a tool that can help you turn your strategic objectives into action plans. To create a strategic roadmap, you’ll need to think about all the different tasks that your team will need to execute to reach its strategic objectives.
Next, you’ll need to estimate the duration of each of those tasks and based on that information, create a timeline. Strategic roadmaps are usually created with Gantt charts, which allow you to create a visual timeline that shows all the different actions your organization will take to achieve its strategic objectives.
A SWOT matrix is a simple yet effective strategic planning chart with four quadrants that allow you to identify the strengths, weaknesses, opportunities and threats of your organization. These four categories describe the internal and external factors that may affect your business’s ability to compete in the market either positively or negatively. Here’s what they mean.
Strengths refer to the internal capabilities of your business which might give it an advantage over its competitors, such as, for example, lower production costs or intellectual property. Weaknesses on the other hand describe the areas of improvement for your business, which can be anything like having higher operational costs than your competitors or lack of brand awareness.
Opportunities refer to the positive external factors such as an underserved market niche or reduced costs of supplies and finally, threats are negative external conditions such as new technologies or new competitors that might replace your product. You must consider these factors before making the strategic plan of your organization so you don’t steer your business in the wrong direction. Our SWOT analysis template helps you document the strengths, weaknesses, opportunities and threats of your business or project.
VRIO stands for value, rarity, imitability and organization, which are the four lenses the VRIO framework uses to determine whether your organization has a competitive organizational strategy. It can help you audit the competitiveness of your business and find weaknesses in your operational strategy .
By analyzing your organization from these four perspectives, you’ll be able to determine whether your business provides value to customers in a way that’s rare and costly to imitate for your competitors. If so, you have a competitive business strategy that can be sustained over time.
An Ansoff matrix or product-market expansion grid is a strategic planning tool that can help you gauge the risk-reward ratio of growth strategies that involve new products and new markets. It’s got four quadrants that show four different strategies: market penetration, product development, market development and diversification.
It’s a great tool to help you decide which of these strategies is the best for your business. You can create a separate Ansoff matrix for different business units or product lines.
A GE matrix or McKinsey matrix is a tool that helps executives and other decision-makers prioritize which business units within an organization should be invested further and which should be divested based on the industry attractiveness and strength of each business unit. It can also be used for prioritizing what projects are approved and executed by an organization, which is a decision that’s made by executives and the board of directors, as advised by project managers and project management offices (PMOs), who are responsible for their success and ensuring they bring the benefits that are expected.
In simple terms, a GE matrix contrasts the potential benefits of an industry with the current positioning of a business unit to determine whether it will be profitable to invest in it. To do so, you’ll need to analyze variables such as the market size, growth rate, competition level and industry trends. It’s ideal for aligning your projects and business strategy .
Now that you know about strategic planning models, and have chosen one to reach your organization’s objective, you have a lot of work ahead of you. ProjectManager is an award-winning tool that organizes strategic plans, so you can execute, monitor and report on their progress.
You have decided on your target, now you need to know how you get there. That’s as simple as breaking down the goal into realistic tasks, or steps, that end at your objective. You can use a work breakdown structure or collect them on a spreadsheet. Now the fun starts. Upload your tasks into our software, and you get to the planning part of your strategic planning model.
Add duration to your tasks, and they instantly populate the Gantt chart tool timeline. Now, you can see your whole project from start to finish. Add priorities, so your team knows what’s important, and break up the project into phases with our milestone feature. There’s a space on each task to write descriptions that guide your team, and they can collaborate by commenting with one another at the task level to facilitate productivity.
There are many ways to work, and we have many tools to get that work done. Besides the Gantt, you can use a task list, calendar or kanban board to manage your work. The board view is especially helpful, as it breaks production into phases and provides transparency into the process, so you can keep traffic flowing and avoid costly bottlenecks.
Part of any strategic planning model isn’t just the planning and execution, but monitoring progress to make sure you’re hitting your targets. We have a real-time dashboard that tracks several project metrics, including project variance, which automatically calculates your planned vs. actual progress.
We’ve created dozens of blogs, templates and guides on project management, operational management and strategic planning. Here’s some content that relates to the strategic planning models and tools we explored above.
ProjectManager is online software made to help teams and projects get better organized. We help you deliver on your strategic plan with tools to help you through every phase of the project. See why tens of thousands of teams are already using our software and take our free 30-day trial today.
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What to read next:
Playing chess without a strong opening is a guaranteed way to disadvantage yourself. Just like in chess, organizations without an adequate strategic planning process are unlikely to thrive and adapt long-term.
The strategic planning process is essential for aligning your organization on key priorities, goals, and initiatives, making it crucial for organizational success.
This article will empower you to craft and perfect your strategic planning process by exploring the following:
By the end of this article, you’ll have the knowledge needed to perfect the key elements of strategic planning. Ready? Let’s begin.
Strategic planning charts your business's course toward success. Using your organization’s vision, mission statement , and values — with internal and external information — each step of the strategic planning process helps you craft long-term objectives and attain your goals with strategic management.
The key elements of strategic planning includes a SWOT analysis, goal setting , stakeholder involvement, plus developing actionable strategies, approaches, and tactics aligned with primary objectives.
In short, the strategic planning process bridges the gap between your organization’s current and desired state, providing a clear and actionable framework that answers: Where are you now? Where do you want to be? How will you get there?
The following strategic planning components work together to create cohesive strategic plans for your business goals. Let’s take a close look at each of these:
Just as a chess player needs a gameplan to reach checkmate, a company needs a solid strategic plan to achieve its goals.
Without a strategic plan, your business will waste precious time, energy, and resources on endeavors that won’t get your company closer to where it needs to be.
Your ideal plan should cover all key strategic planning areas, while allowing you to stay present by measuring success and course-correcting or redefining the strategic direction when necessary. Ultimately, enabling your company to stay future-proof through the creation of an always-on strategy that reflects your company's mission and vision.
An always-on strategy involves continuous environmental scanning even after the strategic plan has been devised, ensuring readiness to adapt in response to quick, drastic changes in the environment.
Let’s dive deeper into the steps of the strategic planning process.
You understand the overall value of implementing a strategic planning process — now let’s put it in practice. Here's our 7-step approach to strategic planning that ensures everyone is on the same page:
The first step of the strategic planning process is understanding your organization’s core elements: vision, mission, and values. Clarifying these will align your strategic plan with your company’s definition of success. Once established, these are the foundation for the rest of the strategic planning process.
Questions to ask:
Read more: What is Mission vs. Vision
Once everyone on the same page about vision, mission, and values, it's time to scan your internal and external environment. This involves a long-term SWOT analysis, evaluating your organization’s strengths, weaknesses, opportunities, and threats.
Internal strengths and weaknesses help you understand where your organization excels and what it could improve. Strengths and weaknesses awareness helps make more informed decisions with your capabilities and resource allocation in mind.
Externally, opportunities and threats in the market help you understand the power of your industry’s customers, suppliers, and competitors. Additionally, consider how broader forces like technology, culture, politics, and regulation may impact your organization.
Prioritization puts the “strategic” in strategic planning process. Your organization’s mission, vision, values, and environmental scan serve as a lens to identify top priorities. Limiting priorities ensures your organization intentionally allocates resources.
These categories can help you rank your strategic priorities:
Next, you establish goals and metrics to reflect your strategic priorities. Purpose-driven, long-term, actionable strategic planning goals should flow down through the organization, with lower-level goals contributing to higher-level ones.
One approach that can help you set and measure your aligned goals is objectives and key results (OKRs). OKRs consist of objectives, qualitative statements of what you want to achieve, and key results, 3-5 supporting metrics that track progress toward your objective.
OKRs ensure alignment at every level of the organization, with tracking and accountability built into the framework to keep everyone engaged. With ambitious, intentional goals, OKRs can help you drive the strategic plan forward.
Get an in-depth look at OKRs with our Ultimate OKR Playbook
The next step of the strategic planning process gets down to the nitty-gritty “how” — developing a clear, practical strategic plan for bridging the gap between now and the future.
To do this, you’ll need to brainstorm short- and long-term approaches to achieving the goals you’ve set, answering a couple of key questions along the way. You must evaluate ideas based on factors like:
From your approaches, you can devise a detailed action plan, which covers things like:
With a detailed action plan like this, you can move from abstract goals to concrete steps, bringing you closer to achieving your strategic objectives.
Writing and communicating your strategic plan involves everyone, ensuring each team is on the same page. Here’s a clear, concise structure you can use to cover the most important strategic planning components:
Finally, it’s time to implement your strategic plan, making sure it's up to date, creating a persistent, always-on strategy that doesn't lag behind. As you get the ball rolling, keep a close eye on your timelines, milestones, and performance targets, and whether these align with your internal and external environment.
Internally, indicators like completions, issues, and delays provide visibility into your process. If any bottlenecks, inefficiencies, or misalignment arises, take corrective action promptly — adjust the plan, reallocate resources, or provide additional training to employees.
Externally, you should monitor changes such as customer preferences, competitive pressures, economic shifts , and regulatory changes. These impact the success of your strategic action plan and may require tweaks along the way.
Remember, implementing a strategic plan isn’t a one-time task — continual evaluation is essential for an always-on strategy. It involves extending beyond planning stages and contextualizing the strategy in real-time, allowing for swift adaptations to changing circumstances to ensure your plan remains relevant.
You can use several frameworks to guide you through the strategic planning process. Some of the most influential ones include:
While strategic planning provides a roadmap for business success, it's not immune to challenges. Recognizing and addressing these is crucial for effective strategy implementation. Let's explore common issues encountered in strategic planning and strategies to overcome them.
Want a quick recap? Watch our summary below
Traditional strategic planning models often follow a linear, annual, and inflexible process that doesn't accommodate quick changes in the business landscape. Strategies formulated this way may quickly become outdated in today's fast-paced environment.
To overcome the rigidity of traditional strategic planning, your organization should integrate continuous environmental scanning processes. This includes monitoring market changes, competitor actions, and technological advancements, ensuring real-time insights inform strategic decision-making. Additionally, adopting agile methodologies allows for iterative planning, breaking down strategies into smaller, manageable components reviewed and adjusted regularly, ensuring adaptability in today's fast-paced landscape.
There's often a significant gap between the strategic objectives and their actual implementation, leading to misalignment, confusion, and inefficiency within the organization.
To bridge the gap, ensure accountability, alignment, and feedback-driven processes across the business. Linking team roles and responsibilities to lower-level objectives can fosters alignment and accountability, whereas aligning these with overarching strategic objectives ensure coherence in execution. To ensure goals are optimized on an ongoing basis, implement a feedback mechanism that continuously evaluates progress against goals, enabling regular adjustments based on market feedback and internal insights.
Traditional planning models rely on historical data and periodic reviews, which might not capture real-time changes or emerging trends accurately. This can result in misaligned strategies unsuitable for the current business landscape.
Leverage advanced analytics tools and AI-driven technologies. Invest in technologies that offer real-time tracking and reporting of key performance indicators, with dashboards and monitoring systems that provide up-to-date insights. These allow you to gather, process, and interpret real-time data for proactive decision-making that aligns with the current business landscape.
The absence of a feedback loop between strategy formulation, execution, and evaluation can impact learning and improvement. Companies might therefore struggle to refine their strategies based on real-time performance insights.
Establish a structured feedback loop encompassing strategy formulation, execution, and evaluation stages. Encourage employees to actively contribute insights on strategy execution, fostering a culture of continuous improvement and adaptation.
Navigating strategic planning goes beyond overcoming challenges. A successful strategic plan requires you to embrace a set of guiding best practices, helping you navigate the development and implementation of your strategic planning process.
With ever-changing business environments, a one-and-done approach to strategic planning is insufficient. Your strategic plan needs to be adaptable to ensure its relevancy and its ability to weather the effects of changing circumstances.
By including voices from across the organization, you can account for varying thoughts, perspectives, and experiences at each step of the strategic planning process, ensuring cross-functional alignment .
Continuous documentation of the strategic management process is crucial in capturing and communicating the key elements of strategic planning. This keeps everyone on the same page and your strategic plan up-to-date and relevant.
Root your decisions in evidence and facts rather than assumptions or opinions. This cultivates accurate insights, improves prioritization, and reduces biased (flawed) decisions.
Your strategic plan can only be successful if everyone is on board with it — company culture supports what you’re trying to achieve. Behaviors, rules, and attitudes optimize the execution of your strategic plan.
Using AI in strategic planning supports the development of an always-on strategy — amplifying strategic agility, conducting comprehensive environmental scans, and expediting planning phases. It can streamline operations, facilitate data-driven decision-making, and provide transparent insights into progress to drive accountability, engagement, and alignment with the strategic plan.
Careful strategy mapping is crucial for any organization looking to achieve its long-term goals while staying true to its mission, vision, and values. The seven steps in the strategic planning process outlined in this article provide a solid framework your organization can follow — from clarifying your organization’s purpose and developing a strategic plan, to implementing, monitoring, and revising performance. These steps will help your company meet goal measurements and create an always-on strategy that's rooted in the present.
It’s important to remember that strategic planning is not a one-time event. To stay effective and relevant, you must continuously monitor and adapt your strategy in response to changing circumstances. This ongoing process of improvement keeps your organization competitive and demonstrates your commitment to achieving your goals.
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As your company navigates today’s competitive landscape, you need an Always-On Strategy to continuously bridge the gap between current and desired business outcomes. Quantive brings together the technology, expertise, and passion to transform your strategy from a static plan to a feedback-driven engine for growth.
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Planning is an important part of most people’s days. Even if you’re the most driven person alive, it’s easy to get sidetracked if you don’t have an action plan.
Maybe you need to train for a marathon and sort the mail, but you binge-watch a new TV show instead. The next day, you’re behind on your training and an important bill goes unread – stalling your health goals and financial plans. And once you’re behind, it’s harder to get ahead.
The same scenario applies to business. Without strategic planning, it’s very difficult to meet long-term goals.
The strategic planning process helps you break your organization’s vision for the future into strategic objectives. You’ll prioritize which strategic goals to focus on, when they should happen, and how you’ll achieve them. This strategic framework drives your operational planning (how you’ll execute this strategic framework).
If you want to know how to apply strategic planning in your business, you’re in the right place. This roadmap will cover the benefits of strategic planning, the strategic planning process, the steps involved, and, most importantly, how to make the long-term goals of your strategic framework a reality.
When should you create a strategic plan, top 6 elements of a strategic plan, how do you adapt strategic planning for your organization’s needs, what is the strategic planning process, how do you chart your strategic path to success.
Successful strategic planning results in a structured business in which your team is united in implementing the strategy execution of your desired outcomes. Here’s how the process helps an organization:
Your strategic framework will ensure that your day-to-day operations bring you closer to your long-term goals. Clarity regarding the strategic goals you want to achieve can help you identify what will (and won’t) help you achieve them.
Strategic planning also helps you better allocate your resources, thanks to a thorough understanding of your organization’s strengths and weaknesses. The process involves analyzing your business processes to find inefficiencies, so you can find ways to streamline workflows and save time, labor, and money.
Strategic planning gives your organization a competitive advantage since it involves thoroughly analyzing your internal strengths and weaknesses. It also considers new opportunities and external threats, helping you identify unique capabilities and areas where the organization can outperform competitors. Moreover, you can anticipate market trends and adapt to changing circumstances more easily.
Identifying and tracking key performance indicators (KPIs) shows exactly how far you’ve progressed in achieving your organization’s goals. These metrics let you measure your organization’s performance against the specific objectives and goals set in your strategic plan.
Tracking your progress using KPIs can also help you communicate where your company is achieving success and how well. Stakeholders want to know these things, and marketing them can make your company a magnet for high-achieving talent.
Strategic planning fosters a systematic and objective decision-making process based on data and evidence – not personal opinions. This prevents cognitive biases from hindering your organization’s growth. Strategic planning encourages a balanced and inclusive decision-making approach by focusing on long-term goals and considering the broader impact of decisions on a diverse set of stakeholders.
No matter what stage of growth your organization is in, successful strategic planning targets your development toward your desired outcomes.
Strategic planning typically captures your vision for your organization’s next three to five years. However, businesses experiencing rapid growth (like small businesses and startups) might need a new strategic plan more frequently, like every two years.
Strategic planning is a continual process. After all, if you don’t adapt to a changing world, you’ll be left behind. Stay on top of changing markets and organizational needs by constantly reevaluating your business strategy, especially when making large organizational changes. You’ll also want to reevaluate your strategic plan once you’ve achieved the initial goals and desired outcomes from your original plan document.
There are six key elements of a good strategic plan:
While these key elements sound similar to a business plan, some crucial differences exist.
A strategic plan outlines your organization’s overall direction, including its vision, mission, long-term goals, and strategies to achieve them. On the other hand, a business plan focuses on specific operational aspects, such as products or services, target markets, and competition, communicating goal-setting and priorities to team members, investors, and key stakeholders. Companies primarily use business plans for management and clarity, especially during the startup phase or when restructuring.
A new organization could create a business plan and use it as a building block of the strategic planning process once it’s more established.
All businesses can reap the benefits of strategic planning at some point in their development. However, the strategic planning process will apply differently depending on your business type.
Below, we’ll go into how to make a strategic plan work depending on the organization type.
The strategic plan’s end result is a roadmap for your organization’s future development. For this reason, startups can especially benefit from the strategic planning process, as they have a large growth potential. Setting long-term goals, metrics, and strategic initiatives keeps startups focused on their desired outcomes and prevents them from being overwhelmed by an undefined future.
But because startups have so much potential, they’ll likely need to adjust their strategic objectives as they make pivots. Many startups have a small team, so they may need to revisit their strategic plan more often than the standard three to five years as they redefine the needs of their organization.
A well-crafted strategic plan offers unique benefits to nonprofits, benefitting those using the nonprofit’s services and the business itself. For one, it enhances donor and stakeholder engagement by showcasing transparency, accountability, and a clear roadmap for achieving impact and fostering trust, confidence, and increased support for the organization’s mission. Secondly, a strategic plan can improve a nonprofit’s resource allocation and efficiency, helping prioritize the initiatives and projects that align with its mission to create maximum impact with limited resources.
Finally, a strategic plan helps nonprofits measure their impact and adapt to changing circumstances. Nonprofits can set measurable objectives and KPIs to track progress and assess initiatives’ effectiveness. This makes it easier to respond to emerging needs and challenges, remain committed to long-term goals, and ensure sustained relevance and success in mission-driven endeavors.
Strategic planning is also useful when embarking on a complex, lengthy project that could take months – or even years – to achieve. When setting long-term goals during the strategic planning process, you’ll likely have some ambitious projects to achieve as a part of your overall business strategy.
A strategic project plan outlines the initiative or project timeline and gives an overview of its desired outcomes. This is especially helpful for long-term project management, where it can be easy to lose sight of your objectives amidst all the moving parts and multiple deadlines.
Also, a clear plan document for your project can help delegate responsibilities as your team changes (for instance, when team members retire or take leaves of absence and when new teammates are hired).
Now that you have an overview of the elements that go into strategic planning, let’s get into the step-by-step methodology needed to make it happen.
While a select leadership group (e.g., a handful of executives) usually completes the strategic planning process, incorporating stakeholder feedback in your decision-making is essential to ensure you’re on the right track.
Strategy development involves creating documentation that communicates your goals. One example is a strategy map , a flowchart of your strategic objectives, and an explanation of how one leads into the next. You can also create a roadmap to provide an overview of your plan’s execution timeline.
You should have a clear action plan with KPIs to measure your desired outcomes before moving into strategy execution. Remember, you can’t move forward without knowing where you’re going and how you’re getting there.
Also, evaluate whether your results align with your organization’s mission. Revise your strategic plan as needed to meet your organization’s changing needs and any updated timeframes.
Keep detailed notes of the challenges, setbacks, and successes you experience during your strategic plan’s time frame. This will improve your execution when it’s time to start the strategic planning process again.
Understanding the mechanics of strategic planning, how it links day-to-day operations to immediate and future objectives— is an important step in achieving your organization’s desired results. Not only will it enable you to manage your resources more effectively, but it will also ensure that your aspirations aren’t left to chance.
However, knowledge is only half the journey. Applying these strategic concepts in a way that aligns with your organization’s unique mission, vision and goals can be a challenge in itself. And that’s where IMD comes in and provide the knowledge and tools needed to help your business create a foundation for secure, long-term success.
Your path to strategic mastery begins here »
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Strategic planning aligns the organization with a common understanding of what they want to achieve and how they will get there with daily operations. It’s taking a company’s vision and breaking it into mid-term and long-term goals. In contrast to strategic planning, business planning focuses on short-term goals. But a strategic plan sets priorities to […]
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Planning is an important part of most people’s days. Even if you’re the most driven person alive, it’s easy to get sidetracked if you don’t have an action plan. Maybe you need to train for a marathon and sort the mail, but you binge-watch a new TV show instead. The next day, you’re behind on […]
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Strategic planning is a process in which an organization's leaders define their vision for the future and identify their organization's goals and objectives. The process includes establishing the sequence in which those goals should be realized so the organization can reach its stated vision.
Strategic planning is forward looking. It differs from traditional business planning, which typically focuses on short-term, tactical goals, such as how a budget is divided up. The time covered by a business plan can range from several months to several years.
The product of strategic planning is a strategic plan. It is often reflected in a plan document or other media. These plans can be easily shared, understood and followed by various people including employees, customers, business partners and investors.
Organizations conduct strategic planning periodically to consider the effect of changing business, industry, and legal and regulatory conditions . A strategic plan may be updated and revised at that time to reflect any strategic changes.
Businesses need direction and organizational goals to work toward. Strategic planning offers that type of guidance. Essentially, a strategic plan is a roadmap to get to business goals . Without such guidance, there is no way to tell whether a business is on track to reach its goals.
The following four aspects of strategy development are worth attention:
While strategic planning has been a cornerstone of organizational management for decades, the landscape of strategic planning has undergone significant shifts in recent years.
Innovations in technology and socioeconomic upheavals, most notably the COVID-19 pandemic, have fundamentally altered the calculus of strategic planning. These modern considerations underscore the evolving nature of strategic planning in today's world.
The advent of the COVID-19 pandemic has starkly highlighted the importance of flexibility and resilience in strategic planning. Organizations worldwide have faced the stark reality that the ability to pivot quickly in response to rapidly changing external conditions is not just advantageous but essential for survival.
This period has reinforced the concept that strategic plans must be living documents -- adaptable, dynamic and responsive to unforeseen challenges and opportunities. The traditional view of strategic planning as a set of fixed guidelines has given way to an understanding of strategic plans as fluid frameworks that guide organizational response to a volatile environment.
The swift pace of technological evolution has made the incorporation of digital transformation strategies a critical component of strategic planning.
Digital capabilities are now at the heart of operational success and competitive differentiation. Organizations can integrate data analytics and AI into strategic planning processes to help them innovate, boost efficiency, enhance customer experiences and maintain a competitive edge .
Modern strategic planning is characterized by an emphasis on agility and the capacity for rapid adaptation. In an era marked by constant change, organizations must be prepared to navigate through a sea of change, adjusting their course in response to market dynamics and environmental shifts.
This necessitates a continuous reassessment of the strategic plan and a willingness to recalibrate goals and tactics in alignment with the evolving external landscape. The agility to adapt strategic priorities swiftly is now a critical competency for organizational resilience and long-term success.
Sustainability and social responsibility have emerged as central considerations in strategic planning. As societal expectations evolve, there is an increasing demand for organizations to align their strategies with environmental, social and governance ( ESG ) criteria.
This alignment reflects a broader commitment to sustainable development and responsible corporate citizenship . Incorporating sustainability and social responsibility into strategic planning not only meets regulatory and societal expectations but also opens new avenues for innovation and connects organizations with eco-conscious consumers and stakeholders .
A strategic plan that resonates with an organization's culture and actively engages employees is more likely to succeed. Cultivating a supportive culture that aligns with the strategic vision is crucial for fostering organizational alignment and buy-in.
Engaging employees in the strategic planning process instills a sense of ownership and commitment to the organization's goals , thereby driving collective effort toward their realization. Modern strategic planning recognizes the value of employee engagement and organizational culture as foundational elements that underpin the successful implementation of strategic objectives.
There are myriad different ways to approach strategic planning depending on the type of business and the granularity required. Most strategic planning cycles can be summarized in these five steps:
Identify. A strategic planning cycle starts with the determination of a business's current strategic position. This is where stakeholders use the existing strategic plan -- including the mission statement and long-term strategic goals -- to perform assessments of the business and its environment. These assessments can include a needs assessment or a SWOT analysis (strengths, weaknesses, opportunities and threats analysis) to understand the state of the business and the path ahead.
Prioritize. Next, strategic planners set objectives and initiatives that line up with the company mission and goals and will move the business toward achieving its goals. There may be many potential goals, so planning prioritizes the most important, relevant and urgent ones. Goals may include a consideration of resource requirements -- such as budgets and equipment -- and they often involve a timeline and business metrics or KPIs for measuring progress.
Develop. This is the main thrust of strategic planning in which stakeholders collaborate to formulate the steps or tactics necessary to attain a stated strategic objective. This may involve creating numerous short-term tactical business plans that fit into the overarching strategy. Stakeholders involved in plan development use various tools such as a strategy map to help visualize and tweak the plan. Developing the plan may involve cost and opportunity tradeoffs that reflect business priorities. Developers may reject some initiatives if they don't support the long-term strategy.
Implement. Once the strategic plan is developed, it's time to put it in motion. This requires clear communication across the organization to set responsibilities, make investments, adjust policies and processes , and establish measurement and reporting. Implementation typically includes strategic management with regular strategic reviews to ensure that plans stay on track.
Update. A strategic plan is periodically reviewed and revised to adjust priorities and reevaluate goals as business conditions change and new opportunities emerge. Quick reviews of metrics can happen quarterly, and adjustments to the strategic plan can occur annually. Stakeholders may use balanced scorecards and other tools to assess performance against goals.
A committee typically leads the strategic planning process. Planning experts recommend the committee include representatives from all areas within the enterprise and work in an open and transparent way where information is documented from start to finish.
The committee researches and gathers the information needed to understand the organization's status and factors that will affect it in the future. The committee should solicit input and feedback to validate or challenge its assessment of the information.
The committee can opt to use one of many methodologies or strategic frameworks that have been developed to guide leaders through this process. These methodologies take the committee through a series of steps that include an analysis or assessment, strategy formulation, and the articulation and communication of the actions needed to move the organization toward its strategic vision.
The committee creates benchmarks that will enable the organization to determine how well it is performing against its goals as it implements the strategic plan. The planning process should also identify which executives are accountable for ensuring that benchmarking activities take place at planned times and that specific objectives are met.
There are no uniform requirements to dictate the frequency of a strategic planning cycle. However, there are common approaches.
Timetables are always subject to change. Timing should be flexible and tailored to the needs of a company. For example, a startup in a dynamic industry might revisit its strategic plan monthly. A mature business in a well-established industry might opt to revisit the plan less frequently.
Strategic planning activities typically focus on three areas: business, corporate or functional. They break out as follows:
In most cases, a strategic plan will involve elements of all three focus areas. But the plan may lean toward one focus area depending on the needs and type of business.
Organizations that are best at aligning their actions with their strategic plans engage in strategic management. A strategic management process establishes ongoing practices to ensure that an organization's processes and resources support the strategic plan's mission and vision statement .
In simple terms, strategic management is the implementation of the strategy . As such, strategic management is sometimes referred to as strategy execution. Strategy execution involves identifying benchmarks, allocating financial and human resources and providing leadership to realize established goals.
Strategic management may involve a prescriptive or descriptive approach . A prescriptive approach focuses on how strategies should be created. It often uses an analytical approach -- such as SWOT or balanced scorecards -- to account for risks and opportunities. A descriptive approach focuses on how strategies should be implemented and typically relies on general guidelines or principles.
Given the similarities between strategic planning and strategic management, the two terms are sometimes used interchangeably.
A strategy map is a planning tool or template used to help stakeholders visualize the complete strategy of a business as one interrelated graphic. These visualizations offer a powerful way for understanding and reviewing the cause-and-effect relationships among the elements of a business strategy.
While a map can be drawn in a number of ways, all strategy maps focus on four major business areas or categories: financial, customer, internal business processes, and learning and growth. Goals sort into those four areas, and relationships or dependencies among those goals can be established.
For example, a strategy map might include a financial goal of reducing costs and a business process goal to improve operational efficiency . These two goals are related and can help stakeholders understand that tasks such as improving operational workflows can reduce company costs and meet two elements of the strategic plan.
A strategy map can help translate overarching goals into an action plan and goals that can be aligned and implemented.
Strategy mapping can also help to identify strategic challenges that might not be obvious. For example, one learning and growth goal may be to increase employee expertise but that may expose unexpected challenges in employee retention and compensation, which affects cost reduction goals.
Effective strategic planning has many benefits. It forces organizations to be aware of the future state of opportunities and challenges. It also forces them to anticipate risks and understand what resources will be needed to seize opportunities and overcome strategic issues.
Strategic planning also gives individuals a sense of direction and marshals them around a common mission. It creates standards and accountability. Strategic planning can enhance operational plans and efficiency. It also helps organizations limit time spent on crisis management , where they're reacting to unexpected changes that they failed to anticipate and prepare for.
Information technology is a key part of developing an effective strategic plan. Look at these eight free IT strategic planning templates that can help make IT a driving force in a business. Learn how to assess an organization's needs and implement a technology strategy and see how to set business goals in these step-by-step guides.
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Strategic planning is an integral part of any business’ success, and it will ensure your business is heading in the right direction. Furthermore, it helps outline your objectives as it's crucial to helping business owners make their everyday decisions.
With the best strategic planning methodology in place, your business will be proactive as opposed to being reactive. You will seamlessly increase your operational efficiency with proper strategic planning and projects. Your profitability and market share will increase significantly. Your business will be more relevant in its respective industry since you will serve your customer base better. However, as important as strategic planning is, many businesses have yet to emulate this opportunity. Also, a single strategic model isn’t better than other models.
So, we’ve come up with the 5 best strategic planning methodologies that will help make your business thrive. But first, let’s see what a strategic planning model is and why it’s important.
It refers to how a business creates a plan and implements it to make its operations better and further meet its business goals. Your business can benefit a great deal by having a well-defined strategic planning model in place.
For instance, a good strategic planning model will ensure all departments of a business work harmoniously. Moreover, it allows businesses to achieve their targets in the long-run.
Every business leader should know the basics of strategic planning to enable them to come up with an appropriate strategic planning model. Such basics include developing your business’ strategic goals, as well as their potential impacts. You have to define your goals while creating your plan. Factor in defining your key goals, long-term goals, operational goals, and company goals. The basics further include crafting strategies for the development of your strategic planning model.
Below are some suitable strategic methodologies you should emulate in your strategic planning process:
The strategic planning methodology is also referred to as the simple strategic planning model. Businesses that utilize this structure include startups or businesses that have little knowledge in strategic planning. Moreover, the model is ideal for smaller companies that lack resources to execute complex strategic planning methodologies.
It also focuses on developing your business’ mission, vision statement and core values. Business leaders can use the model to outline the steps they should take to achieve their business goals. Basic strategic planning methodology can further enable business leaders to monitor the progress of their businesses.
The main advantage of using this strategic planning model is that it helps you create a solid mission statement that perfectly describes why your business exists. Furthermore, you can use it as a resource to select your company’s intermediate goals in regard to what you should accomplish first.
The basic strategic planning methodology helps you create actionable plans that outline the elaborate steps your business should take to implement certain strategies. You can effectively monitor your progress while using this model.
Businesses that start with using basic strategic planning methodology shift to goal-based strategic planning methodology over time. The model is suitable for established organizations or businesses seeking for more complex strategic planning methodologies. It is the most frequently used strategic planning model.
It starts with an analysis of a business’ weaknesses, threats and opportunities. Goal-based strategic planning methodology also focuses on your business’ internal and external factors and threats and competition. Next, you can use the strategic planning model to identify issues and goals which you can use to prioritize your business objectives.
The methodology helps you craft a strong relation between your business’ mission and resources. The model can be a perfect tool for your business, especially if you are striving to fine tune your objectives and identify why you aren’t achieving your goals.
This model helps you outline your business’ resources. It further helps business owners establish the specific aspects of their businesses that are working appropriately, and which aspects need some adjustments. Finally, you can include these adjustments in your business plan. This step is the most important step in making an effective business plan.
The strategic planning methodology doesn’t use linear methodological approaches, unlike other strategic planning models. Organic strategic planning methodology uses an approach that strategic planning experts call story boarding. This approach allows business owners to develop unique business ideas. It can prompt you to be active on matters that affect your business.
The planning models start with clarifying your business’ cultural values through dialogues and storyboarding techniques. Next, the strategic planning methodology focuses on articulating a business’ vision. The accomplishments of this methodology translate into a business’ goals.
This is another common strategic planning methodology to consider. It is more of a strategic planning technique rather than a strategic planning methodology. The methodology is highly effective in identifying issues, goals and external environments. It is useful for businesses that are preparing for a variety of scenarios that are the result of external forces of changes in the business environment.
The strategic planning model starts with establishing vulnerabilities that could possibly affect a business. After identifying possible vulnerabilities , you can look into strategies you can use for responding to the prevailing vulnerabilities.
The strategic planning methodology entails considering your business’ objectives, initiatives and measures. You can develop this model by using programs such as Google Sheets, PowerPoint and Excel. The strategic planning methodology gives you comprehensive details into your business’ initiatives and measures.
The strategic planning methodology is a tool that is used for communicating a strategic plan. The tool is suitable for achieving high-level business goals. It helps communicate-high-level details across your business in an easy-to-understand model. The strategic planning model offers an array of benefits including:
There are many strategic opportunities and complaints you can implement to accomplish your business objectives. Whether you are seeking to reduce complaints in your store by providing better purchase and return policies, or you would like to reduce your production manufacturing costs by implementing better processes and detailed action plans, these strategic planning tools will work for you.
A SWOT analysis is a strategic planning model that businesses can use in the beginning of their strategic planning process.
The strategic planning methodology helps analyze your business’ weaknesses, threats, strengths, and opportunities. Conducting a SWOT analysis is vital to helping you identify your business’ progress and the specific areas you should improve. At the end of the day, managers and staff from human resources need to be on-board with their strategic plan in its entirety for it to be effective, including their SWOT strategy. Here is a breakdown on how to do a SWOT analysis:
SWOT analysis is a perfect methodology to start building a unique and impactful branding and positioning strategy .
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There’s no question that starting and running a business is hard work. But it’s also incredibly rewarding. And, one of the most important things you can do to increase your chances of success is to have a business plan.
A business plan is a foundational document that is essential for any company, no matter the size or age. From attracting potential investors to keeping your business on track—a business plan helps you achieve important milestones and grow in the right direction.
A business plan isn’t just a document you put together once when starting your business. It’s a living, breathing guide for existing businesses – one that business owners should revisit and update regularly.
Unfortunately, writing a business plan is often a daunting task for potential entrepreneurs. So, do you really need a business plan? Is it really worth the investment of time and resources? Can’t you just wing it and skip the whole planning process?
Good questions. Here’s every reason why you need a business plan.
Writing a business plan isn’t about producing a document that accurately predicts the future of your company. The process of writing your plan is what’s important. Writing your plan and reviewing it regularly gives you a better window into what you need to do to achieve your goals and succeed.
You don’t have to just take our word for it. Studies have proven that companies that plan and review their results regularly grow 30 percent faster. Beyond faster growth, research also shows that companies that plan actually perform better. They’re less likely to become one of those woeful failure statistics, or experience cash flow crises that threaten to close them down.
One of the top reasons to have a business plan is to make it easier to raise money for your business. Without a business plan, it’s difficult to know how much money you need to raise, how you will spend the money once you raise it, and what your budget should be.
Investors want to know that you have a solid plan in place – that your business is headed in the right direction and that there is long-term potential in your venture.
A business plan shows that your business is serious and that there are clearly defined steps on how it aims to become successful. It also demonstrates that you have the necessary competence to make that vision a reality.
Investors, partners, and creditors will want to see detailed financial forecasts for your business that shows how you plan to grow and how you plan on spending their money.
When you’re just starting out, there’s so much you don’t know—about your customers, your competition, and even about operations.
As a business owner, you signed up for some of that uncertainty when you started your business, but there’s a lot you can do to reduce your risk . Creating and reviewing your business plan regularly is a great way to uncover your weak spots—the flaws, gaps, and assumptions you’ve made—and develop contingency plans.
Your business plan will also help you define budgets and revenue goals. And, if you’re not meeting your goals, you can quickly adjust spending plans and create more realistic budgets to keep your business healthy.
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A business plan is like a roadmap for your business. It helps you set, track and reach business milestones.
For your plan to function in this way, your business plan should first outline your company’s short- and long-term goals. You can then fill in the specific steps necessary to reach those goals. This ensures that you measure your progress (or lack thereof) and make necessary adjustments along the way to stay on track while avoiding costly detours.
In fact, one of the top reasons why new businesses fail is due to bad business planning. Combine this with inflexibility and you have a recipe for disaster.
And planning is not just for startups. Established businesses benefit greatly from revisiting their business plan. It keeps them on track, even when the global market rapidly shifts as we’ve seen in recent years.
To turn your idea into reality, you need to accurately assess the feasibility of your business idea.
You need to verify:
A business plan forces you to take a step back and look at your business objectively, which makes it far easier to make tough decisions down the road. Additionally, a business plan helps you to identify risks and opportunities early on, providing you with the necessary time to come up with strategies to address them properly.
Finally, a business plan helps you work through the nuts and bolts of how your business will work financially and if it can become sustainable over time.
As your business grows, you’ll have to figure out when to hire new employees, when to expand to a new location, or whether you can afford a major purchase.
These are always major spending decisions, and if you’re regularly reviewing the forecasts you mapped out in your business plan, you’re going to have better information to use to make your decisions.
The other side of those major spending decisions is understanding and monitoring your business’s cash flow. Your cash flow statement is one of the three key financial statements you’ll put together for your business plan. (The other two are your balance sheet and your income statement (P&L).
Reviewing your cash flow statement regularly as part of your regular business plan review will help you see potential cash flow challenges earlier so you can take action to avoid a cash crisis where you can’t pay your bills.
Competitors are one of the factors that you need to take into account when starting a business. Luckily, competitive research is an integral part of writing a business plan. It encourages you to ask questions like:
Finding answers to these questions helps you solidify a strategic market position and identify ways to differentiate yourself. It also proves to potential investors that you’ve done your homework and understand how to compete.
A vital part of starting a business is understanding what your expenses will be and how you will generate revenue to cover those expenses. Creating a business plan helps you do just that while also defining ongoing financial needs to keep in mind.
Without a business model, it’s difficult to know whether your business idea will generate revenue. By detailing how you plan to make money, you can effectively assess the viability and scalability of your business.
Understanding this early on can help you avoid unnecessary risks and start with the confidence that your business is set up to succeed.
A business plan is a great way to document your marketing plan. This will ensure that all of your marketing activities are aligned with your overall goals. After all, a business can’t grow without customers and you’ll need a strategy for acquiring those customers.
Your business plan should include information about your target market, your marketing strategy, and your marketing budget. Detail things like how you plan to attract and retain customers, acquire new leads, how the digital marketing funnel will work, etc.
Having a documented marketing plan will help you to automate business operations, stay on track and ensure that you’re making the most of your marketing dollars.
In order to create a successful business, you need a clear vision and a plan for how you’re going to achieve it. This is all detailed with your mission statement, which defines the purpose of your business, and your personnel plan, which outlines the roles and responsibilities of current and future employees. Together, they establish the long-term vision you have in mind and who will need to be involved to get there.
Additionally, your business plan is a great tool for getting your team in sync. Through consistent plan reviews, you can easily get everyone in your company on the same page and direct your workforce toward tasks that truly move the needle.
A business plan helps you to evaluate your current situation and make realistic projections for the future.
This is an essential step in growing your business, and it’s one that’s often overlooked. When you have a business plan in place, it’s easier to identify opportunities and make informed decisions based on data.
Therefore, it requires you to outline goals, strategies, and tactics to help the organization stay focused on what’s important.
By regularly revisiting your business plan, especially when the global market changes, you’ll be better equipped to handle whatever challenges come your way, and pivot faster.
You’ll also be in a better position to seize opportunities as they arise.
Further Reading: 5 fundamental principles of business planning
An often overlooked purpose of a business plan is as a tool to define success metrics. A key part of writing your plan involves pulling together a viable financial plan. This includes financial statements such as your profit and loss, cash flow, balance sheet, and sales forecast.
By housing these financial metrics within your business plan, you suddenly have an easy way to relate your strategy to actual performance. You can track progress, measure results, and follow up on how the company is progressing. Without a plan, it’s almost impossible to gauge whether you’re on track or not.
Additionally, by evaluating your successes and failures, you learn what works and what doesn’t and you can make necessary changes to your plan. In short, having a business plan gives you a framework for measuring your success. It also helps with building up a “lessons learned” knowledge database to avoid costly mistakes in the future.
Down the road, you might decide that you want to sell your business or position yourself for acquisition. Having a solid business plan is going to help you make the case for a higher valuation. Your business is likely to be worth more to a buyer if it’s easy for them to understand your business model, your target market, and your overall potential to grow and scale.
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By taking the time to create a business plan, you ensure that your business is heading in the right direction and that you have a roadmap to get there. We hope that this post has shown you just how important and valuable a business plan can be. While it may still seem daunting, the benefits far outweigh the time investment and learning curve for writing one.
Luckily, you can write a plan in as little as 30 minutes. And there are plenty of excellent planning tools and business plan templates out there if you’re looking for more step-by-step guidance. Whatever it takes, write your plan and you’ll quickly see how useful it can be.
Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.
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Over the past decade, the global workforce has been continually evolving because of a number of factors. An increasingly competitive business landscape, rising complexity, and the digital revolution are reshaping the mix of employees. Meanwhile, persistent uncertainty, a multigenerational workforce, and a shorter shelf life for knowledge have placed a premium on reskilling and upskilling. The shift to a digital, knowledge-based economy means that a vibrant workforce is more important than ever: research suggests that a very significant percentage of market capitalization in public companies is based on intangible assets—skilled employees, exceptional leaders, and knowledge. 1 Intangible Asset Market Value Study, Ocean Tomo.
We began in 2014 by surveying 1,500 executives about capability building. In 2016, we added 120 L&D leaders at 91 organizations to our database, gathering information on their traditional training strategies and aspirations for future programs. We also interviewed 15 chief learning officers or L&D heads at major companies.
Historically, the L&D function has been relatively successful in helping employees build skills and perform well in their existing roles. The main focus of L&D has been on upskilling. However, the pace of change continues to accelerate; McKinsey research estimates that as many as 800 million jobs could be displaced by automation by 2030.
Employee roles are expected to continue evolving, and a large number of people will need to learn new skills to remain employable. Unsurprisingly, our research confirmed our initial hypothesis: corporate learning must undergo revolutionary changes over the next few years to keep pace with constant technological advances. In addition to updating training content, companies must increase their focus on blended-learning solutions, which combine digital learning, fieldwork, and highly immersive classroom sessions. With the growth of user-friendly digital-learning platforms, employees will take more ownership of their professional development, logging in to take courses when the need arises rather than waiting for a scheduled classroom session.
Such innovations will require companies to devote more resources to training: our survey revealed that 60 percent of respondents plan to increase L&D spending over the next few years, and 66 percent want to boost the number of employee-training hours. As they commit more time and money, companies must ensure that the transformation of the L&D function proceeds smoothly.
All of these trends have elevated the importance of the learning-and-development (L&D) function. We undertook several phases of research to understand trends and current priorities in L&D (see sidebar, “Learning and development—From evolution to revolution”). Our efforts highlighted how the L&D function is adapting to meet the changing needs of organizations, as well as the growing levels of investment in professional development.
To get the most out of investments in training programs and curriculum development, L&D leaders must embrace a broader role within the organization and formulate an ambitious vision for the function. An essential component of this effort is a comprehensive, coordinated strategy that engages the organization and encourages collaboration. The ACADEMIES© framework, which consists of nine dimensions of L&D, can help to strengthen the function and position it to serve the organization more effectively.
One of L&D’s primary responsibilities is to manage the development of people—and to do so in a way that supports other key business priorities. L&D’s strategic role spans five areas (Exhibit 1). 2 Nick van Dam, 25 Best Practices in Learning & Talent Development , second edition, Raleigh, NC: Lulu Publishing, 2008.
Over the years, we have identified and field-tested nine dimensions that contribute to a strong L&D function. We combined these dimensions to create the ACADEMIES framework, which covers all aspects of L&D functions, from setting aspirations to measuring impact (Exhibit 2). Although many companies regularly execute on several dimensions of this framework, our recent research found that only a few companies are fully mature in all dimensions.
One of an L&D executive’s primary tasks is to develop and shape a learning strategy based on the company’s business and talent strategies. The learning strategy seeks to support professional development and build capabilities across the company, on time, and in a cost-effective manner. In addition, the learning strategy can enhance the company culture and encourage employees to live the company’s values.
For many organizations, the L&D function supports the implementation of the business strategy. For example, if one of the business strategies is a digital transformation, L&D will focus on building the necessary people capabilities to make that possible.
Every business leader would agree that L&D must align with a company’s overall priorities. Yet research has found that many L&D functions fall short on this dimension. Only 40 percent of companies say that their learning strategy is aligned with business goals. 6 Human Capital Management Excellence Conference 2018, Brandon Hall Group. For 60 percent, then, learning has no explicit connection to the company’s strategic objectives. L&D functions may be out of sync with the business because of outdated approaches or because budgets have been based on priorities from previous years rather than today’s imperatives, such as a digital transformation.
To be effective, L&D must take a hard look at employee capabilities and determine which are most essential to support the execution of the company’s business strategy. L&D leaders should reevaluate this alignment on a yearly basis to ensure they are creating a people-capability agenda that truly reflects business priorities and strategic objectives.
With new tools and technologies constantly emerging, companies must become more agile, ready to adapt their business processes and practices. L&D functions must likewise be prepared to rapidly launch capability-building programs—for example, if new business needs suddenly arise or staff members require immediate training on new technologies such as cloud-based collaboration tools.
L&D functions can enhance their partnership with business leaders by establishing a governance structure in which leadership from both groups share responsibility for defining, prioritizing, designing, and securing funds for capability-building programs. Under this governance model, a company’s chief experience officer (CXO), senior executives, and business-unit heads will develop the people-capability agenda for segments of the enterprise and ensure that it aligns with the company’s overall strategic goals. Top business executives will also help firmly embed the learning function and all L&D initiatives in the organizational culture. The involvement of senior leadership enables full commitment to the L&D function’s longer-term vision.
After companies identify their business priorities, they must verify that their employees can deliver on them—a task that may be more difficult than it sounds. Some companies make no effort to assess employee capabilities, while others do so only at a high level. Conversations with L&D, HR, and senior executives suggest that many companies are ineffective or indifferent at assessing capability gaps, especially when it comes to senior leaders and midlevel managers.
The most effective companies take a deliberate, systematic approach to capability assessment. At the heart of this process is a comprehensive competency or capability model based on the organization’s strategic direction. For example, a key competency for a segment of an e-commerce company’s workforce could be “deep expertise in big data and predictive analytics.”
After identifying the most essential capabilities for various functions or job descriptions, companies should then assess how employees rate in each of these areas. L&D interventions should seek to close these capability gaps.
Most corporate learning is delivered through a combination of digital-learning formats and in-person sessions. While our research indicates that immersive L&D experiences in the classroom still have immense value, leaders have told us that they are incredibly busy “from eight to late,” which does not give them a lot of time to sit in a classroom. Furthermore, many said that they prefer to develop and practice new skills and behaviors in a “safe environment,” where they don’t have to worry about public failures that might affect their career paths.
Traditional L&D programs consisted of several days of classroom learning with no follow-up sessions, even though people tend to forget what they have learned without regular reinforcement. As a result, many L&D functions are moving away from stand-alone programs by designing learning journeys—continuous learning opportunities that take place over a period of time and include L&D interventions such as fieldwork, pre- and post-classroom digital learning, social learning, on-the-job coaching and mentoring, and short workshops. The main objectives of a learning journey are to help people develop the required new competencies in the most effective and efficient way and to support the transfer of learning to the job.
An established L&D agenda consists of a number of strategic initiatives that support capability building and are aligned with business goals, such as helping leaders develop high-performing teams or roll out safety training. The successful execution of L&D initiatives on time and on budget is critical to build and sustain support from business leaders.
L&D functions often face an overload of initiatives and insufficient funding. L&D leadership needs to maintain an ongoing discussion with business leaders about initiatives and priorities to ensure the requisite resources and support.
Many new L&D initiatives are initially targeted to a limited audience. A successful execution of a small pilot, such as an online orientation program for a specific audience, can lead to an even bigger impact once the program is rolled out to the entire enterprise. The program’s cost per person declines as companies benefit from economies of scale.
A learning strategy’s execution and impact should be measured using key performance indicators (KPIs). The first indicator looks at business excellence: how closely aligned all L&D initiatives and investments are with business priorities. The second KPI looks at learning excellence: whether learning interventions change people’s behavior and performance. Last, an operational-excellence KPI measures how well investments and resources in the corporate academy are used.
Accurate measurement is not simple, and many organizations still rely on traditional impact metrics such as learning-program satisfaction and completion scores. But high-performing organizations focus on outcomes-based metrics such as impact on individual performance, employee engagement, team effectiveness, and business-process improvement.
We have identified several lenses for articulating and measuring learning impact:
Access to big data provides L&D functions with more opportunities to assess and predict the business impact of their interventions.
Just as L&D corporate-learning activities need to be aligned with the business, they should also be an integral part of the HR agenda. L&D has an important role to play in recruitment, onboarding, performance management, promotion, workforce, and succession planning. Our research shows that at best, many L&D functions have only loose connections to annual performance reviews and lack a structured approach and follow-up to performance-management practices.
L&D leadership must understand major HR management practices and processes and collaborate closely with HR leaders. The best L&D functions use consolidated development feedback from performance reviews as input for their capability-building agenda. A growing number of companies are replacing annual performance appraisals with frequent, in-the-moment feedback. 7 HCM outlook 2018 , Brandon Hall Group. This is another area in which the L&D function can help managers build skills to provide development feedback effectively.
Another example is onboarding. Companies that have developed high-impact onboarding processes score better on employee engagement and satisfaction and lose fewer new hires. 8 HCM outlook 2018 , Brandon Hall Group. The L&D function can play a critical role in onboarding—for example, by helping people build the skills to be successful in their role, providing new hires with access to digital-learning technologies, and connecting them with other new hires and mentors.
Many L&D functions embrace a framework known as “70:20:10,” in which 70 percent of learning takes place on the job, 20 percent through interaction and collaboration, and 10 percent through formal-learning interventions such as classroom training and digital curricula. These percentages are general guidelines and vary by industry and organization. L&D functions have traditionally focused on the formal-learning component.
Today, L&D leaders must design and implement interventions that support informal learning, including coaching and mentoring, on-the-job instruction, apprenticeships, leadership shadowing, action-based learning, on-demand access to digital learning, and lunch-and-learn sessions. Social technologies play a growing role in connecting experts and creating and sharing knowledge.
The most significant enablers for just-in-time learning are technology platforms and applications. Examples include next-generation learning-management systems, virtual classrooms, mobile-learning apps, embedded performance-support systems, polling software, learning-video platforms, learning-assessment and -measurement platforms, massive open online courses (MOOCs), and small private online courses (SPOCs), to name just a few.
The learning-technology industry has moved entirely to cloud-based platforms, which provide L&D functions with unlimited opportunities to plug and unplug systems and access the latest functionality without having to go through lengthy and expensive implementations of an on-premises system. L&D leaders must make sure that learning technologies fit into an overall system architecture that includes functionality to support the entire talent cycle, including recruitment, onboarding, performance management, L&D, real-time feedback tools, career management, succession planning, and rewards and recognition.
L&D leaders are increasingly aware of the challenges created by the fourth industrial revolution (technologies that are connecting the physical and digital worlds), but few have implemented large-scale transformation programs. Instead, most are slowly adapting their strategy and curricula as needed. However, with technology advancing at an ever-accelerating pace, L&D leaders can delay no longer: human capital is more important than ever and will be the primary factor in sustaining competitive advantage over the next few years.
The leaders of L&D functions need to revolutionize their approach by creating a learning strategy that aligns with business strategy and by identifying and enabling the capabilities needed to achieve success. This approach will result in robust curricula that employ every relevant and available learning method and technology. The most effective companies will invest in innovative L&D programs, remain flexible and agile, and build the human talent needed to master the digital age.
These changes entail some risk, and perhaps some trial and error, but the rewards are great.
A version of this chapter was published in TvOO Magazine in September 2016. It is also included in Elevating Learning & Development: Insights and Practical Guidance from the Field , August 2018.
Jacqueline Brassey is director of Enduring Priorities Learning in McKinsey’s Amsterdam office, where Nick van Dam is an alumnus and senior adviser to the firm as well as professor and chief of the IE University (Madrid) Center for Learning Innovation; Lisa Christensen is a senior learning expert in the San Francisco office.
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Data strategies and modernization initiatives misaligned with the overall business strategy—or too narrowly focused on AI—leave substantial business value on the table.
In partnership with Thoughtworks
Data modernization is squarely on the corporate agenda. In our survey of 350 senior data and technology executives, just over half say their organization has either undertaken a modernization project in the past two years or is implementing one today. An additional one-quarter plan to do so in the next two years. Other studies also consistently point to businesses’ increased investment in modernizing their data estates.
It is no coincidence that this heightened attention to improving data capabilities coincides with interest in AI, especially generative AI, reaching a fever pitch. Indeed, supporting the development of AI models is among the top reasons the organizations in our research seek to modernize their data capabilities. But AI is not the only reason, or even the main one.
This report seeks to understand organizations’ objectives for their data modernization projects and how they are implementing such initiatives. To do so, it surveyed senior data and technology executives across industries. The research finds that many have made substantial progress and investment in data modernization. Alignment on data strategy and the goals of modernization appear to be far from complete in many organizations, however, leaving a disconnect between data and technology teams and the rest of the business. Data and technology executives and their teams can still do more to understand their colleagues’ data needs and actively seek their input on how to meet them.
Following are the study’s key findings:
AI isn’t the only reason companies are modernizing the data estate. Better decision-making is the primary aim of data modernization, with nearly half (46%) of executives citing this among their three top drivers. Support for AI models (40%) and for decarbonization (38%) are also major drivers of modernization, as are improving regulatory compliance (33%) and boosting operational efficiency (32%).
Data strategy is too often siloed from business strategy. Nearly all surveyed organizations recognize the importance of taking a strategic approach to data. Only 22% say they lack a fully developed data strategy. When asked if their data strategy is completely aligned with key business objectives, however, only 39% agree. Data teams can also do more to bring other business units and functions into strategy discussions: 42% of respondents say their data strategy was developed exclusively by the data or technology team.
Data strategy paves the road to modernization. It is probably no coincidence that most organizations (71%) that have embarked on data modernization in the past two years have had a data strategy in place for longer than that. Modernization goals require buy-in from the business, and implementation decisions need strategic guidance, lest they lead to added complexity or duplication.
Top data pain points are data quality and timeliness. Executives point to substandard data (cited by 41%) and untimely delivery (33%) as the facets of their data operations most in need of improvement. Incomplete or inaccurate data leads enterprise users to question data trustworthiness. This helps explain why the most common modernization measure taken by our respondents’ organizations in the past two years has been to review and upgrade data governance (cited by 45%).
Cross-functional teams and DataOps are key levers to improve data quality. Modern data engineering practices are taking root in many businesses. Nearly half of organizations (48%) are empowering cross-functional data teams to enforce data quality standards, and 47% are prioritizing implementing DataOps (cited by 47%). These sorts of practices, which echo the agile methodologies and product thinking that have become standard in software engineering, are only starting to make their way into the data realm.
Compliance and security considerations often hinder modernization. Compliance and security concerns are major impediments to modernization, each cited by 44% of the respondents. Regulatory compliance is mentioned particularly frequently by those working in energy, public sector, transport, and financial services organizations. High costs are another oft-cited hurdle (40%), especially among the survey’s smaller organizations.
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What’s better than making a sale? Making a selling machine that matches your customers with your product and has tools and data to make your salespeople more efficient and productive. With this, repeatable and dependable sales are sure to come — that’s what a sales strategy is all about.
Let’s talk about why having a sales strategy matters and how to build one in six straightforward steps.
What is a sales strategy, why do you need a sales strategy, 10 popular sales strategy types, how to build a sales strategy in 6 steps, tools to improve your sales strategy, sales planning can be delightful. no, really..
Our Sales Planning solution keeps sellers on track with easy-to-build and easy-to-optimize sales plans.
A sales strategy is a detailed plan to reach revenue targets where you first identify target customers and selling channels and then create a sales process to make it possible. It’s never one and done, though. Sales strategies must continually adapt to business and market changes, usually seeking to do more with less. Sales leaders must keep digging into customer and sales performance data to track progress, make adjustments, and stay on course.
Not really. A sales strategy is a holistic approach to your goal, and planning outlines the details to make it happen. Some people use them interchangeably, but a sales strategy focuses on how to capture market share while sales planning involves detailing how to accomplish it — deciding on resources, revenue types from each channel, number of accounts, and pipeline coverage.
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A great strategy will rally your salespeople around common goals, help them spot risks and trends as they move deals along, and train them to get better every day. Without a strategy, sellers would be out on their own — no unified vision, no shared ideas about the next best action, and no compiled data to learn what is and isn’t working.
Sales strategies are increasingly important to develop when organizations face the challenging combination of limited resources and high pressure. Because sales representatives are usually tasked with meeting lofty goals, you can’t afford to waste time, budget, or resources. A strategy that’s tightly aligned with your company and product strategy, you help you gain revenue even in today’s competitive marketplace.
These are the top three reasons sales strategies are essential:
Sales strategies create a blueprint for sellers on handling leads’ objections and rejections, when to reach out with another email, when to loop other people into the conversation, etc. Repeatable steps and reusable techniques help you close deals.
A strategy distills lessons — both good and constructive — into standards every seller can benefit from. Newbies and sellers with room to improve can learn to mimic your high-performers with guidance and actions on everything from prospecting leads to closing deals .
The structure of your sales strategy will create a consistent sales process for you and your team. You can then bring all your data into one place and track the same key metrics for every rep. Are sellers performing as expected? Are they selling enough to hit your forecast? Are there red flags showing more attention and training is needed? This baseline understanding of all your data (especially when it’s updated in real time) helps you coach your reps to perform better.
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Now you know why sales strategies matter — let’s look at the most popular methods.
This is classic sales — one rep builds a relationship with one customer over time until they close the deal. This sales strategy is a solid method when your product is complex or the deal size is large, requiring a longer sales cycle and a high level of human involvement. Direct sales is often the preferred sales strategy for enterprise sales , also known as complex sales.
Inbound sales come from customers who find your company on their own through marketing efforts, word of mouth, or organic SEO. The strategy may be as easy as laying down the breadcrumbs for customers to follow. A high volume of inbound leads that convert to customers signals a clear need for your product and suggests your organization has a strong presence in the industry.
Outbound sales happen when sales reps contact prospects who haven’t interacted with your company before and convert them into customers. Outbound sales strategies are often more complex than inbound ones because you often have to create a sense of demand or prove why your product or service is the solution the prospect needs.
With this strategy, also known as channel sales , you collaborate with partners to sell. This can be a smart strategy if your goal is to break into a new customer segment the partner has expertise with to or to gain more market share. You may choose a partner because they already have a customer base and distribution engine you can tap into. Successful partnering can require extra training to ensure your brand is being represented the way you want, but it’s generally not as time-consuming or expensive as hiring new employees and can provide a significant return on investment for your organization.
Account-based selling focuses on building relationships with high-value account holders so you can close bigger deals. It’s a more targeted approach to selling, focusing on personalized solutions based on the specific needs of the account. Sales teams using this strategy typically see higher conversions, improved customer loyalty, more cross-selling/upselling opportunities, and long-term relationships.
Instead of a traditional sales relationship, consultative selling places reps in a trusted advisor role. During the early days of the relationship, they focus on learning about the customer’s needs and educating the customer about how their product can help meet them. This approach focuses heavily on providing customers with resources and knowledge that position you as an expert in the field. Once they view you as an advisor, purchasing your products becomes a natural next step.
An acronym for s ituation, p roblem, i mplication, and n eed-payoff, the SPIN selling strategy asks prospective customers probing questions in these four areas. After reps have a solid understanding of the customer’s needs, they can identify their specific pain points and begin discussing potential solutions. This is a great sales strategy for deepening customer relationships, but it can often take more time than other approaches.
A value-based selling strategy focuses on helping prospects solve problems while delivering positive economic and resource impact. Common focus points in this method include cost savings, time savings, competitive advantage, and risk mitigation. With value-based selling, customers develop a high level of trust in your company, which typically leads to longer-term customer relationships.
Instead of leading with product features and benefits, solution selling focuses on your customers’ needs and pain points and provides recommendations to solve them. This customer-centric sales strategy helps you tailor better solutions, which can make customers feel like you have their best interests in mind rather than simply looking to make a sale.
This sales strategy emphasizes challenging the customer’s thinking and assumptions. Your goal with this approach is to bring new insights and value to their business. It typically works better when the whole company — not just sales — buys into delivering solutions that change perspectives.
Ready top build a sales strategy? Start by understanding what you want to achieve — a sales target to work toward. Then think about the type of customers you want to target and how you’ll reach them. Gather leads, and then, finally, build a sales process that you can study, learn from, and refine over time.
A sales leader will often begin the year with a target of how much revenue to bring in. This will help determine the customers you need to target and how many deals you need to close in the coming year.
Let’s imagine your target is $1 million in revenue by this time next year. Analyze what product(s) or service(s) you’re going to focus on and how many you would need to sell. This gives you a base start; the next stage of strategizing is identifying the best target customers and selling channels to help you meet this goal.
You need to have a clear idea of who you’re going to sell to. Determine your target customer based on how you want to subdivide the market in way that’s most likely to get you to your sales goal.
Now you’re ready to get deeper into strategy by deciding how you will go about selling. Studying competitors and learning about your potential customers’ operating methods can help you know how your target customers like to buy. It’s important to review the options and think about how each — or a combination — might help you achieve your sales goal.
For example, say you’re selling accounting software to enterprise business customers and you see a big opportunity among financial services firms. You know from experience that these buyers like to buy one-on-one from experts who understand the nuances of their regulatory environment. Ding-ding-ding! Train your sellers to speak the language of this specific industry and move forward with direct sales.
With your goal, your customers, and your channels narrowed down, you can move on to laying out a process.
Core to building your strategy after you have your base information is establishing a process. Identify steps your sales team can follow to complete a sale based on the type of customer and channel you’ve chosen. Think of it as a roadmap with checkpoints between first customer contact and close, with guidance on moving from one checkpoint to another.
The stages you choose and the milestones for each will depend on the customer and channel. Here’s an example of a sales process that might fit our example target customer (financial services) and channel (direct sales):
Once you’ve defined the stages in your sales process, fill your sales pipeline with prospects. Determine how many you need based on likely deal size for the customer types you’re targeting and past conversion rates. Then, use marketing channels and network outreach to connect with them.
Let’s say you need to hit a $1 million revenue target. If the enterprise tier of your accounting software sells for $10,000 a year, you’ll need to close 100 deals to hit your goal. You know that last year’s conversion rate for enterprise prospects was 30%, which means your team probably needs about 330 prospects in your pipeline. You also know that many of the decision-makers you need to target attend conferences, so you register several of your team members for major ones in your region to make connections and identify prospects.
As you roll out the rest of your strategy, your team will dive into selling — going from cold leads to warm opportunities to red-hot deals. At the same time, your business and your market will experience disruption and change. So it’s critical to monitor the health of your pipeline constantly. If things aren’t going as expected or a change throws a wrench into your selling machine, then act to adjust.
For example, if several of your prospects have tightened budgets, consider changing your approach. Instead of pushing your enterprise software, maybe you pivot from fewer high-value deals to more mid-value deals. How? You start recommending a lower-cost, midrange tier of your accounting software that can be easily upgraded when the time and budget are right.
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Building and executing a strategy starts with a single source of truth , where you can segment your customers and channels and map specific actions to your sales process. Additional tools can be combined with a CRM to boost productivity and efficiency, from reports and dashboards to forecasting tools and revenue management software.
Here are a few of the most important tools to consider:
A CRM system gives you a complete view of all your prospects and customers. This visibility is critical for tracking your leads from initial contact to close, monitoring what is and isn’t working, and making smarter decisions about where to invest.
Reports and dashboards provide a real-time picture of your business revenue at a glance. This data lets you as a sales leader continually adjust your strategy to stay on target. You can even dig deep into detailed reports that show insights at the level of the individual deal or seller.
Part of the sales strategy is creating a sales process — and you’ll need to monitor it. Bring in pipeline and forecasting technology to help you stay up to speed on your team’s progress. Get a handle on where every deal sits in the pipeline and roll those numbers up to create accurate sales forecasts. Then, make cost-effective decisions about where to focus your resources.
A revenue management tool can help you connect customer touchpoints — like quoting, selling, and billing — that used to be locked away in different systems. When you connect the flow of customer data from one touchpoint to the next, you can make it easier and faster for customers to buy.
Creating a sales strategy can be like building a car while driving it. You may be asked to hit your sales projection numbers while also building and refining the process to make it happen.
It can help you develop a strong strategy if you focus on the basics. It comes down to three questions: Who is your customer? What is your product? And how does your customer like to buy? When you have an answer, you know you’re on the right track.
Learn how Sales Planning helps you optimize for customer coverage, and gives you the flexibility to handle change.
Dini is passionate about leading authentically and building high-performing, diverse teams with a strong culture. She offers a wealth of expertise on scaling companies from the Series A stage to unicorn status.
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Topics on this page: HHS Budget in Brief | Budget Justifications | Office of the Secretary Staff Divisions | Operating Division Requests | GAO-IG Act | Offices to Contact | Previous Budgets FY 2024 – FY2020
The President’s Fiscal Year (FY) 2025 Budget supports the Department of Health and Human Services’ (HHS) mission to promote the health and well-being of all Americans. HHS proposes $130.7 billion in discretionary and $1.7 trillion in mandatory proposed budget authority for FY 2025.
This budget illustrates HHS’s commitment to support American families, improve behavioral health, and ensure the nation’s readiness for the next public health crisis. The budget works to ensure all Americans have access to affordable healthcare; improve maternal and reproductive health outcomes; strengthen early care and education; address the needs of Indian Country; and advance scientific innovation.
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NIDCD supports and conducts research and research training in hearing, balance, taste, smell, voice, speech, and language. The NIDCD strategic plan presents a series of themes and goals that highlight the most promising research needs within NIDCD’s mission areas as well as NIH-wide crosscutting priorities.
The strategic plan is designed to help NIDCD prioritize its research funding by identifying areas of opportunity and knowledge gaps. By supporting research in the strategic plan, NIDCD aims to improve quality of life for people with deafness or communication disorders.
In conjunction with the release of the 2023-2027 strategic plan, leading professional journals and professional association websites have published editorials and blog posts elaborating on specific components of the plan most relevant to their readership/membership.
NIDCD helped develop and is supporting the efforts described in the NIH Minority Health and Health Disparities Strategic Plan .
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1. Basic model. The basic strategic planning model is ideal for establishing your company's vision, mission, business objectives, and values. This model helps you outline the specific steps you need to take to reach your goals, monitor progress to keep everyone on target, and address issues as they arise.
Determine your priorities and objectives. Define responsibilities. Measure and evaluate results. Each step requires close collaboration as you build a shared vision, strategy for implementation, and system for understanding performance. Related: Learn how to hold an effective strategic planning meeting.
Strategic management is part of a larger planning process that includes budgeting, forecasting, capital allocation, and more. There is no right or wrong way to do strategic management — only guidelines. The basic phases are preparing for strategic planning, creating the strategic plan, and implementing that plan.
Strategy and strategic plans: How they are different and why it matters. Strategy creates a common understanding of what an organization wants to achieve and what it needs to do to meet its goals. Strategic plans bridge the gap from overall direction to specific projects and day-to-day actions that ultimately execute the strategy. Job No. 1 is ...
Strategic planning is an organization 's process of defining its strategy or direction, and making decisions on allocating its resources to attain strategic goals. Furthermore, it may also extend to control mechanisms for guiding the implementation of the strategy. Strategic planning became prominent in corporations during the 1960s and remains ...
Estimated Duration. Determine organizational readiness. Owner/CEO, Strategy Director. Readiness assessment. Establish your planning team and schedule. Owner/CEO, Strategy Leader. Kick-Off Meeting: 1 hr. Collect and review information to help make the upcoming strategic decisions. Planning Team and Executive Team.
Why Strategic Planning Fails. There are also plenty of organizations that do take steps to fulfill the requirements of strategic planning, yet still fail to see results. These strategies fail for many reasons, including: Lack of communication: This is a big one.Research shows that 95% of most companies' employees don't understand their organization's strategy, and 85% of executive ...
Strategic planning seeks to anticipate future industry trends . During the process, the organization creates a vision, articulates its purpose, and sets strategic goals that are long-term and forward-focused. Those strategic goals inform operational goals and incremental milestones that need to be reached.
Strategic planning process steps. Determine your strategic position. Prioritize your objectives. Develop a strategic plan. Execute and manage your plan. Review and revise the plan. Every business should have a strategic plan—but the number of businesses that try to operate without a defined plan (or at least a clearly communicated one) might ...
The strategic planning process requires considerable thought and planning on the part of a company's upper-level management. Before settling on a plan of action and then determining how to strategically implement it, executives may consider many possible options. In the end, a company's management will, hopefully, settle on a strategy that ...
Strategic planning is defined as a pivotal organizational endeavor, meticulously charting the mission, goals, and objectives over a strategic timeframe, typically spanning 2-5 years. This comprehensive roadmap takes into meticulous consideration the current organizational landscape, navigating through the intricacies of prevailing legislation ...
Share. Save. Summary. Many strategic plans aren't strategic, or even plans. To fix that, try a six step process: first, identify key stakeholders. Second, identify a specific, very important key ...
The outcome of strategic planning is typically a long-term strategic plan that outlines the organization's vision, mission, values, and objectives. Business planning, on the other hand, is a more tactical process that focuses on the implementation of specific initiatives and projects to support the organization's long-term goals.
20 Strategic Frameworks & Models Every Business Leader MUST Know in 2024 1. The Balanced Scorecard. The Balanced Scorecard is a strategy management framework created by Drs. Robert Kaplan and David Norton.. It takes into account your: Objectives, which are high-level organizational goals.; Measures, which help you understand if you're accomplishing your objective strategically.
00:00. Audio. How to improve strategic planning. This sense of disappointment was captured in a recent McKinsey Quarterly survey of nearly 800 executives: just 45 percent of the respondents said they were satisfied with the strategic-planning process. 1 Moreover, only 23 percent indicated that major strategic decisions were made within its ...
For example, if signs suggesting that one or more key assumptions have become less valid emerge from strategic dialogues at the business-unit level, it might be time to update the company's perspective on long-term trends. This exercise could be elevated in importance by making it a core theme of the upcoming strategic-planning process.
Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees on the organization's goals, and ensure those goals are backed by data and sound reasoning. It's ...
This free strategic plan template for Word helps you capture some of the most important elements of your strategic plan such as your business goals, mission and vision statements, a SWOT analysis, and the operational actions that will be taken to achieve your objectives. 2. Strategy Map.
Overcoming Challenges and Pitfalls. Challenge of consensus over clarity. Challenge of who provides input versus who decides. Preparing a long, ambitious, 5 year plan that sits on a shelf. Finding a balance between process and a final product. Communicating and executing the plan. Lack of alignment between mission, action, and finances.
Conduct an environmental scan. Define strategic priorities. Develop goals and metrics. Derive a strategic plan. Write and communicate your strategic plan. Implement, monitor, and revise. 1. Clarify your vision, mission, and values. The first step of the strategic planning process is understanding your organization's core elements: vision ...
Strategic planning also helps you better allocate your resources, thanks to a thorough understanding of your organization's strengths and weaknesses. The process involves analyzing your business processes to find inefficiencies, so you can find ways to streamline workflows and save time, labor, and money.
Strategic planning is a process in which organizational leaders determine their vision for the future as well as identify their goals and objectives for the organization. The process also includes establishing the sequence in which those goals should fall so that the organization is enabled to reach its stated vision .
The strategic planning methodology entails considering your business' objectives, initiatives and measures. You can develop this model by using programs such as Google Sheets, PowerPoint and Excel. The strategic planning methodology gives you comprehensive details into your business' initiatives and measures.
Here's every reason why you need a business plan. 1. Business planning is proven to help you grow 30 percent faster. Writing a business plan isn't about producing a document that accurately predicts the future of your company. The process of writing your plan is what's important. Writing your plan and reviewing it regularly gives you a ...
The strategic role of L&D. One of L&D's primary responsibilities is to manage the development of people—and to do so in a way that supports other key business priorities. L&D's strategic role spans five areas (Exhibit 1). 2. Attract and retain talent. Traditionally, learning focused solely on improving productivity.
Better decision-making is the primary aim of data modernization, with nearly half (46%) of executives citing this among their three top drivers. Support for AI models (40%) and for decarbonization ...
Train your sellers to speak the language of this specific industry and move forward with direct sales. 3. Build the most efficient sales process to hit your numbers. At this point, identify the steps your sales team can follow to complete a sale — the sales process — with the type of customer and channel you've chosen.
The President's Fiscal Year (FY) 2025 Budget supports the Department of Health and Human Services' (HHS) mission to promote the health and well-being of all Americans. HHS proposes $130.7 billion in discretionary and $1.7 trillion in mandatory proposed budget authority for FY 2025. This budget illustrates HHS's commitment to support ...
The strategic plan is designed to help NIDCD prioritize its research funding by identifying areas of opportunity and knowledge gaps. By supporting research in the strategic plan, NIDCD aims to improve quality of life for people with deafness or communication disorders. 2023-2027 NIDCD Strategic Plan (or download PDF version)