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Strategic planning is the process through which an organisation defines a bold vision and develops a plan with objectives and goals to achieve that future. A great strategic plan defines your organization's direction, how you'll win, who will do what, and how you'll review and adapt your strategy development.
What is the definition of a strategic plan? What should be included?
A strategic plan, or effective business strategies plan, should include the following:
Organization's vision for the future.
A clearly articulated mission and value statement.
A current state assessment of your competitive environment, including new opportunities and threats.
What strategic challenges do you face?
A growth strategy and market share breakdown.
Long-term strategic goals.
An annual plan that includes SMART goals or OKRs to help you achieve your strategic objectives.
Clear measures, key performance indicators, and data analytics are used to track progress.
A defined strategic planning cycle, including how you will review, refresh, and recast your plan every quarter.
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The strategic management process involves guiding your organisation from point A (where you are now) to point B (your vision for the future).
Part of that journey is strategy development during strategic planning, and part is execution during the strategic management process. A good strategic plan determines "how" you will travel the chosen road.
Effective execution ensures that your strategy is reviewed, refreshed, and recalibrated in order to reach your goal. The planning process should not take more than 90 days. However, move at the pace that works best for you and your team, and use this as a resource.
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Here you can explore the 5 easy steps to develop a successful strategy plan:
Begin by outlining the organisation's long-term vision. Define: "What would success look like in five years?" Draft a mission statement that explains the organisation's values and how you plan to achieve the vision. What values drive mission, vision, and purpose?
Purpose-driven strategic goals articulate the "why" behind what the company is doing. It connects the vision statement to specific objectives, establishing a link between larger goals and the work of teams and individuals.
This stage involves determining an organization's strategic position.
During this time, data is collected from both internal and external environments, as well as from relevant stakeholders. Including employees and customers in the research.
The task is to collect market data through research. One of the most important aspects of this stage is a comprehensive SWOT analysis, which entails gathering people and perspectives from all stakeholders to determine
Strengths
Weaknesses
Opportunities
Threats
Calculate the company's value using financial forecasting. While a forecast is almost certainly a moving target influenced by the five forces, it can assign initial expected measurable results from the plan or ROI: profits/cost of investment.
The above research and assessment will assist an organisation in setting goals and priorities. Too often, an organisation's strategic plan is overly broad and ambitious. Planners must ask themselves, "What kind of impact do we want to have, and in what time frame?" They must narrow their focus to the most impactful objectives.
The next stage of operational planning involves developing strategic objectives and initiatives. In their balanced scorecard methodology, Kaplan and Norton suggest that there are four perspectives to consider when identifying the conditions for success. They are interconnected and must be evaluated together.
Financial: Such considerations as increasing shareholder value, revenue, cost management, profitability, and financial stability guide strategic initiatives.
Customer satisfaction: Objectives can be defined by identifying targets related to one or more of the following: value for money, best service, increased market share, or providing customers with solutions.
Internal processes: Include operational processes and efficiencies, investments in innovation, total quality and performance management, cost reductions, workplace safety improvements, and process streamlining.
Learning and growth: Organisations must consider whether initiatives for human capital, learning, and growth are in place to sustain change. Employee retention, productivity, building high-performing teams, and developing a pipeline of future leaders are all possible objectives.
It's a team effort. The plan's success is directly proportional to the organization's commitment to educating and engaging its entire workforce in strategy execution. People will only commit to strategy implementation if they are aligned with the organization's goals. When everyone is working in the same direction, cross-functional decision-making becomes simpler and more aligned.
A strategy map is an effective tool for illustrating the cause-and-effect relationship between those perspectives and the 12 to 18 strategic objectives. Because most people are visual learners, the map provides an easy-to-understand diagram for everyone in the organisation, fostering shared knowledge across all levels.
Strategic initiatives are determined after the strategic objectives have been established. These are the steps that the organisation will take to achieve its objectives. They may discuss initiatives related to scope, budget, brand awareness, product development, and employee training.
Evaluation of whether the plan was successful. It tracks activities and progress towards objectives, allowing for the development of better plans and objectives to improve overall performance.
Think of strategic planning as a circular process beginning and ending with evaluation. Adjust a plan as necessary. The frequency with which the plan is reviewed maybe once a year for many organisations or quarterly for those in rapidly evolving industries.
The strategic planning meeting may have a reputation for being just another task, but it's worth reconsidering. With the right action plan and some strategic thinking, you can revitalise your business environment and begin planning for success.
