Strategic planning is the process used by for profit or not-for-profit organizations to establish direction and identify key steps needed to accomplish meaningful goals; where we’re going (priorities) and how we plan to get there (action steps). Most strategic plans cover activities for one to five years in the future. Often strategic planning incorporates articulating organizational mission, vision, and values.
The strategic planning process starts with analyzing the internal and external environments, often called a SWOT analysis (strengths, weaknesses, opportunities, and threats). The internal scan focuses on organizational strengths and weaknesses. Questions asked could include: Do we have the right staffing, enough employees, too many, do they have the right training? Do we have the right equipment to do the job, to grow or will we need to downsize or purchase more in the future? Is management prepared to make decisions to help the company be more profitable? Are we charging the right prices? This is just a short list of the questions that may need to be considered.
The external scan covers opportunities and threats including economic and competitive. Often what looks like an opportunity can also pose threats to the company. For instance, if a company grows too fast it can end up going out of business because cash flow is insufficient to cover the costs of growth. Questions to ask include: What are competitors doing? Are there new markets developing? Are customers changing the way they purchase our products or services? Are new technologies going to make our current products obsolete? The external environment cannot be controlled but planning can mitigate problems before they cause the business to fail.
Planning is done by a team of stakeholders that should include management, owners (or the board of directors), and employees from all departments and all levels in the organization. Ultimately it’s important strategic planning includes decision makers and those responsible for implementing the plan. Without buy-in from all constituents, even the best strategic plan can end up collecting dust on a shelf and not be implemented. Many companies choose to do a formal strategic planning process every 3-5 years with annual updates to monitor progress on the plan.
Goals in a strategic plan represent a stretch for the organization, a chance to grow or move in a new direction. To be effective, action steps in a strategic plan need to have a responsible party (the person who ensures the task is done), a date the action step is to be completed and sufficient resources to accomplish the task.
Planning is a process that includes developing the plan, monitoring the progress, making adjustments where needed, celebrating successes and beginning the planning process again.