Strategic planning is a process in which an organization sets goals and defines plans for meeting its mission. It is high-level planning that articulates the critical success factors needed for success in the future. It is not intended to be a business-as-usual process because it assumes there will be change. To affect change and to ensure the planning makes sense, the process considers the organization’s capabilities, infrastructure, processes, resources, and much more.
One of the impacts of the recent Great Recession is that businesses found they had to be agile in the face of unrelenting change due to technology, globalization, and changing market structures that forced severe cost-cutting. To become more agile, organizations must envision the desired future, set priorities, and determine the series of short-term actions that will produce the desired results.
Following are some key elements of successful strategic planning:
• Assess the Organization’s Present State – Assessing where the business is now creates the springboard for creating a path to new goals. It is like taking an inventory of current processes and resources, management structure, leadership style, centers of control, corporate culture, and environment. Successful strategic planning determines risks, barriers to change, and required organization-wide inputs into the planning process. It also requires rigorous analysis of process performance as the strategy unfolds.
• Develop Innovative Thinking – Businesses with rigid cultures of control and hierarchal structures often do not know how to think outside the box. That limits the ability to innovate. Technology in particular has created a more flexible marketplace where stakeholders can freely network.
To develop innovative thinking, the organization should incorporate a variety of stakeholder perspectives. That means becoming a more open and non-siloed organization that encourages sharing ideas and information across functions. During strategic planning, use the new perspectives and ideas to create several scenarios that take into consideration possible outcomes. This inevitably leads to innovation and puts the business in the position of being prepared for the most likely events, whether it is disruptive technology, the emergence of new competitive markets, a change in economic conditions, and so on.
• Measure and Analyze – To keep strategic performance on track, develop performance measures. Common measures include Key Performance Indicators (KPIs) which should incorporate internal and external factors. Establish performance goals, measure progress, and make corrections should analyzation indicate the strategic process is getting off-track. Savvy businesses incorporate goals in the employee performance review systems, offering incentives for meeting the goals. This will bring organizational members into the strategic process, empowering them as partners in success.
• Execute the Strategy – A PwC Strategy& article, The Four Bases of Organizational DNA, says that four organizational building blocks determines the success of strategy execution. They are: information flow, decision rights, structure, and motivators. How information flows and who makes the decisions will determine how well strategy is executed. Involving a broad range of people across business units will generate information flows that advance strategic thinking and collaboration.
Strategic Planning – Collaborative and Engaged
Strategic planning is a defined route for achieving goals and objectives within the context of the mission. Strategic business planning in today’s dynamic business environment demands a collaborative culture in which everyone is engaged and aligned in the process. Each participant should embrace his or her role in the process and understand how decisions and behaviors impact the strategic process and meet the organization’s mission. Done right, strategic planning ensures the business can go the distance.
Illustrative business plan samples
OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.