Strategic Planning: The Ultimate Guide

Strategic success is closer than you think—especially once you follow these meticulously-crafted steps.

Ted, Founder and Managing Partner at ClearPoint, has over 25 years of experience working with organizations to improve their performance management and strategy execution processes.

More than 90% of businesses fail to meet their strategic targets, but with the right approach, you can overcome those odds. We’ve helped hundreds of clients do exactly that by using the steps outlined in the guide below, which cover the preparation, creation, and execution of strategy. Based on our experience at ClearPoint, we can confidently say that following this three-phase approach will significantly increase your odds of getting high-quality results.

Table Of Contents

What is strategic planning?

On one hand, that definition makes strategy planning sound like a Business 101 concept—define your goals and a plan to achieve them. Unfortunately, the strategic planning process isn’t as straightforward as it seems, especially for large companies.

Some experts say there’s a simple explanation for the high failure rate: companies simply aren’t strategizing at all. They may talk a good game and be able to explain an innovative new mission, but they cannot articulate the processes and business models that will make it happen. As a result, nothing about their way of doing business—including their priorities, projects, or culture—changes. Months or years later, strategic leaders are left wondering why the company never achieved what was intended.

This absence of a strategic plan demonstrates why having one is so important.

Start outlining your strategy right away with our strategic planning templates!

Why do I need a strategic plan?

Why do I need a strategic plan?

The strategic planning process is about looking forward, outside the immediate future for your organization, to reach a particular set of goals. But as noted in the definition above, it also involves laying out—step-by-step—how you’re going to get there. Without this foundation in place, you’ll either continue on a path to nowhere, or get caught up in a tornado of urgent activities that may not actually benefit your organization in the long term. Neither of these scenarios will give you the competitive edge you hoped for.

There are also plenty of organizations that do take steps to fulfill the requirements of strategic planning, yet still fail to see results. These strategies fail for many reasons, including:

  • Lack of communication—This is a big one. Research shows that 95% of most companies’ employees don’t understand their organization’s strategy, and 85% of executive leadership teams spend less than one hour per month discussing strategy.
  • Poor research around customer trends, organizational threats, and market opportunities—Companies tend to spend more time on internal issues (resolving conflicts and reconciling budgets) than they do analyzing important external information.
  • Lack of management support—Organizations neglect to rally support for middle managers, who are key to making sure strategy is executed on a daily basis.
  • Ineffective or inefficient performance evaluations—Organizations dedicate all their time to coming up with a plan, but either forget to follow through by tracking progress or have no organized, reliable way to track performance data.
  • Lack of clear priorities—Organizations try to do too much at once and/or fail to identify the right activities that will help them achieve their strategy.
  • Insufficient resources—Companies don’t acquire new resources, or shift existing resources, to support identified priorities.
  • Disjointed departmental goals and activities—There’s no alignment of departmental goals with organizational strategy. Without everyone working together, goals become more difficult to reach.

Whatever is preventing you from meeting your strategic goals—whether it’s the absence of a strategic plan altogether or an imperfect plan execution—it’s worth your time to address the issue.

Analysis has shown that strategic planning has a positive and significant impact on organizational performance. Most importantly, it enhances an organization’s ability to achieve its goals, but there’s more to it than that. Because strategic planning forces companies to adopt a long-term view, it helps them better prepare for the future, setting them up to initiate influence instead of just responding to situations.

It also strengthens communication between employers and employees. The participation and dialogue that takes place among managers and employees throughout the strategic planning process improves transparency and engagement on everyone’s part.

Keep in mind that everything about strategic planning takes time. Don’t expect your plan to materialize after a few meetings. The initial planning activities usually unfold over the space of several months, but strategy execution itself is an ongoing process. Steps 1–5 below will walk you through the activities involved in preparing for and creating a strategic plan; steps 6–8 relate to plan execution.

How do you create a strategic plan?

How do you create a strategic plan?

Step 1: Gather your team.

Let’s get one thing straight right now: If your organization has turned to you (or your department, a colleague, etc.) and requested that you “make a strategic plan and then report back to the leadership team when you’re done”—stop right where you are. That’s not an effective plan. Why? You need to have buy-in across your organization, and so you need leadership involvement from the beginning.

Now let’s talk about the major player needed for this process: The strategic planner. The strategic planner’s job is to align thoughts from the leadership team with a process the organization can use to execute on their strategy. If this is your role (or even if you’re just highly involved in the process), this guide will be immensely helpful as you navigate the coordination of the strategy.

The strategic planner will also need the help of a cross-functional team that involves members of the board or leadership, along with representatives from finance, human resources, operations, sales, and any other critical functions.

Step 2: Gather and organize the inputs to your strategic plan.

You need to know your company intimately and the environment it is currently operating in before you can make smart decisions about your future. Now’s the time to do some digging in the following areas:

  • Internal input—Do you know if one branch of your business is growing faster than another? If so, does this mean you’ll focus more energy on the faster growing area, or shift to help the underperforming areas? Assess these and other key questions about the business.
  • External input—You may find that parts of your business have shifted, or outside factors are playing a role in where your business is headed. Could political unrest or a looming trade dispute impact your strategy?

Many organizations organize their data-gathering activities according to a particular framework, like a SWOT analysis or Porter’s Five Forces.

  • A SWOT analysis stands for Strengths, Weaknesses, Opportunities, and Threats. This exercise forces you to examine your organization’s strong and weak points, opportunities that have arisen, and threats to your business. Use the SWOT analysis framework to guide your interview questions.

SWOT analysis - ClearPoint Strategy

  • Porter’s Five Forces is a time-honored strategy execution framework built around the competition in your industry. Who are your rivals and what are they doing? You then need to look at the threat of substitutes. Is there another product consumers could purchase instead of your industry’s product, for example, substituting natural gas or solar for coal when it comes to electricity generation?

Pull people from all departments to participate in the analysis, then discuss your findings with the leadership team and managers. You can also talk with board members, customers, and industry experts to see what they think your organization is doing well and what needs improvement. These suggestions could deal with anything from operations to company culture.

Step 3: Confirm your mission and vision statements.

You now have all the background information necessary to create your strategic plan! But this plan doesn’t live in a vacuum—so it’s best to revisit (or create!) your mission and vision statements before getting into the nuts and bolts of the planning process. Remember:

Your mission statement should describe what your company does and how it is different from other organizations in your competitive space.

Your vision statement should describe a future state of what your organization wants to achieve over time.

Where the mission is timeless, your vision is time-bound and more tangible.

Read more: How To Write A Vision Statement: 6 Best Practices

Some organizations use an OAS statement to help build their mission and vision statements; OAS stands for Objective, Advantage, and Scope. Talking through these concepts as they apply to your organization will help formulate a vision that is tangible and interactive. You can read more about creating your OAS statement here.

A second exercise that might be helpful is called Strategic Shifts. It involves thinking through today’s strategic priorities vs. tomorrow’s. For example, your leadership team may say, “We want to shift from central control to autonomy when it comes to our decision-making capability.” If the whole team can get on the same page with these shifts, it can help tremendously later on down the strategy-planning line.

If you’ve already created mission and vision statements, confirm that both are aligned with your current strategy before proceeding to the next step.

Step 4: Choose a strategic planning framework that will help you follow through.

Now you’re ready to choose the framework that will hold your high-level priorities. You’ll define your specific priorities and objectives shortly, but more importantly, you need a way to manage these elements. Strategy management frameworks allow you to bring all your priorities together in one cohesive format.

Choosing a framework might not seem like a big deal, but it is actually critical to your success—in fact, many management teams fail at this point simply because of their disorganization! All models can be customized to suit the way your business works, but this is a key decision that will shape all your efforts going forward.

A bit about the three most popular frameworks:

The Balanced Scorecard (BSC)

The BSC has been one of the world’s top strategy management frameworks since its introduction in the early 1990s. The BSC divides up your objectives by perspectives—financial, customer, process, and people—and themes, like innovation, customer management, operational excellence, etc. (The idea of perspectives is fully developed in Norton and Kaplan’s book The Balanced Scorecard: Translating Strategy into Action.) For example:

  • Financial goals—“What financial goals do we have that will impact our organization?”
  • Customer goals—“What things are important to our customers, which will in turn impact our financial standing?”
  • Process goals—“What do we need to do well internally, to meet our customer goals, that will impact our financial standing?”
  • People (or learning and growth) goals—“What skills, culture, and capabilities do we need to have in our organization to execute on the process that would make our customers happy and ultimately impact our financial standing?”

For an in-depth look at how your organization could use the BSC, check out this Full & Exhaustive Balanced Scorecard Example.

This free Balanced Scorecard template will help you become the strategy superhero your company needs.

Theory Of Change (TOC)

TOC is a logic model that describes a step-by-step approach to achieving your vision. It is popular amongst mission-driven organizations who are describing a change they’re making in the world instead of putting change in their pockets.

The idea behind TOC is that if you have the right people doing the right activities, they’ll affect change on your customers, which will impact your financials, and bring you closer to your vision. According to the Global Family Research Project, the steps to create a TOC are:

  1. Identify a long-term goal.
  2. Conduct “backwards mapping” to identify the preconditions necessary to achieve that goal.
  3. Identify the interventions that your initiative will perform to create these preconditions.
  4. Develop indicators for each precondition that will be used to assess the performance of the interventions.
  5. Write a narrative that can be used to summarize the various moving parts in your theory.

Objectives & Key Results (OKR)

OKRs is a collaborative goal-setting system that aims to unify everyone’s efforts in pursuit of the organization’s broader mission. To do that it uses objectives (which are goals) and key results (which are quantitative measures that define whether goals have been reached).

The idea is that your defined objectives and measurements help employees, managers, and executives link to and align with overall strategic priorities. Not only does OKR strive to measure whether objectives are successful, but also how successful they are.

Objectives & Key Results (OKR)

Step 5: Build out your five-year plan with objectives, measures, and projects.

The strategic planning frameworks above are all meant, in different ways, to help you organize your objectives, measures, and projects. So it’s critical that these elements are well thought-out and defined.

Here’s how objectives, measures, and projects interact:

You have a high-level goal in mind—your objective. Your measures answer the question, “How will I know that we’re meeting our goal?” From there, initiatives, or projects, are put in place to answer the question, “What actions are we taking to accomplish our goals?”

Objectives are high-level organizational goals. The typical BSC has 10-15 strategic objectives. Examples include:

  • Increase Market Share Through Current Customers (Financial)
  • Be Service Oriented (Customer)
  • Achieve Order Fulfillment Excellence Through On-Line Process Improvement (Internal)
  • Align Incentives And Rewards With Employee Roles For Increased Employee Satisfaction (Learning & Growth)

Measures help you understand if you’re accomplishing your objectives strategically. They force you to question things like, “How do I know that I’m becoming an internationally recognized brand?” Note that while your measures might change, your objectives will remain the same. You may select 1–2 measures per objective, so you are aiming to come up with 15-25 measures at the enterprise level. Examples include:

  • Cost Of Goods Sold
  • Customer Satisfaction & Retention
  • Percentage Of Product Defects
  • Percentage Of Response To Open Positions
Red measure dashboards
ClearPoint allows you to create “red measure dashboards” that allow you to quickly see which measures are falling behind their targets.

Initiatives are key action programs developed to achieve your objectives. You’ll see initiatives referred to as “projects,” “actions,” or “activities outside of the Balanced Scorecard.” Most organizations will have 0-2 initiatives underway for every objective (with a total of 5-15 strategic initiatives). Examples include:

  • Develop Quality Management Program
  • Install ERP System
  • Revamp Supply Chain Process
  • Develop Competencies Mode

Whether or not you’re using a Balanced Scorecard as your strategy framework, you’ll benefit from using a graphic model to represent your strategic plan. While many people use a strategy map (shown in the example below), you could also use icons or a color-coding system to visually understand how the elements of your strategy work together.

If you’re just becoming familiar with how strategy mapping works, this article will teach you exactly how to read one—and what you need to do to create one.

Strategy map

How do you execute a strategic plan?

How do you execute a strategic plan?

You’ve made it this far—now you have to be sure you launch correctly! To do so, you need someone from the Office of Strategy Management to push that process, ensure resources are aligned to your strategy, put a solid strategy communication program in place, and get technology to keep you organized.

Step 6: Launch your strategy.

The two important activities of the launch phase are 1) communicating your strategy, and 2) aligning resources with your strategy.

It’s imperative to communicate your strategy both internally and externally. Research shows that, on average, 95% of an organization’s employees don’t understand its strategy—there’s no surer way to guarantee failure than to neglect communicating your goals to your employees. So it’s imperative to shout the news from the rooftops!

To make this easier, create a strategic plan document that houses all elements of your strategy. Distribute it to the leadership team, and direct all your department heads to explain to their teams how they fit into the strategy and why their work matters. (If you use strategy software, the strategic plan document will likely be contained there.) For actionable tips on how to spread the word, check out this article that highlights how you can effectively communicate your strategic plan across your organization.

You’ll also want to create a plan on how to share your strategy with relevant external parties—board members, partners, or customers (particularly if your organization is municipal or nonprofit). Think through how it will be shared, and which parts of it are relevant to outside parties.

Next, align your resources to your strategy. In the short term—which would be your next budgeting cycle or something similar—work to structure the budget around the key components of your strategy. You don’t need to completely rewire your budget, but you do need to create direct linkages between how your resources are allocated and how those efforts support your strategy. Over time, the areas that contribute less directly to strategic goals will become clear, and you can work on gradually aligning everything you fund.

But even if your budget only extends through the fiscal year, consider how you’ll align your strategy to projects in the future. For future resource allocation, link your operations (what some refer to as the “work planning process”) to your strategy. Your expectation should be that the process of aligning your resources to your strategy can happen within year two of your strategic planning execution.

Step 7: Set up strategy review meetings.

Strategy review meetings are a necessity for staying on track over the long haul. However, try to avoid adding yet another meeting onto everyone’s plates; instead, there may be a current meeting you can replace or redesign to make time for strategy discussion.

For now, decide how often you’ll meet and who should be involved. As for timing, there are three types of strategy review meetings:

  • Monthly, where you review progress on projects and initiatives
  • Quarterly, where you review progress on strategy and discuss key action items
  • Annually, where you review year-to-date performance and adjust the strategy as needed

For each of these, you’ll want to send out calendar invites in advance and make sure people know these meetings are a top priority.

Monthly meetings typically include department heads and subject matter experts. Quarterly review meetings may include department heads and upper management. Annual refresh meetings may include upper levels of management and occasionally board members.

Step 8: Evaluate your strategy.

At this point, your strategy has been launched: Now you need to know whether or not you’re making progress!

To make strategy execution work, reporting is unavoidable. At a minimum, you should be reporting on your entire strategy on a quarterly basis, or breaking down your strategy into pieces and reporting on one of those pieces each month. The report you use should highlight progress on your measures and projects, and how those link to your objectives. The point is to show how all these elements fit together and relate to the strategic plan as a whole.

While you might be able to track your first strategy meeting in Excel or give your first presentation via PowerPoint, you’ll quickly realize you need some kind of software to track the continuous gathering of data, update your projects, and keep your leadership team on the same page.

Report on strategy progress via the quarterly or monthly review meetings you scheduled early in the process. It’s important to note that throwing together an impromptu meeting to go over results isn’t going to get you anywhere. Instead, your strategy review meetings should be meticulously organized and accompanied by an agenda. (See this article for a sample agenda.)

Strategy Meetings - Board meeting agenda

Download our All-inclusive Strategy Reporting Guide for details on how to establish a simple yet effective strategic reporting process.

Your meetings should revolve around three key issues:

  • What is your organization trying to accomplish? This may include reiterating your mission and vision to add context around the conversation.
  • Are you making progress toward these goals? You might review key metrics and the status of initiatives and milestones.
  • What actions need to be taken to continue making progress? If metrics are off-track, for example, what can be done to get back on course?

Encourage candid dialogue and make sure the discussion stays focused.

What are the main benefits of strategic planning?

What are the main benefits of strategic planning?

Done right, strategy planning can benefit your business tremendously, but a certain degree of stick-to-itiveness is required to get the job done. (As we noted at the beginning of this guide, organizations that actually meet their strategic objectives are in the minority. Don’t worry, though, yours can be one of the success stories.) But those that develop a disciplined approach to both planning and execution have been shown to improve performance significantly.

Why is strategic planning so effective? Because it fosters healthy organizational practices that drive better outcomes. Engaging in strategic planning will benefit you in multiple ways:

1. You have quality data available to support better decisions.

Setting goals and choosing the relevant metrics to track progress toward achieving them means you always have meaningful data to reference. That naturally leads to faster, more efficient decision-making, especially when that data is readily accessible to employees at every level. Timely, valid, and actionable information is especially valuable in situations where organizations need to react quickly, so they can make the best decisions possible for all their stakeholders.

2. You allocate resources more effectively.

In Chapter 3, we discussed structuring the budget around the key components of your strategy. Doing so helps ensure resources are allocated correctly, and in a way that aligns with your goals. Tying the budget directly to goals also makes it easy to adjust when necessary, if circumstances change and new goals are prioritized over old. For example, a local government may have had a goal to develop a green infrastructure plan at the beginning of 2020, but then had to pivot with the onset of COVID-19. To support a new goal of developing a COVID-19 response plan, they could simply review the resources used by current projects, evaluate those projects’ priorities and budget needs in comparison to the new goal, and reallocate funds as necessary.

3. You maintain focus.

Having a strategic plan brings your main focus points to the forefront, so you don’t have to dig into the details of everything your organization is doing. That means there’s no time wasted analyzing irrelevant and extensive data points in strategic meetings; instead, everyone stays focused on what is most important or where improvements need to be made.

4. You improve communication and build employee engagement.

Strategic planning is intended to create a single, focused vision of where an organization is headed. When that shared vision is communicated clearly and consistently, it inspires employees to take ownership over their role in the plan, and they are typically more motivated to do their best work. High engagement will directly impact your organization’s financial health and profitability.

What are some things to avoid during strategy planning & execution?

What are some things to avoid during strategy planning & execution?

Strategy Fatigue

Communicating your strategy (as noted in Step 8) is a crucial part of the launch phase, but you can’t stop talking about it after that! Strategies play out over the space of three to five years; unless you actively work to maintain focus on it, your employees won’t remember your plans or feel the same sense of motivation they did in the early days.

Look for creative and meaningful ways to keep your strategy top-of-mind—for instance, appointing “Goal Champions” who are responsible for updating measures and initiatives, or hosting periodic “brown bag” events to talk strategy and answer questions. You also need to be transparent with the results each reporting period to keep the momentum going.

For specific ways to continuously engage people, check out our ebook, How To Make Strategy Everyone’s Job.

Analysis Paralysis

Data and analytics are an integral part of strategic planning. And while it may be tempting to use all your available metrics, charts, and graphs for every business decision, doing so unnecessarily can be a detriment to the decision-making process. It’s easy to find yourself drilling deeper into data when perhaps only a high-level view of the information is needed.

Avoid squandering time and energy on excessive analysis by making sure the right people are focusing on the right data and actions: Leadership should focus on organization-wide goals and progress. Teams should focus on the individual projects and daily tasks that are helping to accomplish those goals (and the data that goes with them).

Good planning is only half the battle.

The execution stage is where many organizations stumble. They aren’t prepared for the work involved with follow-through, both in terms of the time commitment and the tools necessary to support performance improvement. So instead of actively managing their strategy execution, they blindly stumble through, only checking on progress occasionally.

It’s imperative to have a system in place that will measure and monitor your progress toward goals during the execution phase. Performance management tools like ClearPoint allow organizations to track a variety of metrics related to strategic projects, which helps to maintain focus.

Measure strategy metrics | ClearPoint Strategy

You’ve made it through these steps….

...but be sure to place a great deal of emphasis on rightsizing this process for your own organization.

Did you recently do a SWOT analysis and create new vision and mission statements? Don’t do it again. Do you already manage with a robust set of KPIs? Use them. Do you currently create reports for your board and management team? Modify them or use a strategy evaluation framework to make sure they’re focused and move on.

Rather than doing everything, it’s more important to realize there is overlap between these steps. Understand how they all fit into your own strategic planning process, and then move forward with the sections you’re missing. And if you have any questions along the way, get in touch with us. We live and breathe strategic planning and are here to help!

Strategic Planning FAQs

The best strategic plans have clear goals, key metrics to track the goals, and smart initiatives to help meet these goals.
Objectives are three-to-five year goals of where you want your organization to be. Organizations should have no more than 10 objectives. One example is to improve patient satisfaction.
Measures are metrics used to measure if you’re meeting your goal. Organizations should aim for 2-4 measures per objective. If you have a goal to improve patient satisfaction, a measure might be average patient wait time.
Initiatives are projects designed to help meet your goals. You should have 1-2 initiatives per objective. A simple example is the initiative to transition to digital sign-in before appointments to reduce patient wait time and improve patient satisfaction.
A strategy map is a visual tool designed to clearly communicate a strategic plan. It’s important because employees need to understand what they are responsible for and why it’s important to the overall success of the organization.
A strategic plan is your organization’s long-term goals and highlights how you want to grow in specific categories. The strategic plan lists objectives and goals for each area your company would like to grow, and lists initiatives the organization will take to meet their goals.
Without a strategy, your organization is walking blindly with no clear, aligned goals in sight. A strategy gets your team aligned on what your long-term goals as an organization are.
Strategic Planning: The Ultimate Guide