As a business owner/manager, you are tasked with making various decisions. From big questions like “How do you know if it’s the right time to make an investment?”, “Are you putting your business on the right path?” to operational decision like “How can I increase the sales & revenue?”, “How can I reduce the costs in 2 years?” Even when you are in a good place now, but the world and markets keep changing. Where will you be in five years’, ten years’ time? Having a clear strategy can help you steer where you want to be. Every company, no matter big, medium or small needs strategic planning. Without an appropriate strategic plan in place, you can miss out on new opportunities, and may even stand in the way of your own growth.
What is a strategy, strategic plan, and strategic planning?
So what exactly is strategy, strategic plan and strategic planning?
Strategy is a map that allows you to steer into the future. Strategy is about the aims and objectives of any organization and how it seeks to achieve these. It is concerned with how managers try to match the capabilities of their organization to fit with market demand as well as competitive and environmental pressures. Strategy is about reducing the complexity of business decision making to manageable proportions.
Strategic plan is the document that shapes the specific activities you will undertake to overcome the challenges you face on the way to your goals. It spells out the roadmap of logical steps you will take to lead you from the start to the finish of your endeavor.
Strategic planning is the process to create this document, in a deliberate, disciplined way, producing a strategy that results in actions that shape what an organization is, what it does, why it does it, and what it will do in the future. It can be used on a large scale to plan business growth over a number of years or may be used on a smaller scale to help one department or a small business achieve a particular goal within a set period of time.
Why should I do strategic planning?
You might be thinking: Is it worth embarking on a strategic planning process? Why should I put my organization through strategic planning, changes and, possibly, a time-consuming transformation that has the potential to bring conflict and disruption to the organization and its stakeholders?
It is true that whenever people are asked to focus in a serious way on what is expandable is their organization and to consider doing things differently, their culture, structures, processes, and interaction patterns can be threatened. So why should they put themselves through such a demanding process?
The simple answer is if they don’t, their organization will stagnate and possibly even fail.
Ask yourself the following questions:
- Do you want your team / company getting the results you desire?
- Do you want to consistently crush your sales objectives and increase profits?
- Do you want to lead your team/company to beat the competitors and gain the market share?
Don’t leave execution to chance. Executional Excellence requires planning, leadership and discipline!
Benefits of strategic planning?
There are 2 key benefits of strategic planning.
Benefits 1: A strategic plan allows organizations to foresee their future and to prepare accordingly.
Through strategic planning, companies can anticipate certain unfavourable scenarios before they happen and take necessary precautions to avoid them. With a strong strategic plan, organizations can be proactive rather than merely reacting to situations as they arise. Being proactive allows organizations to keep up with the ever-changing trends in the market and always stay one step ahead of the competition.
Consider the examples of “lifetime” brands and organizations that remained stagnant and eventually failed. Kodak used to be an undisputed leader in photography, focusing as it did for most of the twentieth century on film, camera, and paper production. Then, when digital photography became the new future, Kodak failed to adapt and eventually forced into bankruptcy.
Benefits 2: A strategic plan helps company to set up a sense of direction to steer where it want to be
A strategic plan helps company to set up a sense of direction where an organization goes, and establish realistic objectives and goals that are in line with the vision and mission charted out for it so as to steer the company where it want to be.
Through a dedicated strategic plan, organizations can get valuable insights on market trends, consumer segments, as well as product and service offerings which may affect their success. An approach that is targeted and well-strategized to turn all sales and marketing efforts into the best possible outcomes can help to increase profitability and market share.
It also helps company to improve operational efficiency as a strategic plan provides management the roadmap to align the organization’s functional activities to achieve set goals. It guides management discussions and decision making in determining resource and budget requirements to accomplish set objectives.
The 5 steps approach of strategic planning
Strategic planning is not one thing but rather set of concepts, procedures, methodologies, tools and techniques, and actions. That is why there is a misconception that strategic planning is time consuming and complicated. But it does not has to be if we work on it in a right way. The strategic approach layout here is proved applicable to both private and public sector organizations at every level. Lots of businesses have gone through the steps and agree that the process can yield highly rewarding result.
Step 1: Assess
Objectives: Strategy is the link between the firm and its environment. That is why assessing is the first step of strategizing. You have to understand in details where we are now in order to come up with a plan for your business. It consists of an extensive assessment of your internal and external environment. Externally, you would need to assess the market, your competition, and your consumers. Internally, you would also require to assess your team, company, and organization. Using this assessment, you solidify the strengths, weakness, and gaps within your organization. Only by assessing everything would you be able to come up with a proper strategy.
1. Assessment of your external environment: your industry, competitors, customers and market trends.
The first step of any strategic planning starts with assessing the external forces shaping your industry, understanding the competitive and regulatory landscape that impact your business and studying the overall market in which you are operating. How big is the industry? How quick is it growing? Who are the key competitors? How well funded are they? What moves are they making? What are pricing trends? What products or services are your customers asking for? Any macro-economic trends at play? Any government regulation issues? You cannot set an effective plan for your business unless you truly understand what you are up against from an industry and competition perspective.
2. Assessment of your internal environment: analysis of internal resources and capabilities (Strength and weakness)
The internal organization scan looks at identifying the strengths and weakness of your organization. By breaking down your internal environment into capabilities, resources, and processes, you then begin to assess your organization. Areas to consider when identifying strengths and weakness include competitive advantages, customer satisfaction, marketing, and sales performance, capital resources, cost and pricing, innovation, organizational design, internal systems, management, human resources, and corporate culture.
To help you conduct the internal and external assessment effectively
5 tools + 1 template are created in our Strategy Toolkit
Step 2: Define
Once you completed the assessment of internal and external environment, you will then define where you want to reach. It involves 3 steps:
#1 Review/Define company Vision, Mission, and Guiding Principles
Once the external and internal evaluation is done, you are in a good position to begin crafting your high-level mission statement and vision statement. The mission, vision and guiding principles guides how your executives, managers, and employees behave in the present and the future. Although mission, vision, and guiding principles statements are often grouped together, each contributes uniquely to the organization in helping it execute the strategy.
- Your mission statement speaks to “Why do we exist?”
- Your vision statement speaks to “What are we offering and where are we heading”. And all good vision statements should be quantifiable and timebound. Something like “We plan on driving $50MM in revenues from our industry-leading social listening platform within 3 years”. These are the “North Star” statements that will guide all detailed decisions from there.
#2 Define your Goal and outline the future state (Objectives)
A desired outcome supportive of mission and vision and fill the gaps you identified in step 1
Leveraging the external and internal assessments and guided by a compelling vision, it is important to focus on the specific goals and priorities to achieve that vision. This is a critical stage for decision making. It is where leaders engage in rich decision-making conversations that define the big plays that will move the organization forward towards its goals. Having an objective, skilled facilitator can be useful at this point to help bring up, clarify, test and harmonize leadership’s views.
All strategies and actions produced in a brainstorming session, for example, look important and interrelated, so how to leave anything out and focus scarce resources on the gaps? You must know your priorities and focus on the goals and objectives that represent them. If you don’t use a method of prioritization, you’ll lack consistency and bounce from one goal to another with no direction or purpose. The saying “Do your best and forget the rest” is applicable here. Focus your resources and energy on your best opportunities and set the others aside
To help you define where you want to reach, the following guides are included in the Strategy Toolkit:
Guide to set up your Company’s Mission, Vision and Guiding Principles
How to set effective Goals & Objectives
How to increase your revenue and profits in business?
- 3 generic strategies
- Diversification matrix
- Generic Performance Improvement strategies
How to prioritize your strategies and actions?
Step 3: Formulate
Now it is time to carefully write the strategic plan itself. The plan should be:
- Concise―not a huge book that no one reads
- Easy to understand
- Comprehensive but not ponderous
One of the core charges when drafting a strategic plan is to develop it in a way that is easily translatable into action. Most strategic plans address high-level initiatives and overarching goals but don’t get articulated (translated) into the day-to-day projects and tasks required to achieve the plan’s goals and objectives. Terminology, word choice, format and the level at which the plan is written are all contribute to the elements mentioned above. You need to articulate your strategic plan in a way that makes sense and is executable by others. Avoid filling the plans with conceptual terms that don’t tie into day-to-day realities for the staff expected to carry the plan out.
Essential elements in the Strategic Plan
Writing the strategic plan involves outlining an organization’s purpose, goals, and methods used to reach those goals. In writing the document, you want to identify what the organization stands for, what it hopes to accomplish, and what methods and processes it will use to realize those accomplishments. The work you have done in step 1 and 2 all contribute to this strategic plan.
Recommended structure of your strategic plan with the topics listed in the sequence below:
- Leadership message. This topic consists of three to four paragraphs written by the CEO that discuss the journey on which the organization is about to embark. The message should also discuss the commitments of the CEO and the responsibility of everyone in the organization to provide his or her full support for implementing the plan. Most important, the CEO should articulate his or her vision in his or her own words.
- The Introduction typically consists of a few paragraphs about the organization, including its reason for existence, historical significance in the marketplace, partnerships, affiliates, and the like.
- Progress since last plan. This is an optional entry in the strategic plan and should include some of the major accomplishments of the organization since the last strategic plan. It also provides some insight as to the value of strategic planning and the overall relevance of the organization to its stakeholders and its community.
- Mission, vision statements, and guiding principles. Here are included the mission, vision statements, and the guiding principles (that you define in step 2). Discuss the vision and how it synchronizes with the future environment. You may include future organizational alignments, new customer bases, and impacts from the external environment. Look at the mission as your nucleus and the vision and the guiding principles as its electrons energetically orbiting the mission.
- Strategic relationships. Discuss your key stakeholders. Who are your customers? Who are your strategic partners?
- Strategic priorities (i.e. goals, objectives and KPIs). Describe the goals and objectives and their linkage to the strategic alignment. The goals and objectives should explain how the organization will manage and influence its primary business lines to provide the best support to customers and stakeholders. List each goal and its supporting objectives as well as the strategy to accomplish the objectives with the relevant Key Performance Indicators. Refer to Figure 2–5, Strategic alignments linkage, for an example of how the vision cascades into action.
- Implementation plan of strategic priorities. Describe the organization’s acknowledgment that a successful strategic plan is an ongoing process of change. Provide an explanation of your implementation plan and what resources you allocate to execute the plan. Also, include how the organization will track implementation of these important objectives and continue to measure performance.
- Summary. You may choose to create a dashboard that summarize the key points in the strategic plan.
To help you formulate the strategy plan, the following guide and template are included in the Strategy Toolkit
Step 4: Execute
The most crucial part is executing the strategy. Whether or not you reach the goals you have set will depend on how well you execute the plans that you have formulated. This step can literally make or break your business.
Once you have your strategic plan in place, you are ready to implement it. This step is the action phase of the strategic planning process. Start by making everyone involved in the plan aware of your strategy. Ideally, you want to distribute tasks among different individuals or departments to prevent one person or group of people from becoming overwhelmed. Also take the time to check back with these individuals or groups to ensure that you are staying on track. If you find that you are not meeting your objectives, make any necessary changes.
Elements of effective execution
- Leadership. Leaders can’t force change, but they can guide it. That means leading from the front, or as Jim Kouzes and Barry Posner would say, “modeling the way.” If employees sense that the leadership’s commitment is tepid, then that’s what leaders can expect in return. Conversely, savvy leadership from the c-suite will inspire others in your organization to lead as well. Without them, your plan is going nowhere.
- Unwavering discipline. Commitment to achieving strategic goals is still not enough—you also need execution. Successful execution means having the discipline necessary to achieve your goals and make sustainable behavioral change. In individual terms, for example, someone might be committed to losing 10 pounds, yet lack the discipline to do what’s necessary to achieve that goal and maintain the new weight. It’s no different in organizations.
- Transparency / Communication. It’s essential that your people embrace the strategic plan as their own plan. Failing that, you’re asking your employees to be more committed to your goals than their own—hardly very realistic. To accomplish this level of buy-in, it’s important to have transparency right from the start. To sustain the effort, employees should understand and be kept apprised of how their daily activities are helping achieve the desired outcomes.
- Identify and track success measures monthly and quarterly. Tracking progress on strategic goals and objectives on a regular basis is key to ensuring that the plan is being implemented and to making course corrections as needed. The discipline to make progress and report on success measures on a regular basis ensures accountability and follow-through. It may be helpful to assign a person responsible for collecting, tracking and reporting progress on the strategic plan using scorecards and dashboards. A quarterly business review includes a status report on strategy implementation through key performance indicators.
- Monitoring, measurement and feedback. Even the best strategic plans require adjustments along the way. Monitor your plan’s progress, measure outputs as well as outcomes, obtain feedback from all your stakeholders and stay nimble. Identifying and documenting key assumptions about the plan is essential. Periodically, challenge your assumptions. If the assumptions are no longer relevant, your plan won’t be either.
Your strategic planning process will not be effective unless everyone is doing their part. This requires you to constantly monitor and manage performance and tweak any components that are not leading to satisfactory results. It is also important to hold those involved in the strategic planning process accountable for their assigned tasks. Know that it may be necessary to repeat the strategic management process if any corrective actions you take are not successful. Continue to collect new and relevant data to help with any future strategic planning that may occur.
- Anchoring the changes in company culture. Recognize small wins, reward your people and reinforce the positive results your strategic initiatives have produced. Doing so will go a long way to taking strategy and change from just what you do to being who you are.
To help you understand how to execute change effectively, we will further elaborate the following elements in the "How to conduct proper change management?" guide (available in the Strategy Toolkit)
Step 5: Review
Many organizations incorporate strategic plan maintenance into their strategy as they create it. They know that, with rapid changes in technology and global expansion, and volatile environment (e.g. impact from pandemic, Brexit, Trade War etc.) an organization will need to evolve over and over again. Therefore, it is necessary to regularly revisit the plan as a whole.
- Conduct an implementation review and measure performance indicators
- Review and refine goals, strategies, and processes
- Align the organization to support new strategies
- Measure, analyze, and improve the strategic plan
Ultimately, make strategy a continuous habit, not an event
To further help you devising your strategic plan... Introducing
The Strategy toolkit
What is in the Toolkit?
1. Content Vault
12 Guides to guide you through the Strategic Planning Process
2. Design Vault
Planning Slides + Strategic Plan Template
We took care the design for you so you can spend less time focusing on the little details that go into making your strategic plan deck and more time focusing on the message and content!
- Over 150+ slides in total covering end-to-end strategic planning process
- Planning Slides: SWOT Analysis, GAP Analysis, Fish Bone, Mind Map
- Introduction: Table of Content, Message from CEO, Executive Summary, Company’s mission & vision
- Strategy Overview: Summary of the key business strategies that the company is going to implement, including Strategy House, Map and Dashboard
- Implementation/Detail Project Plan: Project Plan/Summary, Objectives Chart, Implementation plan (cycle), Business Continuity Plan (process chart) and Capacity Planning
- Budget / Resource Management: Budgeting, Cost Management, Effort & Cost Estimation, Quote Comparison, Request for Resources form
- Stakeholder Management: Project Team Organization / Structure, Communication Plan, Stakeholder Buy-in Map, Governance Timeline & Map
- Performance Dashboard / Project status Report: Roadmap status, Performance Dashboard, Project Risk Analysis, Project Delays Report, Celebrate Success chart
- Roadmap / Milestones: 3 years strategic intent, 3 years roadmap, Implementation Process Map / Chart, Milestone Map
- Risks, Challenges & Benefits
- Size 16:9 ratio
- File Type: PPTX
- Handcrafted Infographic in Powerpoint
- Vector icons
- Pixel-perfect illustrations
- All Graphic Resizable and Editable
- Picture Placeholder, drag & drop
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