6 Features of Strategic Planning
There is no doubt strategic planning is a major part of our future. Successful businesses are spending more time on strategic planning than ever before. Planning is required in order to effectively respond and adapt to a fast changing market place that is becoming more complex with each day that passes.
Strategic planning allows a business to understand its day to day outputs and most importantly its future pathway. This is done by being focused on outcomes whilst thinking about risks and opportunities that could either impact a business or help it grow.
Strategic planning allows us to focus our energy and resources on the most important and high priority opportunities whilst addressing our weaknesses and threats.
Most importantly strategic planning allows us to align our business’s internal activities from top to bottom. Financial resources with non financial resources. Short term plans with long term plans. And business outcomes with staff outcomes.
There is no right or wrong option when it comes to selecting a strategic planning model for your business. The best results are seen when the nature of your business, your mission, and your core values align with your business model. Strategic planning models available include:
- Bottom Up, where design is done at lower levels and merged up to the upper level
- Top Down, where design is done at the upper level and broken down through the business
- Interactive, which brings together bottom up and top down methods
- Dual Level, where designe is done at both upper and lower levels following by a review at the upper level to create alignment
Below are some of the key features of strategic planning.
1. Provides Clarity & Focus
A strategic plan is vital to present a business’s vision. It shows how a business places priority on activities that will take place to achieve its vision. Like a compass, it provides clarity on which road we should take to achieve the best outcome.
Strategic planning is a process that allows us to analyse and respond to the things occurring inside and outside of business. Done properly planning can set up a business for success. It supports the definition of goals, key results, actions, and measures that provide direction and clarity. It assists a business to understand its purpose as well as see into its future.
Strategic planning typically involves a structured step by step approach and for improved decision making that impacts our business success. Effective strategic planning allows us to focus our business on the most important actions whilst fending off unwanted distractions.
2. Aligns People and Business
A strategic plan provides a basis for change that allows staff to assess the resources they require to achieve a positive result. Staff should be involved in planning to ensure a strategy is aligned with day to day activities. The result is that staff are able to make more informed decisions that support the business in achieving its goals.
A direct link exists between strategic planning and a businesses’ outcomes. Results directly depend on how each staff performs. Furthermore, planning activities and measuring outputs usually result in staff performing at a higher level. Effective strategic planning:
- Firstly motivates, rewards and educates staff by tying in skills with assigned activities
- Secondly allows us to be more productive by focussing on the most important activities
- Thirdly allows us to identify and respond to unplanned results
- Next allows for the trouble shooting of issues by supporting a regular review cycle
- Further provides support for the delivery of key initiatives
- Moreover aligns staff with business outcomes
A strategic plan should look at the skills, abilities, and concerns of staff. Capabilities should be aligned with assigned activities to ensure staff members are set up for success.
3. Supports Continuous Improvement
Strategic planning allows us to create future success and provides the means to adapt and respond to change. This is an ongoing process that supports improved decision making and is required to achieve positive business outcomes. As a result, a strategy should be monitored through a set of measures and adjusted as needed. When setting up measures we should:
- Firstly define those that show whether a result is good or bad
- Secondly create a baseline and target for a measure
- Thirdly define how often we should report against a measure
- Then record results against a measure
- Compare current results with previous results
- Moreover make changes to measures as required
A strategic plan should not be a set and forget. An effective delivery process gives life to a strategic plan whilst the plan itself provides a basis for improved decision making. Maintaining a regular review is critical to success. A review allows us to identify and manage new opportunities, issues and risks and keeps our plan on track.
Strategic planning can support a ‘Plan, Do, Check, Act’ cycle for delivery of improvements:
- Firstly, Plan – analyse and create improvement objectives and planned actions. Define resources required to deliver improved outcomes
- Seconly, Do – assign people and dates to improvement actions.
- Thirdly, Check – setup a a review which allows regular check points to assess that improvements activities are producing positive outcomes. Moreover measures can be used to provide a clear and quantified measure of good and bad results
- Finally, Act – if an improvement activity has delivered an expected outcome actions are able to be repeated to reinforce the success.
- Where an improvement activity has not delivered an expected outcome changes may need to be made and the cycle run again
4. Enables Growth
As technology has advanced so have businesses expanded globally, resulting in increased competion. Businesses are gaining an advantage by using technology to predict the future. This has resulted in the delivery of products and services around the world faster and more cheaply than ever before.
Strategic planning allows us to scan the market, understand where to play and how to win. It is used to identify and seize opportunities and anticipate threats that need to be managed.
A strategic plan developed using robust a process allows us to operate more efficiently and focuss on activities which will produce the best results. It will lead us to better outcomes and directly influence confidence in our business. Outside parties will only invest in our business when we can show continued performance and present a clear picture for the future.
5. Responds to Opportunity and Threat
A well designed strategy will dictate how your business responds to opportunity and threat. A strategic plan will help us set priority to opportunities that will produce the best results whilst helping us manage threats to our business. A strategic plan provides a lens into our future state and sets control over our destiny.
Issues and risk will impact every strategy. Our ability to quickly identify and manage these will directly impact us achieving our goals.
6. Follows a Structured Process
Whilst different methods are available to create a strategic plan (OKR, MBO, SMART), which have subtle differences, they mostly follow a consistent pattern which includes:
- Firstly, set a mission, vision, values and goals and outcomes
- Secondly, run a scan to determine opportunities and threats
- Thirdly, design a strategy, which matches strengths with opportunities whilst addressing weaknesses to external threats
- Next, deliver the strategy, which requires us to set a budget, define resources, develop procedures and deliver actions required to achieve our goals
- Moreover evaluate and control, which involves a regular reviews and adjustment as new information becomes known
skefto Helps Businesses Effectively Execute Strategic Plans