business planning strategic planning

Strategic Planning

The art of formulating business strategies, implementing them, and evaluating their impact based on organizational objectives

What is Strategic Planning?

Strategic planning is the art of creating specific business strategies, implementing them, and evaluating the results of executing the plan, in regard to a company’s overall long-term goals or desires. It is a concept that focuses on integrating various departments (such as accounting and finance, marketing, and human resources) within a company to accomplish its strategic goals. The term strategic planning is essentially synonymous with strategic management.

The concept of strategic planning originally became popular in the 1950s and 1960s, and enjoyed favor in the corporate world up until the 1980s, when it somewhat fell out of favor. However, enthusiasm for strategic business planning was revived in the 1990s and strategic planning remains relevant in modern business.

CFI’s Course on Corporate & Business Strategy is an elective course for the FMVA Program.

Strategic Planning Process

The strategic planning process requires considerable thought and planning on the part of a company’s upper-level management. Before settling on a plan of action and then determining how to strategically implement it, executives may consider many possible options. In the end, a company’s management will, hopefully, settle on a strategy that is most likely to produce positive results (usually defined as improving the company’s bottom line) and that can be executed in a cost-efficient manner with a high likelihood of success, while avoiding undue financial risk.

The development and execution of strategic planning are typically viewed as consisting of being performed in three critical steps:

1. Strategy Formulation

In the process of formulating a strategy, a company will first assess its current situation by performing an internal and external audit. The purpose of this is to help identify the organization’s strengths and weaknesses, as well as opportunities and threats ( SWOT Analysis ). As a result of the analysis, managers decide on which plans or markets they should focus on or abandon, how to best allocate the company’s resources, and whether to take actions such as expanding operations through a joint venture or merger.

Business strategies have long-term effects on organizational success. Only upper management executives are usually authorized to assign the resources necessary for their implementation.

2. Strategy Implementation

After a strategy is formulated, the company needs to establish specific targets or goals related to putting the strategy into action, and allocate resources for the strategy’s execution. The success of the implementation stage is often determined by how good a job upper management does in regard to clearly communicating the chosen strategy throughout the company and getting all of its employees to “buy into” the desire to put the strategy into action.

Effective strategy implementation involves developing a solid structure, or framework, for implementing the strategy, maximizing the utilization of relevant resources, and redirecting marketing efforts in line with the strategy’s goals and objectives.

3. Strategy Evaluation

Any savvy business person knows that success today does not guarantee success tomorrow. As such, it is important for managers to evaluate the performance of a chosen strategy after the implementation phase.

Strategy evaluation involves three crucial activities: reviewing the internal and external factors affecting the implementation of the strategy, measuring performance, and taking corrective steps to make the strategy more effective. For example, after implementing a strategy to improve customer service, a company may discover that it needs to adopt a new customer relationship management (CRM) software program in order to attain the desired improvements in customer relations.

All three steps in strategic planning occur within three hierarchical levels: upper management, middle management, and operational levels. Thus, it is imperative to foster communication and interaction among employees and managers at all levels, so as to help the firm to operate as a more functional and effective team.

Benefits of Strategic Planning

The volatility of the business environment causes many firms to adopt reactive strategies rather than proactive ones. However, reactive strategies are typically only viable for the short-term, even though they may require spending a significant amount of resources and time to execute. Strategic planning helps firms prepare proactively and address issues with a more long-term view. They enable a company to initiate influence instead of just responding to situations.

Among the primary benefits derived from strategic planning are the following:

1. Helps formulate better strategies using a logical, systematic approach

This is often the most important benefit. Some studies show that the strategic planning process itself makes a significant contribution to improving a company’s overall performance, regardless of the success of a specific strategy.

2. Enhanced communication between employers and employees

Communication is crucial to the success of the strategic planning process. It is initiated through participation and dialogue among the managers and employees, which shows their commitment to achieving organizational goals.

Strategic planning also helps managers and employees show commitment to the organization’s goals. This is because they know what the company is doing and the reasons behind it. Strategic planning makes organizational goals and objectives real, and employees can more readily understand the relationship between their performance, the company’s success, and compensation. As a result, both employees and managers tend to become more innovative and creative, which fosters further growth of the company.

3. Empowers individuals working in the organization

The increased dialogue and communication across all stages of the process strengthens employees’ sense of effectiveness and importance in the company’s overall success. For this reason, it is important for companies to decentralize the strategic planning process by involving lower-level managers and employees throughout the organization. A good example is that of the Walt Disney Co., which dissolved its separate strategic planning department, in favor of assigning the planning roles to individual Disney business divisions.

An increasing number of companies use strategic planning to formulate and implement effective decisions. While planning requires a significant amount of time, effort, and money, a well-thought-out strategic plan efficiently fosters company growth, goal achievement, and employee satisfaction.

Additional Resources

Thank you for reading CFI’s guide to Strategic Planning. To keep learning and advancing your career, the additional CFI resources below will be useful:

• Broad Factors Analysis
• Scalability
• Systems Thinking
• See all management & strategy resources
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• 7 strategic planning models, plus 8 fra ...

7 strategic planning models, plus 8 frameworks to help you get started

Strategic planning is vital in defining where your business is going in the next three to five years. With the right strategic planning models and frameworks, you can uncover opportunities, identify risks, and create a strategic plan to fuel your organization’s success. We list the most popular models and frameworks and explain how you can combine them to create a strategic plan that fits your business.

A strategic plan is a great tool to help you hit your business goals . But sometimes, this tool needs to be updated to reflect new business priorities or changing market conditions. If you decide to use a model that already exists, you can benefit from a roadmap that’s already created. The model you choose can improve your knowledge of what works best in your organization, uncover unknown strengths and weaknesses, or help you find out how you can outpace your competitors.

In this article, we cover the most common strategic planning models and frameworks and explain when to use which one. Plus, get tips on how to apply them and which models and frameworks work well together. 

Strategic planning models vs. frameworks

First off: This is not a one-or-nothing scenario. You can use as many or as few strategic planning models and frameworks as you like. 

When your organization undergoes a strategic planning phase, you should first pick a model or two that you want to apply. This will provide you with a basic outline of the steps to take during the strategic planning process.

During that process, think of strategic planning frameworks as the tools in your toolbox. Many models suggest starting with a SWOT analysis or defining your vision and mission statements first. Depending on your goals, though, you may want to apply several different frameworks throughout the strategic planning process.

For example, if you’re applying a scenario-based strategic plan, you could start with a SWOT and PEST(LE) analysis to get a better overview of your current standing. If one of the weaknesses you identify has to do with your manufacturing process, you could apply the theory of constraints to improve bottlenecks and mitigate risks. 

Now that you know the difference between the two, learn more about the seven strategic planning models, as well as the eight most commonly used frameworks that go along with them.

1. Basic model

The basic strategic planning model is ideal for establishing your company’s vision, mission, business objectives, and values. This model helps you outline the specific steps you need to take to reach your goals, monitor progress to keep everyone on target, and address issues as they arise.

If it’s your first strategic planning session, the basic model is the way to go. Later on, you can embellish it with other models to adjust or rewrite your business strategy as needed. Let’s take a look at what kinds of businesses can benefit from this strategic planning model and how to apply it.

Small businesses or organizations

Companies with little to no strategic planning experience

Organizations with few resources 

Write your mission statement. Gather your planning team and have a brainstorming session. The more ideas you can collect early in this step, the more fun and rewarding the analysis phase will feel.

Identify your organization’s goals . Setting clear business goals will increase your team’s performance and positively impact their motivation.

Outline strategies that will help you reach your goals. Ask yourself what steps you have to take in order to reach these goals and break them down into long-term, mid-term, and short-term goals .

Create action plans to implement each of the strategies above. Action plans will keep teams motivated and your organization on target.

Monitor and revise the plan as you go . As with any strategic plan, it’s important to closely monitor if your company is implementing it successfully and how you can adjust it for a better outcome.

2. Issue-based model

Also called goal-based planning model, this is essentially an extension of the basic strategic planning model. It’s a bit more dynamic and very popular for companies that want to create a more comprehensive plan.

Organizations with basic strategic planning experience

Businesses that are looking for a more comprehensive plan

Conduct a SWOT analysis . Assess your organization’s strengths, weaknesses, opportunities, and threats with a SWOT analysis to get a better overview of what your strategic plan should focus on. We’ll give into how to conduct a SWOT analysis when we get into the strategic planning frameworks below.

Identify and prioritize major issues and/or goals. Based on your SWOT analysis, identify and prioritize what your strategic plan should focus on this time around.

Develop your main strategies that address these issues and/or goals. Aim to develop one overarching strategy that addresses your highest-priority goal and/or issue to keep this process as simple as possible.

Update or create a mission and vision statement . Make sure that your business’s statements align with your new or updated strategy. If you haven’t already, this is also a chance for you to define your organization’s values.

Create action plans. These will help you address your organization’s goals, resource needs, roles, and responsibilities. 

Develop a yearly operational plan document. This model works best if your business repeats the strategic plan implementation process on an annual basis, so use a yearly operational plan to capture your goals, progress, and opportunities for next time.

Allocate resources for your year-one operational plan. Whether you need funding or dedicated team members to implement your first strategic plan, now is the time to allocate all the resources you’ll need.

Monitor and revise the strategic plan. Record your lessons learned in the operational plan so you can revisit and improve it for the next strategic planning phase.

The issue-based plan can repeat on an annual basis (or less often once you resolve the issues). It’s important to update the plan every time it’s in action to ensure it’s still doing the best it can for your organization.

You don’t have to repeat the full process every year—rather, focus on what’s a priority during this run.

3. Alignment model

This model is also called strategic alignment model (SAM) and is one of the most popular strategic planning models. It helps you align your business and IT strategies with your organization’s strategic goals. 

You’ll have to consider four equally important, yet different perspectives when applying the alignment strategic planning model:

Strategy execution: The business strategy driving the model

Technology potential: The IT strategy supporting the business strategy

Competitive potential: Emerging IT capabilities that can create new products and services

Service level: Team members dedicated to creating the best IT system in the organization

Ideally, your strategy will check off all the criteria above—however, it’s more likely you’ll have to find a compromise. 

Here’s how to create a strategic plan using the alignment model and what kinds of companies can benefit from it.

Organizations that need to fine-tune their strategies

Businesses that want to uncover issues that prevent them from aligning with their mission

Companies that want to reassess objectives or correct problem areas that prevent them from growing

Outline your organization’s mission, programs, resources, and where support is needed. Before you can improve your statements and approaches, you need to define what exactly they are.

Identify what internal processes are working and which ones aren’t. Pinpoint which processes are causing problems, creating bottlenecks , or could otherwise use improving. Then prioritize which internal processes will have the biggest positive impact on your business.

Identify solutions. Work with the respective teams when you’re creating a new strategy to benefit from their experience and perspective on the current situation.

Update your strategic plan with the solutions. Update your strategic plan and monitor if implementing it is setting your business up for improvement or growth. If not, you may have to return to the drawing board and update your strategic plan with new solutions.

4. Scenario model

The scenario model works great if you combine it with other models like the basic or issue-based model. This model is particularly helpful if you need to consider external factors as well. These can be government regulations, technical, or demographic changes that may impact your business.

Organizations trying to identify strategic issues and goals caused by external factors

Identify external factors that influence your organization. For example, you should consider demographic, regulation, or environmental factors.

Review the worst case scenario the above factors could have on your organization. If you know what the worst case scenario for your business looks like, it’ll be much easier to prepare for it. Besides, it’ll take some of the pressure and surprise out of the mix, should a scenario similar to the one you create actually occur.

Identify and discuss two additional hypothetical organizational scenarios. On top of your worst case scenario, you’ll also want to define the best case and average case scenarios. Keep in mind that the worst case scenario from the previous step can often provoke strong motivation to change your organization for the better. However, discussing the other two will allow you to focus on the positive—the opportunities your business may have ahead.

Identify and suggest potential strategies or solutions. Everyone on the team should now brainstorm different ways your business could potentially respond to each of the three scenarios. Discuss the proposed strategies as a team afterward.

Uncover common considerations or strategies for your organization. There’s a good chance that your teammates come up with similar solutions. Decide which ones you like best as a team or create a new one together.

Identify the most likely scenario and the most reasonable strategy. Finally, examine which of the three scenarios is most likely to occur in the next three to five years and how your business should respond to potential changes.

5. Self-organizing model

Also called the organic planning model, the self-organizing model is a bit different from the linear approaches of the other models. You’ll have to be very patient with this method. 

This strategic planning model is all about focusing on the learning and growing process rather than achieving a specific goal. Since the organic model concentrates on continuous improvement , the process is never really over.

Large organizations that can afford to take their time

Businesses that prefer a more naturalistic, organic planning approach that revolves around common values, communication, and shared reflection

Companies that have a clear understanding of their vision

Define and communicate your organization’s cultural values . Your team can only think clearly and with solutions in mind when they have a clear understanding of your organization's values.

Communicate the planning group’s vision for the organization. Define and communicate the vision with everyone involved in the strategic planning process. This will align everyone’s ideas with your company’s vision.

Discuss what processes will help realize the organization’s vision on a regular basis. Meet every quarter to discuss strategies or tactics that will move your organization closer to realizing your vision.

6. Real-time model

This fluid model can help organizations that deal with rapid changes to their work environment. There are three levels of success in the real-time model: 

Organizational: At the organizational level, you’re forming strategies in response to opportunities or trends.

Programmatic: At the programmatic level, you have to decide how to respond to specific outcomes or environmental changes.

Operational: On the operational level, you will study internal systems, policies, and people to develop a strategy for your company.

Figuring out your competitive advantage can be difficult, but this is absolutely crucial to ensure success. Whether it’s a unique asset or strength your organization has or an outstanding execution of services or programs—it’s important that you can set yourself apart from others in the industry to succeed.

Companies that need to react quickly to changing environments

Businesses that are seeking new tools to help them align with their organizational strategy

Define your mission and vision statement. If you ever feel stuck formulating your company’s mission or vision statement, take a look at those of others. Maybe Asana’s vision statement sparks some inspiration.

Research, understand, and learn from competitor strategy and market trends. Pick a handful of competitors in your industry and find out how they’ve created success for themselves. How did they handle setbacks or challenges? What kinds of challenges did they even encounter? Are these common scenarios in the market? Learn from your competitors by finding out as much as you can about them.

Study external environments. At this point, you can combine the real-time model with the scenario model to find solutions to threats and opportunities outside of your control.

Conduct a SWOT analysis of your internal processes, systems, and resources. Besides the external factors your team has to consider, it’s also important to look at your company’s internal environment and how well you’re prepared for different scenarios.

Develop a strategy. Discuss the results of your SWOT analysis to develop a business strategy that builds toward organizational, programmatic, and operational success.

Rinse and repeat. Monitor how well the new strategy is working for your organization and repeat the planning process as needed to ensure you’re on top or, perhaps, ahead of the game. 

7. Inspirational model

This last strategic planning model is perfect to inspire and energize your team as they work toward your organization’s goals. It’s also a great way to introduce or reconnect your employees to your business strategy after a merger or acquisition.

Businesses with a dynamic and inspired start-up culture

Organizations looking for inspiration to reinvigorate the creative process

Companies looking for quick solutions and strategy shifts

Gather your team to discuss an inspirational vision for your organization. The more people you can gather for this process, the more input you will receive.

Brainstorm big, hairy audacious goals and ideas. Encouraging your team not to hold back with ideas that may seem ridiculous will do two things: for one, it will mitigate the fear of contributing bad ideas. But more importantly, it may lead to a genius idea or suggestion that your team wouldn’t have thought of if they felt like they had to think inside of the box.

Assess your organization’s resources. Find out if your company has the resources to implement your new ideas. If they don’t, you’ll have to either adjust your strategy or allocate more resources.

Develop a strategy balancing your resources and brainstorming ideas. Far-fetched ideas can grow into amazing opportunities but they can also bear great risk. Make sure to balance ideas with your strategic direction. 

Now, let’s dive into the most commonly used strategic frameworks.

8. SWOT analysis framework

One of the most popular strategic planning frameworks is the SWOT analysis . A SWOT analysis is a great first step in identifying areas of opportunity and risk—which can help you create a strategic plan that accounts for growth and prepares for threats.

SWOT stands for strengths, weaknesses, opportunities, and threats. Here’s an example:

9. OKRs framework

A big part of strategic planning is setting goals for your company. That’s where OKRs come into play. 

OKRs stand for objective and key results—this goal-setting framework helps your organization set and achieve goals. It provides a somewhat holistic approach that you can use to connect your team’s work to your organization’s big-picture goals.  When team members understand how their individual work contributes to the organization’s success, they tend to be more motivated and produce better results

10. Balanced scorecard (BSC) framework

The balanced scorecard is a popular strategic framework for businesses that want to take a more holistic approach rather than just focus on their financial performance. It was designed by David Norton and Robert Kaplan in the 1990s, it’s used by companies around the globe to: 

Communicate goals

Align their team’s daily work with their company’s strategy

Prioritize products, services, and projects

Monitor their progress toward their strategic goals

Your balanced scorecard will outline four main business perspectives:

Customers or clients , meaning their value, satisfaction, and/or retention

Financial , meaning your effectiveness in using resources and your financial performance

Internal process , meaning your business’s quality and efficiency

Organizational capacity , meaning your organizational culture, infrastructure and technology, and human resources

With the help of a strategy map, you can visualize and communicate how your company is creating value. A strategy map is a simple graphic that shows cause-and-effect connections between strategic objectives. 

The balanced scorecard framework is an amazing tool to use from outlining your mission, vision, and values all the way to implementing your strategic plan .

You can use an integration like Lucidchart to create strategy maps for your business in Asana.

11. Porter’s Five Forces framework

If you’re using the real-time strategic planning model, Porter’s Five Forces are a great framework to apply. You can use it to find out what your product’s or service’s competitive advantage is before entering the market.

Developed by Michael E. Porter , the framework outlines five forces you have to be aware of and monitor:

Threat of new industry entrants: Any new entry into the market results in increased pressure on prices and costs. 

Competition in the industry: The more competitors that exist, the more difficult it will be for you to create value in the market with your product or service.

Bargaining power of suppliers: Suppliers can wield more power if there are less alternatives for buyers or it’s expensive, time consuming, or difficult to switch to a different supplier.

Bargaining power of buyers: Buyers can wield more power if the same product or service is available elsewhere with little to no difference in quality.

Threat of substitutes: If another company already covers the market’s needs, you’ll have to create a better product or service or make it available for a lower price at the same quality in order to compete.

Remember, industry structures aren’t static. The more dynamic your strategic plan is, the better you’ll be able to compete in a market.

12. VRIO framework

The VRIO framework is another strategic planning tool designed to help you evaluate your competitive advantage. VRIO stands for value, rarity, imitability, and organization.

It’s a resource-based theory developed by Jay Barney. With this framework, you can study your firmed resources and find out whether or not your company can transform them into sustained competitive advantages. 

Firmed resources can be tangible (e.g., cash, tools, inventory, etc.) or intangible (e.g., copyrights, trademarks, organizational culture, etc.). Whether these resources will actually help your business once you enter the market depends on four qualities:

Valuable : Will this resource either increase your revenue or decrease your costs and thereby create value for your business?

Rare : Are the resources you’re using rare or can others use your resources as well and therefore easily provide the same product or service?

Inimitable : Are your resources either inimitable or non-substitutable? In other words, how unique and complex are your resources?

Organizational: Are you organized enough to use your resources in a way that captures their value, rarity, and inimitability?

It’s important that your resources check all the boxes above so you can ensure that you have sustained competitive advantage over others in the industry.

13. Theory of Constraints (TOC) framework

If the reason you’re currently in a strategic planning process is because you’re trying to mitigate risks or uncover issues that could hurt your business—this framework should be in your toolkit.

The theory of constraints (TOC) is a problem-solving framework that can help you identify limiting factors or bottlenecks preventing your organization from hitting OKRs or KPIs . 

Whether it’s a policy, market, or recourse constraint—you can apply the theory of constraints to solve potential problems, respond to issues, and empower your team to improve their work with the resources they have.

14. PEST/PESTLE analysis framework

The idea of the PEST analysis is similar to that of the SWOT analysis except that you’re focusing on external factors and solutions. It’s a great framework to combine with the scenario-based strategic planning model as it helps you define external factors connected to your business’s success.

PEST stands for political, economic, sociological, and technological factors. Depending on your business model, you may want to expand this framework to include legal and environmental factors as well (PESTLE). These are the most common factors you can include in a PESTLE analysis:

Political: Taxes, trade tariffs, conflicts

Economic: Interest and inflation rate, economic growth patterns, unemployment rate

Social: Demographics, education, media, health

Technological: Communication, information technology, research and development, patents

Legal: Regulatory bodies, environmental regulations, consumer protection

Environmental: Climate, geographical location, environmental offsets

15. Hoshin Kanri framework

Hoshin Kanri is a great tool to communicate and implement strategic goals. It’s a planning system that involves the entire organization in the strategic planning process. The term is Japanese and stands for “compass management” and is also known as policy management. 

This strategic planning framework is a top-down approach that starts with your leadership team defining long-term goals which are then aligned and communicated with every team member in the company. 

You should hold regular meetings to monitor progress and update the timeline to ensure that every teammate’s contributions are aligned with the overarching company goals.

Stick to your strategic goals

Whether you’re a small business just starting out or a nonprofit organization with decades of experience, strategic planning is a crucial step in your journey to success. 

If you’re looking for a tool that can help you and your team define, organize, and implement your strategic goals, Asana is here to help. Our goal-setting software allows you to connect all of your team members in one place, visualize progress, and stay on target.

Related resources

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What is management by objectives (MBO)?

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More Like this

4-phase guide to the strategic planning process, the strategic planning process in 4 steps, to guide you through the strategic planning process, we created this 4 step process you can use with your team. we’ll cover the basic definition of strategic planning, what core elements you should include, and actionable steps to build your strategic plan..

Free Strategic Planning Guide

What is Strategic Planning?

Strategic Planning is when a process where organizations define a bold vision and create a plan with objectives and goals to reach that future. A great strategic plan defines where your organization is going, how you’ll win, who must do what, and how you’ll review and adapt your strategy development.

A strategic plan or a business strategic plan should include the following:

• Your organization’s vision organization’s vision of the future.
• A clearly Articulated mission and values statement.
• A current state assessment that evaluates your competitive environment, new opportunities, and new threats.
• What strategic challenges you face.
• A growth strategy and outlined market share.
• Long-term strategic goals.
• An annual plan with SMART goals or OKRs to support your strategic goals.
• Clear measures, key performance indicators, and data analytics to measure progress.
• A clear strategic planning cycle, including how you’ll review, refresh, and recast your plan every quarter.

Overview of the Strategic Planning Process:

The strategic management process involves taking your organization on a journey from point A (where you are today) to point B (your vision of the future).

Part of that journey is the strategy built during strategic planning, and part of it is execution during the strategic management process. A good strategic plan dictates “how” you travel the selected road.

Effective execution ensures you are reviewing, refreshing, and recalibrating your strategy to reach your destination. The planning process should take no longer than 90 days. But, move at a pace that works best for you and your team and leverage this as a resource.

To kick this process off, we recommend 1-2 weeks (1-hour meeting with the Owner/CEO, Strategy Director, and Facilitator (if necessary) to discuss the information collected and direction for continued planning.)

Questions to Ask:

• Who is on your Planning Team? What senior leadership members and key stakeholders are included? Checkout these links you need help finding a strategic planning consultant , someone to facilitate strategic planning , or expert AI strategy consulting .
• Who will be the business process owner (Strategy Director) of planning in your organization?
• Fast forward 12 months from now, what do you want to see differently in your organization as a result of your strategic plan and implementation?
• Planning team members are informed of their roles and responsibilities.
• A strategic planning schedule is established.
• Existing planning information and secondary data collected.

Action Grid:

Step 1: Determine Organizational Readiness

Set up your plan for success – questions to ask:

• Are the conditions and criteria for successful planning in place at the current time? Can certain pitfalls be avoided?
• Is this the appropriate time for your organization to initiate a planning process? Yes or no? If no, where do you go from here?

Step 2: Develop Your Team & Schedule

Who is going to be on your planning team? You need to choose someone to oversee the strategy implementation (Chief Strategy Officer or Strategy Director) and strategic management of your plan? You need some of the key individuals and decision makers for this team. It should be a small group of approximately 12-15 people.

OnStrategy is the leader in strategic planning and performance management. Our cloud-based software and hands-on services closes the gap between strategy and execution. Learn more about OnStrategy here .

Step 3: Collect Current Data

All strategic plans are developed using the following information:

• The last strategic plan, even if it is not current
• Mission statement, vision statement, values statement
• Past or current Business plan
• Financial records for the last few years
• Marketing plan
• Other information, such as last year’s SWOT, sales figures and projections

Step 4: Review Collected Data

Review the data collected in the last action with your strategy director and facilitator.

• What trends do you see?
• Are there areas of obvious weakness or strengths?
• Have you been following a plan or have you just been going along with the market?

Conclusion: A successful strategic plan must be adaptable to changing conditions. Organizations benefit from having a flexible plan that can evolve, as assumptions and goals may need adjustments. Preparing to adapt or restart the planning process is crucial, so we recommend updating actions quarterly and refreshing your plan annually.

Strategic Planning Phase 1: Determine Your Strategic Position

Want more? Dive into the “ Evaluate Your Strategic Position ” How-To Guide.

Action Grid

Step 1: Identify Strategic Issues

Strategic issues are critical unknowns driving you to embark on a robust strategic planning process. These issues can be problems, opportunities, market shifts, or anything else that keeps you awake at night and begging for a solution or decision. The best strategic plans address your strategic issues head-on.

• How will we grow, stabilize, or retrench in order to sustain our organization into the future?
• How will we diversify our revenue to reduce our dependence on a major customer?
• What must we do to improve our cost structure and stay competitive?
• How and where must we innovate our products and services?

Step 2: Conduct an Environmental Scan

Conducting an environmental scan will help you understand your operating environment. An environmental scan is called a PEST analysis, an acronym for Political, Economic, Social, and Technological trends. Sometimes, it is helpful to include Ecological and Legal trends as well. All of these trends play a part in determining the overall business environment.

Step 3: Conduct a Competitive Analysis

The reason to do a competitive analysis is to assess the opportunities and threats that may occur from those organizations competing for the same business you are. You need to understand what your competitors are or aren’t offering your potential customers. Here are a few other key ways a competitive analysis fits into strategic planning:

• To help you assess whether your competitive advantage is really an advantage.
• To understand what your competitors’ current and future strategies are so you can plan accordingly.
• To provide information that will help you evaluate your strategic decisions against what your competitors may or may not be doing.

Learn more on how to conduct a competitive analysis here .

Step 4: Identify Opportunities and Threats

Opportunities are situations that exist but must be acted on if the business is to benefit from them.

What do you want to capitalize on?

• What new needs of customers could you meet?
• What are the economic trends that benefit you?
• What are the emerging political and social opportunities?
• What niches have your competitors missed?

Threats refer to external conditions or barriers preventing a company from reaching its objectives.

What do you need to mitigate? What external driving force do you need to anticipate?

Questions to Answer:

• What are the negative economic trends?
• What are the negative political and social trends?
• Where are competitors about to bite you?
• Where are you vulnerable?

Step 5: Identify Strengths and Weaknesses

Strengths refer to what your company does well.

What do you want to build on?

• What do you do well (in sales, marketing, operations, management)?
• What are your core competencies?
• What differentiates you from your competitors?
• Why do your customers buy from you?

Weaknesses refer to any limitations a company faces in developing or implementing a strategy.

What do you need to shore up?

• Where do you lack resources?
• What can you do better?
• Where are you losing money?
• In what areas do your competitors have an edge?

Step 6: Customer Segments

Customer segmentation defines the different groups of people or organizations a company aims to reach or serve.

• What needs or wants define your ideal customer?
• What characteristics describe your typical customer?
• Can you sort your customers into different profiles using their needs, wants and characteristics?
• Can you reach this segment through clear communication channels?

Step 7: Develop Your SWOT

A SWOT analysis is a quick way of examining your organization by looking at the internal strengths and weaknesses in relation to the external opportunities and threats. Creating a SWOT analysis lets you see all the important factors affecting your organization together in one place.

It’s easy to read, easy to communicate, and easy to create. Take the Strengths, Weaknesses, Opportunities, and Threats you developed earlier, review, prioritize, and combine like terms. The SWOT analysis helps you ask and answer the following questions: “How do you….”

• Build on your strengths
• Shore up your weaknesses
• Capitalize on your opportunities
• Manage your threats

Strategic Planning Process Phase 2: Developing Strategy

Want More? Deep Dive Into the “Developing Your Strategy” How-To Guide.

Step 1: Develop Your Mission Statement

The mission statement describes an organization’s purpose or reason for existing.

What is our purpose? Why do we exist? What do we do?

• What are your organization’s goals? What does your organization intend to accomplish?
• Why do you work here? Why is it special to work here?
• What would happen if we were not here?

Outcome: A short, concise, concrete statement that clearly defines the scope of the organization.

Step 2: discover your values.

Your values statement clarifies what your organization stands for, believes in and the behaviors you expect to see as a result. Check our the post on great what are core values and examples of core values .

How will we behave?

• What are the key non-negotiables that are critical to the company’s success?
• What guiding principles are core to how we operate in this organization?
• What behaviors do you expect to see?
• If the circumstances changed and penalized us for holding this core value, would we still keep it?

Outcome: Short list of 5-7 core values.

Step 3: casting your vision statement.

A Vision Statement defines your desired future state and directs where we are going as an organization.

Where are we going?

• What will our organization look like 5–10 years from now?
• What does success look like?
• What are we aspiring to achieve?
• What mountain are you climbing and why?

Outcome: A picture of the future.

Step 4: identify your competitive advantages.

A competitive advantage is a characteristic of an organization that allows it to meet its customer’s need(s) better than its competition can. It’s important to consider your competitive advantages when creating your competitive strategy.

What are we best at?

• What are your unique strengths?
• What are you best at in your market?
• Do your customers still value what is being delivered? Ask them.
• How do your value propositions stack up in the marketplace?

Outcome: A list of 2 or 3 items that honestly express the organization’s foundation for winning.

Step 5: crafting your organization-wide strategies.

Your competitive strategy is the general methods you intend to use to reach your vision. Regardless of the level, a strategy answers the question “how.”

How will we succeed?

• Broad: market scope; a relatively wide market emphasis.
• Narrow: limited to only one or few segments in the market
• Does your competitive position focus on lowest total cost or product/service differentiation or both?

Outcome: Establish the general, umbrella methods you intend to use to reach your vision.

Phase 3: Strategic Plan Development

Want More? Deep Dive Into the “Build Your Plan” How-To Guide.

Strategic Planning Process Step 1: Use Your SWOT to Set Priorities

If your team wants to take the next step in the SWOT analysis, apply the TOWS Strategic Alternatives Matrix to your strategy map to help you think about the options you could pursue. To do this, match external opportunities and threats with your internal strengths and weaknesses, as illustrated in the matrix below:

TOWS Strategic Alternatives Matrix

Evaluate the options you’ve generated, and identify the ones that give the greatest benefit, and that best achieve the mission and vision of your organization. Add these to the other strategic options that you’re considering.

Step 2: Define Long-Term Strategic Objectives

Long-Term Strategic Objectives are long-term, broad, continuous statements that holistically address all areas of your organization. What must we focus on to achieve our vision? Check out examples of strategic objectives here. What are the “big rocks”?

Questions to ask:

• What are our shareholders or stakeholders expectations for our financial performance or social outcomes?
• To reach our outcomes, what value must we provide to our customers? What is our value proposition?
• To provide value, what process must we excel at to deliver our products and services?
• To drive our processes, what skills, capabilities and organizational structure must we have?

Outcome: Framework for your plan – no more than 6. You can use the balanced scorecard framework, OKRs, or whatever methodology works best for you. Just don’t exceed 6 long-term objectives.

Step 3: Setting Organization-Wide Goals and Measures

Once you have formulated your strategic objectives, you should translate them into goals and measures that can be communicated to your strategic planning team (team of business leaders and/or team members).

You want to set goals that convert the strategic objectives into specific performance targets. Effective strategic goals clearly state what, when, how, and who, and they are specifically measurable. They should address what you must do in the short term (think 1-3 years) to achieve your strategic objectives.

Organization-wide goals are annual statements that are SMART – specific, measurable, attainable, responsible, and time-bound. These are outcome statements expressing a result to achieve the desired outcomes expected in the organization.

What is most important right now to reach our long-term objectives?

Outcome: clear outcomes for the current year..

Step 4: Select KPIs

Key Performance Indicators (KPI) are the key measures that will have the most impact in moving your organization forward. We recommend you guide your organization with measures that matter. See examples of KPIs here.

How will we measure our success?

Outcome: 5-7 measures that help you keep the pulse on your performance. When selecting your Key Performance Indicators (KPIs), ask, “What are the key performance measures we need to track to monitor if we are achieving our goals?” These KPIs include the key goals you want to measure that will have the most impact on moving your organization forward.

Step 5: Cascade Your Strategies to Operations

To move from big ideas to action, creating action items and to-dos for short-term goals is crucial. This involves translating strategy from the organizational level to individuals. Functional area managers and contributors play a role in developing short-term goals to support the organization.

Before taking action, decide whether to create plans directly derived from the strategic plan or sync existing operational, business, or account plans with organizational goals. Avoid the pitfall of managing multiple sets of goals and actions, as this shifts from strategic planning to annual planning.

Questions to Ask

• How are we going to get there at a functional level?
• Who must do what by when to accomplish and drive the organizational goals?
• What strategic questions still remain and need to be solved?

Department/functional goals, actions, measures and targets for the next 12-24 months

Step 6: Cascading Goals to Departments and Team Members

Now in your Departments / Teams, you need to create goals to support the organization-wide goals. These goals should still be SMART and are generally (short-term) something to be done in the next 12-18 months. Finally, you should develop an action plan for each goal.

Keep the acronym SMART in mind again when setting action items, and make sure they include start and end dates and have someone assigned their responsibility. Since these action items support your previously established goals, it may be helpful to consider action items your immediate plans on the way to achieving your (short-term) goals. In other words, identify all the actions that need to occur in the next 90 days and continue this same process every 90 days until the goal is achieved.

Examples of Cascading Goals:

Phase 4: Executing Strategy and Managing Performance

Want more? Dive Into the “Managing Performance” How-To Guide.

Step 1: Strategic Plan Implementation Schedule

Implementation is the process that turns strategies and plans into actions in order to accomplish strategic objectives and goals.

How will we use the plan as a management tool?

• Communication Schedule: How and when will you roll-out your plan to your staff? How frequently will you send out updates?
• Process Leader: Who is your strategy director?
• Structure: What are the dates for your strategy reviews (we recommend at least quarterly)?
• System & Reports: What are you expecting each staff member to come prepared with to those strategy review sessions?

Outcome: Syncing your plan into the “rhythm of your business.”

Once your resources are in place, you can set your implementation schedule. Use the following steps as your base implementation plan:

• Establish your performance management and reward system.
• Set up monthly and quarterly strategy meetings with established reporting procedures.
• Set up annual strategic review dates including new assessments and a large group meeting for an annual plan review.

Now you’re ready to start plan roll-out. Below are sample implementation schedules, which double for a full strategic management process timeline.

Step 2: Tracking Goals & Actions

Monthly strategy meetings don’t need to take a lot of time – 30 to 60 minutes should suffice. But it is important that key team members report on their progress toward the goals they are responsible for – including reporting on metrics in the scorecard they have been assigned.

By using the measurements already established, it’s easy to make course corrections if necessary. You should also commit to reviewing your Key Performance Indicators (KPIs) during these regular meetings. Need help comparing strategic planning software ? Check out our guide.

Effective Strategic Planning: Your Bi-Annual Checklist

Never lose sight of the fact that strategic plans are guidelines, not rules. Every six months or so, you should evaluate your strategy execution and strategic plan implementation by asking these key questions:

• Will your goals be achieved within the time frame of the plan? If not, why?
• Should the deadlines be modified? (Before you modify deadlines, figure out why you’re behind schedule.)
• Are your goals and action items still realistic?
• Should the organization’s focus be changed to put more emphasis on achieving your goals?
• Should your goals be changed? (Be careful about making these changes – know why efforts aren’t achieving the goals before changing the goals.)
• What can be gathered from an adaptation to improve future planning activities?

Why Track Your Goals?

• Ownership: Having a stake and responsibility in the plan makes you feel part of it and leads you to drive your goals forward.
• Culture: Successful plans tie tracking and updating goals into organizational culture.
• Implementation: If you don’t review and update your strategic goals, they are just good intentions
• Accountability: Accountability and high visibility help drive change. This means that each measure, objective, data source and initiative must have an owner.
• Empowerment: Changing goals from In Progress to Complete just feels good!

Step 3: Review & Adapt

Guidelines for your strategy review.

The most important part of this meeting is a 70/30 review. 30% is about reviewing performance, and 70% should be spent on making decisions to move the company’s strategy forward in the next quarter.

The best strategic planners spend about 60-90 minutes in the sessions. Holding meetings helps focus your goals on accomplishing top priorities and accelerating the organization’s growth. Although the meeting structure is relatively simple, it does require a high degree of discipline.

Strategy Review Session Questions:

Strategic planning frequently asked questions, read our frequently asked questions about strategic planning to learn how to build a great strategic plan..

Strategic planning is when organizations define a bold vision and create a plan with objectives and goals to reach that future. A great strategic plan defines where your organization is going, how you’ll win, who must do what, and how you’ll review and adapt your strategy..

Your strategic plan needs to include an assessment of your current state, a SWOT analysis, mission, vision, values, competitive advantages, growth strategy, growth enablers, a 3-year roadmap, and annual plan with strategic goals, OKRs, and KPIs.

A strategic planning process should take no longer than 90 days to complete from start to finish! Any longer could fatigue your organization and team.

There are four overarching phases to the strategic planning process that include: determining position, developing your strategy, building your plan, and managing performance. Each phase plays a unique but distinctly crucial role in the strategic planning process.

Prior to starting your strategic plan, you must go through this pre-planning process to determine your organization’s readiness by following these steps:

Ask yourself these questions: Are the conditions and criteria for successful planning in place now? Can we foresee any pitfalls that we can avoid? Is there an appropriate time for our organization to initiate this process?

Develop your team and schedule. Who will oversee the implementation as Chief Strategy Officer or Director? Do we have at least 12-15 other key individuals on our team?

Research and Collect Current Data. Find the following resources that your organization may have used in the past to assist you with your new plan: last strategic plan, mission, vision, and values statement, business plan, financial records, marketing plan, SWOT, sales figures, or projections.

Finally, review the data with your strategy director and facilitator and ask these questions: What trends do we see? Any obvious strengths or weaknesses? Have we been following a plan or just going along with the market?

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The 5 steps of the strategic planning process

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Starting a project without a strategy is like trying to bake a cake without a recipe — you might have all the ingredients you need, but without a plan for how to combine them, or a vision for what the finished product will look like, you’re likely to end up with a mess. This is especially true when working with a team — it’s crucial to have a shared plan that can serve as a map on the pathway to success.

Creating a strategic plan not only provides a useful document for the future, but also helps you define what you have right now, and think through and outline all of the steps and considerations you’ll need to succeed.

What is strategic planning?

While there is no single approach to creating a strategic plan, most approaches can be boiled down to five overarching steps:

• Define your vision
• Assess where you are
• Determine your priorities and objectives
• Define responsibilities
• Measure and evaluate results

Each step requires close collaboration as you build a shared vision, strategy for implementation, and system for understanding performance.

Related: Learn how to hold an effective strategic planning meeting

Why do I need a strategic plan?

Building a strategic plan is the best way to ensure that your whole team is on the same page, from the initial vision and the metrics for success to evaluating outcomes and adjusting (if necessary) for the future. Even if you’re an expert baker, working with a team to bake a cake means having a collaborative approach and clearly defined steps so that the result reflects the strategic goals you laid out at the beginning.

The benefits of strategic planning also permeate into the general efficiency and productivity of your organization as a whole. They include: 

• Greater attention to potential biases or flaws, improving decision-making 
• Clear direction and focus, motivating and engaging employees
• Better resource management, improving project outcomes 
• Improved employee performance, increasing profitability
• Enhanced communication and collaboration, fostering team efficiency 

Next, let’s dive into how to build and structure your strategic plan, complete with templates and assets to help you along the way.

Before you begin: Pick a brainstorming method

There are many brainstorming methods you can use to come up with, outline, and rank your priorities. When it comes to strategy planning, it’s important to get everyone’s thoughts and ideas out before committing to any one strategy. With the right facilitation , brainstorming helps make this process fair and transparent for everyone involved.  

First, decide if you want to run a real-time rapid ideation session or a structured brainstorming . In a rapid ideation session, you encourage sharing half-baked or silly ideas, typically within a set time frame. The key is to just get out all your ideas quickly and then edit the best ones. Examples of rapid ideation methods include round robin , brainwriting , mind mapping , and crazy eights . 

In a structured brainstorming session, you allow for more time to prepare and edit your thoughts before getting together to share and discuss those more polished ideas. This might involve brainstorming methods that entail unconventional ways of thinking, such as reverse brainstorming or rolestorming . 

Using a platform like Mural, you can easily capture and organize your team’s ideas through sticky notes, diagrams, text, or even images and videos. These features allow you to build actionable next steps immediately (and in the same place) through color coding and tagging. 

Whichever method you choose, the ideal outcome is that you avoid groupthink by giving everyone a voice and a say. Once you’ve reached a consensus on your top priorities, add specific objectives tied to each of those priorities.

Related: Brainstorming and ideation template

1. Define your vision

Whether it’s for your business as a whole, or a specific initiative, successful strategic planning involves alignment with a vision for success. You can think of it as a project-specific mission statement or a north star to guide employees toward fulfilling organizational goals. 

To create a vision statement that explicitly states the ideal results of your project or company transformation, follow these four key steps: 

• Engage and involve the entire team . Inclusivity like this helps bring diverse perspectives to the table. 
• Align the vision with your core values and purpose . This will make it familiar and easy to follow through. 
• Stay grounded . The vision should be ambitious enough to motivate and inspire yet grounded enough to be achievable and relevant.
• Think long-term flexibility . Consider future trends and how your vision can be flexible in the face of challenges or opportunities. 

For example, say your vision is to revolutionize customer success by streamlining and optimizing your process for handling support tickets. It’s important to have a strategy map that allows stakeholders (like the support team, marketing team, and engineering team) to know the overall objective and understand the roles they will play in realizing the goals. 

This can be done in real time or asynchronously , whether in person, hybrid, or remote. By leveraging a shared digital space , everyone has a voice in the process and room to add their thoughts, comments, and feedback. 

Related: Vision board template

2. Assess where you are

The next step in creating a strategic plan is to conduct an assessment of where you stand in terms of your own initiatives, as well as the greater marketplace. Start by conducting a resource assessment. Figure out which financial, human, and/or technological resources you have available and if there are any limitations. You can do this using a SWOT analysis.

What is SWOT analysis?

SWOT analysis is an exercise where you define:

• Strengths: What are your unique strengths for this initiative or this product? In what ways are you a leader?
• Weaknesses: What weaknesses can you identify in your offering? How does your product compare to others in the marketplace?
• Opportunities: Are there areas for improvement that'd help differentiate your business?
• Threats: Beyond weaknesses, are there existing potential threats to your idea that could limit or prevent its success? How can those be anticipated?

For example, say you have an eco-friendly tech company and your vision is to launch a new service in the next year. Here’s what the SWOT analysis might look like: 

• Strengths : Strong brand reputation, loyal customer base, and a talented team focused on innovation
• Weaknesses : Limited bandwidth to work on new projects, which might impact the scope of its strategy formulation 
• Opportunities : How to leverage and experiment with existing customers when goal-setting
• Threats : Factors in the external environment out of its control, like the state of the economy and supply chain shortages

This SWOT analysis will guide the company in setting strategic objectives and formulating a robust plan to navigate the challenges it might face. 

Related: SWOT analysis template

3. Determine your priorities and objectives

Once you've identified your organization’s mission and current standing, start a preliminary plan document that outlines your priorities and their corresponding objectives. Priorities and objectives should be set based on what is achievable with your available resources. The SMART framework is a great way to ensure you set effective goals . It looks like this:  

• Specific: Set clear objectives, leaving no room for ambiguity about the desired outcomes.
• Measurable : Choose quantifiable criteria to make it easier to track progress.
• Achievable : Ensure it is realistic and attainable within the constraints of your resources and environment.
• Relevant : Develop objectives that are relevant to the direction your organization seeks to move.
• Time-bound : Set a clear timeline for achieving each objective to maintain a sense of urgency and focus.

For instance, going back to the eco-friendly tech company, the SMART goals might be: 

• Specific : Target residential customers and small businesses to increase the sales of its solar-powered device line by 25%. 
• Measurable : Track monthly sales and monitor customer feedback and reviews. 
• Achievable : Allocate more resources to the marketing, sales, and customer service departments. 
• Relevant : Supports the company's growth goals in a growing market of eco-conscious consumers. 
• Time-bound : Conduct quarterly reviews and achieve this 25% increase in sales over the next 12 months.

With strategic objectives like this, you’ll be ready to put the work into action. 

Related: Project kickoff template

4. Define tactics and responsibilities

In this stage, individuals or units within your team can get granular about how to achieve your goals and who'll be accountable for each step. For example, the senior leadership team might be in charge of assigning specific tasks to their team members, while human resources works on recruiting new talent. 

It’s important to note that everyone’s responsibilities may shift over time as you launch and gather initial data about your project. For this reason, it’s key to define responsibilities with clear short-term metrics for success. This way, you can make sure that your plan is adaptable to changing circumstances. 

One of the more common ways to define tactics and metrics is to use the OKR (Objectives and Key Results) method. By outlining your OKRs, you’ll know exactly what key performance indicators (KPIs) to track and have a framework for analyzing the results once you begin to accumulate relevant data. 

For instance, if our eco-friendly tech company has a goal of increasing sales, one objective might be to expand market reach for its solar-powered products. The sales team lead would be in charge of developing an outreach strategy. The key result would be to successfully launch its products in two new regions by Q2. The KPI would be a 60% conversation rate in those targeted markets.  

Related: OKR planning template  

5. Manage, measure, and evaluate

Once your plan is set into motion, it’s important to actively manage (and measure) progress. Before launching your plan, settle on a management process that allows you to measure success or failure. In this way, everyone is aligned on progress and can come together to evaluate your strategy execution at regular intervals.

Determine the milestones at which you’ll come together and go over results — this can take place weekly, monthly, or quarterly, depending on the nature of the project.

One of the best ways to evaluate progress is through agile retrospectives (or retros) , which can be done in real time or asynchronously. During this process, gather and organize feedback about the key elements that played a role in your strategy. 

Related: Retrospective radar template

Retrospectives are typically divided into three parts:

• What went well.
• What didn’t go well.
• New opportunities for improvement.

This structure is also sometimes called the “ rose, thorn, bud ” framework. By using this approach, team members can collectively brainstorm and categorize their feedback, making the next steps clear and actionable. Creating an action plan during a post-mortem meeting is a crucial step in ensuring that lessons learned from past projects or events are effectively translated into tangible improvements. 

Another method for reviewing progress is the quarterly business review (QBR). Like the agile retrospective, it allows you to collect feedback and adjust accordingly. In the case of QBRs, however, we recommend dividing your feedback into four categories:

• Start (what new items should be launched?).
• Stop (what items need to be paused?).
• Continue (what is going well?).
• Change (what could be modified to perform better?).

Strategic planners know that planning activities continue even after a project is complete. There’s always room for improvement and an action plan waiting to be implemented. Using the above approaches, your team can make room for new ideas within the existing strategic framework in order to track better to your long-term goals.

Related: Quarterly business review template

Conclusions

The beauty of the strategic plan is that it can be applied from the campaign level all the way up to organizational vision. Using the strategic planning framework, you build buy-in , trust, and transparency by collaboratively creating a vision for success, and mapping out the steps together on the road to your goals.

Also, in so doing, you build in an ability to adapt effectively on the fly in response to data through measurement and evaluation, making your plan both flexible and resilient.

Related: 5 Tips for Holding Effective Post-mortems

Why Mural for strategic planning

Mural unlocks collaborative strategic planning through a shared digital space with an intuitive interface, a library of pre-fab templates, and methodologies based on design thinking principles.

Outline goals, identify key metrics, and track progress with a platform built for any enterprise.

Learn more about strategic planning with Mural.

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Tactical vs. strategic planning: Why you need both

5 effective strategic planning models for your business

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How to Set Strategic Planning Goals

• 29 Oct 2020

In an ever-changing business world, it’s imperative to have strategic goals and a plan to guide organizational efforts. Yet, crafting strategic goals can be a daunting task. How do you decide which goals are vital to your company? Which ones are actionable and measurable? Which goals to prioritize?

To help you answer these questions, here’s a breakdown of what strategic planning is, what characterizes strategic goals, and how to select organizational goals to pursue.

Access your free e-book today.

What Is Strategic Planning?

Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees, and ensure organizational goals are backed by data and sound reasoning.

Research in the Harvard Business Review cautions against getting locked into your strategic plan and forgetting that strategy involves inherent risk and discomfort. A good strategic plan evolves and shifts as opportunities and threats arise.

“Most people think of strategy as an event, but that’s not the way the world works,” says Harvard Business School Professor Clayton Christensen in the online course Disruptive Strategy . “When we run into unanticipated opportunities and threats, we have to respond. Sometimes we respond successfully; sometimes we don’t. But most strategies develop through this process. More often than not, the strategy that leads to success emerges through a process that’s at work 24/7 in almost every industry."

Related: 5 Tips for Formulating a Successful Strategy

4 Characteristics of Strategic Goals

To craft a strategic plan for your organization, you first need to determine the goals you’re trying to reach. Strategic goals are an organization’s measurable objectives that are indicative of its long-term vision.

Here are four characteristics of strategic goals to keep in mind when setting them for your organization.

1. Purpose-Driven

The starting point for crafting strategic goals is asking yourself what your company’s purpose and values are . What are you striving for, and why is it important to set these objectives? Let the answers to these questions guide the development of your organization’s strategic goals.

“You don’t have to leave your values at the door when you come to work,” says HBS Professor Rebecca Henderson in the online course Sustainable Business Strategy .

Henderson, whose work focuses on reimagining capitalism for a just and sustainable world, also explains that leading with purpose can drive business performance.

“Adopting a purpose will not hurt your performance if you do it authentically and well,” Henderson says in a lecture streamed via Facebook Live . “If you’re able to link your purpose to the strategic vision of the company in a way that really gets people aligned and facing in the right direction, then you have the possibility of outperforming your competitors.”

Related: 5 Examples of Successful Sustainability Initiatives

2. Long-Term and Forward-Focused

While strategic goals are the long-term objectives of your organization, operational goals are the daily milestones that need to be reached to achieve them. When setting strategic goals, think of your company’s values and long-term vision, and ensure you’re not confusing strategic and operational goals.

For instance, your organization’s goal could be to create a new marketing strategy; however, this is an operational goal in service of a long-term vision. The strategic goal, in this case, could be breaking into a new market segment, to which the creation of a new marketing strategy would contribute.

Keep a forward-focused vision to ensure you’re setting challenging objectives that can have a lasting impact on your organization.

3. Actionable

Strong strategic goals are not only long-term and forward-focused—they’re actionable. If there aren’t operational goals that your team can complete to reach the strategic goal, your organization is better off spending time and resources elsewhere.

When formulating strategic goals, think about the operational goals that fall under them. Do they make up an action plan your team can take to achieve your organization’s objective? If so, the goal could be a worthwhile endeavor for your business.

4. Measurable

When crafting strategic goals, it’s important to define how progress and success will be measured.

According to the online course Strategy Execution , an effective tool you can use to create measurable goals is a balanced scorecard —a tool to help you track and measure non-financial variables.

“The balanced scorecard combines the traditional financial perspective with additional perspectives that focus on customers, internal business processes, and learning and development,” says HBS Professor Robert Simons in the online course Strategy Execution . “These additional perspectives help businesses measure all the activities essential to creating value.”

The four perspectives are:

• Internal business processes
• Learning and growth

The most important element of a balanced scorecard is its alignment with your business strategy.

“Ask yourself,” Simons says, “‘If I picked up a scorecard and examined the measures on it, could I infer what the business's strategy was? If you've designed measures well, the answer should be yes.”

Related: A Manager’s Guide to Successful Strategy Implementation

Strategic Goal Examples

Whatever your business goals and objectives , they must have all four of the characteristics listed above.

For instance, the goal “become a household name” is valid but vague. Consider the intended timeframe to reach this goal and how you’ll operationally define “a household name.” The method of obtaining data must also be taken into account.

An appropriate revision to the original goal could be: “Increase brand recognition by 80 percent among surveyed Americans by 2030.” By setting a more specific goal, you can better equip your organization to reach it and ensure that employees and shareholders have a clear definition of success and how it will be measured.

If your organization is focused on becoming more sustainable and eco-conscious, you may need to assess your strategic goals. For example, you may have a goal of becoming a carbon neutral company, but without defining a realistic timeline and baseline for this initiative, the probability of failure is much higher.

A stronger goal might be: “Implement a comprehensive carbon neutrality strategy by 2030.” From there, you can determine the operational goals that will make this strategic goal possible.

No matter what goal you choose to pursue, it’s important to avoid those that lack clarity, detail, specific targets or timeframes, or clear parameters for success. Without these specific elements in place, you’ll have a difficult time making your goals actionable and measurable.

Prioritizing Strategic Goals

Once you’ve identified several strategic goals, determine which are worth pursuing. This can be a lengthy process, especially if other decision-makers have differing priorities and opinions.

To set the stage, ensure everyone is aware of the purpose behind each strategic goal. This calls back to Henderson’s point that employees’ alignment on purpose can set your organization up to outperform its competitors.

Calculate Anticipated ROI

Next, calculate the estimated return on investment (ROI) of the operational goals tied to each strategic objective. For example, if the strategic goal is “reach carbon-neutral status by 2030,” you need to break that down into actionable sub-tasks—such as “determine how much CO2 our company produces each year” and “craft a marketing and public relations strategy”—and calculate the expected cost and return for each.

The ROI formula is typically written as:

ROI = (Net Profit / Cost of Investment) x 100

In project management, the formula uses slightly different terms:

ROI = [(Financial Value - Project Cost) / Project Cost] x 100

An estimate can be a valuable piece of information when deciding which goals to pursue. Although not all strategic goals need to yield a high return on investment, it’s in your best interest to calculate each objective's anticipated ROI so you can compare them.

Consider Current Events

Finally, when deciding which strategic goal to prioritize, the importance of the present moment can’t be overlooked. What’s happening in the world that could impact the timeliness of each goal?

For example, the coronavirus (COVID-19) pandemic and the ever-intensifying climate change crisis have impacted many organizations’ strategic goals in 2020. Often, the goals that are timely and pressing are those that earn priority.

Learn to Plan Strategic Goals

As you set and prioritize strategic goals, remember that your strategy should always be evolving. As circumstances and challenges shift, so must your organizational strategy.

If you lead with purpose, a measurable and actionable vision, and an awareness of current events, you can set strategic goals worth striving for.

Do you want to learn more about strategic planning? Explore our online strategy courses and download our free flowchart to determine which is right for you and your goals.

This post was updated on November 16, 2023. It was originally published on October 29, 2020.

About the Author

Strategic Planning Should Be a Strategic Exercise

by Graham Kenny

Summary .   

Many managers complain that strategy-making often reduces to an operational action plan that resembles the last one.  To prevent that from happening they need to remember that strategy is about creating a system whereby a company’s stakeholders interact to create a sustainable advantage for the company.  Strategic planning is how the company designs that system, which is very different from an operational action plan in that it is never a static to-do list but constantly evolves as strategy makers acquire more insights into how their system of stakeholders can create value.

Over the years I’ve facilitated many strategic planning workshops for business, government, and not-for-profit organizations. We reflect on recent changes and future trends and consider how to engage with them for corporate success.

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Strategic planning: Read this before it's that time again

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What is strategic planning?

What is strategic plan management?

Benefits of robust strategic planning and management

10 steps in the strategic planning process.

Plans are worthless, but planning is everything. - Dwight D. Eisenhower

It’s that time again. 

Every three to five years, most larger organizations periodically plan for the future. Many times strategic planning documents are shelved and forgotten until the next cycle begins. On the other hand, many smaller and newer organizations, propelled by urgency, may not devote the necessary time and energy to the strategic planning process. 

Only 63% of businesses plan more than a year out. They fail to see that — contrary to Alice in Wonderland’s Cheshire cat — “any way” does not take you there. 

For all organizations, a more rigorous annual planning process is critical for driving future success, profitability, value, and impact.

John Kotter, a former professor at Harvard Business School and noted expert on innovation says, “ Strategy should be viewed as a dynamic force that constantly seeks opportunities, identifies initiatives that will capitalize on them, and completes those initiatives swiftly and efficiently.”

There’s hardly a better case that can be made for dynamic planning than in the tech industry, where mergers and acquisitions are accelerating exponentially. Companies need to be nimble enough to navigate rapid change . In this case, planning should occur quarterly.

Strategic planning is an ongoing process by which an organization sets its forward course by bringing all of its stakeholders together to examine current realities and define its vision for the future.

It examines its strengths and weaknesses, resources available, and opportunities. Strategic planning seeks to anticipate future industry trends .  During the process, the organization creates a vision, articulates its purpose, and sets strategic goals that are long-term and forward-focused. 

Those strategic goals inform operational goals and incremental milestones that need to be reached. The operational plan has clear objectives and supporting initiatives tied to metrics to which everyone is accountable . The plan should be agile enough to allow for recalibrating when necessary and redistributing resources based on internal and external forces.

The output of the planning process is a document that is shared across the enterprise. 

Strategic planning for individuals

Strategic planning isn’t just for companies. At BetterUp, strategic planning is one of the skills that we identify, track, and develop within the Whole Person Model . For individuals, strategic planning is the ability to think through ways to achieve desired outcomes. Just as strategic planning helps organizations realize their goals for the future, it helps individuals grow and achieve goals in a unified direction. 

Working backward from the desired outcome, effective strategic planning consists of coming up with the steps we need to take today in order to get where we want to be tomorrow. 

While no plan is infallible, people who develop this skill are good at checking to make sure that their actions are in alignment with the outcomes that they want to see in the future. Even when things don’t go according to plan, their long-term goals act as a “North star” to get them back on course. In addition, envisioning desired future states and figuring out how to turn them into reality enhances an individual’s sense of personal meaning and motivation. 

Whether we’re talking about strategic planning for the company or the individual, strategic plans can go awry in a variety of ways including: 

• Unrealistic goals and too many priorities
• Poor communication
• Using the wrong measures
• Lack of leadership

The extent to which that document is shelved until the next planning cycle or becomes a dynamic map of the future depends on the people responsible for overseeing the execution of the plan.

What is strategic plan management? 

"Most people think of strategy as an event, but that’s not the way the world works," according to Harvard Business School Professor Clayton Christensen. "When we run into unanticipated opportunities and threats, we have to respond. Sometimes we respond successfully; sometimes we don’t. But most strategies develop through this process. More often than not, the strategy that leads to success emerges through a process that works 24/7 in almost every industry."

Strategic business management is the ongoing process by which an organization creates and sustains a successful roadmap that moves the company in the direction it needs to move, year after year, for long-term success. It spans from research and formulation to execution, evaluation, and adjustment. Given the pace of change, strategic management is more relevant and important than ever for assigning measurable goals and action steps

Many organizations fail because they don’t have the strategic management team at the table right from the beginning of the planning process. A strategic plan is only as good as its ability to be executed and sustained. 

A strategic management initiative might be driven by an internal group — many companies have an internal strategy team — or an outside consulting firm. Ultimately company leaders need to own executing and sustaining the strategy. 

Strategic management teams

In this Harvard Business Review article, Ron Carucci from consulting firm Navalent reports that 61% of executives in a 10-year longitudinal study felt they were not prepared for the strategic challenges they faced upon being appointed to senior leadership roles. Lack of commitment to the plan is also a contributing factor. In addition, leaders attending to quarterly targets, crisis management , and reconciling budgets often consider the execution of a long-term strategy a low priority.

A dedicated strategic management team works with those senior leaders and managers throughout the organization to communicate, coordinate and evaluate progress against goals. They tie strategic objectives to day-to-day operational metrics throughout the enterprise. 

A good strategic management group can assist in creating a culture of empowerment and learning . It holds regular meetings with employees. It sets a clear agenda and expectations to make the strategic plan real and compelling to the organization through concrete objectives, results, and timelines. 

Strategy development is a lot of work, but the benefits are lasting. After all, as the saying goes, "If you fail to plan, you plan to fail." Taking the time for review and planning activities has the following benefits:

• Organizations and people are set up to succeed
• Increased likelihood of staying on track
• Decreased likelihood of being distracted or derailed
• Progress through the plan is communicated throughout the organization
• Metrics facilitate course correction
• Budgets enterprise-wide are based on strategy
• Cross-organization alignment
• Robust employee performance and compensation plans
• Commitment to learning and training
• A robust strategic planning process gets everyone involved and invested in the organizations
• Employees inform management about what’s working or not working at the operational level
• Innovation is encouraged and rewarded
• Increased productivity

1. Define mission and vision  

Begin by articulating the organization's vision for the future. Ask, "What would success look like in five years?" Create a mission statement describing organizational values and how you intend to reach the vision. What values inform and determine mission, vision, and purpose?

Purpose-driven strategic goals articulate the “why” of what the corporation is doing. It connects the vision statement to specific objectives, drawing a line between the larger goals and the work that teams and individuals do.

2. Conduct a comprehensive assessment  

This stage includes identifying an organization’s strategic position.

Gathering data from internal and external environments and respective stakeholders takes place at this time. Involving employees and customers in the research.

The task is to gather market data through research. One of the most critical components of this stage is a comprehensive SWOT analysis that involves gathering people and bringing perspectives from all stakeholders to determine:

• W eaknesses
• O pportunities

Strengths and weaknesses  — In this stage, planners identify the company’s assets that contribute to its current competitive advantage and/or the likelihood of a significant increase in the organization’s market share in the future. It should be an objective assessment rather than an inflated perspective of its strengths. 

An accurate assessment of weaknesses requires looking outward at external forces that can reveal new opportunities as well as threats. Consider the massive shift in multiple industries whose strategy has been disrupted by the COVID-19 pandemic. While it was disastrous to the airline and restaurant industries’ business models , tech companies were able to seize the opportunity and address the demands of remote work. 

Michael Porter’s book Competetive Strategy: Techniques for Analyzing Industries and Competitors claims that there are five forces at work in an industry that influence that industry’s ability to develop a competitive strategy. Since the book was published in 1979, organizations have turned to Porter’s theory to create their strategic framework. 

Here are the 5 forces (and key questions) that determine the competitive strategy for most industries.

• Competitive rivalry : When considering the strengths of an organization’s competitors it’s important to ask: How do our products/services hold up to our competition? If the rivalry is intense, companies need to consider what capacity they have to gain leverage through price cuts or bold marketing strategies. If there is little competition, the organization has a substantial gain in the market.
• Supplier power: How might suppliers influence strategy? For example, what if suppliers raised their prices? To what extent would a company need a particular supplier for our product(s)? Is it possible to switch suppliers in a way that is more cost effective and efficient? The number of suppliers that exist will determine your ability to keep costs low.
• Buyer power: To what extent do buyers have the ability to shop around right into the hands of your competitors? How much power does your customer base have in determining price? A small number of well-informed buyers shifts the power in their direction while a large pool may give you the strategic advantage
• Threat of substitution:  What is the threat of a company’s buyer substituting your services/products from the competition? What if the buyer figures out another way to access the services/products that it offers?
• Threat of new entry:  How easy is it for newcomers to enter the organization’s market?

3. Forecast  

Considering the factors above, determine the company’s value through financial forecasting . While almost certainly to become a moving target influenced by the five forces, a forecast can assign initial anticipated measurable results expected in the plan or ROI: profits/cost of investment.

4. Set the organizational direction of the business

The above research and assessment will help an organization to set goals and priorities. Too often an organization’s strategic plan is too broad and over-ambitious. Planners need to ask, ”What kind of impact are we seeking to have, and in what time frame?” They need to drill down to objectives that will have the most impact. 

5. Create strategic objectives

This next phase of operational planning consists of creating strategic objectives and initiatives. Kaplan and Norton posit in their balanced scorecard methodology that there are four perspectives for consideration in identifying the conditions for success. They are interrelated and must be evaluated simultaneously.

• Financial : Such considerations as growing shareholder value, increasing revenue, managing cost, profitability, or financial stability inform strategic initiatives. 
• Customer-satisfaction:  Objectives can be determined by identifying targets related to one or some of the following: value for the cost, best service, increased market share, or providing customers with solutions.
• Internal processes such as operational processes and efficiencies, investment in innovation, investment in total quality and performance management , cost reduction, improvement of workplace safety, or streamlining processes.
• Learning and growth: Organizations must ask: Are initiatives in place in terms of human capital and learning and growth to sustain change? Objectives may include employee retention, productivity, building high-performing teams, or creating a pipeline for future leaders .

6. Align with key stakeholders

It’s a team effort. The success of the plan is in direct proportion to the organization’s commitment to inform and engage the entire workforce in strategy execution. People will only be committed to strategy implementation when they're connected to the organization's goals. With everyone pulling in the same direction, cross-functional decision-making becomes easier and more aligned.

7. Begin strategy mapping

A strategy map is a powerful tool for illustrating the cause-effect of those perspectives and connecting them to between 12 and 18 strategic objectives. Since most people are visual learners, the map provides an easy-to-understand diagram for everyone in the organization creating shared knowledge at all levels.

8. Determine strategic initiatives

Following the development of strategic objectives, strategic initiatives are determined. These are the actions the organization will take to reach those objectives. They may relate initiatives related to factors such as scope, budget, raising brand awareness, product development, and employee training.

9. Benchmark performance measures and analysis

Strategic initiatives inform SMART goals to which metrics are assigned to evaluate performance. These measures cascade from senior management to management to front-line workers. At this stage, the task is to create goals that are specific, measurable, attainable, relevant, and time-based informing the operational plan.

Benchmarks are established against so that performance can be measures, and a time frame is created. Key performance indicators (KPI’s) are assigned based on organizational goals. These indicators align workers’ performance and productivity with long-term strategic objectives. 

10. Performance evaluation

Assessment of whether the plan has been successful . It measures activities and progress toward objectives and allows for the creation of improved plans and objectives in order to improve overall performance . 

Think of strategic planning as a circular process beginning and ending with evaluation. Adjust a  plan as necessary. The pace at which review of the plan is necessary may be once a year for many organizations or quarterly for organizations in rapidly evolving industries. 

Prioritizing the strategic planning process

The strategic planning meeting may have a reputation for being just another to-do, but it might be time to take a second look. With the right action plan and a little strategic thinking, you can reinvigorate your business environment and start planning for success.

It's that time to get excited about the future again.

Understand Yourself Better:

Big 5 Personality Test

Meredith Betz, M.S.Ed, M.S.O.D.

Meredith Betz is a Betterup Fellow Coach. As an organizational consultant and Executive Coach, Meredith's work focuses on leaders, teams, and the dynamics in the systems in which they live and work. She helps people become more influential and exhibit executive presence. Meredith is a certified Conscious Business Coach who helps leaders to exercise empathy and lead in a way that is consistent with their values. She gives them the tools to communicate and negotiate effectively with their stakeholders. Meredith recently co-wrote a memoir with a 103-year-old Estonian man who lived through the Nazi and Soviet occupations of Estonia in the 1940s. It was a profound experience. A seminal book for her is Man's Search for Meaning by Viktor Frankl, an Austrian Holocaust survivor and psychiatrist.

The only guide you’ll ever need for career planning

4 reasons why you can't afford to skip out on succession planning, strategic plan vs. work plan: what's the difference, contingency planning: 4 steps to prepare for the unexpected, how to excel at life planning (a life planning template), what is strategic plan management and how does it benefit teams, strategy versus tactics: planning and executing on your goals, declining capabilities in productivity and wellness signal a need for worker support, what is an action plan how to become a real-life action hero, everything you need to know about strategic leadership, 6 tactics to unlock operational excellence and drive performance, when you need to set the direction, swot analysis is a classic tool, how organizational effectiveness enhances how you work and grow, strategy vs. tactics: the difference is execution, stay connected with betterup, get our newsletter, event invites, plus product insights and research..

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What is strategic planning & why is it important?

Planning is an important part of most people’s days. Even if you’re the most driven person alive, it’s easy to get sidetracked if you don’t have an action plan. 

Maybe you need to train for a marathon and sort the mail, but you binge-watch a new TV show instead. The next day, you’re behind on your training and an important bill goes unread – stalling your health goals and financial plans. And once you’re behind, it’s harder to get ahead. 

The same scenario applies to business. Without strategic planning, it’s very difficult to meet long-term goals. 

The strategic planning process helps you break your organization’s vision for the future into strategic objectives. You’ll prioritize which strategic goals to focus on, when they should happen, and how you’ll achieve them. This strategic framework drives your operational planning (how you’ll execute this strategic framework). 

If you want to know how to apply strategic planning in your business, you’re in the right place. This roadmap will cover the benefits of strategic planning, the strategic planning process, the steps involved, and, most importantly, how to make the long-term goals of your strategic framework a reality.

What are the benefits of strategic planning for your organization?

When should you create a strategic plan, top 6 elements of a strategic plan, how do you adapt strategic planning for your organization’s needs, what is the strategic planning process, how do you chart your strategic path to success.

Successful strategic planning results in a structured business in which your team is united in implementing the strategy execution of your desired outcomes. Here’s how the process helps an organization:

Creates cost-effective day-to-day operations

Your strategic framework will ensure that your day-to-day operations bring you closer to your long-term goals. Clarity regarding the strategic goals you want to achieve can help you identify what will (and won’t) help you achieve them.

Strategic planning also helps you better allocate your resources, thanks to a thorough understanding of your organization’s strengths and weaknesses. The process involves analyzing your business processes to find inefficiencies, so you can find ways to streamline workflows and save time, labor, and money.

Gives you a competitive advantage

Strategic planning gives your organization a competitive advantage since it involves thoroughly analyzing your internal strengths and weaknesses. It also considers new opportunities and external threats, helping you identify unique capabilities and areas where the organization can outperform competitors. Moreover, you can anticipate market trends and adapt to changing circumstances more easily. 

Helps you track progress and communicate success

Identifying and tracking key performance indicators (KPIs) shows exactly how far you’ve progressed in achieving your organization’s goals. These metrics let you measure your organization’s performance against the specific objectives and goals set in your strategic plan.

Tracking your progress using KPIs can also help you communicate where your company is achieving success and how well. Stakeholders want to know these things, and marketing them can make your company a magnet for high-achieving talent.

Keeps bias out of your organization

Strategic planning fosters a systematic and objective decision-making process based on data and evidence – not personal opinions. This prevents cognitive biases from hindering your organization’s growth. Strategic planning encourages a balanced and inclusive decision-making approach by focusing on long-term goals and considering the broader impact of decisions on a diverse set of stakeholders. 

No matter what stage of growth your organization is in, successful strategic planning targets your development toward your desired outcomes. 

Strategic planning typically captures your vision for your organization’s next three to five years. However, businesses experiencing rapid growth (like small businesses and startups) might need a new strategic plan more frequently, like every two years. 

Strategic planning is a continual process. After all, if you don’t adapt to a changing world, you’ll be left behind.  Stay on top of changing markets and organizational needs by constantly reevaluating your business strategy, especially when making large organizational changes. You’ll also want to reevaluate your strategic plan once you’ve achieved the initial goals and desired outcomes from your original plan document.

There are six key elements of a good strategic plan:

• Mission statement: Your mission statement is the north star of your strategic planning. It’s a concise, declarative statement that defines your organization’s core purpose and primary objectives. It explains the motivations, or the why, behind your plan, which motivates team members and stakeholders to work toward your organization’s goals. For example, a tech company’s mission statement could read: “Our mission is to empower people through innovative technologies, creating a more connected and sustainable world.”
• Vision statement: A vision statement outlines how you’ll achieve your organization’s driving motivation. It can also help employees solve problems based on organizational guidelines since your vision statement reflects your organization’s strategic plan in broad terms. To continue from the above example, a vision statement example might read: “Our vision is to be a global leader in driving transformative technological advancements that shape the future and enrich lives.”
• Organizational goals : Organizational goals are specific and measurable objectives an organization sets to achieve its mission and fulfill its long-term vision. These are realistic, attainable goals (e.g., performance expectations, KPI objectives, and specific deadlines). For example, short-term goals might include yearly or quarterly objectives for individuals, departments, or the entire organization (e.g., employee performance, turnover rate, or sales goals). Meanwhile, long-term goals might stretch these goals beyond one year.
• SWOT analysis : A SWOT analysis aims to create situational awareness about your organization’s position within your industry. The acronym stands for strengths, weaknesses, opportunities, and threats. This strategic management tool is a comprehensive assessment that helps you make informed business decisions.
• Action plan : Your action plan is the part of your strategic planning process that lays out exactly how you will achieve your goals and priorities. It captures your strategic initiatives and, specifically, how you will execute them.
• Key performance indicators ( KPIs ): Key performance indicators are measurable metrics that help you evaluate your progress toward your desired outcomes. KPIs include profit margins, sales data, customer satisfaction, and employee retention. These hard data help you track progress within your set time frame.

While these key elements sound similar to a business plan, some crucial differences exist.

A strategic plan outlines your organization’s overall direction, including its vision, mission, long-term goals, and strategies to achieve them. On the other hand, a business plan focuses on specific operational aspects, such as products or services, target markets, and competition, communicating goal-setting and priorities to team members, investors, and key stakeholders. Companies primarily use business plans for management and clarity, especially during the startup phase or when restructuring.

A new organization could create a business plan and use it as a building block of the strategic planning process once it’s more established.

All businesses can reap the benefits of strategic planning at some point in their development. However, the strategic planning process will apply differently depending on your business type. 

Below, we’ll go into how to make a strategic plan work depending on the organization type.

The strategic plan’s end result is a roadmap for your organization’s future development. For this reason, startups can especially benefit from the strategic planning process, as they have a large growth potential. Setting long-term goals, metrics, and strategic initiatives keeps startups focused on their desired outcomes and prevents them from being overwhelmed by an undefined future. 

But because startups have so much potential, they’ll likely need to adjust their strategic objectives as they make pivots. Many startups have a small team, so they may need to revisit their strategic plan more often than the standard three to five years as they redefine the needs of their organization. 

Nonprofit organizations

A well-crafted strategic plan offers unique benefits to nonprofits, benefitting those using the nonprofit’s services and the business itself. For one, it enhances donor and stakeholder engagement by showcasing transparency, accountability, and a clear roadmap for achieving impact and fostering trust, confidence, and increased support for the organization’s mission. Secondly, a strategic plan can improve a nonprofit’s resource allocation and efficiency, helping prioritize the initiatives and projects that align with its mission to create maximum impact with limited resources.

Finally, a strategic plan helps nonprofits measure their impact and adapt to changing circumstances. Nonprofits can set measurable objectives and KPIs to track progress and assess initiatives’ effectiveness. This makes it easier to respond to emerging needs and challenges, remain committed to long-term goals, and ensure sustained relevance and success in mission-driven endeavors.

Project management

Strategic planning is also useful when embarking on a complex, lengthy project that could take months – or even years – to achieve. When setting long-term goals during the strategic planning process, you’ll likely have some ambitious projects to achieve as a part of your overall business strategy. 

A strategic project plan outlines the initiative or project timeline and gives an overview of its desired outcomes. This is especially helpful for long-term project management, where it can be easy to lose sight of your objectives amidst all the moving parts and multiple deadlines. 

Also, a clear plan document for your project can help delegate responsibilities as your team changes (for instance, when team members retire or take leaves of absence and when new teammates are hired).

Now that you have an overview of the elements that go into strategic planning, let’s get into the step-by-step methodology needed to make it happen. 

• Analysis of current position: First, gain an understanding of your organization’s current position and how it fits into the broader industry. This is when you’ll complete a SWOT analysis, conduct research, survey your clients, and gather employee feedback. 
• Strategy formulation: Now that you know where your organization stands, determine the direction you’d like to head and strategize how to get there. First, define your mission statement, vision statement, and organizational goals. Then, prioritize your strategic initiatives .

While a select leadership group (e.g., a handful of executives) usually completes the strategic planning process, incorporating stakeholder feedback in your decision-making is essential to ensure you’re on the right track.

Strategy development involves creating documentation that communicates your goals. One example is a strategy map , a flowchart of your strategic objectives, and an explanation of how one leads into the next. You can also create a roadmap to provide an overview of your plan’s execution timeline.

You should have a clear action plan with KPIs to measure your desired outcomes before moving into strategy execution. Remember, you can’t move forward without knowing where you’re going and how you’re getting there. 

• Strategy execution : You’ve done the dreaming; now it’s time for the doing. Use your action plan, KPIs, and metrics to guide your strategy execution. Additionally, maintain clear communication with team members so everyone understands their individual roles in achieving the desired outcomes and how you’ll measure their performance. 
• Evaluation: Track your progress to ensure successful strategic planning and to confirm you’re meeting your KPIs and metrics for success. Use strategic management tools like a balanced scorecard , which helps visualize the impact of your initiatives across the sectors of development, business processes, finance, and customers.

Also, evaluate whether your results align with your organization’s mission. Revise your strategic plan as needed to meet your organization’s changing needs and any updated timeframes. 

Keep detailed notes of the challenges, setbacks, and successes you experience during your strategic plan’s time frame. This will improve your execution when it’s time to start the strategic planning process again. 

Understanding the mechanics of strategic planning, how it links day-to-day operations to immediate and future objectives— is an important step in achieving your organization’s desired results. Not only will it enable you to manage your resources more effectively, but it will also ensure that your aspirations aren’t left to chance.

However, knowledge is only half the journey. Applying these strategic concepts in a way that aligns with your organization’s unique mission, vision and goals can be a challenge in itself. And that’s where IMD comes in and provide the knowledge and tools needed to help your business create a foundation for secure, long-term success. 

Your path to strategic mastery begins here »

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The relentless pace of change in technology, customer demands, and geopolitics are adding new challenges to an already complex business landscape. This is particularly evident in Asia, with a recent PwC study reporting that 63% of Asia Pacific CEOs think their companies will stop being economically viable within a decade if they continue on their […]

Strategic planning aligns the organization with a common understanding of what they want to achieve and how they will get there with daily operations. It’s taking a company’s vision and breaking it into mid-term and long-term goals. In contrast to strategic planning, business planning focuses on short-term goals. But a strategic plan sets priorities to […]

Ever stood at the crossroads of business decisions, the winds of uncertainty howling around you? Illuminate your path with the beacon of SWOT analysis. This revered compass, trusted by entrepreneurs and seasoned executives alike, unveils the landscape of opportunities and hurdles that lie ahead, waiting to be conquered.  A SWOT analysis is a powerful tool […]

Planning is an important part of most people’s days. Even if you’re the most driven person alive, it’s easy to get sidetracked if you don’t have an action plan.  Maybe you need to train for a marathon and sort the mail, but you binge-watch a new TV show instead. The next day, you’re behind on […]

How to improve strategic planning

In conference rooms everywhere, corporate planners are in the midst of the annual strategic-planning process. For the better part of a year, they collect financial and operational data, make forecasts, and prepare lengthy presentations with the CEO and other senior managers about the future direction of the business. But at the end of this expensive and time-consuming process, many participants say they are frustrated by its lack of impact on either their own actions or the strategic direction of the company.

This sense of disappointment was captured in a recent McKinsey Quarterly survey of nearly 800 executives: just 45 percent of the respondents said they were satisfied with the strategic-planning process. 1 1. “ Improving strategic planning: A McKinsey Survey ,” The McKinsey Quarterly , Web exclusive, September 2006. The survey, conducted in late July and early August 2006, received 796 responses from a panel of executives from around the world. All panelists have mostly financial or strategic responsibilities and work in a wide range of industries for organizations with revenues of at least $500 million. Moreover, only 23 percent indicated that major strategic decisions were made within its confines. Given these results, managers might well be tempted to jettison the planning process altogether.

But for those working in the overwhelming majority of corporations, the annual planning process plays an essential role. In addition to formulating at least some elements of a company’s strategy, the process results in a budget, which establishes the resource allocation map for the coming 12 to 18 months; sets financial and operating targets, often used to determine compensation metrics and to provide guidance for financial markets; and aligns the management team on its strategic priorities. The operative question for chief executives is how to make the planning process more effective—not whether it is the sole mechanism used to design strategy. CEOs know that strategy is often formulated through ad hoc meetings or brand reviews, or as a result of decisions about mergers and acquisitions.

Our research shows that formal strategic-planning processes play an important role in improving overall satisfaction with strategy development. That role can be seen in the responses of the 79 percent of managers who claimed that the formal planning process played a significant role in developing strategies and were satisfied with the approach of their companies, compared with only 21 percent of the respondents who felt that the process did not play a significant role. Looked at another way, 51 percent of the respondents whose companies had no formal process were dissatisfied with their approach to the development of strategy, against only 20 percent of those at companies with a formal process.

So what can managers do to improve the process? There are many ways to conduct strategic planning, but determining the ideal method goes beyond the scope of this article. Instead we offer, from our research, five emergent ideas that executives can employ immediately to make existing processes run better. The changes we discuss here (such as a focus on important strategic issues or a connection to core-management processes) are the elements most linked with the satisfaction of employees and their perceptions of the significance of the process. These steps cannot guarantee that the right strategic decisions will be made or that strategy will be better executed, but by enhancing the planning process—and thus increasing satisfaction with the development of strategy—they will improve the odds for success.

Start with the issues

Ask CEOs what they think strategic planning should involve and they will talk about anticipating big challenges and spotting important trends. At many companies, however, this noble purpose has taken a backseat to rigid, data-driven processes dominated by the production of budgets and financial forecasts. If the calendar-based process is to play a more valuable role in a company’s overall strategy efforts, it must complement budgeting with a focus on strategic issues. In our experience, the first liberating change managers can make to improve the quality of the planning process is to begin it by deliberately and thoughtfully identifying and discussing the strategic issues that will have the greatest impact on future business performance.

Granted, an approach based on issues will not necessarily yield better strategic results. The music business, for instance, has discussed the threat posed by digital-file sharing for years without finding an effective way of dealing with the problem. But as a first step, identifying the key issues will ensure that management does not waste time and energy on less important topics.

We found a variety of practical ways in which companies can impose a fresh strategic perspective. For instance, the CEO of one large health care company asks the leaders of each business unit to imagine how a set of specific economic, social, and business trends will affect their businesses, as well as ways to capture the opportunities—or counter the threats—that these trends pose. Only after such an analysis and discussion do the leaders settle into the more typical planning exercises of financial forecasting and identifying strategic initiatives.

One consumer goods organization takes a more directed approach. The CEO, supported by the corporate-strategy function, compiles a list of three to six priorities for the coming year. Distributed to the managers responsible for functions, geographies, and brands, the list then becomes the basis for an offsite strategy-alignment meeting, where managers debate the implications of the priorities for their particular organizations. The corporate-strategy function summarizes the results, adds appropriate corporate targets, and shares them with the organization in the form of a strategy memo, which serves as the basis for more detailed strategic planning at the division and business-unit levels.

A packaged-goods company offers an even more tailored example. Every December the corporate senior-management team produces a list of ten strategic questions tailored to each of the three business units. The leaders of these businesses have six months to explore and debate the questions internally and to come up with answers. In June each unit convenes with the senior-management team in a one-day meeting to discuss proposed actions and reach decisions.

Some companies prefer to use a bottom-up rather than top-down process. We recently worked with a sales company to design a strategic-planning process that begins with in-depth interviews (involving all of the senior managers and selected corporate and business executives) to generate a list of the most important strategic issues facing the company. The senior-management team prioritizes the list and assigns managers to explore each issue and report back in four to six weeks. Such an approach can be especially valuable in companies where internal consensus building is an imperative.

Bring together the right people

An issues-based approach won’t do much good unless the most relevant people are involved in the debate. We found that survey respondents who were satisfied with the strategic-planning process rated it highly on dimensions such as including the most knowledgeable and influential participants, stimulating and challenging the participants’ thinking, and having honest, open discussions about difficult issues. In contrast, 27 percent of the dissatisfied respondents reported that their company’s strategic planning had not a single one of these virtues. Such results suggest that too many companies focus on the data-gathering and packaging elements of strategic planning and neglect the crucial interactive components.

Strategic conversations will have little impact if they involve only strategic planners from both the business unit and the corporate levels. One of our core beliefs is that those who carry out strategy should also develop it. The key strategy conversation should take place among corporate decision makers, business unit leaders, and people with expertise essential to the discussion. In addition to leading the corporate review, the CEO, aided by members of the executive team, should as a rule lead the strategy review for business units as well. The head of a business unit, supported by four to six people, should direct the discussion from its side of the table (see sidebar, "Things to ask in any business unit review").

Things to ask in any business unit review

Are major trends and changes in your business unit’s environment affecting your strategic plan? Specifically, what potential developments in customer demand, technology, or the regulatory environment could have enough impact on the industry to change the entire plan?

How and why is this plan different from last year’s?

What were your forecasts for market growth, sales, and profitability last year, two years ago, and three years ago? How right or wrong were they? What did the business unit learn from those experiences?

What would it take to double your business unit’s growth rate and profits? Where will growth come from: expansion or gains in market share?

If your business unit plans to take market share from competitors, how will it do so, and how will they respond? Are you counting on a strategic advantage or superior execution?

What are your business unit’s distinctive competitive strengths, and how does the plan build on them?

How different is the strategy from those of competitors, and why? Is that a good or a bad thing?

Beyond the immediate planning cycle, what are the key issues, risks, and opportunities that we should discuss today?

What would a private-equity owner do with this business?

How will the business unit monitor the execution of this strategy?

One pharmaceutical company invites business unit leaders to take part in the strategy reviews of their peers in other units. This approach can help build a better understanding of the entire company and, especially, of the issues that span business units. The risk is that such interactions might constrain the honesty and vigor of the dialogue and put executives at the focus of the discussion on the defensive.

Corporate senior-management teams can dedicate only a few hours or at most a few days to a business unit under review. So team members should spend this time in challenging yet collaborative discussions with business unit leaders rather than trying to absorb many facts during the review itself. To provide some context for the discussion, best-practice companies disseminate important operational and financial information to the corporate review team well in advance of such sessions. This reading material should also tee up the most important issues facing the business and outline the proposed strategy, ensuring that the review team is prepared with well-thought-out questions. In our experience, the right 10 pages provide ample fuel to fire a vigorous discussion, but more than 25 pages will likely douse the level of energy or engagement in the room.

Adapt planning cycles to the needs of each business

Managers are justifiably concerned about the resources and time required to implement an issues-based strategic-planning approach. One easy—yet rarely adopted—solution is to free business units from the need to conduct this rigorous process every single year. In all but the most volatile, high-velocity industries, it is hard to imagine that a major strategic redirection will be necessary every planning cycle. In fact, forcing businesses to undertake this exercise annually is distracting and may even be detrimental. Managers need to focus on executing the last plan’s major initiatives, many of which can take 18 to 36 months to implement fully.

Some companies alternate the business units that undergo the complete strategic-planning process (as opposed to abbreviated annual updates of the existing plan). One media company, for example, requires individual business units to undertake strategic planning only every two or three years. This cadence enables the corporate senior-management team and its strategy group to devote more energy to the business units that are “at bat.” More important, it frees the corporate-strategy group to work directly with the senior team on critical issues that affect the entire company—issues such as developing an integrated digitization strategy and addressing unforeseen changes in the fast-moving digital-media landscape.

Other companies use trigger mechanisms to decide which business units will undergo a full strategic-planning exercise in a given year. One industrial company assigns each business unit a color-coded grade—green, yellow, or red—based on the unit’s success in executing the existing strategic plan. “Code red,” for example, would slate a business unit for a strategy review. Although many of the metrics that determine the grade are financial, some may be operational to provide a more complete assessment of the unit’s performance.

Freeing business units from participating in the strategic-planning process every year raises a caveat, however. When important changes in the external environment occur, senior managers must be able to engage with business units that are not under review and make major strategic decisions on an ad hoc basis. For instance, a major merger in any industry would prompt competitors in it to revisit their strategies. Indeed, one advantage of a tailored planning cycle is that it builds slack into the strategic-review system, enabling management to address unforeseen but pressing strategic issues as they arise.

Implement a strategic-performance-management system

In the end, many companies fail to execute the chosen strategy. More than a quarter of our survey respondents said that their companies had plans but no execution path. Forty-five percent reported that planning processes failed to track the execution of strategic initiatives. All this suggests that putting in place a system to measure and monitor their progress can greatly enhance the impact of the planning process.

Most companies believe that their existing control systems and performance-management processes (including budgets and operating reviews) are the sole way to monitor progress on strategy. As a result, managers attempt to translate the decisions made during the planning process into budget targets or other financial goals. Although this practice is sensible and necessary, it is not enough. We estimate that a significant portion of the strategic decisions we recommend to companies can’t be tracked solely through financial targets. A company undertaking a major strategic initiative to enhance its innovation and product-development capabilities, for example, should measure a variety of input metrics, such as the quality of available talent and the number of ideas and projects at each stage in development, in addition to pure output metrics such as revenues from new-product sales. One information technology company, for instance, carefully tracks the number and skill levels of people posted to important strategic projects.

Strategic-performance-management systems, which should assign accountability for initiatives and make their progress more transparent, can take many forms. One industrial corporation tracks major strategic initiatives that will have the greatest impact, across a portfolio of a dozen businesses, on its financial and strategic goals. Transparency is achieved through regular reviews and the use of financial as well as nonfinancial metrics. The corporate-strategy team assumes responsibility for reviews (chaired by the CEO and involving the relevant business-unit leaders) that use an array of milestones and metrics to assess the top ten initiatives. One to expand operations in China and India, for example, would entail regular reviews of interim metrics such as the quality and number of local employees recruited and the pace at which alliances are formed with channel partners or suppliers. Each business unit, in turn, is accountable for adopting the same performance-management approach for its own, lower-tier top-ten list of initiatives.

When designed well, strategic-performance-management systems can give an early warning of problems with strategic initiatives, whereas financial targets alone at best provide lagging indicators. An effective system enables management to step in and correct, redirect, or even abandon an initiative that is failing to perform as expected. The strategy of a pharmaceutical company that embarked on a major expansion of its sales force to drive revenue growth, for example, presupposed that rapid growth in the number of sales representatives would lead to a corresponding increase in revenues. The company also recognized, however, that expansion was in turn contingent on several factors, including the ability to recruit and train the right people. It therefore put in place a regular review of the key strategic metrics against its actual performance to alert managers to any emerging problems.

Integrate human-resources systems into the strategic plan

Simply monitoring the execution of strategic initiatives is not sufficient: their successful implementation also depends on how managers are evaluated and compensated. Yet only 36 percent of the executives we surveyed said that their companies’ strategic-planning processes were integrated with HR processes. One way to create a more valuable strategic-planning process would be to tie the evaluation and compensation of managers to the progress of new initiatives.

Although the development of strategy is ostensibly a long-term endeavor, companies traditionally emphasize short-term, purely financial targets—such as annual revenue growth or improved margins—as the sole metrics to gauge the performance of managers and employees. This approach is gradually changing. Deferred-compensation models for boards, CEOs, and some senior managers are now widely used. What’s more, several companies have added longer-term performance targets to complement the short-term ones. A major pharmaceutical company, for example, recently revamped its managerial-compensation structure to include a basket of short-term financial and operating targets as well as longer-term, innovation-based growth targets.

Although these changes help persuade managers to adopt both short- and long-term approaches to the development of strategy, they don’t address the need to link evaluation and compensation to specific strategic initiatives. One way of doing so is to craft a mix of performance targets that more appropriately reflect a company’s strategy. For example, one North American services business that launched strategic initiatives to improve its customer retention and increase sales also adjusted the evaluation and compensation targets for its managers. Rather than measuring senior managers only by revenue and margin targets, as it had done before, it tied 20 percent of their compensation to achieving its retention and cross-selling goals. By introducing metrics for these specific initiatives and linking their success closely to bonus packages, the company motivated managers to make the strategy succeed.

An advantage of this approach is that it motivates managers to flag any problems early in the implementation of a strategic initiative (which determines the size of bonuses) so that the company can solve them. Otherwise, managers all too often sweep the debris of a failing strategy under the operating rug until the spring-cleaning ritual of next year’s annual planning process.

Some business leaders have found ways to give strategic planning a more valuable role in the formulation as well as the execution of strategy. Companies that emulate their methods might find satisfaction instead of frustration at the end of the annual process.

Renée Dye is a consultant in McKinsey’s Atlanta office, and Olivier Sibony is a director in the Paris office.

This article was first published in the Autumn 2007 issue of McKinsey on Finance . Visit McKinsey’s corporate finance site to view the full issue.

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The Importance of Strategic Planning

Every successful business has a plan and knows where it is heading in the future. Setting a plan with goals, target dates, and a purpose should be finalized before embarking on a business. Taking the time on an ongoing basis to review the company's past performance, and predict its future performance, gives it a road map to follow.

Without strategic planning , which is knowing the current state of your business and where you want it to go, most businesses will fail. A strategic plan allows you to see what is important, how to get there, the pitfalls to avoid, and the noise to ignore. Below we discuss some of the reasons why strategic planning is important and how to implement it.

Key Takeaways

• Strategic planning is crucial for a business as it creates a map for a business to follow and course correct when need be.
• The first part of a strategic plan is the business plan, which outlines the purpose of the business, budgets, goals, and the mission statement.
• Making time to evaluate your business on an ongoing basis will allow you to determine how well your results are adhering to your plan. This will allow you to make adjustments or double-down on how the business is being run.
• Communicating your strategic plan to your employees is critical so that everyone is on the same page and working towards the same goals.
• Reviewing and following up on your business will highlight strengths and weaknesses in your business so that you can continue with what works well and eliminate what is hindering the growth of your business.

The very first strategic planning most businesses do is a business plan . When you first start your business, you will likely have prepared a mission statement , a budget, and a marketing and promotion plan. The business plan is a good first step, but it needs to be reviewed and updated as the business continues and grows. If you shove it in a drawer and let dust gather on it, it won't serve as the foundation of your business, as it was meant to.

A business plan serves as the blueprint for a company's success, providing a comprehensive roadmap that outlines its objectives, strategies, and tactics for achieving growth and profitability. In some cases, a business plan is also necessary for attracting external funding and support from an outside investor or bank.

How you go about conducting strategic planning will depend on many variables, including the size of your business, the time frame included, and your personal preferences. The most common style of plan is goals-based. In this type of plan, you set goals for the business (financial and non-financial) and map out the steps needed to meet those goals.

For example, if your goal is to have $100,000 in revenues next year, the steps to get there might include bringing in five new clients a month and attending three trade shows. Whatever the goals you set for your business, they should be concrete and measurable so that you know when you reach them. Another method of strategic planning is mission-based.

When you first started your business, you likely developed a mission or values statement, outlining the purpose of your company and its overall reason for being. A mission-based strategic plan ties each part of the plan into the mission, to ensure that the company is always operating in the service of that mission.

For example, if your mission statement is to be recognized as a leader in the financial services sector and to help families become financially independent, your strategic plans should address how you will meet those goals.

It can be difficult to find the time to plan your business. Other, more pressing priorities, like trying to bring in revenue , may grab your attention; however, carving out time regularly will help you keep on top of your business.

Blocking off a few hours a day or week to focus on your plan should be part of your business operations. During that time, you can examine the prior week's financial performance and update any marketing initiatives to make sure that your business is on track with your initial plan. If it's not, then you'll need to make adjustments to get back on track.

Regardless of how often you plan, make sure that you set it in stone in your day planner. Block off the time and don't let anything else get in the way. Turn off your cell phone and, if at all possible, go somewhere away from your office to plan in order to minimize distractions.

As a business owner, you will most likely have employees. It is critical to inform them of your strategic plan so that they are on the same page and working towards the same goal as you.

Including your staff in your strategic plan will instill a feeling of responsibility in their jobs that will help ensure productivity.

For example, if you have a sales team and your strategic plan involves bringing in five new clients a month, your sales team needs to be aware of this so that they know the goal to achieve. If they don't, perhaps they would be under the assumption that bringing in two new clients a month is excellent, when in actuality, it is only 40% of your goal. Without clear communication to your employees, your business will be a boat set adrift without any course to follow.

A critical part of the planning process is reviewing your previous plan and comparing it to your actual results. Were you able to bring in five new clients last month? If not, why not? Tweak the plan going forward to account for changes in your business or the general economic climate. The more experience you get with the planning process and with the operational side of your business, the more accurately you will be able to plan.

Once you have had your business running for a while and block out time to follow up on your strategic plan, you will be able to determine where the strengths and weaknesses in your business lie. This would allow you to correct course, perhaps changing your business plan and goals slightly to focus on your strengths, while allowing you to eliminate your weakness, making your business stronger and increasing the likelihood of achieving your goals.

Why Is Strategic Planning Important for Businesses?

Strategic planning is crucial for businesses because it provides a roadmap for achieving long-term objectives, identifying opportunities, and mitigating risks. It helps align organizational resources, activities, and goals, ensuring that everyone is working towards a common vision.

What Are the Key Benefits of Strategic Planning?

The key benefits of strategic planning include improved decision-making, enhanced resource allocation, increased organizational alignment, better risk management, and the ability to seize opportunities for growth and innovation.

What Are the Risks of Not Having a Strategic Plan in Place?

Without a strategic plan, organizations may struggle to maintain focus, allocate resources efficiently, or adapt to changing circumstances. They may miss opportunities for growth or become vulnerable to competitive threats. Companies with a strategy may be more likely to face challenges in sustaining long-term success.

What Are Some Best Practices for Effective Strategic Planning?

Best practices for effective strategic planning include involving key stakeholders in the process and conducting thorough environmental scans to fully understand all aspects of a company that will be impacted. This can be done through a SWOT analysis. Once your strategy is in place, set clear and measurable objectives, regularly monitor progress, and don't be afraid to realign the strategy with new information as it comes available.

Planning out the future of your business is the best way to ensure success. Creating an initial plan and communicating that plan to your employees will ensure that everyone is working towards the same goal.

Taking out time to review your business's results and comparing them to your plan will help ensure that the right policies and procedures continue whereas those that are not benefiting the company will be removed. It may seem awkward and difficult at first to create a strategic plan, but with practice, you will be able to move your business in the right direction.

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21 ​​Strategic Planning Frameworks for Driving Business Growth

Strategic planning is crucial for any business aiming to grow and succeed. To help guide this process, companies use strategic planning frameworks. These frameworks provide a structured approach to defining goals, creating strategies, and ensuring that all efforts align with the company’s vision. In this guide, we will look at 21 strategic planning frameworks that you can use along with templates.

What is a Strategic Planning Framework

A strategic planning framework is a structured method that helps businesses outline their goals, strategies, and actions. It acts as a roadmap, guiding decision-making and ensuring that every aspect of the business is aligned with its overall objectives. This framework helps businesses focus on what’s important, identify opportunities and challenges, and allocate resources effectively to achieve their goals.

Who Can Use Strategic Planning Frameworks

Strategic planning frameworks are versatile tools that can be used by a wide range of businesses and organizations. Here’s who can benefit:

• Small businesses : Helps in setting clear goals and making the most of limited resources.
• Large corporations : Ensures all departments are aligned with the company’s strategic goals.
• Nonprofits : Assists in focusing efforts on mission-driven objectives.
• Startups : Provides a clear direction for growth and helps prioritize efforts.
• Government agencies : Guides in policy-making and resource allocation.

Regardless of size or industry, any organization that wants to grow strategically can benefit from using a strategic planning framework.

Strategic Planning Frameworks vs Strategic Planning Models

The terms “strategic planning frameworks” and “strategic planning models” are often used interchangeably, but they actually refer to different components of the planning process.

Strategic planning models

A strategic planning model outlines the comprehensive structure of your strategic plan. It provides a big-picture view of how all components of your plan connect. The model is established first because it shapes the entire plan’s architecture and direction.

Strategic planning frameworks

Strategic frameworks are used to address specific sections of your strategic plan, providing methods to develop each part in detail. Frameworks are employed to achieve particular goals within the broader plan.

Key differences

• Scope : The model offers a complete view (like seeing the entire forest), while frameworks delve into specific areas (like focusing on individual trees).
• Role : Models establish the structure for the entire strategy, whereas frameworks refine particular aspects within that structure.
• Use : You’ll use one model to organize your strategic plan, but multiple frameworks can be applied to enhance various parts of the strategy.

21 Strategic Planning Frameworks to Achieving Organizational Goals

By providing structured approaches, strategic plannnig frameworks guide businesses in analyzing their environment, identifying opportunities, and executing strategies effectively. In this section, we’ll explore 21 strategic planning frameworks, each offering unique ways to drive organizational growth and achieve long-term objectives.

1. SWOT Analysis

SWOT analysis is a strategic planning framework that helps organizations understand their internal and external environments. The name “SWOT” stands for Strengths, Weaknesses, Opportunities, and Threats.

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What it is : SWOT analysis involves identifying and evaluating an organization’s strengths and weaknesses (internal factors) and opportunities and threats (external factors).

How it’s used : Organizations use SWOT analysis to assess where they stand and to create strategies that leverage their strengths, address their weaknesses, take advantage of opportunities, and protect against threats. This balanced approach ensures that strategic decisions are well-informed and aligned with the organization’s capabilities and the external environment.

2. PESTEL Analysis

PESTLE analysis is a strategic planning framework used to examine external factors that could impact an organization. The acronym “PESTLE” stands for Political, Economic, Social, Technological, Legal, and Environmental factors.

What it is : PESTLE analysis helps organizations understand the broader environment they operate in by evaluating six key areas:

• Political : Government policies and regulations.
• Economic : Economic conditions and trends.
• Social : Societal attitudes and demographics.
• Technological : Technological advancements and innovations.
• Legal : Laws and regulations affecting the industry.
• Environmental : Environmental concerns and sustainability issues.

How it’s used : Organizations use PESTLE analysis to identify potential opportunities and threats in the external environment. This helps them adapt their strategies to align with external changes and make informed decisions to navigate challenges effectively.

3. Porter’s Five Forces

Porter’s five forces is a strategic planning framework that helps organizations understand the level of competition in their industry. The framework examines five key factors that influence competitive intensity:

What it is : Porter’s five forces analyzes:

• Industry rivalry : The degree of competition among existing companies in the industry.
• Threat of new entrants : How easy or difficult it is for new companies to enter the market.
• Bargaining power of suppliers : The influence suppliers have on the prices and quality of materials.
• Bargaining power of buyers : The power customers have to affect prices and quality.
• Threat of substitutes : The likelihood of customers finding alternative products or services.

How it’s used : Organizations use Porter’s five forces to assess the competitive pressures they face. This helps them develop strategies to strengthen their market position, improve their competitive advantage, and address potential threats from competitors, new entrants, and alternative products.

4. Balanced Scorecard

Balanced scorecard is a strategic planning framework that helps organizations track and manage their performance from multiple perspectives. It goes beyond just financial metrics to provide a more complete view of how well the organization is doing.

What it is : The balanced scorecard measures performance across four key areas:

• Financial : Financial outcomes and profitability.
• Customer : Customer satisfaction and market share.
• Internal processes : Efficiency and effectiveness of internal operations.
• Learning and growth : Employee skills, training, and organizational culture.

How it’s used : Organizations use the balanced scorecard to align their day-to-day activities with their long-term goals. By tracking performance in these four areas, they ensure that they are not only achieving financial success but also improving customer satisfaction, streamlining processes, and fostering growth and development within the organization.

5. Growth-Share Matrix (BCG Matrix)

Growth-share matrix or BCG matrix is a strategic planning framework that helps organizations decide how to allocate resources among their products or business units. It classifies them based on their market growth and market share.

What it is : The BCG matrix divides products or business units into four categories:

• Stars : High market share and high growth. These are leaders in a growing market and need investment to maintain their position.
• Cash cows : High market share but low growth. These generate steady revenue with little investment needed.
• Question marks : Low market share but high growth. These require careful analysis to determine if they should be invested in or discontinued.
• Dogs : Low market share and low growth. These are typically candidates for divestment or strategic re-evaluation.

How it’s used : Organizations use the BCG matrix to prioritize their investments. It helps them decide where to invest, which areas to maintain, and which products or units might need to be phased out or restructured, based on their potential for growth and profitability.

6. Ansoff Matrix

Ansoff matrix is a strategic planning framework used to determine growth strategies based on new or existing products and markets.

What it is : The Ansoff matrix outlines four growth strategies:

• Market penetration : Selling more of existing products to existing markets. Focuses on increasing market share.
• Product development : Creating new products for existing markets. Aims to meet changing customer needs or preferences.
• Market development : Introducing existing products to new markets. Targets new customer segments or geographic areas.
• Diversification : Launching new products in new markets. Involves entering entirely new industries or areas.

How it’s used : Organizations use the Ansoff Matrix to choose the best strategy for growth. It helps them evaluate opportunities for expanding their market presence, developing new products, or exploring new market segments. This structured approach supports strategic decision-making to achieve sustainable growth.

7. Porter’s Value Chain

Porter’s Value Chain is a framework used to analyze the steps an organization takes to create and deliver a product or service, aiming to find ways to add value and gain a competitive advantage.

What it is : Porter’s Value Chain breaks down the activities involved in producing and delivering a product into two main categories:

Primary activities : Directly related to creating and delivering the product or service. These include:

• Inbound logistics : Receiving and handling raw materials.
• Operations : The process of transforming materials into products.
• Outbound logistics : Distributing the finished products to customers.
• Marketing and sales : Promoting and selling the products.
• Service : Supporting customers after the sale.

Support activities : Help improve the efficiency and effectiveness of primary activities. These include:

• Procurement : Acquiring the resources needed.
• Technology development : Innovating and improving processes.
• Human resources : Recruiting, training, and managing employees.
• Infrastructure : Organizational systems and management.

How it’s used : Organizations use Porter’s Value Chain to identify where value is added in their processes and where improvements can be made. By analyzing each activity, they can optimize operations, reduce costs, and enhance the overall quality of their product or service, which helps in gaining a competitive edge.

8. Blue Ocean Strategy

Blue Ocean Strategy is a strategic planning framework that encourages organizations to create new markets or “blue oceans” instead of competing in crowded, existing markets or “red oceans.”

What it is : Blue Ocean Strategy focuses on finding untapped market spaces with little or no competition. It’s about innovating and offering unique products or services that stand out and meet new or underserved customer needs.

How it’s used : Organizations use Blue Ocean Strategy to explore and develop new opportunities where they can offer something different from their competitors. By creating value in a new way, they avoid fierce competition and open up new areas for growth, allowing them to attract customers and generate profits in less contested environments.

9. OKRs (Objectives and Key Results)

OKRs is a strategic planning framework that helps organizations set and achieve clear goals by defining specific objectives and measurable results.

What it is : OKRs consist of two parts:

• Objectives : Clear, specific goals you want to achieve. They describe what you want to accomplish.
• Key results : Measurable outcomes that track progress towards the objective. They show how success will be measured.

How it’s used : Organizations use OKRs to set ambitious goals and track their progress. By defining objectives and key results, teams can focus on what’s important, align their efforts, and measure their achievements. This framework helps ensure everyone is working towards the same goals and provides a clear way to monitor performance and drive results. Learn how to create OKRs in more detail with out guide to setting OKRs.

10. Scenario Planning

Scenario planning is a strategic framework used to prepare for possible future changes by exploring different “what-if” scenarios.

What it is : Scenario planning involves imagining several different future situations based on various factors like market trends, economic conditions, or technological advancements. It helps organizations think about how these changes might affect their business.

How it’s used : Organizations use scenario planning to create flexible strategies that can adapt to different possible futures. By considering various scenarios, they can plan responses to potential challenges and opportunities, ensuring they are ready for whatever the future might bring.

11. Gap Analysis

Gap analysis is a strategic planning framework that helps organizations identify the differences between their current performance and their desired goals.

Explore more gap analysis tools .

What it is : Gap analysis involves comparing where the organization currently stands with where it wants to be. It highlights the gaps between current performance and target goals.

How it’s used : Organizations use gap analysis to pinpoint areas where improvements are needed. By identifying these gaps, they can develop action plans to bridge them, ensuring they meet their strategic objectives and improve overall performance.

12. VRIO Analysis

VRIO analysis is a strategic planning framework used to evaluate a company’s resources and capabilities to see if they provide a competitive edge.

What it is : VRIO stands for:

• Value : Does the resource or capability help meet customer needs or solve problems?
• Rarity : Is it something unique or not widely available to competitors?
• Imitability : Is it hard for competitors to copy or recreate?
• Organization : Is the company set up to effectively use this resource or capability?

How it’s used : Organizations use VRIO analysis to understand which resources or capabilities can give them an advantage over competitors. By evaluating these factors, they can focus on strengthening and leveraging their most valuable assets to improve their market position.

13. Lean Canvas

Lean canvas is a strategic planning framework used to quickly outline and test key aspects of a business model.

What it is : Lean canvas is a one-page template that covers essential elements of a business, including:

• Problem : The main issues your product or service aims to solve.
• Customer segments : The specific groups of people or businesses you want to target.
• Unique value proposition : What makes your product or service stand out.
• Solution : How your product or service solves the problem.
• Channels : The ways you will reach and deliver your product to customers.
• Revenue streams : How you will make money.
• Cost structure : The main expenses involved in running your business.
• Key metrics : How you will measure success.
• Unfair advantage : What gives you an edge over competitors.

How it’s used : Organizations use Lean canvas to quickly sketch out and refine their business ideas. It helps them identify key aspects of their business model, test assumptions, and make adjustments based on feedback, leading to more effective and efficient planning.

14. Pareto Analysis

Pareto analysis is a strategic planning framework used to identify and prioritize the most important issues or factors that will have the biggest impact.

What it is : Based on the Pareto Principle, often known as the 80/20 Rule, Pareto analysis helps you find the 20% of causes or problems that contribute to 80% of the results or effects.

How it’s used : Organizations use Pareto analysis to focus their efforts on the most significant problems or opportunities. By identifying the key areas that will have the greatest impact, they can allocate resources more effectively and achieve better results with less effort.

15. Strategy Map

Strategy map is a strategic planning framework that visually outlines an organization’s strategic objectives and how they are connected to achieve its overall goals.

What it is : A strategy map is a diagram that shows the relationships between different strategic goals across four main perspectives:

• Financial : Goals related to financial performance.
• Customer : Objectives focused on customer satisfaction and market positioning.
• Internal Processes : Targets for improving internal processes and efficiency.
• Learning and Growth : Goals related to employee skills, knowledge, and organizational culture.

How it’s used : Organizations use strategy maps to clearly communicate their strategy and how different goals support each other. By visualizing how objectives in each area connect and contribute to overall success, they can ensure alignment across the organization and track progress towards achieving their strategic vision.

16. McKinsey 7-S Framework

McKinsey 7-S framework is a tool used to analyze and align the key elements of an organization to ensure effective strategy implementation.

What it is : The McKinsey 7-S framework examines seven interconnected elements of an organization:

• Strategy : The plan for achieving goals and competitive advantage.
• Structure : The organization’s hierarchy and how roles and responsibilities are arranged.
• Systems : The procedures and processes used to run the organization.
• Shared Values : The core beliefs and culture that guide behavior within the organization.
• Skills : The capabilities and competencies of employees.
• Style : The leadership approach and management style.
• Staff : The organization’s people and how they are recruited, developed, and managed.

How it’s used : Organizations use the McKinsey 7-S framework to ensure all these elements are aligned and support each other. By analyzing and adjusting these areas, they can improve efficiency, adapt to changes, and successfully implement their strategy.

17. SOAR Analysis

SOAR analysis is a framework used to focus on an organization’s strengths and opportunities to create a positive and actionable strategic plan.

What it is : SOAR stands for:

• Strengths : What the organization does well and its key advantages.
• Opportunities : The potential areas for growth and new possibilities in the market.
• Aspirations : The organization’s vision and goals for the future.
• Results : The measurable outcomes and impacts the organization aims to achieve.

How it’s used : Organizations use SOAR Analysis to build on their strengths and opportunities while setting clear goals and desired results. This framework helps in creating a forward-looking, strengths-based strategy that encourages positive growth and aligns efforts with long-term aspirations.

18. Hoshin Kanri

Hoshin Kanri is a strategic planning framework used to align an organization’s strategic goals with its day-to-day operations, ensuring everyone works towards the same objectives.

What it is : Hoshin Kanri, also known as Policy Deployment, involves setting long-term strategic goals and breaking them down into actionable steps. The process includes:

• Setting vision and goals : Define long-term objectives and overall direction.
• Developing strategies : Create plans to achieve these goals.
• Action plans : Break down strategies into specific tasks and responsibilities.
• Monitoring and adjusting : Regularly review progress and make necessary adjustments.

How it’s used : Organizations use Hoshin Kanri to ensure that strategic goals are effectively translated into actionable plans. By aligning all levels of the organization with these goals, it helps improve focus, coordination, and performance, making sure that strategic objectives are consistently pursued and achieved.

19. ADKAR Model

ADKAR model is a framework used to manage and guide organizational change effectively. It focuses on the people side of change to ensure successful transitions.

What it is : ADKAR stands for:

• Awareness : Understanding why the change is needed.
• Desire : Wanting to support and participate in the change.
• Knowledge : Knowing how to change and what new skills are required.
• Ability : Having the capability to implement the change effectively.
• Reinforcement : Ensuring the change is sustained and supported over time.

How it’s used : Organizations use the ADKAR model to guide individuals through change by addressing each of these five areas. It helps in creating a structured approach to managing change, ensuring that people understand, accept, and can effectively implement new strategies or processes.

20. GE-McKinsey Matrix

GE-McKinsey Matrix is a framework used to evaluate and prioritize different business units or products based on their attractiveness and the organization’s strengths.

What it is : The GE-McKinsey Matrix uses two key factors:

• Industry Attractiveness : How appealing the market or industry is, considering factors like growth potential and competition.
• Business Unit Strength : How strong the business unit or product is within the market, based on factors like market share and capabilities.

The matrix divides business units into nine categories, ranging from high attractiveness and strong strength (ideal for investment) to low attractiveness and weak strength (which may need to be divested).

How it’s used : Organizations use the GE-McKinsey Matrix to decide where to allocate resources and make strategic decisions. By evaluating each business unit or product against these criteria, they can focus on areas with the greatest potential for growth and profitability while managing or eliminating weaker areas.

21. Action Plans

Action plan is a strategic planning framework used to outline the specific steps needed to achieve your strategic goals. It breaks down your strategy into manageable tasks with clear timelines.

What it is : An action plan details the who, what, when, and how of your strategy. It includes a list of tasks, deadlines, assigned responsibilities, and resources needed to accomplish each task.

How it’s used : Organizations use action plans to ensure that their strategic goals are turned into actionable steps. By clearly defining each task, setting deadlines, and assigning responsibilities, an Action Plan helps teams stay organized, focused, and on track to achieving their objectives. It provides a clear roadmap for implementing the strategy, making it easier to monitor progress and make adjustments as needed.

Streamline Your Strategic Planning with Creately

Creately is a visual collaboration tool that can make strategic planning easier and more effective. It helps you visualize, collaborate, and manage your strategic planning more effectively, making the entire process smoother and more organized.

Create visual diagrams

• Templates : Use pre-made templates for strategic planning frameworks like SWOT Analysis, PESTEL Analysis, and Value Chain Analysis to quickly get started.
• Drag-and-drop interface : Easily add and arrange elements like shapes, text, and connectors to build custom diagrams.

Collaborate in real-time

• Live editing : Work on your strategic plans simultaneously with team members, seeing changes in real-time.
• Comments and feedback : Add comments directly on the diagrams to provide feedback and discuss ideas without leaving the platform.

Organize information

• Layers and groups : Organize complex information into layers or groups to keep your diagrams clear and manageable.
• Color coding : Use colors to differentiate between various elements or categories in your diagrams.
• Integrated notes and data fields : Attach additional information, attachments, and data with per item notes and data fields to keep everything in the same place.

Track progress

• Interactive charts : Use charts and graphs to visualize data and track progress towards strategic goals.
• Milestones and timelines : Create timelines and milestones to monitor the implementation of your strategies.
• Kanban boards: Use kanban boards and task cards to keep track of tasks and monitor progress. Assign tasks to team members directly within your diagrams, ensuring clear responsibilities.

Share and present

• Export options : Export your diagrams in formats like PDF or PNG to share with stakeholders or include in reports.
• Presentation mode : Use presentation mode to showcase your strategic plans in meetings or presentations.

Strategic planning is essential for guiding your organization toward success. Using different strategic planning frameworks like SWOT Analysis, PESTEL Analysis, and Porter’s Five Forces helps you understand your strengths, weaknesses, opportunities, and market conditions.

Each strategic planning framework offers a unique way to analyze your business and make smart decisions. For example, the GE-McKinsey Matrix helps prioritize resources, the Ansoff Matrix explores new market opportunities, and Value Chain Analysis improves operations.

By applying these strategic planning frameworks, you can better prepare for challenges, identify growth opportunities, and stay on track to achieve your goals. Regularly updating your strategies with these tools helps ensure you are always moving in the right direction.

Join over thousands of organizations that use Creately to brainstorm, plan, analyze, and execute their projects successfully.

FAQs Related to Strategic Planning Frameworks

Which strategic planning framework should i use, can i use multiple strategic planning frameworks together, how often should i update my strategic plan using these frameworks, how do strategic planning frameworks help with execution, what are common challenges in using strategic planning frameworks, can strategic planning frameworks be used for small businesses, how do i measure the success of a strategic planning framework, more related articles.

Amanda Athuraliya is the communication specialist/content writer at Creately, online diagramming and collaboration tool. She is an avid reader, a budding writer and a passionate researcher who loves to write about all kinds of topics.

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Business plan vs Strategic Plan - What You Must Know

Like everything else in life, the nature of business needs a plan in place to follow and measure. Crafting a strategic roadmap isn't just a suggestion—it's a necessity.

This is one of the key elements of a startup or even a business division within an organization that is expanding or diversifying. It has every resource element and needs to be mapped out for the business, including projected milestones for the future.

However, every business strategist needs to know that there are some subtle differences between what constitutes a business plan, and the several differences it has with a strategic plan. Let’s walk through the different elements that comprise each and understand the outcome each aims to achieve.

Introducing The Business Plan

A business plan is exactly what the name suggests— a plan to start and run a business or a new entity of an existing business; usually either an expansion in a newer region or a diversification into a new market. Business plans are mainly created for internal reference purposes or external funding purposes, with the latter being the common usage. They form the basis of all business strategies and decisions made at the ownership level in an organization. The most essential components of a business plan include:

Organizational Plan - This is the core of a business plan, and it includes the mission and vision statement, along with the market in which the company plans to operate. This plan also encompasses thorough market research to gauge the potential of the business, crucial for securing funding or sponsorship. It articulates the rationale behind the business's growth trajectory, outlining clear timelines for achieving milestones along the way.

Financial Plan - A robust financial plan is the bedrock of any successful business venture, where cash flow reigns supreme, and a meticulously crafted balance sheet serves as the ultimate scorecard. A financial plan includes some of the most important elements of the entire business plan and includes elements like projected cash flow statements, capital requirements, a summary of projected overheads, a projected balance sheet including assets and liabilities, and income and expense statements.

Remember to regard this as the central nervous system, for it permeates and influences almost every aspiration the enterprise hopes to attain.

Sales and Marketing Plan - We mentioned “almost” everything above for this very reason. Sales and marketing form the other significant component of the business plan. These include sales forecasts and overheads, marketing and brand management summaries, and market share projections that the business hopes to achieve within a time frame.

Business plans are indeed comprehensive and all-encompassing. They form the basis of the business's existence or the rationale for investments in it. But what about translating these plans into action? How do we ensure that the sky-high goals set forth are actually achievable?

The Actionables- A Strategic Plan

Strategic plans constitute the basis of operations and responsibilities within the business. These plans lay the paths out for each member of the organization to follow and define the functional outline and the key outcomes for every project and process within the business. A strategic plan goes on to define the operations and their outcomes within the organization, its departments, and its employees. The single thread connecting strategic planning with the business plan is the vision of the organization, and for obvious reasons— vision serves as the guiding light for strategy formation, which, in turn, directs the day-to-day operations of the business.

Why A Strategic Plan is Crucial to The Organization

In a word— synchronization. A robust and well-laid-out strategic plan establishes the much-needed sync between teams and their objectives. Not only that, it also provides a guide for daily operations alongside the focus and direction that teams often need to get the job done, on time and within budget. When all these components are integrated into a cohesive network, the true value of a strategic plan emerges—a seamless and grand orchestration of departments, teams, and individuals using the resources allocated to them to achieve the key performance indicator that they are responsible for.

Elements to Consider in a Strategic Plan

When tasked with creating a strategic plan for your business, you will need to incorporate certain components that will ensure that the stakeholders are aligned completely with the organization’s goals and objectives. These include:

Vision and Values - The vision statement is the most important component of the strategic plan and the most overarching. It propels the organization towards established goals and the values that every employee and stakeholder must incorporate.

Goals - These are short, medium, or long-term, depending on the scope of the strategic plan. They provide the much-needed context for the organization to undertake initiatives that meet the vision while maintaining the values.

Guiding Principles - Often, organizations face crossroads where they must decide which steps to take next, to reach their vision. Principles are included in strategic plans to align teams towards the vision when faced with a dilemma and form a critical part of strategic planning.

Action Plans - A sum of key initiatives, processes, and projects that are required to be performed on a pre-determined periodic basis for the goal to be accomplished. These also include the time frames for each stakeholder responsible for each option. They usually follow the DACI format for each action (Driver, Approver, Contributor, Informed)

SWOT Analysis - The quintessential component, the Strength, Weaknesses, Opportunities, and Threats analysis of the strategic plan lends context to all business actions vis-a-vis the external environment. This includes competitors, market forces and conditions, identification of internal and external threats, and several other factors.

Read This - SWOT Analysis: How to Strengthen Your Business Plan

Here’s a table highlighting the main differences between a Business Plan and a Strategic Plan with a focus on the key components of each—

Learning All About Strategic Planning

In all businesses, a strategic plan serves as the foundational blueprint, akin to a meticulously drawn map for a general. It provides the essential guidance and direction needed for the entire organization to navigate toward success. It is crucial, therefore, to acquire the necessary skills and certifications for employment as a business strategist who would be entrusted with creating it. Know more about how to become a successful and sought-after business strategist today!

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• CIO strategy

strategic planning

• Katie Terrell Hanna
• Stephen J. Bigelow, Senior Technology Editor
• Mary K. Pratt

What is strategic planning?

Strategic planning is a process in which an organization's leaders define their vision for the future and identify their organization's goals and objectives. The process includes establishing the sequence in which those goals should be realized so the organization can reach its stated vision.

Strategic planning is forward looking. It differs from traditional business planning, which typically focuses on short-term, tactical goals, such as how a budget is divided up. The time covered by a business plan can range from several months to several years.

The product of strategic planning is a strategic plan. It is often reflected in a plan document or other media. These plans can be easily shared, understood and followed by various people including employees, customers, business partners and investors.

Organizations conduct strategic planning periodically to consider the effect of changing business, industry, and legal and regulatory conditions . A strategic plan may be updated and revised at that time to reflect any strategic changes.

Why is strategic planning important?

Businesses need direction and organizational goals to work toward. Strategic planning offers that type of guidance. Essentially, a strategic plan is a roadmap to get to business goals . Without such guidance, there is no way to tell whether a business is on track to reach its goals.

The following four aspects of strategy development are worth attention:

• The mission. Strategic planning starts with a mission that offers a company a sense of purpose and direction. The organization's mission statement describes who it is, what it does and where it wants to go. Missions are typically broad but actionable. For example, a business in the education industry might seek to be a leader in online virtual educational tools and services.
• The goals. Strategic planning involves selecting goals. Most planning uses SMART goals -- specific, measurable, achievable, relevant and time-bound -- or other objectively measurable goals. Measurable goals are important because they enable business leaders to determine how well the business is performing against goals and the overall mission. Goal setting for the fictitious educational business might include releasing the first version of a virtual classroom platform within two years or increasing sales of an existing tool by 30% in the next year.
• Alignment with short-term goals. Strategic planning relates directly to short-term, tactical business planning and can help business leaders with everyday decision-making that better aligns with business strategy. For the fictitious educational business, leaders might choose to make strategic investments in communication and collaboration technologies , such as virtual classroom software and services but decline opportunities to establish physical classroom facilities.
• Evaluation and revision. Strategic planning helps business leaders periodically evaluate progress against the plan and make changes or adjustments in response to changing conditions. For example, a business may seek a global presence, but legal and regulatory restrictions could emerge that affect its ability to operate in certain geographic regions. As a result, business leaders might have to revise the strategic plan to redefine objectives or change progress metrics.

Modern considerations for strategic planning

While strategic planning has been a cornerstone of organizational management for decades, the landscape of strategic planning has undergone significant shifts in recent years.

Innovations in technology and socioeconomic upheavals, most notably the COVID-19 pandemic, have fundamentally altered the calculus of strategic planning. These modern considerations underscore the evolving nature of strategic planning in today's world.

The importance of strategic planning in an evolving society

The advent of the COVID-19 pandemic has starkly highlighted the importance of flexibility and resilience in strategic planning. Organizations worldwide have faced the stark reality that the ability to pivot quickly in response to rapidly changing external conditions is not just advantageous but essential for survival.

This period has reinforced the concept that strategic plans must be living documents -- adaptable, dynamic and responsive to unforeseen challenges and opportunities. The traditional view of strategic planning as a set of fixed guidelines has given way to an understanding of strategic plans as fluid frameworks that guide organizational response to a volatile environment.

Embracing digital transformation

The swift pace of technological evolution has made the incorporation of digital transformation strategies a critical component of strategic planning.

Digital capabilities are now at the heart of operational success and competitive differentiation. Organizations can integrate data analytics and AI into strategic planning processes to help them innovate, boost efficiency, enhance customer experiences and maintain a competitive edge .

Agility and adaptability

Modern strategic planning is characterized by an emphasis on agility and the capacity for rapid adaptation. In an era marked by constant change, organizations must be prepared to navigate through a sea of change, adjusting their course in response to market dynamics and environmental shifts.

This necessitates a continuous reassessment of the strategic plan and a willingness to recalibrate goals and tactics in alignment with the evolving external landscape. The agility to adapt strategic priorities swiftly is now a critical competency for organizational resilience and long-term success.

Sustainability and social responsibility

Sustainability and social responsibility have emerged as central considerations in strategic planning. As societal expectations evolve, there is an increasing demand for organizations to align their strategies with environmental, social and governance ( ESG ) criteria.

This alignment reflects a broader commitment to sustainable development and responsible corporate citizenship . Incorporating sustainability and social responsibility into strategic planning not only meets regulatory and societal expectations but also opens new avenues for innovation and connects organizations with eco-conscious consumers and stakeholders .

Cultivating organizational culture and employee engagement

A strategic plan that resonates with an organization's culture and actively engages employees is more likely to succeed. Cultivating a supportive culture that aligns with the strategic vision is crucial for fostering organizational alignment and buy-in.

Engaging employees in the strategic planning process instills a sense of ownership and commitment to the organization's goals , thereby driving collective effort toward their realization. Modern strategic planning recognizes the value of employee engagement and organizational culture as foundational elements that underpin the successful implementation of strategic objectives.

What are the steps in the strategic planning process?

There are myriad different ways to approach strategic planning depending on the type of business and the granularity required. Most strategic planning cycles can be summarized in these five steps:

Identify. A strategic planning cycle starts with the determination of a business's current strategic position. This is where stakeholders use the existing strategic plan -- including the mission statement and long-term strategic goals -- to perform assessments of the business and its environment. These assessments can include a needs assessment or a SWOT analysis (strengths, weaknesses, opportunities and threats analysis) to understand the state of the business and the path ahead.

Prioritize. Next, strategic planners set objectives and initiatives that line up with the company mission and goals and will move the business toward achieving its goals. There may be many potential goals, so planning prioritizes the most important, relevant and urgent ones. Goals may include a consideration of resource requirements -- such as budgets and equipment -- and they often involve a timeline and business metrics or KPIs for measuring progress.

Develop. This is the main thrust of strategic planning in which stakeholders collaborate to formulate the steps or tactics necessary to attain a stated strategic objective. This may involve creating numerous short-term tactical business plans that fit into the overarching strategy. Stakeholders involved in plan development use various tools such as a strategy map to help visualize and tweak the plan. Developing the plan may involve cost and opportunity tradeoffs that reflect business priorities. Developers may reject some initiatives if they don't support the long-term strategy.

Implement. Once the strategic plan is developed, it's time to put it in motion. This requires clear communication across the organization to set responsibilities, make investments, adjust policies and processes , and establish measurement and reporting. Implementation typically includes strategic management with regular strategic reviews to ensure that plans stay on track.

Update. A strategic plan is periodically reviewed and revised to adjust priorities and reevaluate goals as business conditions change and new opportunities emerge. Quick reviews of metrics can happen quarterly, and adjustments to the strategic plan can occur annually. Stakeholders may use balanced scorecards and other tools to assess performance against goals.

Who does the strategic planning in a business?

A committee typically leads the strategic planning process. Planning experts recommend the committee include representatives from all areas within the enterprise and work in an open and transparent way where information is documented from start to finish.

The committee researches and gathers the information needed to understand the organization's status and factors that will affect it in the future. The committee should solicit input and feedback to validate or challenge its assessment of the information.

The committee can opt to use one of many methodologies or strategic frameworks that have been developed to guide leaders through this process. These methodologies take the committee through a series of steps that include an analysis or assessment, strategy formulation, and the articulation and communication of the actions needed to move the organization toward its strategic vision.

The committee creates benchmarks that will enable the organization to determine how well it is performing against its goals as it implements the strategic plan. The planning process should also identify which executives are accountable for ensuring that benchmarking activities take place at planned times and that specific objectives are met.

How often should strategic planning be done?

There are no uniform requirements to dictate the frequency of a strategic planning cycle. However, there are common approaches.

• Quarterly reviews. Once per quarter is usually a convenient time frame to revisit assumptions made in the planning process and gauge progress by checking metrics against the plan.
• Annual reviews. A yearly review lets business leaders assess metrics for the previous four quarters and make informed adjustments to the plan.

Timetables are always subject to change. Timing should be flexible and tailored to the needs of a company. For example, a startup in a dynamic industry might revisit its strategic plan monthly. A mature business in a well-established industry might opt to revisit the plan less frequently.

Types of strategic plans

Strategic planning activities typically focus on three areas: business, corporate or functional. They break out as follows:

• Business. A business-centric strategic plan focuses on the competitive aspects of the organization -- creating competitive advantages and opportunities for growth. These plans adopt a mission evaluating the external business environment, setting goals, and allocating financial, human and technological resources to meet those goals. This is the typical strategic plan and the main focus of this article.
• Corporate . A corporate-centric plan defines how the company works. It focuses on organizing and aligning the structure of the business, its policies and processes and its senior leadership to meet desired goals. For example, the management of a research and development skunkworks might be structured to function dynamically and on an ad hoc basis. It would look different from the management team in finance or HR.
• Functional. Function-centric strategic plans fit within corporate-level strategies and provide a granular examination of specific departments or segments such as marketing, HR, finance and development. Functional plans focus on policy and process -- such as security and compliance -- while setting budgets and resource allocations .

In most cases, a strategic plan will involve elements of all three focus areas. But the plan may lean toward one focus area depending on the needs and type of business.

What is strategic management?

Organizations that are best at aligning their actions with their strategic plans engage in strategic management. A strategic management process establishes ongoing practices to ensure that an organization's processes and resources support the strategic plan's mission and vision statement .

In simple terms, strategic management is the implementation of the strategy . As such, strategic management is sometimes referred to as strategy execution. Strategy execution involves identifying benchmarks, allocating financial and human resources and providing leadership to realize established goals.

Strategic management may involve a prescriptive or descriptive approach . A prescriptive approach focuses on how strategies should be created. It often uses an analytical approach -- such as SWOT or balanced scorecards -- to account for risks and opportunities. A descriptive approach focuses on how strategies should be implemented and typically relies on general guidelines or principles.

Given the similarities between strategic planning and strategic management, the two terms are sometimes used interchangeably.

What is a strategy map?

A strategy map is a planning tool or template used to help stakeholders visualize the complete strategy of a business as one interrelated graphic. These visualizations offer a powerful way for understanding and reviewing the cause-and-effect relationships among the elements of a business strategy.

While a map can be drawn in a number of ways, all strategy maps focus on four major business areas or categories: financial, customer, internal business processes, and learning and growth. Goals sort into those four areas, and relationships or dependencies among those goals can be established.

For example, a strategy map might include a financial goal of reducing costs and a business process goal to improve operational efficiency . These two goals are related and can help stakeholders understand that tasks such as improving operational workflows can reduce company costs and meet two elements of the strategic plan.

A strategy map can help translate overarching goals into an action plan and goals that can be aligned and implemented.

Strategy mapping can also help to identify strategic challenges that might not be obvious. For example, one learning and growth goal may be to increase employee expertise but that may expose unexpected challenges in employee retention and compensation, which affects cost reduction goals.

Benefits of strategic planning

Effective strategic planning has many benefits. It forces organizations to be aware of the future state of opportunities and challenges. It also forces them to anticipate risks and understand what resources will be needed to seize opportunities and overcome strategic issues.

Strategic planning also gives individuals a sense of direction and marshals them around a common mission. It creates standards and accountability. Strategic planning can enhance operational plans and efficiency. It also helps organizations limit time spent on crisis management , where they're reacting to unexpected changes that they failed to anticipate and prepare for.

Information technology is a key part of developing an effective strategic plan. Look at these eight free IT strategic planning templates that can help make IT a driving force in a business. Learn how to assess an organization's needs and implement a technology strategy and see how to set business goals in these step-by-step guides.

Continue Reading About strategic planning

• What is IT-business alignment and why is it important?
• The evolving CIO role: From IT operator to business strategist
• How to create a great strategy in a digital age
• What is digital transformation strategy? Everything you need to know
• ESG benefits for businesses

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How To Write a Strategic Plan for Your Business

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Strategic planning forms the foundation of effective strategy management. It's the crucial first step that sets the direction for your entire business, regardless of its size or industry. A well-crafted strategic plan does more than outline goals—it provides a roadmap for achieving them, aligning your team's efforts, and adapting to change. Whether you're steering a multinational corporation or managing a neighborhood café, mastering the art of strategic planning can significantly impact your business's trajectory. Let's explore how strategic planning initiates the strategic management process and lays the groundwork for long-term success.

What are the seven elements of a strategic plan?

A comprehensive strategic plan typically consists of seven key elements that work together to create a cohesive roadmap for your business. Let's explore each of these elements:

Vision 

Your vision statement articulates what your organization aspires to achieve in the future. It's your long-term goal to provide a clear picture of where you want your business to be. A strong vision statement is inspirational and guides your strategic decision-making.  

The mission statement is the driving force behind why your company exists. It defines who you serve, how you create value, and what sets you apart. A well-crafted mission statement should be concise, memorable, and aligned with your vision.

Values 

Your core values are the fundamental beliefs that guide your company's behavior and decision-making process. They shape your organizational culture and influence how you interact with customers, employees, and stakeholders.

Goals 

Goals are the measurable objectives that align with your business mission, vision, and values. These are typically your long-term ambitions, often set for a 3-5 year timeframe. They provide direction and focus for your entire organization.

Your strategy is the long-term plan for achieving your objectives. It's based on both internal and external factors, often informed by a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats). Your strategy maps out how you'll leverage your strengths, address weaknesses, capitalize on opportunities, and mitigate threats.

The approach outlines how you'll execute your strategy and achieve your objectives. It involves defining specific actions and initiatives. These are often your short-term objectives, breaking down long-term goals into smaller, measurable milestones to track progress and maintain momentum.

Tactics are the granular, short-term actions, programs, and activities that support your approach. They are the detailed steps and specific tasks that, when executed, help you achieve your objectives and, ultimately, your long-term goals.

By incorporating these seven elements into your strategic plan, you create a comprehensive framework that bridges the gap between your current state and your desired future. This strategic roadmap not only defines where you want to go but also outlines how you'll get there, ensuring that every aspect of your business is aligned towards achieving your vision.

What is an example of a strategic plan?

A strategic plan is your business's GPS, guiding you from where you are to where you want to be. It's a comprehensive document that outlines your goals, strategies, and the steps needed to achieve them. 

Let's look at a real-world example to see what a strategic plan could look like in practice:

Imagine a mid-sized tech company aiming to become a market leader in cloud computing solutions. 

Their strategic plan might include:

• Mission : To revolutionize business efficiency through innovative cloud solutions
• Vision: To be the go-to cloud service provider for small and medium enterprises by 2026
• Core values: Innovation, customer-centricity, collaboration
• SWOT analysis: Identifying strengths (cutting-edge technology), weaknesses (limited market presence), opportunities (growing demand for cloud services), and threats (intense competition)
• Long-term goals : Achieve 25% market share within five years
• Short-term objectives: Increase customer base by 50% in the next 12 months
• Action plans: Launch a targeted marketing campaign, develop new product features, and expand the sales team

This example demonstrates how a strategic plan provides a clear roadmap for achieving business objectives.

Specific examples of strategic plans for various sectors

Different sectors may emphasize different aspects of strategic planning . For instance:

• Healthcare: Focus on patient outcomes, technology integration, and regulatory compliance
• Education: Prioritize student achievement, faculty development, and funding strategies
• Non-profit: Emphasize mission alignment, donor engagement, and program effectiveness

Remember, the key is to adapt your strategic plan to your unique context and needs.

How do you make a strategic plan for a small business?

Strategic planning is essential for all business sizes, not just corporate giants. Small businesses, with their limited resources, can greatly benefit from a well-structured strategic plan. By prioritizing initiatives and allocating resources wisely, a strategic plan helps avoid costly mistakes and maximizes return on investment. It allows business owners to focus on impactful activities, adapt quickly to market changes, and ensure every effort contributes to long-term goals. 

Even a simplified version of the seven strategic planning elements can provide a solid foundation for growth. The key is creating a plan that's both comprehensive and flexible. In the resource-constrained world of small business, a well-crafted strategic plan ensures that every resource is channeled effectively, promoting smart, strategic growth rather than just hard work.

Here's how a small business can create a strategic plan: 

• Clarify your vision, mission, and values
• Conduct an environmental scan
• Define strategic priorities
• Develop goals and metrics
• Derive a strategic plan
• Write and communicate your strategic plan
• Implement, monitor, and revise

These steps provide a comprehensive framework for organizations to create, execute, and maintain an effective strategic plan.

For a more in-depth guide, check out this article on the  strategic planning process .

Simplify the process using strategic frameworks and templates

Strategic frameworks and templates can be invaluable tools, especially for those new to the process or looking to streamline their approach. They provide structure and ensure you don't overlook critical components. Here are some examples of strategic frameworks and templates and their specific use cases:

• Use case: Ideal for small businesses or startups needing a concise overview.
• Example : A tech startup might use this to outline its product development roadmap, key market targets, and growth milestones for the next 12 months.
• Use case: Perfect for teams setting specific, measurable objectives.
• Example: A sales team could use this to set targets like “Increase quarterly revenue by 15% through expanding into two new market segments by Q3.”
• Use case: Valuable for businesses conducting a comprehensive situational analysis.
• Example: A retail company might use this to assess its e-commerce capabilities (strength), limited physical presence (weakness), emerging markets (opportunity), and increasing online competition (threat).
• Use case: Suited for larger organizations needing to align various departments.
• Example: A healthcare provider could use this to track patient satisfaction (customer), operational efficiency (internal processes), staff training (learning and growth), and cost management (financial) metrics.
• Use case: Useful for project managers or team leaders implementing specific strategies.
• Example: A marketing team might use this to outline steps for a product launch, including timelines for content creation, media outreach, and performance tracking.

By choosing the right framework for your specific needs, you can significantly simplify the strategic planning process and ensure all crucial elements are addressed. Remember, these templates are starting points - customize them to fit your unique business context and goals.

Want to streamline strategic planning?

Strategic planning is more than a business exercise — it's a commitment to your future success. Whether you're learning how to write a strategic plan for a department or figuring out how to write a strategy for a project, the principles remain the same: clarity, focus, and actionable steps.

Writing a strategic plan from scratch may seem daunting, but it doesn't have to be. Our strategic intelligence platform, Quantive StrategyAI , can help you create a strategic plan based on your current business circumstances, ways of working, and goals. Here's how:

• AI-Powered Insights: StrategyAI analyzes your business data, both structured and unstructured, to provide contextually relevant insights and guidance at every step.
• End-to-end Management: From strategy development to execution and evaluation, StrategyAI offers a comprehensive solution to manage your entire strategic process.
• Adaptive Approach: The platform adapts to your business context, inputs, and way of working, eliminating the need for you to adjust to a new system.
• Data-Driven Decision Making: With over 170 integrations, StrategyAI connects with your business data sources, ensuring your insights are always fresh and relevant.
• Always-On Strategy: StrategyAI enables a continuous, responsive, and connected approach to strategy, which is crucial for success in today's fast-paced business environment.

At Quantive, we specialize in turning complex business challenges into clear, effective strategies. Our AI-powered platform, combined with our team of experts, can guide you through the process, helping you create and execute a strategic plan that drives real results.

Quantive empowers modern organizations to turn their ambitions into reality through strategic agility. It's where strategy, teams, and data come together to drive effective decision-making, streamline execution, and maximize performance.     

As your company navigates today’s competitive landscape, you need an Always-On Strategy to continuously bridge the gap between current and desired business outcomes. Quantive brings together the technology, expertise, and passion for transforming your strategy and playbooks from a static formulation to a feedback-driven engine for growth.    

Whether you’re a fast-growing scale-up, a mid-market business looking to conquer, or a large enterprise looking for innovation, Quantive keeps you ahead – every step of the way. For more information, visit  www.quantive.com .

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Strategic planning

Growing a business means taking many decisions about the way you want to expand your operations. Creating a strategic plan is a key component of planning for growth. It will help you prepare a realistic vision for the future of your business and in doing so can maximise your business' potential for growth.

A strategic plan should not be confused with a business plan. A business plan is about setting short- or mid-term goals and defining the steps necessary to achieve them. A strategic plan is typically focused on a business' mid- to long-term goals and explains the basic strategies for achieving them.

This guide sets out the basics of the strategic planning process. It explains how to go about drawing up a strategic plan, it highlights some important issues to bear in mind and it shows how to turn from planning to implementation.

The purpose of strategic planning

The three key elements of strategic planning, getting started with strategic planning, build your plan on solid strategic analysis, what a written strategic plan should include, some important strategic planning issues to consider, implementing a strategic plan.

The purpose of strategic planning is to set your overall goals for your business and to develop a plan to achieve them. It involves stepping back from your day-to-day operations and asking where your business is headed and what its priorities should be.

Why strategic planning matters more to growing businesses

Taking the decision actively to grow a business means embracing the risks that come with growth. Spending time on identifying exactly where you want to take your business - and how you will get there - should help you reduce and manage those risks.

As your business becomes larger and more complex, so strategy formulation will need to become more sophisticated, both to sustain growth and to help you muster the leadership and resources you need to keep your business developing.

To do this, you will also need to start collecting and analysing a wider range of information about your business - both about how it operates internally and about how conditions are developing in your current and potential markets.

The difference between strategic planning and writing a business plan

The process of strategic planning is about determining the direction in which you want to take your business. It involves setting out your overall goals for your business. By contrast, the purpose of the business plan is to provide the detailed roadmap that will take you in your desired direction.

Your strategic planning and your business planning should be complementary, but effective strategy development requires you to shift your focus from the day-to-day concerns of your business and to consider your broader and longer-term options.

Developing a strategy for business growth requires you to deepen your understanding of the way your business works and its position relative to other businesses in your markets. As a starting point, you need to ask yourself the following three questions:

• Where is your business now? This involves understanding as much about your business as possible, including how it operates internally, what drives its profitability, and how it compares with competitors. Keep your review separate from day-to-day work and be realistic, detached and critical in distinguishing between the cause and effect of how your business operates. You should also write it down and review it periodically.
• Where do you want to take it? Here you need to set out your top-level objectives. Work out your vision, mission, objectives, values, techniques and goals. Where do you see your business in five or ten years? What do you want to be the focus of your business and your source of competitive advantage over your rivals in the marketplace? This step should be the foundation for the final plan and motivate change.
• What do you need to do to get there? What changes will you need to make in order to deliver on your strategic objectives? What is the best way of implementing those changes - what changes to the structure and financing of your business will be required and what goals and deadlines will you need to set for yourself and others in the business? Think about the business as a whole, for example consider diversification, existing growth, acquisition plans, as well as functional matters in key areas.

While the second question - Where do you want to take it? - is at the heart of the strategic planning process, it can only be considered usefully in the context of the other two.

You should balance your vision for the business against the practical realities of your current position and changes, such as increased investment in capital and other resources that would be required to implement your vision. A strategic plan needs to be realistically achievable.

As with any business activity, the strategic planning process itself needs to be carefully managed. Responsibilities and resources need to be assigned to the right people and you need to keep on top of the process.

Who to involve

Try to find people who show the kind of analytical skills that successful strategic planning depends upon. Try to find a mix of creative thinkers and those with a solid grasp of operational detail.

A good rule of thumb is that you shouldn't try to do it all yourself. Take on board the opinions of other staff - key employees, accountants, department heads, board members - and those of external stakeholders, including customers, clients, advisors and consultants.

How to structure the process

There is no right or wrong way to plan the process of strategic planning, but be clear in advance about how you intend to proceed. Everyone involved should know what is expected of them and when.

For example, you may decide to hold a series of weekly meetings with a strategy team before delegating the drafting of a strategy document to one of its members. Or you might decide to block off a day or two for strategy brainstorming sessions - part of which might involve seeking contributions from a broader range of employees and even key customers.

Getting the planning document right

The priority with strategic planning is to get the process right. But don't neglect the outcome - it's also important to make sure you capture the results in a strategic planning document that communicates clearly to everyone in your business what your top-level objectives are. Such a document should:

• reflect the consensus of those involved in drafting it
• be supported by key decision-makers, notably owners and investors
• be acceptable to other stakeholders, such as your employees

Strategic planning is about positioning your business as effectively as possible in the marketplace. So you need to make sure that you conduct as thorough as possible an analysis of both your business and your market.

There is a range of strategic models that you can use to help you structure your analysis here. These models provide a simplified and abstract picture of the business environment. SWOT (strengths, weaknesses, opportunities and threats) analysis is probably the best-known model and is used by both smaller and bigger businesses in the for-profit and not-for-profit sectors alike. STEEPLE (social, technological, economic, environmental, political, legal, ethical) and Five Forces analysis are two other widely used models.

A SWOT analysis involves identifying an objective of a business or project and then identifying the internal and external factors that are favourable and unfavourable to achieving that goal.

These factors are considered using four elements:

• s trengths - attributes of the business that can help in achieving the objective
• w eaknesses - attributes of the business that could be obstacles to achieving the objective
• o pportunities - external factors that could be helpful to achieving the objective
• t hreats - external factors that could be obstacles to achieving the objective

There are other models you can use to assess your strategic position. STEEPLE analysis, for example breaks the business environment down into the following components:

s ocial –e.g. demographic trends or changing lifestyle patterns

t echnological – e.g. the emergence of competing technologies, or productivity-improving equipment for your business

e conomic – e.g. interest rates, inflation and changes in consumer demand

e nvironmental – e.g. changing expectations of customers, regulators and employees on sustainable development

p olitical – e.g. changes to taxation, trading relationships or grant support for businesses

l egal – e.g. changes to employment law, or to the way your sector is regulated

e thical – e.g. ethical and moral standards governing policies and practices

STEEPLE analysis is often used alongside SWOT analysis to help identify opportunities and threats.

Five Forces

The Five Forces model aims to help businesses understand the drivers of competition in their markets. It identifies five key determinants of how operating in a given market is likely to be for a business:

• customers' bargaining power - the higher it is (perhaps because there is a small number of major buyers for your product or service) the more downward pressure on prices and thus revenue they will be able to exert
• suppliers' bargaining power - the ability of suppliers to push prices up (for instance if you rely on a single firm) can impact significantly on costs and profitability
• the threat of new competitors entering your market or industry - more businesses competing makes it more difficult to retain market share and maintain price levels
• the threat of customers switching to substitute products and services - an example would be the threat to fax machine manufacturers posed by the wide availability of email
• the level of competition between businesses in the market - this depends on a wide range of factors, including the number and relative strength of the businesses and the cost to customers of switching between them.

There is no set blueprint for how to structure a strategic plan, but it is good practice to include the following elements:

• Analysis of internal drivers - corresponding, for example, to the strengths and weaknesses of a SWOT (strengths, weaknesses, opportunities and threats) analysis.
• Analysis of external drivers - this should cover factors such as market structure, demand levels and cost pressures, all of which correspond to the opportunities and threats elements of a SWOT analysis.
• Vision statement - a concise summary of where you see your business in five to ten years' time.
• Top-level objectives - these are the major goals that need to be achieved in order for your vision for the business to be realised. These might include attracting a new type of customer, developing new products and services, or securing new sources of finance.
• Implementation - this involves setting out the key actions (with desired outcomes and deadlines) that will need to be completed to attain your top level objectives.
• Resourcing - a summary of the implications your proposed strategy will have for the resources your business needs. This will reflect financing requirements, as well as factors such as staffing levels, premises and equipment.

You may also want to consider adding an executive summary . This can be useful for prospective investors and other key external stakeholders.

Growing a business can pose some considerable personal challenges to the owner or manager, whose role can change dramatically as the business grows.

Effective strategic planning involves considering options that challenge the way that business has been done up to this point. It may be that decision-making in some areas will be handed to others, or that processes which have worked well in the past will no longer fit with future plans.

It can be tempting for owners or managers to overlook alternatives that are uncomfortable for them personally, but to disregard your options on these grounds can seriously compromise your strategic plan and ultimately the growth of your business.

Examples of the kind of issues that tend to get overlooked by growing businesses include:

• The future role of the owner - for example, it may be in the best interests of the business for the owner to focus on a smaller number of responsibilities, or to hand over all day-to-day control to someone with greater experience.
• The location of the business - most small businesses are located close to where the owner lives. But as a business grows it may make sense to relocate the business -for example, to be closer to greater numbers of customers or employees with certain skills.
• Ownership structure - growing businesses in particular should ensure that they get this right. The more a business grows, the more sophisticated it needs to be about meeting its financing needs. In many cases, the best option is for the owner to give up a share of the business in return for equity finance - but this can be emotionally difficult to do.

In the final analysis, it is the owner of the business who decides the strategic plan. Growing a business is not something done "at all costs". However, an honest assessment of the options allows for any decisions made to be as informed as possible.

The plan needs to be implemented and this implementation process requires planning.

The key to implementation of the objectives identified in the strategic plan is to assign goals and responsibilities with budgets and deadlines to responsible owners - key employees or department heads, for example.

Monitoring the progress of the implementation plan and reviewing the strategic plan against implementation will be an ongoing process. The fit between implementation and strategy may not be perfect from the outset and the implications of implementing the strategy may make it necessary to tweak the strategic plan.

Monitoring implementation is the key. Using key performance indicators (KPIs) and setting targets and deadlines is a good way of controlling the process of introducing strategic change.

Your business plan is another important tool in the implementation process. The business plan is typically a short-term and more concrete document than the strategic plan and it tends to focus more closely on operational considerations such as sales and cash flow trends. If you can ensure that your strategic plan informs your business plan, you'll go a long way to ensuring its implementation.

Remember that strategic planning can involve making both organisational and cultural changes to the way your business operates.

Original document, Strategic planning , © Crown copyright 2009 Source: Business Link UK (now GOV.UK/Business ) Adapted for Québec by Info entrepreneurs

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Legal development

ASIC releases its Corporate Plan for 2024-2025

28 August 2024

What you need to know

On 22 August 2024 ASIC released its Corporate Plan for 2024-2025 outlining its strategic priorities for the next four years (2024 to 2028).

ASIC's plan over that period covers five strategic priorities:

• improving consumer outcomes;
• addressing financial system climate change risk;
• bettering retirement outcomes and member services;
• advancing digital and data resilience and safety; and
• driving consistency and transparency across markets and products.

Alongside these strategic priorities, ASIC will undertake a range of key activities and focus on three operational capabilities:

• digital technology and data;
• staff culture, capabilities and capacity; and
• stabilising and uplifting the ASIC business registers.

Consumer outcomes

ASIC is expecting improved consumer outcomes to be delivered as a result of a number of activities.

Taking regulatory action

ASIC is expecting to take action against firms that:

• target vulnerable customers, including those involved in predatory lending, the provision of high cost credit and conduct by unlicensed or 'fringe' entities;
• offer high risk financial products in the over the counter and exchange markets;
• engage in systemic non compliance that results in widespread consumer harm;
• have in place poor product design and distribution practice or have harmful product design and distribution practices, including conduct that results in consumers receiving unsuitable products (particularly in relation to life insurance products);
• engage in car financing misconduct, especially misconduct that affects vulnerable customers and First Nations peoples (this will include working closely with the ACCC and other regulators).

Keeping a close eye on the industry

ASIC will monitor and examine in respect of:

• the adequacy of internal dispute resolution arrangements (as outlined in RG 271 Internal dispute resolution) to check whether licensees have fair and efficient dispute resolution processes in place, and identify areas where licensees need to improve;
• compliance with the small amount credit contract and consumer lease requirements that commenced in June 2023;
• compliance practices of debt management firms, including a targeted review of policies, practices and procedures of high risk debt management firms;
• general insurers' improvements to claims handling;
• direct sales of life insurance products, with a focus on low value products.

Sharing data and observations

To help industry understand what ASIC is seeing across the industry and how industry participants can lift their game, ASIC will share data and observations in respect of:

• internal dispute resolution data (observations from the first year of IDR data reported by all firms will be published in 2024 with firm level data to be published in 2025);
• direct sales of life insurance products (which will involve engaging with identified entities to help drive behavioural change).

Being part of the conversation

ASIC will engage in:

• the independent review of the 2020 General Insurance Code of Practice; and
• the progress of the Delivering Better Financial Outcomes (DBFO) law reform package, the Australian Government's response to the Quality of Advice Review.
• the progress of the Delivering Better Financial Outcomes (DBFO) law reform. This will include providing guidance, making legislative instruments and other relevant ASIC documents.

Addressing financial system climate change risk

ASIC will support market integrity and protect consumers and investors, with a focus on the following:

• Supporting the introduction of mandatory climate related financial disclosure for large Australian businesses and financial institutions, and engaging with key stakeholders domestically through the Council of Financial Regulators Climate Working Group and internationally through the International Organization of Securities Commissions. ASIC intends to establish a new team that will develop regulatory guidance, assess applications for relief and supervise compliance with the new obligations.
• Examining how general insurers are handling customer complaints and responding to recommendations from previous reviews about their handling of claims following severe weather events.
• Deterring greenwashing and sustainable finance misconduct by undertaking ongoing surveillance activity and taking enforcement action, where necessary.
• Supporting fair and efficient carbon markets and products through effective licensing and supervision, including updating policy, and monitoring new and established markets for, carbon related financial products.

Bettering retirement outcomes and member services

ASIC will support better outcomes for consumers planning for and in retirement, with a focus on:

• Taking targeted enforcement action against cold calling superannuation switching models that result in the inappropriate erosion of superannuation.
• Taking action to target misconduct in the superannuation sector, with a particular focus on member experience, including superannuation trustees' provision of services to members and harms arising from complaints handling and claims handling.
• Reviewing member services (as part of ASIC's multi year project reviewing industry compliance with laws relevant to contact centres and trustee administration practices). ASIC will publish the findings from the review of member services to drive improvement in industry behaviour.
• Reviewing SMSF establishment advice, including conducting surveillance of personal advice provided to retail clients about the establishment of SMSFs, and the quality of advice by financial advisers and the role of financial services licensees.
• Driving industry progress towards improving retirement outcomes, including by monitoring trustees' implementation of the retirement income covenant and taking regulatory action where ASIC identifies poor conduct or practices.

Advancing digital and data resilience and safety

ASIC will manage and minimise technology, cyber and data related risks, with a focus on:

• Supporting regulated entities in enhancing cyber resilience, including by reviewing cyber resilience in various industries and sending letters based on findings. ASIC will also work on information-sharing initiatives, design a single reporting portal and partner with APRA for supervisory efforts.
• Monitoring how retail financial services and credit entities use AI and advanced data analytics, and as sess risk management and governance processes. ASIC will also contribute to the Australian Government's development of AI specific regulation.
• Monitoring the how investment managers and financial advisers manage the risks of using offshore service providers, including in relation to technology, data sharing and privacy.
• Holding ASX to account on the safe and efficient implementation of the CHESS replacement program with the view of ensuring that all regulatory requirements continue to be met. ASIC will also oversee planned refreshes of the ASX Trade and ASX 24 trading systems, and upgrades to ASX's derivatives clearing platforms.

Driving consistency and transparency across markets and products

ASIC will drive to strengthen integrity across markets with a focus on:

• Examining changes in public and private markets, including the significant growth of private markets and the implications for the integrity and efficiency of public markets.
• Supervising the conduct of financial market infrastructure providers.
• Creating a central coordination function to monitor and engage entities on digital assets, tokenisation and decentralised finance.
• Enhancing monitoring and reporting on market cleanliness and expanding beyond equity markets.
• Providing guidance and engaging with stakeholders to ensure the smooth implementation of the ASIC Derivative Transaction Rules (Reporting) 2024 (which commence in October 2024).
• Creating clearing and settlement service rules to support ASX in fostering competition for clearing and/or settlement.
• Carrying out surveillance of financial reports of listed entities, unlisted entities that are of public interest, previously grandfathered large proprietary companies and superannuation funds. This will also involve a review of audit firms' adherence to ethical and independence standards.

Other key activities

Alongside its strategic priorities ASIC will undertake a range of other key activities:

• Implementing the Financial Accountability Regime;
• Ensuring the objectives of the reportable situations regime are met;
• Implementing the Compensation Scheme of Last Resort;
• Targeting gatekeeper misconduct;
• Acting against non-lodgement of financial reports;
• Acting against misconduct that impacts small businesses;
• Contributing to the development of the beneficial ownership regime;
• Focusing on better outcomes from reports from registered liquidators;
• Focusing on poor behaviours by registered liquidators;
• Contributing to the development of a licensing regime for payments providers;
• Contributing to the development of a licensing regime for buy now pay later providers; and
• The Regulatory Initiatives Grid.

Operational capabilities

ASIC will focus on three operational capabilities to improve its effectiveness and efficiency as a regulator:

ASIC's complete Corporate Plan for 2024-2025 can be accessed via its website .

The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to. Readers should take legal advice before applying it to specific issues or transactions.

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