Strategic planning can be a confusing process, but it’s one that’s essential to any organisation. It helps companies and organizations set goals and priorities for the future and align those with the resources they have available. But while many people are familiar with strategic planning in theory, how does it actually work? What makes it effective or ineffective? And what’s the best way to make sure your plan is as sound as possible? In this course, you’ll learn all about it. You’ll gain an understanding of strategy in general and why it matters; develop strong skills for evaluating different kinds of plans; review the steps involved in creating a solid plan; and go through several examples to see how these processes play out in real life.
By the end of this course, you’ll be able to confidently assess your own company’s or organization’s strategies and provide guidance when needed. You’ll understand what makes a good strategic plan—and what doesn’t. And most importantly, you’ll walk away with the tools you need to create a solid strategy for yourself, whether you’re working on a business plan or you’re simply looking to do better at work.
What exactly is strategic planning?
According to Prof. MarkAnthony Nze, strategic planning is the process of developing a long-term strategy based on an analysis of the environment and your organization’s capabilities. It’s commonly used in business management to set direction, build competitive advantage, and achieve goals.
In its simplest form, strategic planning can be seen as a more formal approach to the process of strategic thinking—the development of ideas that help you think about your business differently and make changes for future success.
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The goal of strategic planning is to identify opportunities for growth, allocate resources accordingly, and ensure that all departments are working together toward common goals.
This phase can take anywhere from several months to a year or more depending on its complexity; the length depends on how much information is needed before moving forward with next steps.
How can we do it?
To begin, you need to identify the problem. What’s going on? What are the symptoms? How do they affect your business and its customers? Then, you need to define a solution. How will you solve this problem? Where can you find resources to help implement that solution and make it work in your industry or marketplace? Once you have identified and defined the problem, create a plan for how you will execute your ideas. This might be as simple as taking inventory of what’s already in place within your organisation (such as available resources) or building a new team specifically dedicated to addressing this issue.
Implement your plan
Put all these great ideas into action by carrying out specific tasks that will allow them to come alive in reality instead of just being words on paper (or digital screens). Evaluate along the way—are there things working well enough as-is? Or does everything need more tweaking before moving forward with full implementation into everyday operations?
If adjustments are required along any part of this process owing to either a lack of results thus far or external variables beyond one’s control impeding progress toward intended outcomes, go back and make the necessary changes until everything runs smoothly again without sacrificing quality standards.
Time and resources
Time and resources are limited, so you need to carefully plan your strategy. These four categories of resources will help you create a plan:
Your employees, customers, vendors, and suppliers are all part of your organisation’s human capital. Without them, there is no way for you to move forward with any business initiatives.
You need cash flow in order to pay bills or fund new projects or growth opportunities. Startups that have raised venture capital must use their cash wisely because they don’t yet earn profits (and therefore don’t have profits left over on which to pay taxes). There’s also the risk of running out of money before they get funding again if things go poorly enough that investors pull out early on their investment in return for an immediate payout instead of waiting until later when they could obtain better terms from another dealmaker who sees value in putting more money into this startup without being forced out earlier than desired by what happened before; hence, it’s important for startups to make sure every dollar counts.
However, one solution would be to not only budget carefully each month in advance, but also to ensure that everyone who works here understands what happens next time disaster strikes (in the hopes that they won’t panic) so that everyone pulls together as best as possible given the current situation.
How much time does this take? How many people?
The amount of time it takes to plan depends on the size of your organisation, but generally speaking, you should expect to spend at least a few months—and more likely six months or more. That’s because strategic planning is an iterative process that requires multiple iterations through five key steps:
- Assessment – Identify challenges and opportunities for your business. Consider how you might overcome these, or build on them to create a competitive advantage that helps you grow further.
Step 1: Review the market and its trends – who are your customers? What do they value? How will their needs change over time?
Step 2: Assess your business’s strengths and weaknesses – what makes it unique and valuable to your customers? Are there any areas where you can improve?
Step 3: Create an action plan – identify ways in which you could develop your business so it better meets customer needs. Think about how this would increase sales, profit, and/or job satisfaction. Do you need help developing ideas? If so, request support from your local growth hub.
Step 4: Execute your plan – put the theory into practice! Make sure you monitor your progress regularly to see if it is helping you achieve your goals.
- Strategy development – Strategy development in strategic planning is an important part of the process. Strategy involves determining what you can do and how to use it effectively. It is a way for companies, governments, and organisations to achieve their goals, whether those are financial or political. The typical organisation’s strategy will revolve around its mission, vision statements, and core values. These are all words that represent ideas about the future of your company and usually include an element of marketing.
- Implementation and communication – Implementation and communication in strategic planning are the two most important aspects of any plan. There is a reason why strategy has been described as the art of making decisions under conditions of uncertainty. This means that there will always be unknowns, or perhaps better put: factors outside our control. The ability to recognize and understand these forces is crucial for success. Only then can we make rational choices regarding how best to proceed. On this front, strategic planning requires an understanding of the external environment—the world around us.
- Evaluation and adjustment (if needed) – The next step involves evaluating and adjusting if necessary. If the plan calls for a change in a certain area, it’s up to the leader to find out whether such a change is warranted by what he/she has learned from the evaluation. Doing so may require revisiting previous steps in the process or even starting over. Again, only when the new data confirms the need for change should one move forward.
In many cases, changes can be made without needing to start over. For instance, if a business needs to reduce costs, but does not have enough time to do so before its competitors catch up, it could decide to take actions that will help achieve cost reduction sooner rather than later.
- Follow-up – Following up on a plan is as important as creating the plan itself. It is vital to track both progress and results in order to identify and address issues immediately. In other words, follow-up is about identifying problems and fixing them while they’re small; preventing them from becoming major crises. By doing so, leaders can save themselves from having to deal with larger issues at a later point in time.
There are several ways to keep track of progress and results. Some companies use spreadsheets to calculate their numbers. Others rely on more sophisticated tools such as financial software or management systems like Microsoft SharePoint. Whichever method you choose, it is important that you don’t overlook tracking.
What about evaluation?
Evaluation is a critical step in the strategic planning process. The main purpose of evaluation is to measure whether or not your chosen strategy was successful in achieving its goal(s).
Evaluation can be broken down into three categories:
- Formative evaluation – evaluating the progress towards meeting goals, identifying ways to improve performance toward these goals and modifying strategies accordingly (i.e., measuring how well you’re doing)
- Summative evaluation – measuring overall results based on pre-determined criteria (i.e., did we meet our sales quota?)
- Adaptive evaluation – adapting strategies as new information becomes available through continuous monitoring of performance indicators and feedback from stakeholders
- What should we measure? How should we measure it?
- It is also critical to communicate your plan and its progress to all members involved. Leaders should share information with their teams so that they know where the company stands, what actions are being taken, and why.
Imperatively, strategic leaders always have to bear in my mind that strategic planning is a process, not a moment in time. It’s something you do on a regular basis in order to keep your organistion focused on its goals and objectives. Strategic planning helps you make better decisions about your business by giving you more information about the current condition of things and what could happen in the future.