6 Key Elements Of Strategic Planning

I recently spoke with a prospect at a distribution company about how our software could help with their strategic planning. The prospect liked what our platform could do, but thought their plan needed work before they were ready to use it.

After speaking with him more, it was clear the issue wasn’t the plan’s readiness. It was how they built it. They had a mix of measurable items in their strategy that made it difficult to consistently report on goals: some items were projects, others were big-picture strategies, a few KPIs, and descriptions of day-to-day operations. It was hard to make sense of it all because the distribution company didn’t have the right structure to its strategic plan.

I told the prospect he might be right. It might be too early to use strategy software. ClearPoint automates your planning, tracking, and reporting, but you need some structure in your strategic plan to get value from any software. Any organization trying to execute a strategy should focus on six key elements of strategic planning:

6 Key Elements Of Strategic Planning

1. Themes Or Perspectives

Your first step is to identify themes, which are sometimes similar to perspectives. These themes are buckets or categories that define the overall structure of your strategic plan. For example, it’s common for a private organization to use financial, customer, internal, and learning and growth perspectives. But a local government may use public safety, public works, transportation, and quality of life. You may choose to focus on innovation, customer intimacy, or operational excellence (or a combination of some of the above). All other components of a strategic plan will be categorized under the framework you choose.

2. Goals

Goals say what you are trying to accomplish. Your goals should be aspirational statements and visionary improvements for your organization, organized within your themes. While lofty, they must be written as actions. Use words like improve, reduce, or grow, followed by a clear directive. For example: “Improve the quality of the customer experience.” Also, keep the length of your strategic plan in mind and create goals accordingly. If you have a five-year strategic plan, a goal to “Double revenue in five years” is better than “Grow revenue by 20% this year.”

‍Note: Some companies choose to combine elements #1 and #2. This is fine, but be consistent. If you use both themes and goals, carry that alignment through your whole strategic plan. Consistency makes the plan understandable across your organization.

3. Key Performance Indicators (KPIs)

KPIs are the measures or metrics that show your progress. They are separate from, but related to, your goals. Of all the elements of strategic planning, this one can create the most confusion. Here’s a cheat sheet for telling what is a KPI and what is not:

• KPIs have measurable targets.
• KPIs can be visualized in a chart. (If you can’t quickly sketch a bar chart of results, you might not have a KPI.)
• KPIs can answer the question, “Are we on track to achieving this goal?”

Depending on the goal or internal challenge you’re addressing, you’ll employ different types of measures. For example, improving the quality of the customer experience could be measured by the time it takes to complete a task, the number of customer complaints, a percentage of expected behaviors, cost of expenses, etc.

4. Projects

Projects are multi-step initiatives you complete to improve your overall performance. (Compared to single-step efforts, which are really just tasks...see #6 below.) Your strategic plan could include construction projects, such as building a new bridge, or even intellectual projects, like redesigning the customer onboarding process. Remember, these are strategic projects. Your organization will have numerous, non-strategic projects that don’t belong in your plan. Strategic projects are typically tracked in Gantt charts, and should support your goals and improve your measures...all the pieces fit together like a puzzle.

5. Operations

The operational elements of your strategic planning relate to your daily ongoing activities. A bakery’s daily operations might include tracking the number of buns made or rate of on-time deliveries. If this data goes awry, no amount of innovation will keep your strategy afloat.

Every company has a large amount of operational data, and it can be tough to decide what belongs in your strategy. Again, strategic planning is not the same as operational planning. To avoid internal arguments, consider creating a goal around operational excellence and adding a few KPIs in that area. This gives operations a presence in your strategy report. Follow the strategy framework you established to avoid confusion.

6. Action Items

Action items are simpler efforts, sometimes known as tasks. When you have the big components of a strategic plan in place (themes, goals, KPIs, projects, and operations), you still need to manage and report on that plan. You need to discuss it and make adjustments. That takes legwork.

All the small things that happen in a strategy discussion or reporting meeting should be translated into action items. Anytime someone says, “Do this,” “Follow up with that,” “Adjust this,” or “Research that,” you need to capture these action items and follow up with reminders (you can do all this in ClearPoint). You may even need to create a full-blown strategic action plan. These tasks keep your strategy alive and breathing.

Check Your Plan’s Structure

The next time you look at your strategy, take a moment to question its structure. If your strategy seems confusing or isn’t providing the value you expected, maybe you just need to tighten up your framework. Get your perspectives, goals, measures, and projects into organized sections. Focusing on the key elements of a strategy gives you the structure you need to execute your plan.

If you’d like to read in more detail about how to actually do strategic planning, this guide will walk you through the process. Or if you want to talk about it with people who’ve been strategy planning for a long time, contact us. We can help.