What is Strategic Planning?

What is strategic planning?

Strategic Planning is an organisation-wide process to identify the strategic direction of your business, including vision, mission, values and overall goals. Direction is pursued by implementing associated action plans, including multi-level goals, objectives, timelines and responsibilities. Strategic Planning determines where an organisation is going over the next year or more, how it’s going to get there and how it will know if it got there or not.

Why do we do it?

The development of the strategic plan helps clarify the organisation’s plans and ensures that key leaders are all “reading from the same page”. I’ve worked with businesses that operate under flat structures, i.e. each department head has complete autonomy for their department with no collective decision making with other business units. There were no clear or common goals.

I’ve worked with business owners or managers who assume they know everything about their business and plan from what they know or understand, making planning much less strategic and a lot more guesswork. In both situations, the result was confusion and frustration with employees, poor decision making, merry go round task lists present on the agenda at every management meeting, additional workloads, significantly reduced efficiencies, and lost profits.

Running in the wrong direction is slower than walking in the right one. Companies need direction and discipline to achieve goals and growth.

What are the benefits of strategic planning?

A great strategic plan is the “glue” that holds the business together. It provides the bridge between staff, senior management and owners, and provides a base to measure progress. Communications of the goals and objectives of the company are transparent, allowing resources in the organisation to focus on critical priorities. Businesses with no strategy are like corks in the ocean, drifting around, blown by the wind, and pushed by the tides.

What’s the difference between a business plan and a business strategy?
The focus of a strategic plan is usually on the entire organisation, while the focus of a business plan is usually on a particular product, service or program. There are a variety of perspectives, models and approaches used in strategic planning.

  • The development of a strategic plan depends on:
  • the nature of the organisation’s leadership;
  • the culture of the organisation;
  • the complexity of the organisation’s environment;
  • the size of the organisation;
  • the expertise of planners, etc.

How do I include business analysis in my strategy?

When seeking to improve the performance of an organisation, it is essential to analyse the organisation’s current performance. Well-done analysis typically use tools, such as comprehensive questionnaires, SWOT analyses, diagnostic models, and comparison of results to best practices or industry standards. By following robust strategic analysis and having an accurate strategic plan, you will learn where you are currently, where you want to be in 3, 5, 10 years, and how you’re going to get there. It’s never too late to get planning or revise your current plan.
The top 3 ways to approach strategic planning

Goals-based planning is probably the most common and starts with:

  • a focus on the organisation’s mission (and vision or values);
  • goals to work toward the mission;
  • strategies to achieve the goals;
  • and action planning (who will do what and by when).

Issues-based strategic planning often starts by:

  • examining issues facing the organisation;
  • strategies to address those issues;
  • and action plans.

Organic strategic planning might start by:

  • articulating the organisation’s vision and values;
  • and then action plans to achieve the vision while adhering to those values.

Often we may use a combination of several planning methodologies. Within your business, Try this as an excellent whiteboard exercise with your team…

  1. Determine your target market
    1. Grade your customers as Awesome, Basic, Can’t make money on
      1. A – high repeats, high sales value, high margin
      2. B – lower value, less repeats, less margin
      3. C – price sensitive and always shopping around
  2. Determine your loyalty hook
    1. There is always a primary driver that motivates our “A” grade customers to buy from us – the loyalty hook.
    2. If our A-grade customers didn’t receive this, their loyalty would be broken, and they’d leave.
    3. What are your loyalty hooks for you’re A-grade Customers?
      1. Quality, Service, Selection, Relationship, Convenience, Specifications, Expertise, Volume, Consistency, Price, Accessibility, Flexibility
  3. From the loyalty hooks, what do you BEAT the market on, and what do you MEET the market on?
  4. We want to develop a strategic plan that aligns with the areas where we BEAT the Market.
    1. Select your Strategic Direction from the list below
      1. Trusted Service – Service, Relationships, Flexibility, Accessibility
      2. Product Leadership – Quality, Expertise, Spec’s, Consistency
      3. Value for money – Price, volume, convenience
  5. Strategic Goal # 1 – Products/Services
    1. What do we need to do to start, stop, or continue to deliver on our BEAT the market strategy?
    2. What do we need to do to start, stop, or continue to deliver on our MEET the market strategy?
  6. Strategic Goal # 2 – Sales & Marketing
    1. How do we communicate our business strategy to our target market?
  7. Strategic Goal # 3 – People & Productivity
    1. How do we measure the output of the different parts of an organisation?
  8. Strategic Goal # 4 – Systems & Procedures
    1. What systems do we need to improve our operational efficiency and effectiveness?


WARNING
– don’t try and MEET the market in all three areas without BEATING the market in one. A one size fits all approach doesn’t recognise the difference between A and C customers.

How can I get my team involved?

Far more important than the strategic plan document is the strategic planning process itself. Thorough strategic analysis of a business forms part of the strategic planning process. Strategic analysis is the heart of the strategic planning process, should not be ignored, and should be a team exercise.

Try this…

Work through the example above with your senior management team and lead representatives from each department. See what you come up with and be honest with yourself, how many of the ideas tabled by the group are new to you, or you wouldn’t have come up with on your own. From experience, we find the answers to problems are in the room, as long as you’ve invited your team to be part of the solution.

When should I do my strategic planning?

It’s never too late to get planning or revise your current plan. I’m working with successful businesses on their 3rd ten-year strategic plan and with businesses who have never had a strategic plan before. The current Covid lockdown is an opportunity for you as a business owner or manager to take the time to consider what your strategic plan might be.

How can my strategic plan be responsive during Covid? How do I embed flexibility and agility in my strategic plan?

Strategic plans are living documents and need to be reviewed at your monthly meetings. No matter how good your business plan is, external influences will affect it negatively. By having monthly meetings, you will have the means to make course adjustments to keep the business tracking toward its vision. Imagine just letting it drift along with no adjustments – disaster!!!

 

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What is Strategic Planning?

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