The Strategic Planning Process: 10 essential steps for success (2024)

"Strategy is the direction and scope of an organization over the long-term which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations"- Johnson and Scholes

To move the needle, you’ve got to have a plan. A strategic plan at its best helps an organization or small business determine where they excel and where they can differentiate – and as a result, understand where to spend their time and resources.

Entering into the strategic planning process can seem daunting, but if it is done and managed well it can be surprisingly straightforward. In addition, it serves as the road map for all business decisions ahead.

As a strategic planning facilitator, I always recommend 10 key steps. Here they are in brief:

1. Determine who needs to be in the room

   The strategic planning process usually occurs over a two- to three-day time period. Typically senior management is in the room. You may also want to consider key contributors to invite for certain segments of the discussion where their input would be helpful.

2. Identify a facilitator

   Choosing an outside facilitator (or someone internally who is not a part of the working group) is key so that the working team can be freed up to contribute without having to deal with meeting logistics.

3. Define terms

   Prepare a glossary of terms for strategic planning elements like: Strategy, Business Model, Vision, Mission, Culture, Tactics, etc. It is surprising how these terms are often defined differently for different people. Get everyone on the same page.

4. Assess the environment

   Before launching into what you want in the future, determine what the present looks like for your organization.

   • Conduct a SWOT to assess the current situation – your organization’s strengths, weaknesses, opportunities and threats
     
   • Analyze your peers
     
   • Explore market conditions and competition
     
   • Understand the political, economic, social and technological environment in which you do business

5. Answer six key strategic questions

   • Direction – Where is the business trying to go long-term?
     
   • Scope – Which markets should we compete in?
     
   • Advantage – How will we do it better than anyone else?
     
   • Resources – What will be required for success (talent, skills, assets, finance, relationships, technical or operational competence, facilities, etc.)?
     
   • Environment – How are external environmental factors affecting the business’ ability to compete?
     
   • Shareholders – What are the values and expectations of stakeholders?

6. Know how you will differentiate

   As strategy guru Michael Porter once said,Strategy is about making choices, trade-offs; it’s about deliberately choosing to be different.What is it that you do better than anyone else? Determine the space in which you want to differentiate. For instance:

   • Price – Do you intend to be the lowest-cost provider? (Think Wal-Mart)
     
   • Product – Do you intend to provide products or services that are unique and valued by consumers? (Think GoPro cameras or Apple)
     
   • Process – Will you deliver products and services faster and more efficiently than others? (Think Netflix or Amazon)
     
   • Service – Are you offering a customer experience that is memorable and distinct from the competition? (Think Zappos or Nordstrom)
     
   • Cause – Do you intend to be an environmental steward? (Think Whole Foods or Tesla)

7. Establish your vision, mission and values

   While you may currently have a vision, mission and value statement, it can be important to examine them through the lens of where you are headed, as directed by your new strategic plan. If you currently don’t have these overarching banners, this is the time to create them. Remember -

   • Vision – Represents the future state of the company and serves as inspiration and the framework for strategic planning. It should answer the question, “Where do we want to go?”
     
   • Mission – Represents a description of the company’s purpose and values and answers the question, “Why do we exist?” It describes how the organization will go about achieving its vision.
     
   • Values are an organization’s operating philosophies, principles, or behaviors that guide its internal conduct as well as its relationships with the external world.

8. Create Commitments, Initiatives and Tactics

   It is essential to determine how you’d like the final product of the strategic plan to look. Many end up with multitudes of PowerPoint presentations in three-ring binders that collect dust over time. Work towards making the strategic plan accessible to all. One way to achieve that is to create:

   • Commitments – these represent the overarching organizational goals that identify the major areas of focus for success (Examples might be: Become a Regional Best Employer; Achieve a Customer Engagement Score of 80%, Receive National Recognition for Corporate Citizenship, etc.)
     
   • Establish the key initiatives that will help you drive the success of the commitments.
     
   • Develop tactics to accomplish the initiatives.

9. Define accountability

   A strategic plan is just a document without the hearts and minds of those responsible for implementation. Ensure success by assigning roles and responsibilities for all initiatives and tactics – along with deadlines for completion. Ask, “Who owns this?”

   This final step is perhaps the most important and it’s the area that tends to lose traction with time. An organization must apply rigorous discipline to measuring the progress against the plan. Every time the senior team meets there should be an opportunity for accountable team members to report on progress, milestones, challenges and actions.

10. Measure

    This final step is perhaps the most important and it's the area that tends to lose traction with time. An organization must apply rigorous discipline to measuring the progress against the plan. Every time the senior team meets there should be an opportunity for accountable team members to report on progress, milestones, challenges and actions.