Developing a strategic plan can seem like an overwhelming task, but the best place to start is by defining the strategic planning process. The definition of a strategic planning process is quite simply the process of envisioning a future and translating this vision into defined goals, objectives, strategies and tactics. To survive in business, organizations have to make tough decisions and create “battle plans” for success. It is hard to accomplish anything without a plan, but if you don’t understand strategic planning, clarifying the basics is a great way to start.
The biggest difference between the definition of strategic planning and the definition of long-term planning is that the strategic planning process begins with the end-goal and works backward. Rather than asking “What do we need to do at the higher level to get to our goal?” the strategic planner asks, “What do we do at the lower level to reach our goal?” Strategic planning must always look at the bigger picture. Often, long-term planning can be enveloped within a strategic plan.
When studying the definition of strategic planning, it is also important to make the distinction between a strategic plan and a business plan. A strategic plan should be more about the vision of the company than the quarterly figures. Oddly enough, this distinction is not included in many organizations’ definition of strategic planning, which can get confusing. The simplest of strategic plans includes a set of statements describing the purpose and values for the company, along with a set of statements on how to achieve targets the organization has set. To ensure that real, meaningful business results are achieved through your plan, always make sure that you include measurable and quantifiable business objectives.
Now that we have covered the definition of strategic planning, we are going to elaborate on our favorite strategic planning and execution management methodology —the Execution Flywheel. Most organizations use this six-phase design to approach to strategic planning and execution management. The most commonly utilized phases are Focus, Plan, Align, Forecast, Monitor and Report.
The first step of the Focus phase mandates the organization cultivate written mission, values and vision statements. This initial step is the most important. It is vital the organization has a clear idea of where the priorities and values of the company lie. While mission, values and vision statements are important to the planning process, the definition of strategic planning includes conducting both internal and external analysis during the Focus phase to develop consensus for the company’s strategic change agenda.
The Plan phase is where the organization articulates the short- and long-term goals, objectives, strategies, and tactics. Goals should be wide-reaching and long-term in focus. The objectives should support the goals, be measurable and quantifiable and include strategies and tactics that cause action. Understanding strategic planning terms is as important as understanding the definition of strategic planning itself.
The Align phase allows the organization to assign all plan elements to people within the company, ensuring that everything that must be carried out has an owner, firm due date and a clear deliverable. Each tactic should have a single person in charge of completing the tactic within a set time-frame. Never allow individuals within your organization to share assignments, as it minimizes accountability and impairs execution.
The purpose of the Forecast phase, which provides revenue and cost savings forecasts, as well as implementation costs, is to calculate the plan’s return on investment. It also allows plan assumptions to easily flow into the budget.
The final phases – Monitoring and Report – are devoted to execution of the plan, and can often be where most organizations fail. Monitoring includes the establishment of scorecards and dashboards to oversee performance, while Report focuses on management oversight of plan execution. Better than understanding the definition of strategic planning, leaders need to understand how to monitor and best execute their strategic plans.
When studying the Execution Flywheel and the definition of strategic planning, it is important to note that strategic planning is a way to define what it is you truly want for your organization. AchieveIt can help you get there; our cloud-based software is built on the six-phase design described here. It includes a suite of tools that allow organizations to Focus their plans, cascade assignments to individuals and report with a single click.