Businesses know that to thrive (and even survive), they need to pursue defined goals, adjust to changing market conditions, catch up to their competition and evolve their technology. Completing these initiatives successfully can only be accomplished by starting with strategic planning.
But strategic planning also has more benefits than you may realize. It provides your business with focus and direction, drives organizational alignment and ensures you’re solidifying and communicating your strategy in effective ways.
By providing your entire organization with access to a clearly articulated mission and vision, you can help your leadership develop goals and strategies required for future success and get the buy-in you need from top to bottom to support the changes that need to be made. Having broad participation in the strategic planning process encourages teamwork, creates discussion and promotes adoption of the planned strategies.
Follow These Seven Parts of Strategic Planning
Now you know the why of strategic planning, but what about the how? A successful strategic plan consists of seven parts, from the information-gathering process through decision making all the way to implementation — including measuring success to confirm your strategic priorities have actually been met.
The SWOT exercise analyzes your strengths, weaknesses, opportunities and threats. Strengths and weaknesses are internally-focused. In your planning process, evaluate your strengths to find out what you can build on and look at your weaknesses to see how you can improve on or mitigate them.
Opportunities and threats are external. Look at what’s developing that you want to capitalize on, and beware of or actively minimize threats you’re facing, such as those from the competition or upcoming regulations. Your SWOT exercise will give you a lot of great insights to help you develop your strategic priorities.
Your vision is the long-term future your organization wants to reach, centered around the people it serves (e.g., shareholders, employees, customers/clients and communities). It’s why you do what you do. But it doesn’t have to stay the same year after year. Your vision can be revised during your strategic process in order to react to industry changes and better position your company for future success.
It’s also valuable in recruiting situations. Now employees more commonly want to know not just where the company is headed but also what they’re doing that matters in the long term.
Your vision statement should be three to four paragraphs that paint a picture of where your company is headed and can be used as a measuring stick in the strategic planning process for whether or not you should pursue a goal. All goals should lead to fulfilling your vision.
3. Mission and Core Values
Your mission is the purpose of your organization, and it identifies what you do and who you serve. Your mission should be put together by your top leadership (with some involvement from your board of directors) and must be considered very carefully, because unlike visions, missions are difficult to change for organizations.
Your core values are the principles of behavior and action your organization bases its decisions on. Since they basically describe how you do what you do, your values generally don’t change either.
4. Strategic Priorities
Strategic priorities are the high-level goals needed to achieve your vision, flowing directly from that vision as well as your SWOT analysis. They’re not at the individual or departmental level, so think broadly when developing them.
Also make sure to keep your organization’s strategic priorities down to four or five, as this will help you figure out what you can act on and accomplish within your plan’s timeframe. Having too many priorities splits your focus too much and decreases your likelihood of success.
5. Goals and Strategies
Your goals and strategies roll up to strategic priorities and are the actions necessary to fulfill them. Keep them broad — they shouldn’t go down to the project level — and make sure they’re measurable. You need to know what “better” looks like, and you need to know when you’re done and you’ve met your priorities.
For example, if your strategic priority is profitable growth, your goal/strategy could be “grow inside sales by 20% annually over each of the next three years.”
6. Action Plan
Your action plans roll up to goals and strategies. They consist of the task-level activities needed to accomplish your strategies and strategic priorities, ultimately fulfilling your mission and accomplishing your vision.
Action plans identify what needs to be done, in what order, by which people and by what date. An action plan can be as simple as gathering the information necessary to make a decision, or as complicated as planning out all the steps needed to boost your sales by 20% annually. You can also have multiple projects under each action plan.
Just make sure you routinely update your action plans as time goes along so you stay on target.
7. Financial Measures
Reaching success is your ultimate goal, but to get there you need to know what success looks like. Figure out the numbers tied to success and then measure them on a frequent basis — not just once a year. It’s an excellent approach to help make sure you’re executing your strategic plan.
Remember that the numbers are not the plan — they are a measurement or an outcome. Use them to measure your strategic impact and identify when you’ve fulfilled a strategic priority.
Put Together the Right Team
The team in charge of strategic planning should be diverse; it should never be just the CEO sitting down to write it. A team of 8–12 members will make sure you don’t miss anything, allowing your business to capture more opportunities, recognize more threats, leverage strengths and improve weaknesses.
Your team should consist of all types of personalities and strengths. You should have smart people, creative people, the “Devil’s advocate” (to challenge assumptions), those always biting at the bit for change and the wise, sage people you always go to for advice.
Strategic planning members often become critical change agents when action plans are implemented, so take them from all areas of your organization.
Remember that strategic planning is not a one-time event; rather, strategic planning is a process you should refine and improve as your company moves along and repeats it with new goals and priorities.
Generally, updating your plan annually also gives your business a chance to look at what’s been accomplished so far and what’s come up during the implementation process that didn’t get considered during the decision-making process.
Your strategy should have three key components: the plan, the process and the implementation. The plan should be clear and concise, and it should be measurable so that you know when you meet each goal successfully. The process should be consistent, iterative and involve your whole organization to give your changes momentum. And implementation should be measured, communicated and celebrated. Notifying the whole company when you reach a goal makes everyone feel like they’ve made a difference and improves buy-in with future initiatives.
Want to learn more about strategic planning? Develop a growth mindset by working with professionals who have advised businesses on all facets of strategic thinking and planning. Contact Wipfli to get started.