Module 1

Strategic Planning

Introduction
Every organization has grand goals on their business agenda. However, there’s a long way between
formulating those goals and seeing the results of their successful accomplishment. A lot of things can happen
in-between – the project can get side-tracked, the timeline may change and new threats may emerge. To get a
better sense of what needs to be accomplished and how, most managers regularly engage in strategic planning
(short and long term).

What is Strategic Planning?

A strategic plan is a document that reflects how a company plans to function and grow over a significant
period of time, usually three-to-five years. It is based on a mission/vision statement, stated core values, and
goals.

A strategic plan also includes all the steps an organization needs to take in order to get where it needs to be.
Why is strategic planning important? Because it focuses on an entire organization on long-term goals and
allows managers and supervisors to develop plans that will work toward meeting them.

There are many benefits to strategic planning:

∙ It allows a company to be proactive, rather than simply engaging in tasks randomly. ∙ If the process is
conducted well (inclusion of all stakeholders in the strategic planning process), there is buy-in by leaders
of all functions of a business.
∙ It determines the allocation of resources in a way that promotes the plan.
∙ It lets an organization measure where it is and how it has progressed toward the objectives it has set,
and then to modify accordingly.

Strategic Planning Misconceptions

There are many strategic planning misconceptions. From not having enough time or thinking it only benefits
larger businesses, to fearing you’ll put your business on the wrong path, there are a variety of reasons why
business owners may be wary of strategic planning. But don’t be alarmed; strategic planning can help your
business—big or small—and the benefits far outweigh any perceived negatives.

Regardless of the size of your business, a strategic plan is beneficial. Whether you are a small business or a
large corporation with hundreds or thousands of employees, strategic planning helps you make sure the
company is headed in the right direction.

But how do you know if you’re steering the company in the right direction? The beginning phases of strategic
planning focus on research and discussions. The decisions you make during strategic planning aren’t based on
assumptions; they’re based on research and information you’ve gathered while talking with your employees
and people outside of your company.
The strategic planning process may seem daunting at first, but when you understand what’s involved and how
to do it, it’s not that complicated. It takes time, but the amount you invest in the process pays off when
everyone in your company works toward accomplishing the goals and objectives you’ve laid out.
The process doesn’t stymie creativity either. When you meet with your employees for strategic planning,
you’re asking everyone to have a discussion and brainstorm ideas. The strategic planning process puts
everyone’s minds together to think of creative ideas.

If you go through the strategic planning process once, don’t think you won’t have to do it again. The strategic
plan is a living document; it should change over time. It’s not uncommon for business owners to create a
strategic plan with their employees and rarely—or never—revisit the document. Reviewing and evaluating
your strategic plan regularly will help keep you accountable and on track to achieve your goals and objectives.

Business plan vs. Strategic plan: What’s the Difference?

Strategic plans should not be confused with business plans. A business plan is a document that is developed
when launching a business describing the business model and its components, explaining the business
potential and attempting to raise capital (loans or investment). Once a company is established (up and
running), it is time for a detailed strategic plan that would outline growth and perhaps digital transformations.

What Makes Strategic Planning Successful?

Successful strategic planning involves a team effort among you and your employees, as well as among you and
your vendors and other outside people. The more you engage your employees with strategic planning, the
better they’ll understand the strategy you want to have for your business.

Strategic planning also needs to be flexible. While it’s necessary to have goals and objectives for your business,
you also have to be able to adapt to changes. It may take you longer than expected to achieve a particular goal;
recognize that this isn’t an issue and that you can incorporate changes to your plan to put you in a better
position to succeed.

When strategic planning is successful, everyone in your business is on the same page with the business’s
direction and goals. Each individual understands what makes the business stronger and what needs to be
worked on. And it’s more likely that each person wants to contribute to the business’s growth and success.

When Strategic Planning Should Occur?

There is no single time that is right for all businesses, but, rather, it depends on the company’s unique
situation and its industry. But there are certain times when it’s worth to think about it:

∙ If the industry is evolving quickly and competition is becoming brisk.

∙ At the time of product launch, if the products/services are fully developed, as part of the go-to market
strategy.
∙ At the beginning of a new fiscal year.
∙ If government regulations are causing a change in process, production, etc.
∙ If the company itself is contemplating a new initiative.
∙ If a previous strategic plan is old and in need of re-evaluation.
So, how does a manager go about designing a strategic plan? The first step would be to choose the right
model or framework.

Where Do Strategic Plans Go Wrong?

Strategic planning is an ongoing commitment. Even if you go through an initial round of strategic planning
and it leads to the development of your business’s first strategic plan, it’s still not finished. The plan has to be
implemented.

Strategic plans also can go wrong if the goals and objectives you set are unrealistic. Every business owner
wants to see their business grow and succeed, but if you set an overly ambitious growth rate, it could
discourage you and your employees.

A successful strategic plan requires commitment. Your entire team needs to be focused on the business and
carrying out the strategic plan. If the strategic plan isn’t being used regularly or as the foundation of the
business, you and your employees can lose sight of the company’s direction and goals.

The Basics of Strategic Planning: Models and Frameworks

All strategic plans sit atop of a model and a framework. A model is a structure that you design for your plan,
while the strategic planning frameworks are the details that you place within that model to achieve and
evaluate progress toward the goals of your plan – for example, specific objectives, action plans, resources, and
evaluative process.

Over the years, a number of models and related frameworks have been developed. So, let’s take a look at
some of the most popular ones.

Strategic Planning Models

The Basic Plan: Open up with a mission statement, formulate the mid-range goals, and specify strategies for
achieving these. Sometimes, loftier goals may be divided into smaller strategic objectives. In any case,
however, there should be action plans for each objective, spelling out what is to be done, when it will be done,
and who will be responsible for each task.

The Cascade Strategy Planning Model: The model begins with a vision statement, much like the mission
statement in the model above. It states why the organization is in existence. Beyond this, the structure
includes value statements/core beliefs, areas for focus (goals), and then specific objectives that are translated
to action plans or projects. The model includes lists of KPI’s and how those will be measured.

The Scenario Model: The idea behind this model is to construct a variety of scenarios that could occur due
to external events or changes – regulations, demographics, etc. – and make plans for addressing those issues.
The business identifies its vulnerabilities or threats, including the best and worst-case outcomes, and then
develops a series of action plans for each one. Usually, the scenario model attempts to anticipate issues that
might be faced over a long period of time, generally three-to-five years.

The Goal-Based Model: As the title implies, organizations establish prioritized goals/objectives, and then
align them with respective action plans. Some goals will be short-term, some – intermediate, and some long-
term. The structure is created after goals a prioritized and followed by action plans for achievement. This
model also includes monitoring and assessment of progress at stated intervals.

Strategic Planning Frameworks

Remember, frameworks are the actions you will take as you develop your strategic plan and the details that
will go into its structure. Here are some of the popular ones in strategic management:

SWOT stands for strengths, weaknesses, opportunities and threats. Strengths and weaknesses are internal conditions;
opportunities and threats refer to external forces. Identifying each of these elements will point out to the
organization their areas for growth and improvement are and will assist them in developing the goals for their
strategic planning.

PEST is an acronym for Political, Economic, Socio-cultural, and Technological. These are all external factors
that could impact a business, for good or bad. They are identified and plans then made to respond to each
factor.

Gap Planning: As the name implies, the gap planning framework allows an organization to identify where it
is now and where it would like to be at some point in the future. This framework is generally used when
internal, not external, conditions can be changed/ improved.

Blue Ocean: Organizations often live in a red ocean – an environment in which there is lots of competition,
and strategic goals must relate to competing in an existing marketplace, beating that competition, and working
to gain more of an existing customer base. The goal of this framework is to determine how an organization
can move into a blue ocean of new marketplaces and new customer bases.

VRIO stands for “value, rarity, imitability, organization.” The framework allows a company to identify
opportunities for growth, how to become more competitive with products/services that cannot easily be
imitated, and how an organization can be structured to take advantage of the value and rarity it has planned
for.

How to Write a Strategic Plan Using The 7 Elements Technique

Strategy development and planning are complex tasks and it’s easy to approach them from the wrong angle.
The easiest way to approach this task is to base your strategic planning outline around the following 7
elements.

1. A Vision Statement
This is your “big” statement, taking into account what the ultimate goal for your business is. It’s what you
want when you finally can say, this organization is a great success.

Here are several inspiring vision statements for reference:

∙ Teach for America: One day, all children in this nation will have the opportunity to attain an excellent
education.
∙ WWF: We seek to save a planet, a world of life.
∙ Toms Shoes: The responsibility of providing for the comfort of children in impoverished regions
worldwide.

2. The Mission Statement

A mission statement is one of the key elements of a strategy. It helps to formulate and formalize what your
organization does, why it does what it does, and who it does it for. What value does your product or service
bring to your target customers? What gap in your niche/industry are you filling? How will you improve
people’s lives through your product or service? Brainstorm answers to these questions as part of your strategy
development session.
3. Core Values
These relate to how you intend to do business and usually reflect a larger picture. Are you committed to
product quality? How about diversity? Are environmental sustainability and social responsibility a part of your
company’s actions and behaviors? Is full customer satisfaction an abiding focus?

4. SWOT Analysis
Performing a SWOT analysis will help you understand how you currently stand out in your niche, what will it
take to grow your business further and what vulnerabilities and risks you should address. A standard SWOT
analysis accounts for both internal and external factors.

5. Long-Term Goals
Looking beyond just the next year is critical for a business that intends to grow. These may not necessarily be
included in your current strategic plan, but you must have those in mind as you develop annual
goals/objectives. And you may want to develop a three or five-year strategic plan and then strategic sub-plans
on an annual basis.

6. Shorter-Term Goals
These should usually be annual in nature, and they may relate to various parts of an organization, depending
on its needs. You might have an annual sales increase goal; you might develop a goal that relates to bringing
technology up to date to streamline supply chain management or customer service.

7. Action Plans
Next, for each goal you’ll have to develop an action plan that accounts for the following:

∙ What activities will occur to bring about the change?

∙ Who is responsible for the activities that will take place?
∙ What is the timeline for the completion of the activities?
∙ What resources (money, staff, etc.) will be required?
∙ What stakeholders need to be kept informed of activities and progress?

Once you’ve developed a draft, ask the following questions:

∙ Is the plan clear, and do all participants understand exactly what their roles are?
∙ Have any outside participants been included (e.g., are there regulatory agencies that must be involved or
communicated with)?
∙ Does the plan anticipate potential events that could have positive or negative progress? ∙
Is there an activity in place to evaluate progress and success?

These 7 elements are sufficient for creating a detailed 3- to 5-year strategic plan. However, you can also settle
for a shorter, more agile version – a one-page strategic plan.

How to Create a One-Page Strategic Plan (OPSP)

Can this even be done, given all that must-go into a strategic plan? The short answer is yes. Verne Harnish,
CEO of Gazelles consultancy, originally popularized this concept. His main idea is that if you want to ensure
that all people in your company are on board with the new strategy, you should be able to fit it into just one
page.

There are plenty of OPSP templates that a manager can use to develop this type of plan, and here are a few
tips as one is completed:

∙ Include mission/vision statement(s) and goals (targets) – include long-term goals and from those the
focus goals for the next years.
∙ Answer the questions who, what, when, where, how, and why relative to goals/action plans. ∙ Ask
and answer the challenging questions: Should We do this? Why? These identify the core values. ∙ List
action plans and responsibilities, as well as time frames.

Note: Full action plans will obviously include much more detail than space will allow on the OPSP. These can
be developed separately, including stakeholders in the process, and available for anyone to view if and when
they wish.

Strategic planning is a complex process. It involves many steps and many key elements of a plan, no matter
what specific frameworks or templates are chosen for the design and development. To recap, the keys to
successful planning are the following:

∙ Involve as many stakeholders as possible, especially those who will be responsible for managing the
implementation and the action plans.
∙ Involve representatives from top to bottom of an organization, so that there is much buy-in and sense
of ownership as possible.
 ∙ If a business is new to this process, it may be wise to bring in a strategic planning consultant for the
initial plan development.
∙ Without the element of measuring progress and achievement, a strategic plan is just a document to go
into a file. Focus and accountability will just not happen.

Most of all, remember this: strategic plans are not inflexible documents. Internal and external environments
change; things just happen. Re-visiting, modifying, and updating will always be necessary.

References:

https://slidemodel.com/strategic-planning-overview
https://sba.thehartford.com/business-management/what-is-strategic-planning