Strategic planning is a process of defining the direction in which the organisation wants to go and allocating its recourses to pursue this strategy through making better decisions to achieve this strategy, as well as implementing mechanism that helps control and guide the strategy. Strategic planning is often about long-term business goals, rather than short-term wins.
Strategic planning is quite a straightforward process, that is mainly consistent with a situational analysis. In short, this entails looking at your current external and internal environment, formulating organizational objectives and strategies based on this assessment and developing procedures to implement and evaluate the strategic plan. Commonly strategic plans cover a three-to-five-year period but based on the volatility of your industry a shorter period might be good too.
STRATEGIC PLANNING PROCESS:
Here are the main steps for strategic planning:
1. Determine Position
As with many situational, risk and operational analyses one must start with determining the position the business is currently in. Starting with organisations external and internal environment, using a SWOT analysis is recommended at this stage as it helps to review all aspects of the environment the enterprise is currently in.
Next, determine business’ position in the industry based on the previously delivered SWOT and other external factors, such as competitors, the power of your suppliers, customers, and any barriers. Additionally, some sources suggest determining your employee input at this stage as one of the contributing internal factors.
Lastly, to fully review the current position your business is in, review your existent strategy and identify any current strategic issues that are occurring and any potential future issues that you and your strategic planning team might see.
2. Develop Strategy
When it comes to defining your organisations future state, one must start with clarifying the vision first. Start with defining both short- and long-term objectives. Imagine what success looks like in three-to-five years.
Then, look at what are your competitive advantages, what is your unique position in the industry right now, and where you want to be in the three-to-five years period.
Further, develop a balanced organisation wide framework on smaller goals and objectives and how you think you would be able to achieve such goals and objectives.
Finally, to keep your plan detailed, realistic and matching your objectives finish this part of your strategic planning by creating a strategic forecasting for your three-to-five years plan.
3. Build the Plan
Now, that you have established your framework for strategic planning, you can start by working on the actual plan. Using your SWOT analysis and organisational goals determine your business KPIs. Selecting your key performance indicators to track your business progress can be a daunting task, but if you avoid these 5 KPI mistakes, it will be a very useful resource in your business.
To finalise your business strategic plan determine your departmental and team member goals by cascading individual goals over 12 month period. Such way of tracking ensures that you don’t lose sight of your year-on-year performance. And lastly, align all of it with a yearly budget.
4. Manage Performance
The last step to the strategic planning process is to implement and evaluate the plan. Depending on the size of your organisation you might want the implementation to be done by a set of organisational members that created the plan, while smaller organisations might go for department heads to report on their part.
Also, you will need to monitor and assess the implementation of the plan to determine if the plan is achieving the selected objectives that lead to your selected goal and adjust when necessary.
And this is how you implement a strategic planning process in your organisation!