There is no specific hard and fast rule about exactly how often you should conduct strategic planning. However, with ever-shortening life-cycles, and what feel like every changing assumptions, executives are feeling the pressure to think strategically about every decision. Often their solution is to conduct “strategic planning” annually. These annual “strategic planning” sessions are more to explore emerging issues and tweak existing priorities plans and less of true comprehensive strategic planning efforts.
Long-range planning in which you create or significantly update your vision and strategic direction should be conduct every 3–5 years. This planning includes deep analysis of your market and an in-depth exploration of where you believe it is heading. It also includes a review of your current business model and what you should be doing more of and less of as you think about how you want to evolve over the next 3 -5 years. It is in these planning meetings that you discuss and decide how your business model will shift over time and where you first explore which aspects of your business should be eliminated or offloaded to make room for the new things you need to add. This vision-drive planning is deliberate planning; it sets a definite pathway that guides resource allocation and clarifies the ideal market position you strive to hold so you can achieve the metrics articulated in your vision.
Emergent planning is different. Annually, 2–3 months BEFORE budgeting begins, you should review progress on your (deliberate) long-range plans, discuss emerging issues and reconfirm your strategic priorities for the next operating cycle. It is in these planning forums that you discuss how to respond to changes in the assumptions and market conditions used to formulate the strategic thinking on which your long-range plan is based, but you do not rethink the strategic plan. If you decided to make changes in your strategic goals, like moving one up in the timeline or deferring others, this change is made because emerging conditions make it more favorable to do so, not because you are changing the goals or the long-range plan substantially. The annual strategic plan update confirms your vision and the priorities in continuing to make progress towards it while also informing how to build annual operating objectives. It should also outline the resource allocation challenges that will be debated and negotiated throughout the budgeting cycle.
This discipline of the strategic plan outlining the deliberate strategies and the annual strategic update exploring emerging issues and possibly updating the deliberate strategies keeps an organization balanced between staying vision-driven and responding to changing market conditions.
So, do you have your deliberate strategies outlined?
No? Then now is the time to conduct strategic planning to define your long-range thinking.
Yes? Then prepare to stay ahead of the curve by updating your strategic thinking and schedule a strategic update as a way to kick-off your annual budgeting cycle.
One caveat to this strategic planning rhythm. If there is a significant shift in your market, the economy or your leadership team, you will have to convene immediately to digest the strategic implications of your long-range planning to ensure you stay focused on the long game as you work to get back on track.
Prepare for your next strategy discussion with our free strategy session checklist.