You (generally) know where you want to take your organization, but aren’t sure how to get there. Don’t fall into the trap of making it up as you go along. Instead, launch a more directed effort with strategic planning. Think of this process as a map that plots out, step by step, how to get where you want to be. More specifically, the definition of strategic planning is the development of an organization’s purpose and goals, beyond the immediate future, and actions to achieve those goals.
The best way to understand strategic planning is to learn how it’s done. Read on and we’ll walk you through the entire process.
The 5 Steps Of Strategic Planning
Putting time and energy into strategic planning now will make it much easier for your organization later, and it all starts with five simple steps. Not only will following these steps enable you to reliably achieve your goals, but you’ll be set up to refresh your strategy as your organization matures and grows.
Step 1: Choose a framework.
Your first decision is to pick a strategic planning framework. Working from a specific format will make it much easier to determine which elements need to be included in your strategic plan. The Balanced Scorecard, Ansoff Matrix, and Hoshin Planning model are a few examples of strategic planning frameworks, and each has its strengths. The Balanced Scorecard works for any organization or industry, whereas the Ansoff matrix is specifically focused on aggressive sales growth, and the Hoshin model is project-centric. The framework you choose should suit the structure of your organization.
Step 2: Define your organization’s mission, vision, and values.
This is your “big picture” step, so put on your visionary thinking cap. Now is the time to nail down the purpose and direction of your organization. It involves three important elements:
- Your mission: It defines why you exist as an organization. Every aspect of your strategic plan should ultimately tie to your overarching mission.
- Your vision: It tells where you want to be in the future. Your vision should be feasible, based on ambitious but achievable targets.
- Your values: It states what you stand for as an organization.
No strategy is complete without a mission statement—it is mandatory. Vision and values are also important, but not integral to a strategic plan.
Step 3: Get into the details of your strategy.
Once you’ve defined your mission, zero in on the details and address the actual components of your strategic plan. (For the purposes of this article, we’ll use Balanced Scorecard terminology, but the general concepts are universal.)
You’ll begin by defining your strategic plan’s high-level goals for both individual departments and the corporation as a whole. Then, create measures (metrics) with targets so you can track and evaluate progress toward these goals. Finally, develop initiatives, or projects, to drive your measures and support your goals. Your goals, measures, and initiatives form the backbone of your strategy. Getting these right is critical to the strategic planning process.
Step 4: Create a reporting process.
Most organizations pull together monthly, quarterly, and annual reports for different audiences (divisions, executives, boards/councils). At this point in strategic planning, you’ll document the reports needed and the process to get them created. Your reporting process should outline details such as the reporting calendar, frequency, owners and stakeholders, and more. The strategic reports you require should all tie to your strategy—don’t report on something just because “Pat asked for it.”
Step 5: Communicate with your organization.
This isn’t as much of a final step as a best practice that spans the entire strategic planning process: Open the lines of communication between your strategy team and the rest of your organization throughout all four previous steps. Get feedback—even using something as simple as a survey—from department heads and internal stakeholders on everything from the mission statement to the most important metrics to track, measure, and report. Senior leadership may think they have these answers, but without asking the people on the ground doing the day-to-day work, nothing’s certain and your strategy could miss the mark. Give your department leads and managers a say in how the strategic plan is defined, and they will be on board and motivated to improve performance.
Once your strategy is complete, don’t let it sit on a shelf. Put it in play with this guide on how to execute your strategic plan.
Remember to keep communication flowing even after you’ve wrapped up your strategic planning—the last crucial piece is to share your finalized strategy. Organizations do this in different ways. For example, an international financial institution effectively communicated its new plan to all staff using videos, progress reports, brochures, posters, and its internal corporate social network. A smaller organization held meetings with each department to review the new strategic plan and followed up by emailing each department its goals and how each tied to the strategy. There’s no single right way to communicate, but integrated efforts will ensure the strategic plan is recognized as part of the organization’s core culture.
Don’t be intimidated by strategic planning. Your efforts will pay off—we promise! Embrace the process, and turn to us for help along the way.