What is Strategic Planning?
At its most basic, strategic planning is the process of determining exactly where your organisation is heading, why it should head that way and how it's going to get there. Without a strategic plan, your organisation will essentially be trying to navigate unknown territory without a map and will almost certainly lose its way as soon as there’s any change or uncertainty on the horizon.
What does strategic planning normally include?
A strategic plan lays out where your organisation is going so that everyone, from part-time team members to the Board of Directors is working with the same information. Ultimately, strategic planning helps to determine what your organisation is, what it does, why it does it, and how to focus on optimizing your future potential.
There are many different frameworks and methods for strategic planning, but a strategic plan will generally include:
- Your mission, vision and value statements.
- A strategic analysis, such as a SWOT analysis that explains your strengths, weaknesses, opportunities and threats.
- An explanation of your strategies and tactics.
- An action plan.
- Your budget and operating plans.
- Detailed monitoring and evaluation methods.
- Finally, an executive summary.
A brief, concise strategic plan might be fine for small organisations, but bigger ones will need a more detailed plan that’s based on various aspects of the group if it’s to be effective.
The history of strategic planning
The term "strategy" comes from the Greek "strategos," which means, literally, "general of the army”, and strategic planning continued its military roots with the teachings of Chinese general Sun Tzu, who wrote of warfare and the strategic underpinnings of success in 500BC.
It wasn’t until the early 1920s that strategy found its way to academia and Harvard Business School developed the Harvard Policy Model - one of the first strategic planning frameworks for private businesses. The Harvard model taught that strategy is a pattern of purposes and policies that defining the company and its business. In short, it’s the common thread or underlying logic that holds a business together.
Through the late 1950's, strategic planning's shifted toward the “portfolio model”, which focused on the management of risk, industry growth, and market share.
One of the early modern frameworks for business planning was developed by Igor Ansoff, whose “Ansoff Matrix” was based on the idea that there were only four ways an organization could expand its markets or overall performance. Then through the 1960s, strategic planning became a standard management tool in virtually every Fortune 500 company, and many smaller companies as well.
In the 1990s, “The Balanced Scorecard” approach came to the fore and tied the strategic objectives of an organization to its performance measures. The approach was based on the idea that in order to improve strategic planning, organisations needed to maintain a tight link between their objectives and their day-to-day operations.
How do strategic plans help?
If done well, strategic planning will help you:
- Prepare and define your actions and review your motivation, costs and resources.
- Review your internal and external environment to make the most of your strengths, minimise your weaknesses and capitalise on opportunities.
- Create strategies and decide which strategies and tactics you should use as a result of the above factors.
- Implement your strategies, assess your resources and get your plan on paper.
- Get everyone in the organisation working from the same page and build consensus by getting the message out to key stakeholders.
- Measure your success, track your progress and motivate teams to keep up their efforts.
- Increase productivity by ensuring everyone knows where the organisation is going, what they’re supposed to be doing and how best to optimize their use of resources.
Using the right tools
Whichever method you use for your strategic planning, it’s important to take full advantage of the right tools to carry it out. The right software will not only help you define your organisation’s strategic goals and priorities, but also communicate them clearly and drive the right activities to focus on reaching the right objectives.
Yearly, or even quarterly plans aren’t always enough to keep up with the rapid pace of change these days, so organisations are now using tools that deliver real-time data to inform their decisions, and predict, plan and pivot at a speed that was simply unachievable before the advent of modern technology.