Ultimate Guide To Strategic Planning
By Indeed Editorial Team
Updated March 1, 2021 | Published October 7, 2019
Updated March 1, 2021
Published October 7, 2019
Strategic planning is an organized, systematic and coordinated way to plan for achieving specific goals. Using strategy to map out a path for your personal career, your team or your organization can create direction and clarity, ultimately leading to success.
In this guide to strategic planning, we will explain the importance of strategic planning, how to develop and plan a strategy and the benefits of doing so. With a strategy process in place, you can optimize the operations of your career and establish a process for achieving goals.
What is strategic planning?
Strategic planning is a business management strategy that helps businesses communicate organizational goals and the activities and actions necessary to reach those goals. Basic ideas of strategic planning include:
Proper focus of manpower and resources
Adjustment of organizational direction
Alignment of stakeholder, shareholder and employee goals
Collaboration at all organizational levels toward a common goal
When properly applied, strategic planning can determine the current status of a business, where it plans to go in the future and ways to measure success. There's no one-size-fits-all method on how to develop a strategic plan, as all industries are different. Depending on your role at a business or experience on the job, you might also have to tweak strategic planning strategies to suit your short-term and long-term goals.
But discovering the various ways to draft, apply and follow up on a strategic plan has many advantages in companies of all sizes. With strategy and planning, you craft a roadmap to profitability, efficiency and possible expansion.
How to develop a strategic plan
The more thorough you are in your foundational planning, the better your plan will be. Creating and writing a strategic plan starts with a development phase. Remember that this step can take weeks or even months to craft. This should be highly detailed, research-intensive and well-written to reduce ambiguity and confusion.
Here are the steps involved in developing a strategic plan:
Analyze industry, consumer and competitor trends.
Perform a SWOT analysis.
Write your mission statement.
Create a vision statement.
Define your long-term and short-term goals.
Create core values and departmental objectives.
Define budget, finance and staffing needs.
A good strategic plan, when completed, allows managers to handle key decision-making and guides the internal workings of the business. Let’s look at each of the above steps in more detail:
1. Analyze industry, consumer and competitor trends
The first step toward organizational strategic planning is to align with the organization’s established mission and goals. This starts with analyzing the industry, market and competitor trends.
The best way to start this process is by considering external factors in your business, rather than internal facets. Some of the ideas you should study in your analysis include:
The size of your respective industry
Governmental regulation, licensing and other potential issues
Consumer issues regarding products and services
Competitors and threats, as well as their actions over the past six months to a year
Industry growth rate
Most of this information is readily available. Once again, the more thorough and heavily researched these areas of your plan are, the more effective your plan will become. Understanding what the industry is from the top-down and differentiating your brand from competitors are two of the most crucial aspects.
2. Perform a SWOT analysis
Now that you've addressed the research part of your plan, you should put together a SWOT analysis. This analysis evaluates you, your team or your organization’s strengths, weaknesses, opportunities and threats. Like many other processes in strategic planning, it is essential to take the time necessary to provide an in-depth assessment of each aspect.
Strengths: Think about what you do better than anyone else in the industry. A highly skilled staff, a high amount of capital or cash resources, investors, industry growth, low barriers to entry, customer base and profit margin can all factor into what you do better than your competitors.
Weaknesses: Lack of capital, a staff with little training, low-profit margin, high barriers to entry and a small customer base are all examples of weaknesses. The SWOT process can help when brainstorming solutions to improve upon weaknesses.
Opportunities: Opportunities are areas in which you, your team or your organization can excel. Examples of opportunities include willing and interested investors, brand recognition from other product offerings, new product offerings, patents or anything else that offers a chance for success in some way.
Threats: Threats include anything that can cause your organization to suffer. Examples of these are market trends, consumer spending power, a lack of cash flow or decreasing prices for your product.
The SWOT analysis focuses on both internal (strengths and weaknesses) and external (opportunities and threats) factors. It is important to use this and other analysis tools during this stage to get a good understanding of your position and what goals to work toward.
3. Write your mission statement
Developing a mission statement can help your organization to define goals and plans for how to achieve them. Specific and straightforward, a good mission statement can bring clarity to your organization at all levels by defining core values and explaining the organization’s reason for existence. These two aspects are central to strategic planning.
For examples of mission statements you can use to inform your own, most companies post their statements online for customers. Search your favorite brands online to see how they state their goals and core values. Mission statements can be short or long. The idea is to address why your business exists and what you can offer customers.
4. Create a vision statement
A vision statement should explain how you will fulfill the mission statement. To craft a great vision statement, remove jargon and industry language to make it accessible for everyone. Unlike a mission statement, a vision statement is used as inspiration for employees rather than outsiders such as investors or customers. Writing a vision statement will support and maintain your brand’s values, goals, purpose and mission.
You can create your own vision statement by answering the following questions:
Where will the brand be in five to ten years?
How will my company interact with customers or improve their life?
What will be my company's impact on the industry? the world? consumers?
After you’ve answered the above questions, you can put together a vision statement that outlines your plans for the future.
5. Define your long-term and short-term goals
After completing the SWOT analysis and defining the company’s core values you should develop short and long-term business goals. Long-term goals should align with the company’s mission statement while short-term goals are milestones that will help you achieve them. Using the SMART goal framework can provide direction for establishing specific, relevant goals.
While your goals should be specific to your organization, here are a few examples of areas in which goals can produce value:
Improving operational efficiency
Developing company culture
Changing or upgrading product offerings
Supporting new sales and marketing strategies
The most important aspect of creating a goal is to make it challenging, yet attainable. Also, you should have a method to measure your goals for improvements.
6. Create core values and departmental objectives
Another part of strategic planning is creating core values. These not only help craft your mission and vision statements but they can also function obversely. This means that your vision and mission statements can help you determine what your core values are. Core values are usually one or two words that describe the fundamental beliefs of your organization.
From these core values, you can derive departmental objectives. Departmental objectives help build strategy and are a core component of corporate strategic planning. Each of these objectives should be set on an annual basis to allow your team to achieve them and to tweak them as necessary in the following years.
For example, a company's goal might be to launch a new product line. Therefore, your departmental objective for your research and development team might be to build a new product that satisfies problems or issues that consumers may have. Using specific, measurable and actionable goals within the department can help achieve success. In some instances, companies provided bonuses to employees that met these objectives before the given deadline.
7. Define budget, finance and staffing needs
The final part of your strategic plan is to determine the budgeting, financing and staffing needs to achieve the set goals. Each department should play a role in determining what they will need to do their part in supporting the organization’s mission.
Standard sections of a strategic plan
While your plan might include different elements depending on your organizational needs, here are the standard sections of a strategic plan:
Executive summary: Summarize the purpose of your strategic plan in the executive summary. This should be short and to the point. In some cases, you might want to write this portion last so everything is fresh in your mind and you can conclude the ideas in a few sentences.
Signature page: This is a page for all high-level stakeholders to sign off on your strategic plan.
Company description: This can be helpful in providing context, such as a brief history of the company and its products and business offerings. Highlight relevant achievements of the brand that pertain to the plan.
Mission and vision statements with core values: Core values can also go in this section to help solidify your mission and vision statements.
SWOT and strategic analysis: To introduce your goals and plans, you should include your SWOT analysis along with any other important research that informs the rest of the strategy.
Action plans: Your action plan should clearly explain how you plan to achieve your vision and goals over the given timeframe. Be precise about your actions and how to apply the plan across the company.
Financing and operating budget: Finance professionals or accountants can help you put together projections that to how much money you need to finance your action plan. Include items such as forecasted cash flow, expenses, revenues, return on investment, return on equity and any debt you may accrue.
Evaluating the strategic plan: Provide a detailed rubric for evaluating your strategic plan. This could include analyzing year-end numbers, asking for customer feedback, interviewing employees and more. Set forth one or two sentences that sum up how you plan to measure the success of the plan.
Execution: This should explain how you want to introduce the plan to the departments, employees and individuals involved. This section should be provided to every stakeholder in management and on your team. Each individual should clearly understand how they contribute to the plan as it pertains to their position. They should understand what it means to achieve success in their required responsibilities.
Feedback and scorecard: A feedback or scorecard section is optional, but it may allow management and employees to ask valuable questions about the progress of the plan. A scorecard is a visual method that works better with most people than a written document.
Strategic plan development tips
When writing a strategic plan, consider the following tips to make it clear and effective:
Keep all of the language as simple as possible. Use clear, straightforward language that is easy for everyone to understand.
Use a team of trusted individuals to help you draft the strategic plan. Using a variety of perspectives will make the final document better.
Hire a consultant if needed. Many consultants specialize in strategic planning. While they will require payment for consulting services, their expertise can help you create a better strategic plan that translates to profits in the future.
If you're a mid-level manager or individual contributor, send strategic planning drafts to senior management for approval. Doing so ensures the plan aligns with higher-level goals within the organization.
Make your document easy to read and refer back to. Use formatting such as bolding, underlining, and bulleted or numbered lists to organize the information.
How to write a strategic plan for personal career goals
A personal strategic plan is beneficial to individuals who want to improve their job outlooks, strengthen their personal skills and achieve career goals. Much like a strategic plan for a business, your personal strategic plan should help you:
Assess your personal strengths and weaknesses.
Assess your milestone goals over certain time intervals.
Assess where you see yourself in the future.
To develop a personal career strategy, consider the following steps:
1. Outline your core values
Understanding what is most important to you can help you identify your career goals. Whether you value financial stability, helping others, building relationships or other items, these should drive how you establish your strategy.
2. Write down SMART goals
To develop a plan, you need an endpoint or destination. Identifying your goals can help you solidify your direction and understand what you are working towards. These can be career goals specific to your current job, such as earning a certain role or level of seniority, or more general goals such as earning a certain degree, skill or starting your own business. To meet the SMART goal standards, your goals should be Specific, Measurable, Achievable, Relevant and Time-based.
3. Identify milestones
Once you have set long-term goals, you should identify which milestones or short-term goals you will need to reach to achieve them. If you are seeking a promotion, for example, you should set up milestones (such as learning certain skills or leading a certain number of people) that are required to earn the promotion.
4. Keep your goals updated
Each year, you should update your strategic plan to offset any type of change in your life. Your goals may change or you may need to add, remove or revise the milestones you have set for yourself. Keep track of what you have achieved and what areas you need to focus on.
Strategic planning is a vital part of any business, providing documentation to track progress towards a goal. Remember, strategic planning is a process and not a singular event. Strategic planning aims to improve or transform a company over a long period of time and should be addressed and adjusted regularly.
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