Strategic Planning Process

What Is Strategic Planning?

Strategic planning is the process and activities involved in communicating and defining the direction and strategy of a company, and making decisions related to generating, allocating, and utilizing the resources required to achieve that strategy. It incorporates the processes and procedures by which an organization's goals are defined, communicated, and executed.

Why Every Organization Needs a Strategic Plan

Organizations and businesses employ different approaches to generate revenue and become profitable. One thing they have in common is that they all need a clearly defined and strategic plan to attain peak profitability. Every organization needs to create and implement a strategic plan to guide its operations and engagements.

However, despite the significant role that strategic plans play in the success of organizations, not all companies operate with a clearly defined and communicated plan. It is crucial that the top management of a company be kept abreast of the strategic plan, but they're not the only ones that need to be kept in the loop. A company's workforce also has to be informed of the master plan so they understand the direction of the organization.

How Strategic Planning Differs from Other Planning

Strategic planning is fundamentally different from other planning processes in an organization because it employs a holistic, long-term approach — unlike the procedures used to execute single organizational projects. Strategic planning has a much wider scope, as it lays down the specific path through which set objectives will be achieved with organizational resources.

Control mechanisms are used to measure the efficacy of a strategic plan and also serve as a guide for plan implementation and modification as required. Strategic planning involves procedures and is itself a process that requires inputs and monitoring.

The Four Key Elements of Organizational Strategy

According to Michael Porter, four elements are key when creating organizational strategy: the strengths and weaknesses of a company, the values of organizational decision-makers, analysis of opportunities and threats in the industry, and expectations in society at large. These elements incorporate both internal and external factors.

Strategic Position and Readiness

This is the first step in the strategic planning process. The requirement at this stage is to determine whether the conditions at the company are adequate to create and implement a master plan. Possible hindrances also have to be considered so they can be avoided. This stage requires decision-makers to determine where the company is, where it is headed, and the specific methods to drive it toward the desired destination. A SWOT analysis is quite effective at determining an organization's readiness and position.

Develop Objectives and Create a Plan for the Company

Once the organization's position has been determined, the next step is clearly defining the objectives of the company. These objectives must be created with a consideration of the vision of the company and need to position it for achieving its goals. The techniques by which company objectives will be achieved have to be determined and outlined at this stage. Techniques for measuring performance also need to be determined here.

Data Collection, Review, and Plan Execution

Putting a company's strategic plan into effect is as important as creating a strategic plan in the first place. Data related to finances and sales projections and position need to be collected and analyzed before putting a plan into action. The plan has to be clearly communicated to everyone in the organization — and revisited as conditions evolve. Explore more on our strategic planning services and broader public relations expertise pages.