What is Strategic Planning? Even the words strategic and planning used together can cause confusion. Strategy and plan both mean the same thing, right? Not really. Any organisation can plan but not every organisation thinks about planning in a strategic way where they look towards the future and map out a series of measured steps and objectives to get them there.
In order for a business to be really successful, to really capitalise on its strengths and to be agile in an ever changing set of market conditions there needs to be a clearly thought out roadmap for success. That roadmap is often developed as a Strategic Plan. The Strategic Plan determines where an organisation is going and how exactly it’s going to get there.
Why A Strategic Plan Is Important
While many organisations will claim to have some sort of Strategic Plan it is the organisations that are performing at a high level who have a good Strategic Plan and are working towards delivering the vision laid out in the plan. These high performing organisations are using their Strategic Plans as the guide and map for the future of the company.
The importance of the Strategic Plan is that it provides direction and focus for the organisation and its employees (if used as a tool by the organisation, rather than laying on a shelf gathering dust). The plan lays out specific goals that are to be achieved and sets out the course of action for achieving them. A good strategic plan looks out 3 to 5 years (sometimes longer) and describes clearly what market, product/service; pricing, marketing and other strategies will be followed. In short, the Strategic Plan defines how the business will develop and grow over the period of the plan.
Before you jump in with both feet, remember the value of a strategic planning exercise is more than in the documentation of the plan itself. The journey taken by the organisation in analysing where their journey will take them is extremely valuable in itself. Furthermore, developing the plan is a dynamic process. The idea or objective arrived at today might very well alter the decisions made previously. The planning process will move the Strategic Plan through a number of iterations before it is finalised.
Developing the Strategic Plan
Charting the path for an organisation to follow can leave even the most organised and focused manager stumped. Basically, any strategic planning effort must answer three key questions:
1. Where are we now?
2. Where do we need to be?
3. How do we get there?
Building a Strategic Plan is not complex. It is, however, a journey and like all journeys the process of getting to the destination is often as valuable as reaching the end point. In his book, Selling the Invisible – A Field Guide to Modern Marketing, Harry Beckwith wrote:
Don’t value planning only for its results: The Plan.
The greatest value is in the process: The Thinking.(reference)
The ‘thinking’ should involve all the key stakeholders to the business at some level. An organisation might involve staff at all levels – from the Board right through to the front line staff in developing the plan. Customer opinion should be solicited. Creative thinking and new ideas tabled will confirm the core values that drive the organisation.
The Strategic Planning process should generate excitement and commitment to the way forward. And, by involving a wide spectrum of stakeholders in the process there is a greater likelihood of buy-in to the plan and its successful implementation.
In developing the Strategic Plan the aim is to answer the following questions:
What do we as an organisation aspire to become (vision)?
- A Vision: outlines what a company wants to be. It concentrates on future; it is a source of inspiration; it provides clear decision-making criteria.
What business are we in (mission)?
- A Mission: tells you about the company now. It concentrates on present and determines the desired level of performance.
· What goals are we seeking to achieve (market-focused performance objectives)?
· What value proposition will we deliver to customers?
· Which capabilities do we need for success?
· How can we distinguish our portfolio of products and services from our competitors (marketplace positioning)?
So, what exactly do we do when we embark upon a strategic planning exercise? In answering the questions laid out above there are a structured set of strategic planning steps that should be followed:
Strategic Planning Steps:
- Analyse the Organisation – conduct an internal analysis. Assess company strengths and weaknesses, financial performance, people, key operational aspects, culture, positioning in the market(s), and critical issues facing the organisation.
- Assess the external landscape – look outside the organisation. Focus on understanding competitors, market opportunities and threats, evaluate new and changing technologies, analyse any regulatory or legislative concerns, trends in the market(s) and so on.
- Develop the vision and mission – this will underpin the strategic plan. What do we do now? What do we aspire to do? Developing the vision and the mission will help to focus the organisation on the big picture.
- Set Goals and objectives – Setting clear goals will establish the framework and basis for implementing the plan. The idea is to ensure that the organisation has specific and measurable targets to aim for.
- Define Critical Success Factors – Understand and document the critical factors which will influence the successful implementation of the Strategic Plan. If everyone in the organisation understands and is bought in to what it takes to be successful on the journey, the implementation of the plan will run much more smoothly.
Strategic planning does not end once the plan is documented. The key to making the plan work is a commitment to implementing it, to aim for the goals laid out in the plan. The Strategic Plan must be socialised within the organisation. Each Department/Business Unit in the organisation must understand the vision and mission and have a clear grasp on the goals and objectives that they must focus on during the period of the plan. The people in the organisation must be held accountable for what they said they would do.
Finally, plans change – even Strategic Plans. Regular review of the Strategic Plan will ensure that it is still current and that it is still providing the right level of focus and direction for the organisation. In changing market conditions or when facing shifting internal priorities an organisation should regularly review the Strategic Plan so it is able to adapt the course of action and remain flexible.
It is important to understand the limitations as well as the possibilities of strategic planning. A Strategic Plan is not a solution for everything that might challenge an organisation. However, both the development process and the plan itself can be valuable tools in charting the future path for the organisation. If an organisation is committed and bought into its implementation, a Strategic Plan can provide the platform for success, enabling it to clearly articulate where it is now, where it needs to be and how it’s going to get there.
A well thought out and developed Strategic Plan will highlight an organisation’s unique strengths and particular weaknesses, enabling it to develop new opportunities or understand current/future challenges to the success of the business. The Strategic Plan will provide the map; all the organisation has to do is trust and follow the landmarks.
Catherine Smith McKiernan is an experienced business consultant based in Dublin and owner of CSM Consulting.