Organizations Have Specific Strategies And Policies To Achieve Success. One Of These Unique Methods Is Strategic Planning. Strategic Planning Is An Organized, Systematic, And Coordinated Approach That Is Used To Achieve Specific Goals.
The strategic plan allows organizations to more closely monitor the details of business process implementation and decision-making concerning short-term and long-term goals. This guide examines the importance of strategic planning, how it is designed and implemented, and shows why strategic planning has many benefits for organizations.
What is strategic planning?
Strategic planning is a set of interconnected and interrelated policies that describe how to manage business processes. More specifically, strategic planning identifies achievable goals through various metrics such as time management and resource allocation. Properly implemented, strategic planning improves operations, builds focus, sets priorities, and improves team collaboration.
Basic principles of strategic planning
Strategic planning is the cornerstone of business management and helps organizations achieve the visions they draw. The basic principles of strategic planning are as follows:
- Proper focus on human resources and resources.
- Change and adjust organizational policy.
- Align the goals of shareholders, managers, and employees.
- Solidarity and cooperation at all organizational levels to achieve a common goal.
Properly covered, it will withstand plenty of adverse conditions. However, given that industries are significantly different, there is no complete and comprehensive way to develop a strategic plan. Accordingly, strategic planning should be prepared by the business model.
Identifying different ways to prepare, implement, and pursue a strategic plan has many benefits for all organizations in all dimensions. To be more precise, organizations with strategy and planning can draw a roadmap to increase profitability, improve performance and develop business plans more accurately.
How to prepare a strategic plan?
The more accurate you are in high-risk planning, the more efficient your plan will be. Designing and preparing a strategic plan begins with the development phase. This step can take weeks or months. At this stage, you should pay attention to the details as much as possible, do thorough research and use the appropriate writing method to reduce any ambiguity and confusion.
If you are a member of the Strategic Planning Committee, you will need to work on the following steps to build a complete strategic plan:
- Analyze industry, consumer, and competitor trends.
- Perform SWOT analysis. SWOT is the title of the words Strength, Weakness, Opportunity, and Threat. This method is used in addition to strategic planning in analyzing the situation of organizations.
- Describe your vision for the plan you plan to implement.
- Explain the purpose of this program to other participants.
- Define short-term and long-term goals.
- Identify the key values and goals of different parts of the organization.
- Define capital budgets and staff needs.
- Decide on how to monitor the progress of business operations.
- Use the participation of all employees.
- Follow the process of getting things done regularly.
Now let’s examine each of the steps described.
1. Analyze industry trends, consumers, and competitors
The first step in organizational strategic planning is to align with the organization’s mission and goals. This is done by analyzing the industry, market, and competitor trends. The best way to start this process is to consider the external factors that affect the business instead of the internal factors.
These factors include the industry’s size, pricing trends, government regulations and licenses, consumer problems with products and services, competitors and threats along with their activities over the past six months to a year, and the industry’s growth rate. Most of this information is readily available.
The more thoroughly you study the details, the more effective the program you are implementing. Accurate knowledge of different industry angles and differentiating the brand from other competitors are two crucial aspects for business survival.
2. Perform a SWOT analysis
You should perform the SWOT analysis when the research phase is complete. This analysis identifies the strengths and weaknesses, your team or organization, opportunities, and threats. As with any strategic planning process, you need to take the time to consider each of these factors carefully.
SWOT analysis is used to evaluate the following factors:
- Identify Strengths: Think about where you are better than your competitors. Skilled staff, adequate financial resources, investors, industry growth, low barriers to entry into unsaturated markets, efficient infrastructure mechanisms such as well-designed databases, and profit margins are some of the things that give you a good competitive advantage.
- Identify weaknesses: Lack of capital, poorly trained employees, low-profit margins, high barriers to entry into new markets, weak infrastructure are clear examples of weaknesses. Again, SWOT analysis can create a brainstorming session and provide a solution to improve problems.
- Identifying Opportunities: Opportunities are areas in which you, your team, or your organization can thrive. Among the things that can be considered as opportunities should be enthusiastic investors, offering differentiated products from competitors, new products, new inventions, or anything else that can give you a chance to succeed in some way.
- Identifying Threats: Any factor that causes harm to the organization is a threat. One of the most common threats to an organization is a sudden change in trends that have been popular but no longer available, lack of liquidity, or declining product prices.
SWOT analysis focuses on both internal factors (strengths and weaknesses) and external factors (opportunities and threats).
Using SWOT analysis and other analytical tools is important because they allow you to understand the position and goals you are about to achieve in the future.
4. Prepare a mission statement
One of the first steps in strategic planning is to define the vision, values , and mission of the organization. The vision is the long-term goal of the business, and it must be set based on tangible facts.
Values are the beliefs that form the foundation of an organization and affect all parts of the business, from marketing strategy to organizational culture. Finally, the mission describes the goal that the organization seeks to achieve.
This step is one of the longest steps in strategic planning because you or the group must reach a consensus on defining all the top-level components of the organization. Making a mission statement can help the organization define and plan to achieve its goals.
A well-defined mission statement can promote transparency at all levels of the organization by defining core values and explaining why the organization exists.
These two aspects are fundamental aspects of strategic planning. In addition, some companies publish their statements online, which is a good source of inspiration for organizing an organization statement.
Please search on the internet for your favorite brand to see how they describe their core goals and values. The mission statement can be short or long. The main idea of the statement is to address why a business exists and what it can offer to its customers.
5. Prepare a vision statement
The vision statement should describe how to achieve the mission statement. To prepare a good vision statement, it is best to forget the industry literature and idioms and describe the statement in plain, plain literature to understand it. Unlike the mission statement, the vision statement is used to inspire staff within the complex. Writing a vision statement supports and protects the brand’s values, goals and mission.
To prepare an accurate vision statement, look for answers to the following questions.
- Where will the brand stand in the next five or ten years?
- How does the company interact with customers or improve their lives?
- What impact will the company have on the industry, the environment, and customers?
6. Define long-term and short-term goals
Once you have defined your mission and blueprint, consult with different parts of the organization about the goals you are going to set. These goals must be clear and have a clear timeline.
For example, the marketing team states that it will prepare five articles per day for its website and expects to receive 1,500 views in the next 30 days.
They can review analytical data each week to see how close they are to the goal. After completing the SWOT analysis and defining the organization’s core values, you can set short-term and long-term organizational goals.
Long-term goals should align with the organization’s mission statement, but short-term goals are milestones that help you reach your ultimate goal. Using the SMART framework can determine the achievement of the relevant goals.
The most important areas in which goals can create value are:
- Improve performance in processes
- Development of organizational culture
- Increase revenue
- Change or update the offered goods
- Support for new sales and marketing strategies
The most important aspect of goal setting should be that it is challenging and achievable. In addition, you need to have a way of evaluating your goals to improve them.
7. Define the core values and goals of the organization
Another part of strategic planning focuses on determining core values. This will help you prepare mission and vision statements. In other words, the mission statement and vision can help you discover the organization’s core values.
Typically, core values are one or two words (such as honesty, quality, reliability, creativity, and diversity) that describe an organization’s core beliefs. Thus, it is possible to derive the organization’s goals from these key values.
Each of these goals must be set annually so that different teams have the opportunity to achieve them. For example, the organization may aim to launch a new product line. Therefore, organizational goals for the R&D team may be to identify potential customer problems and provide products to solve problems.
Defining specific, measurable, and executable goals in different parts of the organization can make it possible to achieve them. In some cases, companies offer special benefits to teams that reach their goals ahead of time.
8. Define the budget, capital, and needs of employees
The last part of the strategic plan is determining employees’ budget, capital, and needs to achieve the set goals. Each part of the organization must be involved in determining the needs for the successful implementation of its role, following the organization’s mission.
9. Decide on how to monitor progress
One of the most important parts of strategic planning is building a mechanism to track progress. You can do this by preparing and reviewing reports regularly. Typically, different departments of an organization prepare different reports that you can use in the planning process. Then, use these reports to document progress.
10. Use the participation of all employees
All employees are involved in the success of an organization. Therefore, the program you develop should be made available to all team members and their feedback received. Employees may have more information about what the company can or cannot do. Interacting with employees helps keep all employees moving toward the same goals, and the organization values what they do.
Standard sections of strategic planning
As mentioned, strategic planning for different industries has its own rules. However, some sections are standard in all strategic plans.
These sections include the following:
- Executive Abstract: Summarizes the purpose of the strategic plan. This summary should be short and precise. In some cases, it is best to write this section after completing the other sections of the program to include all the important points.
- Signature page: This page is the place of the signature of all-important shareholders.
- Company Description: This section includes a brief history of the company, products, and services it has provided. Brand achievements are also including in this section.
- Mission Statement and Vision Statement with Key Values: The core values can be found in this section to form the Mission Statement and Vision in an integrated format.
- SWOT and strategic analysis: To introduce the goals and plans, in this section, it is better to describe the SWOT analysis along with the researches that have influenced the performance of other parts of the plan.
- Executive Plan: The executive plan clearly shows how you intend to achieve your goals and vision in the allotted time. In addition, it is better to explain the actions and how to implement the program in the organization.
- Operating capital and budget: Accountants and financial professionals can help you determine the financial capital you need to run the program. Items include project cash flow, expenses, income, return on investment and contingent liabilities, equity, and the loan you receive to include this section.
- Implementation: This section should explain how you want to introduce your program to departments of the organization, employees, and others.