What Are the Steps of Strategic Planning Process? And Does Your Company Need It?Reading Time: 4 minutes
If you don’t know where you’re going, you’ll end up someplace else. Not exactly the best approach to reach success in business. Getting good results takes deliberate and directed actions. And making them in a large group of people can’t do without having a solid, well-articulated strategy.
Developing a strategy can be tough and resource-consuming. However, investing time and effort in it earlier in the project’s life cycle helps prevent resources from being put to no avail. Asking and answering the right strategic planning questions can help you to trace out an effective strategy for your company. How do we start and what are the strategic planning steps we need to take? Let’s jump in.
The first step of strategic planning is making your mission statement. A mission statement should describe the core purpose of your organization. It should answer the question “Why do we exist in the first place?”, be concise, memorable, and inspiring. Be sure to involve your staff and management into the discussion. Gather up and try to come up with key ideas to describe what value you bring to the customers.
A copywriter might help you with worksmithing and synthesize the one statement that best fits your company. One more idea is to put your mission statement against a so-called t-shirt test: would you and your staff wear it on a t-shirt?A good mission statement is one you and your staff would wear on a t-shirt. Click To Tweet
Identify your position
Once you’ve defined what your organization is about, you need to determine the context in which you operate. This can be done in a number of ways, one of which is the SWOT analysis. It allows you to understand the business environment you work in, see your advantages and weak spots. We have a separate article on SWOT analysis that gives you an in-depth review of all its aspects, we recommend that you take a look at it.
Another popular tool for this stage is building a Balanced Scorecard (BSC). The BSC suggests that we view our organization from four perspectives and then develop our targets, actions, and measures (KPIs) according to them. These perspectives are:
- Finance: this perspective views financial performance of the company and resources used.
- Customers: views the company’s performance from the viewpoint of those whom the organization is intended to serve.
- Internal processes: views the processes happening in the organization, and the quality of the end products and services the organization produces.
- Learning and growth: views the company’s developing capacity in regards to people, their skills, technology, infrastructure, culture, and other qualities.
A well-made Balanced Scorecard serves a number of purposes:
- Communication: BSC puts the strategy in a way that everyone can understand and see their role in it.
- Measurement: BSC helps to track progress towards your strategic objectives.
- Alignment: the BSC helps to ‘cascade’ objectives across and down different parts of the organization and its functional elements.
Accountability: the BSC helps to reinforce the culture of accountability, measurement, and improvement.
Since we now see where we stand, we can develop a vision of where we want to go from there.
If you don’t have a vision of where you want your company to move, your employees will not have it too. A visual statement should be futurecasting, bold, daring, clear, and aim at 5+ year range. Your future state must stay within the declared mission.
How to make a visual statement?
Gather a board of up to 5 people. Set up a hypothetical situation for them: assume it’s 5 years from now and your organization have made a magazine cover. Let the people play with ideas of how they think your company will be discussed. Compile their suggestions as to the headline, description, and so on. Then try to produce the most accurate representation of your vision from the bulk of the given options.
Strategic objectives formalize what you put out in the visual statement. They define your general strategy, drawing a link between your current state, which you identified with a SWOT and BSC analyses, and your future state, defined by your visual statement.
In order to set strategic objectives, you can use a so-called strategic map, making visual statements for individual areas of operation of your company. It might look something like this:
Alright, we have our long-term strategic objectives. Now we should try to identify our short-term constituent plans with which we’ll be paving our way towards our objectives. 1-3 year range is good for goals. When you have those, translate them into department and individual functions. Let everybody know the relevance and relation of their functions to the general strategy. Conduct strategy sessions regularly to adjust the strategy and update functions accordingly.
What is the difference between a strategy and a plan?
A strategy is long-term, it is dynamic and is changed according to conditions. It consist of plans that outline actions needed to be performed to achieve strategic objectives. A plan is static, meaning if it fails, it usually gets replaced with another plan.
Communicating your strategy
A great strategy needs to be understood to be useful. Thus, you need to decide how you are going to communicate your strategy with the involved parties.
Medium: this describes what form you are going to use to share your strategy. Agile planning and presentation tools like Roadmap Planner by KeepSolid are perfect for sharing your vision with a specific audience.
Delivery: describes an occasion on which you’ll present your strategy.
Frequency: how often will you share it?
Now that you know more about strategic planning, you should try doing it for your company. Roadmap Planner can help you out with that. With it you’ll be able to create a visually appealing, easily-read document to cover all aspects of your strategy. Give it a try!