Strategic planning is a systematic
process of making the fundamental decisions and actions to shape and guide what
an organisation is, what it does, and why it does it to develop a road map to
manage its positioning within a given market sector.
The management process of strategic planning focuses organisational energy towards achieving common goals to assess and shape its direction in response to a changing environment. Some of the elements that underlie the strategic planning process include the following:
- Strategic: It is a strategic process that involves preparing the ultimate way forward to respond to the circumstances of an organisation's environment, whether its events are known in advance or not. Ultimately, this means understanding and being transparent about objectives, being aware of resources and incorporating them into a consciously responsive planning process within a dynamic environment.
- Planning: Planning is related because it involves setting goals by choosing a desired future and developing an approach to achieve those goals.
- Disciplined: Discipline highlights the constructive collaboration between the different steps in strategic planning. The mission depends on the environment. Strategic planning is concerned with a sequence of questions typically raised to examine the experience of an organisation and test assumptions, gather, and use information about the present to try to forecast the future environment in which an organisation will be working. It calls for a specific order and pattern to keep it focused and productive.
- Fundamentals: Organisational strategic planning implies that some decisions and actions are more important than others and that the formulation of strategy concerns making complex decisions about what is essential to achieve organisational success.
- Decision-Making: Strategic planning is based on the critical issues raised in the formal organisational planning process. Choices must be made as the plan is no more or less than a set of decisions about why they must be resolved, what to do about the issues identified, and how to overcome them.
- Long-Range Planning: The long range is the most extended period for which it makes sense to make plans. The period varies from organisation to organisation, but a 3-5 year period is appropriate for most organisations' meaningful long-term planning.
- Operating Plan: Operating plans detail the actions required to achieve the goals laid out in the strategic plan to prepare how each significant action corresponds to its fiscal year.
- Strategic Management: Strategic planning relates to managing day-to-day and month-to-month in a way that focuses on the most critical decisions and actions. It requires the kind of longer-term perspective and priorities which result from a strategic plan. The concept also incorporates the assumption that the market sector is constantly changing. Thus, strategic management requires an ongoing re-assessment of current projects considering long-term priorities.
A management team that supports the strategic plan may need to align fully with an organisation's goals and priorities, thus undermining its execution. It is expected that without a proper assessment of the industry and an organisation's capabilities, the plan will lack strategic thinking to become more of a projection of past performance into the following year. The following steps will guide the creation of a successful strategic planning process:
- Assess the Industry, Competitors, and Market Trends: To create an effective strategic plan, an organisation must assess the external market sectors shaping an industry, understand the competitive and regulatory landscape and identify market trends. If data is unavailable, conducting an efficient external assessment before the strategic planning event would be prudent to provide market insights and validate data to inform decisions and test assumptions, resulting in more strategic conversations during the event.
- Conduct a SWOT Analysis: To consider the threats and opportunities in assessing the external market sector, an internal organisational review will ground the strategy and set a baseline for an organisation's culture and capabilities. A SWOT analysis will reveal an organisation's strengths, weaknesses, opportunities, and threats. With this information, a management team can draw a set of offensive/defensive strategies that capitalise on opportunities to offset the risks of potential threats.
- Review Organisational Mission And Vision: The value of a successful strategic event inspires a management team to achieve meaningful goals. Reviewing an organisation's mission and vision is essential at the start of a strategic planning event. An engaging envisioning session helps a management team collaborate to create a shared story of success. This activity unites and inspires a management team and everyone to embrace an organisation's greater purpose.
- Set Organisational Goals and Priorities: By creating an unclouded vision of the internal and external assessments and guided by an immersive vision, it is essential to focus on the specific priorities and goals to achieve the vision. It is a critical stage for decision-making as a management team engages to define the big scenarios that will move an organisation towards its goals.
- Define Objectives and Critical Initiatives: With a clear set of organisational goals and priorities, the next stage is to define the key objectives and initiatives that activate the strategic plan, undertaken at a functional level, to enable alignment and increase ownership. Keeping the number of initiatives reasonable to what can be realistically done annually is vital. It is also essential that these initiatives truly align and help deliver on an organisation's goals.
- Determine Staffing, Budgets, and Financial Needs: The strategic plan is operationalised by assigning sponsors, champions, and resources behind the project to monitor budgets and sponsor-specific issues to identify and deploy actions charged to tackle cross-functional strategic initiatives.
- Identify and Track Success Measures: Regularly monitoring progress on attaining strategic goals and objectives is critical to ensuring that the plan is being implemented, making course corrections if needed, and ensuring accountability and follow-through. Assigning someone to collate, track, and report progress on the strategic plan using relevant measures is critical. An annual organisational review includes a status report on strategy implementation through key performance indicators.
Strategic planning is critical for
positioning an organisation for success, aligning a management team to a
standard plan and guiding decision-making. Most organisations conduct some form
of strategic planning event before starting a new year.
However, most strategic planning
processes all too often fail to deliver real value due to common pitfalls, such
as a management team that views strategic planning as an event rather than an
annual cycle. Strategic plans must be fully implemented since they are seldom
reviewed throughout the year once a strategic vision is assimilated.
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