What is Strategic Planning and Why is it Important?

The Steps in a Strategic Planning Process

All leadership teams can produce a brilliant strategic plan by focusing on these essential steps.

The Strategic Planning Model

A Strategic Planning process should stimulate creativity and provide an environment to explore new ideas that will propel the organization forward with renewed excitement and optimism. To accomplish this, planning groups need to interrupt their typical business management patterns to open gaps in their thinking. This “gap” is where groups gain new insights and fresh ideas for strategy development.

The Strategic Planning Model defines the structure to guide the steps a strategic planning process should follow.

By structuring your strategic planning process around these three steps, you will deepen your team’s strategic thinking and leverage your raw materials to a transformative level.

This will, in turn, propel your organization forward to new levels of success, and your team will be prepared for their epic journey.

The power of this approach lies in its narrative structure. It turns strategic planning from a dry, analytical process into an engaging story of transformation and growth.

This narrative approach can help to:

1. Engage emotions as well as intellect, increasing buy-in across the organization
2. Provide a clear and memorable framework for understanding the strategic plan
3. Inspire and motivate team members by casting them as heroes in the organization’s story
4. Create a sense of shared purpose and collective mission

By framing your strategic plan as an epic journey, you create a compelling narrative to drive your organization toward its envisioned future.

TOP

FAQs and Misconceptions

Strategic Planning has many terms, concepts, and models. Frequently, the terms are similar, and the distinction between concepts and models is subtle.

This section is intended as a resource for definitions and an orientation to many of these elements inherent in strategic planning. It is by no means definitive, but it is based on over 25 years of leading teams through the complexity of strategic planning, so battle-tested.

Check back from time to time, as this section will continue to grow as we find more to share!

What is Strategic Planning?

Strategic Planning is the management process used to create a long-range plan of how to achieve an ideal end-state or a set of goals, often called a vision. This long-range plan is called a Strategic Plan.

What is a Strategic Plan?

A strategic plan is a document that summarizes all the critical strategic thinking from the strategic planning process. It defines where the entity sees itself today and the challenges it is facing. It also describes the ultimate end-state it wants to create (its vision), the high-level path it plans to take to move from where it is today to its vision, and finally, the key near-term priorities to begin this journey.

Strategy Vs Plan?

The word "strategy" is overused today. So, how do you know what you need, a strategy or a plan?

A strategy is the overarching narrative that guides an organization's journey from its current state to a desired future state. It's a high-level story of how you intend to overcome challenges, leverage strengths, and navigate the competitive landscape to achieve long-term objectives. A strategy provides direction and purpose, serving as a compass for decision-making across all levels of an organization.

A plan, on the other hand, is a detailed roadmap that outlines specific actions, timelines, and resources required to achieve a particular goal or objective. It's the tactical component that brings a strategy to life, focusing on the who, how, when, and how much of execution. A plan is typically more short-term and concrete than a strategy, providing a clear path for implementation.

How does a Business Plan differ from a Strategic Plan?

A business plan is a detailed planning document that defines how to achieve a specific milestone or objective for an entity within the strategic planning period. It covers specifics about product/program development, marketing tactics, revenue/growth targets, and the resource requirements to execute these specific plans. It is often used to collaborate with partners or to secure funding for a specific unfunded objective in the plan. It is typically more specific than the strategic plan, and it may omit elements that are not relevant to its audience.

As already stated, a strategic plan charts the course as defined by the plan's strategic goals. It covers a planning period of up to 10 or 15 years and outlines the high-level story to achieve a comprehensive set of goals by the end of this period. 

A business plan details the voyage by guiding near-term decisions on priorities and resource allocations, whereas a strategic plan sets out the criteria to make long-term or higher-stakes decisions.

TOP

What is Strategy Development?

Strategy development is the exploration of ideas and plans to achieve a long-term goal or set of goals. 

It is the process of exploring, building out, and testing various alternatives and options. To many, this non-linear and often iterative process can feel chaotic and unproductive, but it is strategic thinking in action. It is how "crazy" ideas become brilliant plans and how teams deepen their understanding to lead strategy execution. 

Are Strategic Planning and Strategy Development the same thing?

They are not the same thing.

Strategy development is the exploration of ideas and strategies used to create a strategic plan or to develop implementation plans for a strategic goal included in the strategic plan.

Strategic planning uses strategy development structures and techniques to build a strategic plan. This can take many forms, such as:

• Prioritizing many objectives into a phased and staged approach and then developing plans for each objective, taking time to integrate at specific milestones. This is the classic strategic plan structure.
• Developing multiple ideas in parallel and then integrating the highest-ranked plans into a single strategic goal. The strategy development technique here is called scenario development. 
• Creating a series of plans to achieve one strategic goal over time. In this case, strategy development would start with one goal, then the development of many plans with a series of objectives over time to ultimately achieve a single strategic goal. This approach is most typically aligned with cross-organization initiatives.

Building a strategic plan is a complex and iterative process. This means that it provides an opportunity for leaders to engage in more complicated strategic thinking.

What makes leading a strategic planning process especially challenging is keeping track of, monitoring, and leveraging all strategy development activities efficiently and effectively so that a new, truly brilliant strategic direction is created.

TOP

What is the difference between Strategic Planning and Problem-solving?

These two distinct management processes are designed to produce different results.

Strategic Planning Flashcards

A few additional terms for you!

Hover over each card to view the definition

Using your Strategic Plan to Improve Decision-making

From a proactive perspective, a strategic plan provides the priorities and goals to guide operational plans as well as annual or multi-year resource allocations. It helps to guide management decisions such as:

• Which long-term goals must we include in this year's plans and budgets?
• How do we allocate our resources to their highest and best use to meet current goals and prepare us to take on long-term goals?
• What activities or resources should be eliminated or redeployed to align with long-term goals?
• What new competencies do we need to add to our operations?

From a responsive perspective, a strategic plan provides the criteria to decide on issues, opportunities, ideas, or threats that emerge after the strategic planning process ends. No planning effort can incorporate all future conditions, and in today's highly fluid and dynamic operating environments, leadership teams must embrace the duplicity of being vision-driven and market-responsive.

Without making this dual focus visible to those they lead, leadership teams often are criticized for changing direction or not sticking with their decisions. The answer is a strategic decision-making discipline that uses the organization's strategic plan to make decisions consistently.

A strategic plan defines a deliberate plan and priorities to achieve long-range goals. It also provides the criteria for applying strategic decision-making discipline as issues, ideas, opportunities, and challenges emerge between planning cycles.

TOP

What are the Causes of Strategic Plan Failure?

Strategic planning is arguably one of the most visible and significant undertakings for management. Yet alarmingly, 80-85% of strategic planning efforts are deemed a failure by those who lead them.

In recent years, improvements have been made by focusing on implementation.  New software tools have been developed to embed strategic goals into operating plans and provide greater visibility and data that reveal factors that could block progress.  These new management tools and practices will continue to support implementation, but what if your planning process produces a weak plan?

As strategic planning consultants with thousands of hours guiding leadership teams through their strategy development and implementation we have fantastic insight into why strategic plans fail. In fact, we are often brought in after management experiences an epic failure in prior planning efforts.  

From this vantage point, we have compiled the most common reasons why well-intended efforts can produce such poor results.

Incomplete Strategy Development

It’s not unusual for those leading the strategic planning effort to set the expectation that strategy development can be completed in a one-day planning meeting.  Therefore, it is understandable that when participants reach a consensus on a new goal or set of goals, they think they have completed their strategic planning. In reality, they have only begun.

Although it may be exciting and initially inspiring to think that one can make a magical leap into the future in just one day, that’s not how it works.  Strategy development takes the patience and the focus of a craftsman.  

An excellent planning process aims to leverage the excitement generated during group strategy meetings, when passion is fresh, to agree to a set of fast-paced next steps to complete the planning.

You want to take advantage of the momentum created by the enthusiasm to make the commitment for the hard lift – not just feel good about reaching an agreement and then leave it behind.

A lack of understanding of how to lead such a process significantly contributes to the high failure rates of strategic planning efforts. 

Management Neglect

There is no nice way to say this.

Strategic plans fail because senior management neglects to ensure that new strategic thinking is adopted.

When this occurs, it is 100% the fault of senior management, but it is not intentional. It results from a lack of understanding of their role in nurturing the new direction and possibly an unwillingness to participate in the strategy implementation phase.

In recent years, we have seen the success rates for strategic planning improve.  This progress results from new software tools that embed strategic goals into operating plans, allowing greater visibility of what may be blocking successful execution.

Many larger companies have also formed dedicated teams or created full-time roles to guide the implementation of cross-functional strategic goals.  These new strategic management disciplines are beneficial but cannot translate the core thinking of a new strategic direction when it comes up against the status quo.

Getting beat

Another reason strategic planning efforts can be viewed as a failure is simply that someone else’s strategy performed better than yours.

You got beat. Beaten by competitors, defeated by changing market conditions, or trounced because you focused on the wrong strategic objectives.

Competition is real, and it’s everywhere!

This goes for the non-profit sector as well as the commercial sector, maybe even more!

So, if your strategy fails because you were outgunned by companies with bigger budgets or outmaneuvered by faster or more agile competitors, you can learn from these setbacks. There is no need to beat up yourself or the planning team.

The fix is adjusting your strategy and returning to the game.

However, suppose you were beaten because you failed to acknowledge and incorporate changing market conditions, resulting in a focus on irrelevant goals. In that case, you must look hard at your strategic planning process because it failed you.

TOP

Tips for a Successful Strategic Planning Project

Completing a strategic planning effort is a significant effort. To increase its success, we have included a list of the most important factors to clarify before starting.

Set Project Goals & Define Ideal Outcomes

Before scheduling the first planning meeting, clarify the goals for the strategic planning process.

• What significant outcomes do you need from a strategic planning effort?
• What cultural outcomes would you like to see from this planning effort?

Set a Realistic Deadline

Clarify when the plan needs to be completed or approved, then work backward to ensure you can meet this deadline.

If you don't have enough time to complete a comprehensive strategic plan, explore alternative approaches in the short term - see our Strategy Boost™. Then, schedule a full strategic planning process after you have met your near-term deadline.

Optimize the Project Timing

Planning never happens in a vacuum. Being thoughtful about all the other demands on participants is an essential requirement for a successful project.

• What is the best time to schedule the steps in the strategic planning process, considering these other priorities?

Don't Underestimate the Costs

Engaging in strategic planning will have expenses, even if you conduct it entirely in-house. You should prepare a budget for the following:

• Meeting location costs (rooms, catering, AV)
• Travel to bring participants to the meetings
• Supplies
• Consulting fees if you decide to bring in experts.

Include the Price of Participation

One thing that is not a budget line but can be equally important is the time and attention of those asked to participate in planning activities.

The time for things like assessment activities, strategy meetings, strategy development sub-teams, senior leadership sponsorship, participation, preparing to participate, plan modeling, and forecasting. The focus on these activities means that participants cannot be doing something else. That is the price of their participation.

Carefully consider how best to use participants' time to keep the price of their involvement low.

Find the Right Project Sponsors

The process should be sponsored by the most senior individual in the organization but supported by a small team to ensure diversity of opinion on who is involved and how the process is conducted.

For participants to engage effectively, the strategic planning project must be visibly viewed as a high priority from the top.

Be Strategic About How to Increase Participation

As already stated, participation has a price, but everyone typically wants to be involved in strategic planning because it sets a future direction for the organization. Inclusion is essential, but it is not a one-size-fits-all approach. 

Outline the strategic planning activities and then determine the best way to ensure inclusion and diversity of viewpoints for each activity. Leverage regular communication to include those who cannot participate in all planning activities.  

Plan Communication from Day One

Strategic Planning is an org-wide project; therefore, it should be something everyone knows about. The subtlety comes in what to communicate to each audience group. Before you start, clarify who will update which audience groups and when during your planning process. 

Since strategy development is an iterative process and decisions are not made until the plan is complete and approved by the appropriate governance body, there are typically very few details that can be shared. The rule is: when you cannot share details of the planning discussion, share details of the process: tone of meetings, who participated, how preparation activities (that the audience group may have participated in) shaped discussions, and next steps.

Getting your project requirements worked out before you begin will enhance the success of this important and highly visible management effort.

TOP