Strategic planning refers to an organization's process of defining its direction and making decisions on allocating its resources to pursue this strategy. This typically includes developing the organization's vision, mission, objectives, and strategies to achieve them over time.
Strategic planning can be a complex process and usually involves multiple steps:
- Situational Analysis: The first step in strategic planning often involves a situational analysis, which can include various forms of research and data analysis to understand the current state of the organization, the environment in which it operates, and the opportunities and challenges it faces. Tools like a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis or PESTEL (Political, Economic, Social, Technological, Environmental, and Legal) analysis can be used here.
- Developing Vision and Mission Statements: These statements set out the organization's overarching direction. The vision statement describes where the organization wants to be in the future, while the mission statement describes the fundamental purpose of the organization, outlining why it exists.
- Setting Strategic Goals and Objectives: Based on the vision and mission, the organization should then set clear, measurable, and actionable strategic goals and objectives. These goals and objectives are typically long-term and should align with the mission and vision of the organization.
- Strategy Formulation: Based on the goals and objectives, the organization will formulate its strategies, which are broad plans for how it will achieve its goals. This could include different strategic options like market penetration, product development, market development, or diversification. It may also consider strategic partnerships, mergers, or acquisitions.
- Implementation Planning: The organization will need a detailed plan for how it will implement the strategies. This includes assigning responsibilities, resources, setting timelines, and determining how progress will be monitored and evaluated.
- Monitoring and Evaluation: This is an ongoing part of strategic planning. The organization needs to regularly review and assess how well it is progressing toward its strategic goals, and adjust its plans as needed based on this evaluation. Key performance indicators (KPIs) can be established for this purpose.
- Strategic Review and Adjustment: Strategy isn't a fixed, one-time thing. The business environment changes continuously, and the strategies must adapt. Regular strategic reviews are necessary to assess whether the chosen strategy is still valid or if adjustments are required.
Effective strategic planning can provide a sense of direction and outline measurable goals. It can be a powerful process for envisioning a desired future, and translating this vision into broadly defined goals or objectives and a sequence of steps to achieve them.
