Strategic planning is an organization’s process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. In order to determine the future direction of the organization, it is necessary to fully understand its current position and the actionable paths for growth.
In the simplest terms, Strategic Planning deals with three key questions:
- What do we do?
- For whom do we do it?
- How do we excel in our market?
Done well, Strategic Planning is a valuable tool for determining what a business should become and how it can best achieve that goal. It appraises the full potential of a business and directly links the business’s objectives to the actions and resources required to achieve them. Strategic Planning is a deliberate, systematic process designed to ask and answer the most critical questions confronting a management team.
A successful Strategic Planning process should:
- Describe the organization’s mission, vision and fundamental values
- Explore potential business growth areas and analyze emerging opportunities, as well as risks
- Understand the current and future priorities of targeted customer segments
- Analyze the company’s strengths and weaknesses relative to competitors
- Identify and evaluate alternative strategies
- Develop a business model to take advantage of emerging profit centers
- Define and establish clear objectives for the business
- Prepare programs, policies, and plans to implement the strategy
- Establish and align organizational support for the objectives:
- Decision processes
- Information and control systems
- Hiring and training
- Budget resources
- Plan for and respond to contingencies
- Monitor performance
Many organizations view strategic planning as a process for determining where an organization is going over the next year or—more typically—3 to 5 years (long term).