man sat down - strategically planning board

What is strategic planning?

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Strategic planning is the process businesses and organisations use to outline their long-term directions and objectives. Through the planning process, organisational leaders determine their overarching vision as well as specific long-term goals, and then map out a plan for achieving each milestone, such as how and when the milestones should be completed.

The outcome of strategic planning is called a strategic plan. This document typically includes:

  • a vision statement outlining the organisation’s aspirations for its future and growth
  • a mission statement, outlining the organisation’s purpose
  • specific goals, objectives, and initiatives to help deliver the organisation’s vision and mission. These goals should be SMART (specific, measurable, achievable, relevant, and time-bound).
  • an action plan outlining how each goal will be achieved, including resources, tactics, and dates
  • Key Performance Indicators (KPIs) – quantifiable measurements and metrics used to gauge strategic, financial, and operational performance.

Once completed, a strategic plan should be shared across the business so teams can use it to inform short-term goals, such as specific projects and other actions and decisions, and help deliver on the wider strategic aims of the organisation. 

It’s also important for an organisation to continually review its strategic plan. Using information gleaned from its SMART goals, KPIs, and so on, businesses can evaluate the current trajectory of their strategic plan, and make adjustments and revisions – or even large changes – to help keep things on track and progressing on schedule.

The benefits of strategic planning

An effective strategic plan can bring a number of benefits to an organisation. For example, it can:

  • create and maintain a competitive advantage
  • support business decision-making
  • identify new opportunities for growth

Steps in the strategic planning process

The strategic planning process can vary from organisation to organisation, but typically has five key steps.

Identify

When starting a successful planning process, the first step is assessing the organisation’s current strategic position. Relevant stakeholders can review key information, such as:

  • Past strategic plans. Previous strategic plans – including their vision and mission statements – can provide a helpful roadmap for new strategy formulation. For example, they might inform the methodology used for setting new objectives, or can even act as templates for the new strategic plan document.
  • Existing organisational data. This might include sales figures, finance and cash flow numbers, online engagement figures, reputational analyses, human resources data, and so on.
  • The current external business environment. Available data might include reports on industry and market conditions, competitor analyses, emergent trends, and customer insight such as information about target client demographics.

This first step in the process also includes defining the organisation’s longer term vision. Whether the organisation is a new startup or a long-standing nonprofit, there needs to be a clear understanding about what the future state of the organisation looks like. These conversations should include all members of the senior leadership team alongside other key stakeholders, and together they should discuss topics such as:

  • strategic issues
  • organisational values
  • ideas around a strategic framework and strategy execution

Prioritise

The second step in strategy development is setting and prioritising strategic goals. These organisational goals should all align with – and help deliver on – the vision outlined in the first planning step. They should also be prioritised according to their impact, relevance, importance, and urgency. The goal-setting process should also identify any necessary resource requirements, deadlines, and KPIs.

Develop

During the third step of the strategic management process, planners outline the steps and tactics required to deliver the business strategy. This development stage is one of the key elements of the process because it determines how the vision, mission, and business goals will be achieved.

During this stage:

  • responsibilities are outlined
  • short-term tactical plans are developed
  • Strategy communications are shared more widely 

Implement

During the fourth stage of the strategic planning process, the strategic plan is implemented and managed. Executing the plan may include:

  • communicating the plan to all staff and stakeholders
  • Writing new policies and processes or amending existing ones 
  • establishing systems for measurement and reporting
  • assigning responsibilities

Review

The final step towards delivering on strategic organisational goals is reviewing progress, and then revising the strategic plan as necessary. By measuring and evaluating the results of the plan in either real-time  or on a quarterly or annual basis –  organisations can adapt and optimise as needed. 

Strategic planning tools

There are a number of valuable tools for strategic planning. 

SWOT analysis

One of the most valuable tools for strategic planning, particularly in the first stage, is a SWOT analysis. A SWOT analysis is used to identify an organisation’s:

  • strengths
  • weaknesses
  • opportunities
  • threats

Completing a SWOT analysis allows planners to comprehensively assess an organisation’s current position and then plan the organisation’s goals accordingly.

Balanced scorecard

A balanced scorecard is a performance review tool that’s used to identify and improve strategic business activities. To create the scorecard, organisational data is gathered in four key areas:

  1. Finance 
  2. Customers
  3. Business processes
  4. Learning and growth

This tool is especially helpful during the final review stage of the strategic planning process.

Strategy map

Strategy maps are tools used to help illustrate and visualise a strategic plan. They are particularly useful during the second and third steps of strategic planning – setting and prioritising goals, and developing tactics – because they help organisations easily identify gaps in their plans.

The difference between strategic planning, business planning, and operational planning

Business planning – as well as operational planning – are often confused with strategic planning.While closely linked, they are different processes with different purposes. 

Strategic planning considers long-term visions and goals, while business and operational planning are focused on day-to-day business activities that deliver on short-term goals. 

Shape the future of organisations

Lead strategic planning in the public or voluntary sector with the 100% online Master of Public Administration (MPA) at the University of York. This flexible MPA programme has been designed for professionals in public and non-profit organisations who want to make a positive impact on improving public service provision and public life.

One of the core modules on this flexible masters degree explores strategic planning. It will introduce you to the main themes, concepts, and practices of strategic planning and management. Students are given practical skills and opportunities to use the skills in work-based and case-study scenarios.  The module will also enable you to analyse and evaluate the strengths and weaknesses of strategic planning in the public and not-for-profit sectors.