I’ve written before about the importance of careful, meticulous strategic planning. Basically, this is the process wherein leaders and managers set the short-term and long-term goals for the organization. It also involves setting metrics; clarifying expectations; allocating the resources that will be used in pursuit of those goals; and communicating the plan to the entire team, ensuring you have everyone’s buy-in.
In my past writings about strategic planning, I’ve acknowledged that it’s a large, potentially intimidating job to take on. Today, I’d like to help make the process a bit more digestible. I’m going to offer six steps that I believe are incredibly helpful to the strategic planning process. While this may not be a comprehensive overview, it should at least provide you with a big-picture summary.
Essential Steps in Strategic Planning
1) Assess trends.
Your business doesn’t exist in a vacuum, and neither does your strategic plan. Before you get too far into the process, I’d recommend putting your finger to the wind and see which way the trends are blowing. Specifically, you’re going to want to evaluate trends in your industry; trends among your competitors; and trends among your customers.
There are some key questions that can guide you down this process, including:
- How big is your industry?
- Is your industry growing? Or is it in decline?
- Who are your closest competitors?
- What moves/initiatives are those competitors making?
- How are competitors branding themselves?
- What are the pricing trends in your industry?
- What are the products and services your customers are asking for?
Carefully researching the answers to these questions can give you a foundation for success in your strategic planning efforts.
2) Do a SWOT analysis.
A SWOT analysis can also guide your strategic planning efforts. If you’re not familiar with this term, it stands for your company’s Strengths, Weaknesses, Opportunities, and Threats.
- Your business strengths might encompass your market position, products, customer base, marketing channels, or the financial resources you have available to you.
- Weaknesses could include anything from poor market position to inadequate staffing, as well as bad reviews, customer complaints, a low reputation, etc.
- Business opportunities can include the pursuit of M&A activity, untapped channels for customer acquisition, new product launches, new marketing endeavors, and more.
- Threats, on the other hand, can range from departing staff members, a bad economy, or competitors who are dominating more and more of the market share.
Again, thoughtful analysis can put you on a path to effective strategic planning.
3) Define your mission and your vision.
One of the outcomes of your strategic planning process should be a clear articulation of your company mission and your vision.
And no, they’re not the same thing. Your mission statement basically declares why your company exists. The vision statement tells people what you’re doing and where you’re headed in the future; it is more aspirational in nature.
I really recommend having both of these statements in place, as they can provide good rallying points for you and your team members.
4) Set business goals.
Your mission and vision statements will point you down a certain road. And once you’re headed in the right direction, your next step can be to set some business goals.
These might be specific goals, like hitting a certain financial benchmark. But they can also be a little more open-ended and high-level. For example, your goals might be to find new revenue streams, to innovate a new product, or to achieve a certain kind of organizational culture.
Develop goals that align with your mission and vision, and make sure you have buy-in from your entire team.
5) Set specific goals for specific teams and departments.
Once you have your big-picture goals in place, you can then break them down into smaller, more specific goals for different teams or departments.
This is such a critical phase of strategic planning, because it allows everyone who’s part of your organizational culture to see how their work contributes to shared success.
For example, let’s say you set a goal of launching a new product. How will the sales team contribute? What about marketing? And in what ways can HR underscore this goal? Provide some clear avenues for everyone on your team to play a part.
6) Determine resource needs.
I mentioned at the start of this post that asset allocation is a big part of the strategic planning process. That’s where we find ourselves here. As you consider the goals you’ve set, it’s important to ask yourself what each division or each employee will need to accomplish those goals. This includes allocation of staffing, resources, and budget.
Think about the ideal resource levels you’d need to achieve your goals. If you have those resources available, great! If not, you’re faced with the option of either setting more manageable goals or raising some new capital.
Either way, clear resource allocation is crucial to the strategic planning process.
This article originally appeared in Dr. Rick Goodman’s Blog.