What is strategic planning and how to improve it? (2023)

Long-term goals are essential for the sustained success of any organization. However, many struggle to shine without a solid strategy to achieve those goals.

But even once you've decided on your company's strategy, implementing it is a whole different task.74% of executivesdon't have confidence that their organization's transformation strategies will be successful -- likely because they don't have a strategic plan.

This is where strategic planning comes into play. Strategic planning enables companies of all sizes to achieve their most ambitious goals—whether it's realigning brand efforts, increasing social impact, or increasing profitability.

An action plan makes it easier to accelerate team performance, improve communication, and empower employees while increasing profitability and moving your business forward.

What Exactly is Strategic Planning and How Can Your Business Improve It?

What is strategic planning?

Strategic planning is the process of defining a vision for an organization's future and identifying relevant goals and objectives before creating an action plan to achieve them.

When creating a strategic plan, executives and key stakeholders typically come together to assess the current state of the organization and may define or redefine the organization's mission as part of the strategic planning cycle.

A strategic plan is typically designed to guide the achievement of business goals over a long period of time. All goals should be clear and measurable so progress can be tracked efficiently.

A successful strategic plan should also include how goals should be achieved in order to maximize impact. These mid- to long-term goals should focus on transformative change rather than short-term gains.

Strategic planning in project management

Although you may associate strategic planning with C-suite executives and high-level stakeholders, developing and executing a strategic plan is also an important task for project managers who seek itmanage their projects successfullyuntil completion.

It's worth noting that strategic planning differs from business planning, which focuses on short-term goals. A robust strategic plan is crucial to ensure that improvements and transformative changes take place within an organization, which is also the goal of many projects.

A solid strategic plan is beneficial to project managers for several reasons, including:

• Better communication:Discussing project strategy with team members helps employees feel involved and understood. Not to mention astrong flow of dialoguehelps ensure departmental strategies are aligned with overall corporate strategies.
• Improved resource management:A strategic plan helps project managers determine the resources available for a project and how best to delegate responsibilities to optimize project success.
• Team engagement:With a comprehensive strategic plan, employees are more likely to stay engaged with their work throughout the project lifecycle. Because the plan has been clearly defined, team members know what is expected of them or what the next step in the process is, which can be helpfulAccelerate team performance.

How often should strategic planning be done?

While you should definitely start your roadmap during the planning phase of your project, there's no real guideline for how often your team should review and update your roadmap. The frequency depends on the nature of the business and the specific components of the strategic plan.

However, there are generally two main times when a strategic plan should be re-evaluated:

• Quarterly:Most competitive companies conduct quarterly reviews of their strategic plans. Incorporating an assessment of your strategic planning system into quarterly reviews is a great way to track progress and ensure goals are being met.
• Yearly:While quarterly reviews can provide insight into monthly progress, annual reviews allow senior management, key stakeholders, and executives to see the bigger picture. The combined metrics from all four quarters can reveal trends and insights not visible in quarterly reviews.

A company's maturity can also determine the frequency of the strategic planning cycle. A small startup in a highly competitive industry may need to reevaluate its plan monthly, while a more established company may only need to revise its plans every few years.

It is also important to note that a strategic plan is meant to be ongoing. In hisHarvard Business School online course,Professor Clayton Christensen points out that most companies with successful long-term strategies tend to change their plans over time. Unforeseen threats and opportunities arise and companies must adjust their plans accordingly - which can also mean that existing strategic plans are frequently reviewed and revised.

The different types of strategic plans

Each method has its particular advantages and disadvantages, but the real magic of strategic planning is that different types can be combined.

Let's take a closer look at some of the most common types of strategic planning.

SWOT-Analyse

A strategic plan that is most effective is also the simplest. In a SWOT analysis, an organization assesses its current strengths, weaknesses, opportunities, and threats. These components are relatively easy to understand, but can be quite comprehensive depending on the size and type of organization.

SWOT analysis is a great way to gain a fresh perspective on current operations. Best of all, SWOT is extremely inexpensive and doesn't typically require the expertise of a consultant or business analyst. Really, any experienced member of an organization can do a SWOT analysis.

However, this strategic planning approach has its limitations. Bias and preconceived notions can influence analysis and result in inaccurate data or poor recommendations.

PEST Model

When companies want to understand the external market they operate in, they turn to the PEST model. With PEST, a company examines the external political, economic, social and technological factors affecting its market segment. Although the application of PEST in domestic markets is not necessarily uncommon, it is usually most useful when implemented prior to entering a foreign market.

The PEST model only considers external factors and does not include internal variables. It is best used in combination with another strategic plan.

OKRs

Objectives and Key Results is another fairly simple method. A concrete goal with three to five corresponding key results is chosen. The goal must be clearly defined and the results must be accurately measured to determine success.

Set OKRsis a great way to move a business forward, but setting too many OKRs can create difficulties in prioritizing and balancing the workload.

Porter's Five Powers

Organizations looking to increase their competitive advantage can turn to Porter's Five Forces to understand their position in the marketplace and the factors affecting their profitability. The five forces include:

1. competition in the industry
2. The potential of new market entrants
3. Supplier power
4. Customer power
5. The threat of substitute products

While Porter's Five Forces can help identify opportunities, these factors may not be exhaustive depending on the company. For example, there are usually more than five forces at play in a given industry. Government regulations and technological disruptions also affect a firm's competitive advantage, but are not included in Porter's model.

VRIO-Framework

The VRIO framework is based on value, rarity, imitability and organization. This type of roadmap helps companies evaluate their competitive potential by considering each of the four aspects of VRIO and leveraging their unique advantages.

The VRIO framework is similar to SWOT, but focuses more on an organization's particular value than general strengths and weaknesses.

Balanced Scorecard (BSC)

The Balanced Scorecard is used to communicate goals and ensure that day-to-day tasks and responsibilities align closely with those goalsmeasure progress and performance. The BSC brings together a mix of perspectives, including:

• financial management
• Customer/Participant
• internal process
• organizational skills

The BSC approach to the strategic planning process is excellent for ensuring that employees are working towards achieving organizational goals. However, this method requires collecting and analyzing large amounts of data and can get complicated.

Blue Ocean Strategy

Focusing on untapped opportunities and uncontested spaces, the Blue Ocean strategy defines the boundaries between known markets and new markets as the “Red Ocean” and “Blue Ocean”, respectively.

In a red ocean, companies in the same industry struggle to attract and retain customers, leading to intense competition. Conversely, the blue ocean represents emerging markets with no competition, only the need to establish demand.

The Blue Ocean Strategy includes six main components that companies need to consider:

• Alternative Industries
• Strategic groups within your industry
• buyer groups
• Complementary product and service offerings
• Functional-emotional orientation of an industry
• historical tendencies

What does the strategic planning process look like?

As we have seen, there are many different approaches and benefits to strategic planning. Some of these methods work well on their own, while others can be combined with other robust strategic techniques.

Regardless of the specific framework or methodology that an organization uses as the basis for its strategic action plan, creating a strategic plan can generally be summarized in a few steps.

Let's take a fictional education company called LearnSMRT as an example.

Identify your current market position

As the strategic planning process begins, LearnSMRT's senior management and key stakeholders must examine their current position in the marketplace and identify any necessary improvements that need to be made to achieve long-term strategic goals.

Perhaps LearnSMRT will be overtaken by educational software offerings offered by competitors in their niche. Perhaps they are suffering from a recruitment and retention problem.

Regardless of the current issues the company is facing, this phase of the process is best suited for implementing a SWOT analysis or similar assessment to assess the state of the organization and determine the appropriate way forward. An existing mission statement or previous long-term goals are often helpful in assessing the current state of the organization and making necessary recommendations.

Set your priorities and goals

After a thorough assessment of the organization, the next step in the strategic planning process is to set specific goals. It's rare that a company has just one goal, so it's important to prioritize which goals and objectives are most important.

Factors such as available resources and project schedules can affect how LearnSMRT strategic planners prioritize their organization's goals.

Develop an action plan

At this stage of the strategic planning process, LearnSMRT stakeholders dive into the specific steps required to achieve their long-term goals. This may involve the development of many short-term business plans that support the overall strategic plan. Tools like a business strategy map can be used to visualize and map out the connections between strategic goals en route to your organization's goals of your fictional education company.

Implement your plans

After the strategic action plan has been fully developed, it needs to be implemented. This phase of strategic planning brings together team members from across the LearnSMRT organization to establish accountability, make operational adjustments, and determine the specific metrics to measure success.

Communication is essentialat this stage, and all employees should know what they are doing to achieve strategic goals and why they are doing it. Aligning strategic plans with organizational culture can help employees feel purposeful in executing long-term plans.

Update your strategic plan accordingly

No plan is perfect, and regular reviews and revisions are often required to ensure the strategy remains strong. Market changes can occur unexpectedly and jeopardize established plans. Reevaluate strategic goals as the business environment evolves. Regular metric reviews are important, and the Balanced Scorecard method can be extremely useful for identifying deficiencies and making updates accordingly.

5 ways to improve your strategic planning

We've looked at the different types of strategic plans and the high-level steps required to implement most strategic plans. But what about improving your strategic planning? Here are some important steps to consider:

1. Put planning first

Make sure your organization spends enough time charting your path to achieving long-term goals. This includes everything from resource allocation to consultation with stakeholders.

2. Involve employees

Involving employees in the strategic planning system is more than just a nice gimmick, it's a practical step in improving internal operations. Involving employees can help ensure strategies are achievable and potential roadblocks avoided. Recruitment, retention, equipment and technology issues are often best understood in the shop floor rather than the C-suite.

Finally,30% of respondentsnamed the failure to coordinate the units across the board as the greatest challenge in implementing the corporate strategy. Involving everyone in your strategic planning process can help facilitate this coordination better.

3. Fostering collaboration

To give your organization the best chance of success in executing your strategic plans, it is important to foster close collaboration between teams. This is usually easier said than done, but wide acceptance of strategic plans depends on the involvement of everyone in every department.

4. Recognize achievement

Your strategic plan won't get very far without recognizing and rewarding those responsible on a daily basis. As your long-term plans get underway, be sure to give employees and teams the credit they deserve for succeeding. It can be anything from a company meeting with an informal awards ceremony to a gift card or cash reward.

5. Always evaluate

Be sure to regularly evaluate progress toward your strategic goals. Without continuously monitoring key metrics, you won't know if your teams are actually achieving their intended goals.

Get extra help with Rodeo

If you're interested in robust strategic planning as part of your strategic management efforts, see what Rodeo can do for you.

Rodeo is an all-in-one tool that equips creative professionals with the features they need to simplify project management. Our robust software can support your projects at every stage, so you can spend more time building and less time tedious administration.

Rodeo can streamline your project management workflows by helping you:

• LightPlan and assign tasksto your team members
• track timespent on projects
• Create detailed budgetsupdated in real-time as your project progresses
• Createcustom invoicesAndestimatesand send them to customers directly from the Rodeo platform
• Access arich collection of reportson metrics like project profitability, employee productivity, time tracking and more

Combined with budgeting, estimating, invoicing, planning, time tracking and reporting in one easy-to-use tool,Rodeooffers you a truly comprehensive strategic management solution. You don't need to invest in additional third-party software to make your team more productive and your projects more profitable.