Strategic management vs. strategic planning: Key differences, benefits and a framework to implement

Strategic planning and strategic management are two distinct yet interconnected components of achieving a business’s long-term goals. Both affect where you’re going, but understanding the difference between strategic planning versus strategic management is crucial for organizational success.

Keep reading to learn more about each, plus how to start implementing both more effectively.

What is strategic planning vs. strategic management?

Strategic planning is the approach used in forming an organization’s direction (e.g., its vision, mission and priorities), while strategic management is the overall process of achieving that direction, from planning to executing.

Managing the action plans, projects and life cycle of the strategic plan is crucial to accomplishing your business’s long-term priorities.

• Strategic planning: Think in terms of establishing an overall sense of what you want your organization to achieve, often over a period of several years or more. During the strategic planning process, you’ll create big picture goals and set high-level KPIs that will help you measure your progress in achieving them.
• Strategic management: This is about everything that goes into leading your organization through the journey of accomplishing your strategic plan. You’ll do things like conduct a SWOT analysis, break your strategic plan down into action steps and then execute each of those steps.

How do effective strategic planning and management contribute to an organization’s success?

An effective strategic planning effort gets your whole team pulling together in a unified organizational direction. If you don’t know where you’re going, you risk spinning your wheels, wasting energy and resources on misaligned initiatives and falling behind competitors — while having a clear plan can help you avoid that.

But even the best strategic planning work doesn’t mean much if you just stick the result in a drawer somewhere and don’t use it. You need both strategy and execution, which is why strategic management is an equally important component.

By implementing a focused strategic management approach, you translate ideas into everyday actions that move you toward your goals and generate revenue, impact and other results both small and large.

What are the key components of good strategic planning?

A successful strategic planning process model involves elements like establishing your organizational vision, mission and goals. The key steps of strategic planning are typically carried out by senior leadership, usually in consultation with your board.

You may also benefit from working with a strategic planning consulting advisor here.

Vision

Your vision defines the direction of your organization at the highest level. Where do you want to go? For example, a business might want to become a market leader in its niche over the next decade, while a nonprofit might aim to achieve a transformative impact for its constituents over the same timespan.

Mission

Your mission defines your organization on a day-to-day level. What is the main work you do every day and who do you serve? Clarifying this helps you define yourself in the market.

Core values

Your core values set the foundation for your culture. What values do you want to shape your team? Define them during your strategic planning efforts.

Goals

Your goals are your major KPIs or objectives that measure progress in carrying out your mission and achieving your vision. Think big picture: Valuation, annual revenue, number of constituents served and other high-level qualitative or quantitative metrics.

Strategies

A strategy (or strategies) is your plan to actually meet your goals. This sets a blueprint to follow with your strategic management efforts, and involves thinking about areas like growth, how to go to market and operational performance.

Planning process

Develop your strategic plan within your core leadership team. Lean on your board too, drawing on board members’ insights and expertise as a key resource.

What are the key components of an effective strategic management process?

Strategic management implements your strategic planning and can be divided into four phases: Think, plan, act and measure. Here’s what each one means:

1. Think

The thinking phase comprises both an external assessment and an internal assessment, which are key components of a SWOT analysis. SWOT analysis in strategic planning is a crucial tool for evaluating your organization’s strengths, weaknesses, opportunities and threats.

You want to consider external factors, such as emerging opportunities for your business to leverage in the future and threats you can minimize or work around. Technology can pose both an opportunity and a threat; your business must decide what your vision is and how developing technology fits into that vision.

Your internal assessment should evaluate your capabilities, processes, culture and change readiness. It’s incredibly important to understand how flexible and ready for change your organization is.

• Also consider culture: Developing a good strategy doesn’t automatically equal buy-in from your employees. Culture and change readiness can blindside you when you’re trying to implement your strategy if you don’t take them into account beforehand and effectively manage change.
• Pay attention to what your customers want: You should also take your customers into consideration during the SWOT analysis. What feedback are you getting from them? Do they seem interested in a product or service you traditionally haven’t provided?
• Weigh your competition: Is a competitor disrupting your industry or gaining some sort of competitive advantage over your business? Don’t leave out your customers when evaluating your organization’s strengths and weaknesses, as well as external opportunities and threats.

2. Plan

This is where strategic planning comes into play. Essentially, the process involves using your SWOT analysis to form your long-term vision and drill down from there into your strategic priorities, goals and action plans. Various strategic planning frameworks can be employed to guide this process effectively.

A key aspect of strategic planning is to include organizational drivers of success. Make sure to ask what “success” and “done” look like. You should be able to measure your progress to see if you’ve met your goals.

Determine those measurements during the planning process, not after. This is where key performance indicators (KPIs) come into play, helping you track progress toward your strategic objectives.

3. Act

Executing your strategic plan involves a few vital steps. First is creating a performance culture to give your employees visibility into what your goals are, how they’re being met and when you successfully complete a goal.

Since every employee plays some sort of role in the strategic plan’s execution, visibility and communication must start at the top. Otherwise, those employees are less invested in the plan, and you run into change management problems.

To overcome those problems, you must also build accountability. Developing a culture of ownership allows every employee to feel like they own the results and successes of your plan.

This is where strategic management frameworks like the balanced scorecard can be particularly useful. The balanced scorecard approach helps in translating strategy into action by aligning organizational activities with the vision and strategy of the company.

4. Measure

Not every plan will go smoothly without any readjustments. Be sure to act on the measurements you set in the planning phase. Are you seeing the results you expected? Is there something new you can leverage?

Reviewing and evaluating your strategy execution to adjust course is one of the most important strategic management actions you can take. This process of continuous evaluation and adjustment is crucial for maintaining strategic alignment and helping to ensure your organization stays on track to achieve its goals.

Key considerations of strategic management

Key considerations of strategic management include setting priorities, keeping your team aligned and allowing your processes to evolve over time. Here’s what to know:

Set priorities

While communication and metrics are two big parts of strategic management, don’t discount prioritization. You can’t ask your employees to do two full-time jobs, so you need to balance strategy with everyday work so production doesn’t grind to a halt and make your strategy a moot point.

Prioritize goals and action plans and build out a timeline that takes into account the everyday work.

Keep your team aligned

Make sure you keep an eye on how people’s roles change because of the strategy. Updating job descriptions and titles helps ensure employees feel aligned with a shared vision and are committed to the strategy.

Also, be sure to clearly communicate performance measurements at all levels and find a way for employees to provide feedback in return. This feedback loop is essential for maintaining strategic alignment and ensuring that your strategic objectives remain relevant and achievable.

Allow your process to evolve

In the end, remember that strategic management is an iterative, ongoing process, not a single event. When you have the plan, the buy-in and the measurements, you’ll still need to review and readjust to help your organization stay on the path to achieving its long-term vision and goals.

This may involve revisiting your SWOT analysis, reassessing your strategic positioning and adjusting your resource allocation as needed.

How Wipfli can help

We advise businesses and nonprofit organizations on how to do effective strategic planning and strategic management. Let’s talk about where you want to go and how you can get there. Start a conversation.

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