Strategic Planning Process Definition, Steps and Examples

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Digital Strategy

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Organizations use Strategic Planning to gather all their stakeholders to evaluate the collection of current circumstances and decide upon their ongoing goals and benchmarks. They decide upon long-term objectives and establish a vision for the company’s future.

The efforts behind an organization’s Strategic Planning Processes are vital to its success, and yet, while many organizations acknowledge they need to do this kind of planning, they often don’t understand how to make it a reality. In this article, we explain the reasons behind Strategic Planning and how to make your Strategic Planning Process as powerful as possible.

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What is a Strategic Plan

Strategic planning is a systematic process wherein the leaders of an organization articulate their vision for the future and delineate the goals and objectives that will guide the trajectory of the organization.

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What is the Strategic Planning Process

Strategic planning is a process of defining an organization’s direction and making decisions on allocating its resources to pursue this direction. It involves creating a long-term plan that outlines the organization’s vision, mission, values, and objectives, as well as the strategies and tactics that will be used to achieve them.

Strategy is often misunderstood, which is surprising because fundamentally it’s a pretty basic concept. Strategy is a clearly expressed direction and a verified plan on how to get there. Your Strategic Planning Process formalizes the steps you’ll take to decide on your plan. The Strategic Planning Process facilitates using a Strategic Execution Framework that articulates where you’ll invest in innovation and where you can cut costs.

As far as business development planning is concerned, your Strategic Execution Framework is a vital tool for driving innovation, but first you must define the process you’ll undertake to determine how you and your team see the future of your organization. In this article, we discuss how to create your Strategic Plan and define its relationship to other concepts and documents that direct your business and its activities.

Innovation Strategy Execution Framework
The UNITE Strategy-Execution Framework
Designed By: Digital Leadership AG

Related: Organizational Development: Everything You Need to Know

Strategic Planning Process Steps

Strategic Planning Process - Strategic Planning
Strategic Planning Process

While it’s true that every business is different and must develop their own processes, we believe there are some process of strategic planning stepsthat benefit all organizations.

Below are our recommendations for the steps to take when undergoing your Strategic Planning Process, along with the questions we suggest you answer during each specific step.

Step One: Analyze your Business Environment

  • Who are your competitors?
  • What relevant market data do you have, and what do you still need?
  • What technology has emerged that impacts your business model?
  • How have customer expectations changed since your last Strategic Plan?
  • What advantages do you have over competitors?
  • Where is your company weaker compared to competitors?
  • What predictable complications are on the horizon?
  • Which unpredictable complications seem most likely or most potentially impactful?

Step Two: Set your Strategic Direction

  • What is your overall Business Purpose?
  • How have your operations reflected your Purpose and Goals recently?
  • How should your operations reflect your Purpose and Goals?
  • Where do you see your business going in the next year?
  • In two years? In three years?
  • What are the metrics you’ll use to measure success?
  • What are your make-or-break necessities?

Step Three: Set and develop Strategic Goals and Strategic Objectives

  • Have you considered short-, mid-, and long-term business goals, and what are they?
  • How do your Strategic Goals reflect your Mission Statement?
  • How do your Strategic Goals reflect your company values and vision?
  • What daily operations must be completed to work toward your Strategic Objectives?
  • How will you communicate your Strategic Goals and Strategic Objectives?
  • Who is responsible for reporting on success?
  • How will strategic data be collected?

Related: Strategic Goals: Examples, Importance, Definitions and How to Set Them

Step Four: Drill down to Department-Level Objectives

  • What are specific department concerns?
  • How will your budget influence and be influenced by your Strategic Goals and Objectives?
  • Which departments have resources that could be shared to better advantage?
  • What roles do individual departments play in your overall Strategic Goals?
  • Who is responsible for reporting on success?
  • What ongoing projects become a priority because of your new Strategic Goals?
  • How will strategic data be collected?
  • Are Departmental Objectives complementing each other and the overall Business Model?

Step Five: Manage and Analyze Performance

  • Who is on the Strategic Planning team?
  • Are tasks and job descriptions properly aligned to ensure the right work is getting completed?
  • What is the schedule for the meeting for Strategic Planning?
  • What are your metrics for measuring performance and success?
  • Have you clearly articulated and shared KPIs?
  • Who is responsible for gathering data?
  • How will data be collected?
  • How will data be reported?
  • What’s at stake for strategy success or failure?

Step Six: Review and develop your Strategic Plan

  • How should your Strategic Plan look on paper?
  • What is your Strategy Execution Framework—how will you guarantee the Strategic Plan Team’s decisions are respected and executed?
  • What is the review process?
  • How often do you evaluate your Strategic Plan?
  • How will you communicate your final Strategic Plan?

Strategic Planning Process Examples

1) Apple Strategic Plan Process

  • Vision and Mission: Apple’s strategic planning begins with a clear vision and mission. Apple’s vision is to create innovative products that inspire and enrich people’s lives.
  • Environmental Analysis: Apple conducts thorough environmental analyses, considering technological trends, market demands, and competitive landscapes. This includes staying at the forefront of cutting-edge technologies.
  • SWOT Analysis: Apple evaluates its strengths, weaknesses, opportunities, and threats. For example, one of Apple’s strengths is its strong brand image, while a weakness might be dependence on a limited product line.
  • Setting business Goals and Objectives: Apple sets specific, measurable, achievable, relevant, and time-bound (SMART) goals. This could include objectives like maintaining a certain market share, launching new products, or achieving specific financial targets.
  • Strategies and Tactics: Apple develops strategies based on its goals. For instance, a strategic move might be expanding its ecosystem by integrating hardware, software, and services. Tactics could include aggressive marketing campaigns and product launches.
  • Implementation and Execution: Apple’s strategic plans are meticulously executed. The launch of iconic products like the iPhone, iPad, and Mac series demonstrates effective implementation of their strategies.
  • Monitoring and Adjusting: Apple constantly monitors its performance metrics, customer feedback, and market dynamics. If necessary, adjustments are made to the strategic plan to stay responsive to changing conditions.

2) Tesla Strategic Plan Process

  • Vision and Mission: Tesla’s strategic planning revolves around its mission to accelerate the world’s transition to sustainable energy. The vision includes producing electric vehicles and renewable energy solutions.
  • Market Analysis: Tesla analyzes global markets for electric vehicles, renewable energy, and energy storage. This involves understanding regulatory environments, consumer behaviours, and technological advancements.
  • Risk Assessment: Tesla conducts risk assessments related to manufacturing, supply chain, and market volatility. For instance, it considers risks associated with battery production and global economic conditions.
  • Setting Bold Objectives: Tesla is known for setting ambitious objectives, such as achieving mass-market electric vehicle adoption and establishing a robust network of charging stations worldwide.
  • Innovative Strategies: Tesla’s strategic planning involves innovation in technology and business models. For instance, the “Gigafactories” for mass production of batteries and the “Autopilot” feature in vehicles reflect innovative strategies.
  • Agile Adaptation: Due to the rapidly changing automotive and energy sectors, Tesla maintains an agile approach. The company adapts its plans swiftly to capitalize on emerging opportunities, as seen in the expansion of its energy products.
  • Continuous Improvement: Tesla places emphasis on continuous improvement. The iterative development of electric vehicle models, software updates, and advancements in battery technology showcase a commitment to refinement.

These examples demonstrate how strategic planning is a dynamic and integral part of the business processes of leading companies. They highlight the importance of a well-defined vision, rigorous analysis, adaptability, and innovation in the strategic planning process.

Tactical vs. Strategic Planning Process

An easy way to distinguish your company’s Tactical Planning from your Strategic Planning is to separate your wants from your HOWs.

In your Strategic Planning, you identify what you WANT for the company. These are big-picture dreams (achievable, but big) that are your definition of success. In your Tactical Planning, you identify the HOW for reaching those dreams, including the smaller necessary steps.

TacticalStrategic
PurposeInspire specific actionsIdentify general concerns and interests
TimeframeShort termLong term
ReportSpecific results to achieveBroad but realistic goals
Tactical vs Strategic Planning

Each kind of planning is vital for securing the organization’s future, but they require different sorts of attention and philosophy, and teams that are good at planning one way may not necessarily be good at the other kind of planning.

Strategic Planning vs. Your Business Purpose

Your Strategic Planning Process will of course be deeply connected to your Business Purpose.

We like to think of Business Purpose in broad terms, choosing especially to think of a business’s role in massive transformation. Embedded within a Business Purpose is the Business Plan that directs operations and how a company delivers value to its customers.

What is the relationship between your Strategic Planning and your Business Purpose? One feeds into the other. Your Business Purpose must point to a larger impact you’ll have on the people who purchase your goods and services, and your Strategic Planning takes into account how you’ll grow and expand that Purpose as you reach more customers more successfully.

Strategic Planning vs Business Planning

Strategic planning and business planning are two distinct processes that are often used interchangeably, but they have some key differences.

Strategic planning is a top-level process that focuses on determining the direction of an organization over the long term. It involves setting goals, determining the key resources and actions necessary to achieve those goals, and allocating those resources in a way that best serves the organization’s future. The outcome of strategic planning is typically a long-term strategic plan that outlines the organization’s vision, mission, values, and objectives.

Business planning, on the other hand, is a more tactical process that focuses on the implementation of specific initiatives and projects to support the organization’s long-term goals. Business plans typically outline the steps necessary to launch a new product, enter a new market, or achieve a specific objective. They may also include budgets, marketing plans, and other operational details.

In short, strategic planning is about setting the direction for an organization, while business planning is about implementing specific initiatives to support that direction. Both processes are important for the success of an organization and should be used in conjunction to ensure that resources are allocated effectively and that the organization is moving in the right direction.

Why is Strategic Planning Important?

Imagine this scenario: A warehouse full of goods sits, unsold and unmoved. A collection of brilliant people languishes at desks all day. Outside, the world spins and changes. It’s ready for what these people could do, can do, and yet nothing happens. Needs remain unmet. Progress is halted. Everyday life takes several backwards steps. This is what your business will look like without proper Strategic Planning.

Strategic Planning forces you to consider your Strategic Objectives and critically compare them to the resources you have available. As you continuously evaluate the circumstances of your business and your customers, your Strategic Plan evolves to match your goals and business capabilities.

The process involved pushes decision-makers to practice Strategic Thinking. It limits wasteful spending, especially when upper-level managers are willing to forgo pet projects in favor of operations with a broader use and appeal.

Strategic Planning is important because it directs your resources to efficiently meet your overall Business Goals. Without Strategic Planning, you are likely to waste resources, make conflicting decisions, or fail to grow your business to its greatest potential.

When Do You Create a Strategic Plan?

Most businesses find value in reviewing their Strategic Plan every three years. This allows enough time to pass that you can evaluate the success of previous plans, reflect on the achievement of your Strategic Goals, consider developments outside your organization that affect your business, and begin formulating new goals that will become the next version of your plans.

When businesses first begin, they often have too many fires burning at once. They remain focused on existing today rather than planning for tomorrow. Most entrepreneurs remember those stressful early days of starting their businesses and can understand why formalities like Strategic Plans can fall by the wayside. We believe if your business lasts longer than a year it’s important to develop a plan for the future. Think of Strategic Planning as a celebration of a first anniversary—a sign that you’re poised to continue moving forward for years to come.

However, Strategic Planning is not a one-off event that is over once the cookies are all gone and the room clears. Your Strategic Planning team should meet regularly to measure how effective the plans are at helping you reach your Strategic Goals. Ad hoc subcommittees can play a role in gathering evidence to ensure that your plans remain appropriate, especially if conditions change.

For example, we recommended a close review of Strategic Plans and Strategic Goals once the COVID-19 pandemic made it clear that business was going to be affected at least short- to mid-term. We continue to recommend teams regularly revisit their Strategic Plans with global circumstances in mind to recognize opportunities and prepare for challenges.

The Benefits of Strategic Planning

As we’ve mentioned, there are many benefits of Strategic Planning. Some of those benefits include:

  • Shared sense of power and importance
  • United direction
  • Clear path and purpose for decision-making and operations
  • Boosted operational effectiveness
  • Responsible, efficient use of available resources
  • Meaningful work done on a daily basis
  • Tracking of progress
  • Ability to adjust to changing circumstances

What is a business without Strategic Planning? In most cases, it’s not much, nor is it long for the world. While it’s possible to accidentally find success without much planning, most successful businesses are a result of careful thought mixed with the urge to pounce on the opportunity.

What prepares you to pounce?

Your Strategic Planning and the processes that make it possible.

The UNITE Business Model Framework: A Framework for Innovation Success

Business Model framework
THE UNITE Business Model Framework
Designed By: Digital Leadership AG

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