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What is Strategic Planning? Definition, Importance, Model, Process and Examples

By Paul VanZandt

Published on: February 2, 2023

strategic planning

Table of Contents

What is Strategic Planning?

Importance and benefits of strategic planning, strategic planning models, strategic planning process: 6 key steps, what makes an effective strategic plan example, strategic planning example.

Strategic planning is defined as a pivotal organizational endeavor, meticulously charting the mission, goals, and objectives over a strategic timeframe, typically spanning 2-5 years. This comprehensive roadmap takes into meticulous consideration the current organizational landscape, navigating through the intricacies of prevailing legislation, the dynamic business environment, product portfolios, departmental dynamics, and the judicious allocation of budget resources. By weaving together these critical elements, a strategic plan becomes a guiding compass, steering the organization towards its vision with adaptability and foresight.

Strategic planning first entered business environments in the post-war period of the 1950s, and has been so effective that it is still widely used and applied across organizational spectrums, including non-profits.

While a strategic plan is the final outcome of the strategic planning process, here are the key factors and components that feed into creating this plan:

  • Profitability and balance sheet management

For any business, profitability and the adjacent balance sheet management is and always should be a key factor to be taken into consideration during strategic planning, depending on the size of the business. Both these factors are in fact co-dependent. For example, one of the key outcomes of a strategic plan is to set the revenue growth percentage to be achieved each year for, say, 3 years. This in turn will require an evaluation of the balance sheet, including any debt payments, dividend payout, shareholder expectations, etc.

Even if the business is a startup and is rich with investor cash to spend in acquiring customers in the short to medium term, it is still aspiring to be profitable and must lay out a larger strategic path to profitability.

  • SWOT analysis outcomes

Strength, weaknesses, opportunities, and threats – these are the outcomes and full terms of the abbreviated term, SWOT analysis. Strength refers to the business factors that indicate key factors that are contributing to the achievement of business outcomes. These may be factors related to sales, employee and talent retention, software stack, business efficiency, etc. Similarly, weakness refers to factors that are holding back the growth and achievement of business outcomes, such as poor margins, lack of company data management, employee attrition, etc.

Opportunity refers to areas in the business environment that the business can potentially explore. For example, one of the opportunities identified could be sales in a new market, implementing a better human resources management model, branching into new products and/ or services, etc.

  • Operations management

Operations management pertains to the cohesive movement of all moving and communicating parts to produce the company’s products or services. While creating a strategic business plan, management needs to take into account how each department and team will need to interact with each other to produce the results desired as outcomes in the strategic plan. This includes ensuring the right technology stack needed for each team including communication and collaboration technology needed for remote and on-premise task execution.

  • Human resource management

Strategic planning involves taking into account all aspects of HR and employee-related spending and policies. One of the key aspects of a strategic plan must be to ensure a harmonious work experience for employees such that it increases employee retention and helps build an environment that enhances employee productivity and workplace satisfaction.

A strategic plan is more than just a business tool, it also plays a key role in defining operational, cultural, and workplace ethics. Here are some of the key aspects of the importance of strategic planning:

1. Provides a unified goal

A strategic plan is like a unified action plan for the whole company in order to achieve common outcomes. For example, a strategic plan to achieve a certain revenue growth each year requires sales, account management, product development, and marketing teams to work together to ensure a seamless lead pipeline, customer upsells and account retention, meet customer expectations, etc.

2. Adds to management transparency

Strategic planning is more than just for direct business growth, it also helps shine clarity to employees and shareholders as to what their mid-to-long-term objectives are and how their actions are derived from these larger goals. Such a plan must always be referenced for citation and justification for key business moves and decisions to make it apparently justified and based on logic and reason. This also encourages team leads and employees to in turn be more transparent with their team members and peers with their plans and goals.

One of the issues most dreaded by investors and employees alike is management that seems to make random decisions without any clear guidance on how they help meet requirements for the final business objectives or tackle the challenges of the day. A strategic plan helps build investor and employee confidence in the management and adds to building a culture of transparency in day-to-day business operations.

3. Identifies hidden strengths and weaknesses

Many strengths and weaknesses in a company may be contributing, yet hidden factors in the path to meeting or hindering the meeting of business goals. A strategic plan’s primary input is a SWOT analysis of the company, which is conducted by auditing the firm to recognize and list strengths and weaknesses within the company. These may be a competitive product, a better monetization model, a weak employee incentive policy, etc.

The important step here is the actual deep analysis and listing down of these strengths and weaknesses and how they can be leveraged or minimized.

4. Leads to better financial health

A company with a clear strategic plan is able to better plan expenses and set the right expectations on return on investment (ROI). It takes into account balance sheets, profitability, accounting and expense management, all of which contribute to better bookkeeping and financial health of the company.

5. Improves management-employee relations

Employees and teams work in silos when the management works in silos. But when a company shares a strategic plan with employees and lays out exactly how each team will be working towards contributing to this larger plan, it gives each team and its members a sense of belonging and importance within the larger company, In today’s environment of hybrid or remote work cultures, it is a key step to ensuring that the company remains cohesive and collaborative in getting work done and meeting final objectives.

Learn more: What is Tactical Planning?

Strategic planning inputs may require one of many of the following business analysis models:

  • SWOT analysis

SWOT analysis is the process and visual template for identifying and listing a company’s strengths, weaknesses, opportunities, and threats. These are cornerstone considerations for any leadership team and play a key role in the strategic planning process.

  • Business model canvas

A business model canvas is a process used to identify and represent existing business models of an enterprise and develop new models to better meet company goals and objectives. Like SWOT analysis, the business model canvas is also a standard business template.

  • PESTEL analysis

PESTEL is an abbreviation for political, economic, social, technological, environmental, and legal, and PESTEL analysis aims to identify the impact of these external factors on a business.

  • Cost-benefit analysis

A cost-benefit analysis is a method of evaluating an investment in the business based on the benefits it would bring to the table. This is a good method for ensuring a healthy financial balance sheet where spending and budgeting are carefully analyzed to ensure only those investments bring back reasonable ROI.

Most companies have 2 or more product/service streams or even 2 or more businesses. A BCG matrix is a visual process of managing an enterprise’s portfolio by prioritizing profitable companies with good market share and growth.

An effective strategic planning process requires the following key steps:

1. Identify core business objectives

Strategic planning begins with first identifying your business objectives- what does it produce? What does it do better than the competition? What is the quality-profitability balance? These are examples of the questions that need to be asked to identify core business objectives. The strategic planning tools can be applied at any stage of the planning process to help answer these questions.

2. Identify the objectives of each department

Once the core business objective is ready, it needs to trickle down to an execution plan that involves each department. This in turn will result in breaking down of the core objectives into smaller objectives for the teams. This needs to be laid out with clarity and precision since the team leaders will further use this team goal to assign individual targets for members.

3. Identify potential roadblocks

Before formulating the final strategy, it is important to discuss it with relevant leaders in the company to ensure an error-free process that is achievable with minimal roadblocks. Of course, as the execution work begins, the management should be flexible enough to absorb unforeseen and small issues that are inevitable. The goal here is to avoid any big boulders which may cripple the strategy at a later stage, such as data security, pricing estimations, hiring new employees or expansion to new departments/ teams, investment in new product development, mergers and acquisition plans, etc.

4. Formulate the final strategy

Once the objectives and goals have been scanned for potential roadblocks and alterations/ safeguards have been accommodated, this is the first draft of the final strategic plan for the company. This strategy may be applicable for the foreseeable future or have a specific deadline, it should however be pulled up for revision annually. Small companies or startups who have much to learn on the way, need to keep an active eye on the larger strategy based on changing business realities.

5. Re-evaluate based on feedback

Before you iron out the processes and policies that will enable the execution of the new strategic plan of the company, it is important to hear back from your employees. This doesn’t have to be every single employee, especially if you have a large team, but to the extent possible. You may at first discuss the strategy with team leaders, who if needed, may take it further down the chain to their own team members and absorb their feedback. Complete agreement may not be possible, but it is important that both sides remain flexible while discussions are on but must be prepared to execute once the discussions are over.

6. Set or revise adjacent policies and processes

Now that the strategic plan for the business is complete and sealed, the leadership team needs to start the execution with necessary changes to the processes and policies as the need may be. This may need to include data management process changes, technology stack updates, issue escalation matrix, etc. In some cases, it may not require any change, and the right processes may already be in place with just a new direction based on the strategic plan.

Learn more: What is SWOT Analysis Framework?

Crafting a good example of a strategic plan involves several key elements. Here’s a breakdown of what makes a strategic plan exemplary:

  • Clear Mission Statement: A strong strategic plan starts with a clear and concise mission statement that defines the organization’s purpose and the value it aims to provide.
  • SMART Objectives: The plan should include specific, measurable, achievable, relevant, and time-bound (SMART) objectives. This ensures that goals are well-defined and actionable.
  • Environmental Analysis: A good strategic plan conducts a thorough analysis of the internal and external environment, taking into account strengths, weaknesses, opportunities, and threats (SWOT). This provides a foundation for strategic decision-making.
  • Alignment with Vision: The plan should clearly articulate how each objective contributes to the overall vision of the organization. There should be a cohesive alignment between the strategic goals and the long-term vision.
  • Resource Allocation: Effective resource allocation is crucial. The plan should outline how financial, human, and other resources will be distributed to support the strategic goals.
  • Actionable Steps: Each objective should be broken down into actionable steps or initiatives. This helps in practical implementation and provides a roadmap for achieving the goals.
  • Monitoring and Evaluation: A good strategic plan includes mechanisms for ongoing monitoring and evaluation. Key performance indicators (KPIs) should be defined, and regular assessments should be conducted to track progress.
  • Flexibility and Adaptability: The plan should acknowledge the dynamic nature of business environments. Flexibility and adaptability are essential to adjust strategies in response to changes in the internal or external landscape.
  • Communication Strategy: A strategic plan should include a communication strategy to ensure that stakeholders are well-informed about the goals, progress, and any adjustments made to the plan.
  • Inclusivity: Involving key stakeholders in the strategic planning process fosters a sense of ownership and commitment. A good plan considers input from various departments, employees, and external partners.
  • Risk Management: Anticipating and addressing potential risks is a vital aspect of a strategic plan. Contingency plans should be in place to mitigate unforeseen challenges.
  • Continuous Improvement: A strategic plan should not be static. There should be a commitment to continuous improvement, with regular reviews and updates to ensure its relevance and effectiveness.

By incorporating these elements into your example of a strategic plan, you can demonstrate a comprehensive and thoughtful approach to organizational planning, which may resonate well with both practitioners and those seeking to understand the principles of strategic planning.

A strategic plan is a detailed document that outlines an organization’s goals, objectives, and the actions required to achieve them. While the specific details of a strategic plan will vary depending on the organization, its industry, and its unique circumstances, here’s an example of a strategic plan for a fictional company:

Company: Visionary Tech Solutions (VTS)

Mission Statement: “To empower businesses through innovative technology solutions, fostering growth and sustainability in an ever-evolving digital landscape.”

Strategic Goals: Presented below are ten strategic goals that serve as excellent examples to enhance the functionality of a company.

1. Market Leadership in Tech Solutions:

Objective: Capture a 20% increase in market share within the next three years.

Action Steps:

  • Launch two new cutting-edge products catering to emerging market demands.
  • Strengthen strategic partnerships with key industry players.
  • Implement aggressive marketing campaigns highlighting VTS’s technological prowess.

2. Operational Efficiency:

Objective: Improve operational efficiency by 15% over the next two years.

  • Streamline internal processes through the implementation of advanced project management tools.
  • Invest in employee training programs to enhance skills and productivity.
  • Conduct regular process audits for continuous improvement.

3. Customer-Centric Innovation:

Objective: Introduce at least three customer-centric innovations annually.

  • Establish a dedicated R&D team focused on anticipating and addressing customer needs.
  • Implement customer feedback loops to gather insights for product enhancements.
  • Launch a customer loyalty program to foster long-term relationships.

4. Global Expansion:

Objective: Expand operations to two new international markets within the next four years.

  • Conduct thorough market research to identify viable expansion opportunities.
  • Establish local partnerships to navigate regulatory and cultural nuances.
  • Develop customized marketing strategies tailored to each target market.

5. Resource Allocation:

Budget allocation:

  • 30% for research and development.
  • 25% for marketing and promotional activities.
  • 20% for employee training and development.
  • 15% for operational improvements.
  • 10% for international expansion initiatives.

6. Monitoring and Evaluation:

  • Quarterly performance reviews with key performance indicators (KPIs) tracked against predefined targets.
  • Annual comprehensive evaluation of the strategic plan’s effectiveness and adjustments as needed.

7. Communication Strategy:

  • Regular updates through internal newsletters, town hall meetings, and an interactive company intranet.
  • External communication through press releases, social media updates, and a dedicated section on the company website.

8. Risk Management:

  • Identification of potential risks such as technological disruptions, market fluctuations, and geopolitical challenges.
  • Development of contingency plans and regular risk assessments.

9. Inclusivity:

  • Cross-functional teams involved in the strategic planning process, ensuring diverse perspectives and expertise.

10. Continuous Improvement:

  • Commitment to regular reviews and updates to the strategic plan based on industry trends, technological advancements, and feedback from stakeholders.

This example of a strategic plan for Visionary Tech Solutions outlines a roadmap that integrates the company’s mission, strategic goals, resource allocation, monitoring mechanisms, and a commitment to adaptability and continuous improvement. Adjustments should be made as needed based on ongoing evaluations and changes in the business environment.

Learn more: What is Enterprise Planning?

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Why Is Strategic Planning Important?

Above view of team creating a strategic plan

  • 06 Oct 2020

Do you know what your organization’s strategy is? How much time do you dedicate to developing that strategy each month?

If your answers are on the low side, you’re not alone. According to research from Bridges Business Consultancy , 48 percent of leaders spend less than one day per month discussing strategy.

It’s no wonder, then, that 48 percent of all organizations fail to meet at least half of their strategic targets. Before an organization can reap the rewards of its business strategy, planning must take place to ensure its strategy remains agile and executable .

Here’s a look at what strategic planning is and how it can benefit your organization.

Access your free e-book today.

What Is Strategic Planning?

Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees on the organization’s goals, and ensure those goals are backed by data and sound reasoning.

It’s important to highlight that strategic planning is an ongoing process—not a one-time meeting. In the online course Disruptive Strategy , Harvard Business School Professor Clayton Christensen notes that in a study of HBS graduates who started businesses, 93 percent of those with successful strategies evolved and pivoted away from their original strategic plans.

“Most people think of strategy as an event, but that’s not the way the world works,” Christensen says. “When we run into unanticipated opportunities and threats, we have to respond. Sometimes we respond successfully; sometimes we don’t. But most strategies develop through this process. More often than not, the strategy that leads to success emerges through a process that’s at work 24/7 in almost every industry.”

Strategic planning requires time, effort, and continual reassessment. Given the proper attention, it can set your business on the right track. Here are three benefits of strategic planning.

Related: 4 Ways to Develop Your Strategic Thinking Skills

Benefits of Strategic Planning

1. create one, forward-focused vision.

Strategy touches every employee and serves as an actionable way to reach your company’s goals.

One significant benefit of strategic planning is that it creates a single, forward-focused vision that can align your company and its shareholders. By making everyone aware of your company’s goals, how and why those goals were chosen, and what they can do to help reach them, you can create an increased sense of responsibility throughout your organization.

This can also have trickle-down effects. For instance, if a manager isn’t clear on your organization’s strategy or the reasoning used to craft it, they could make decisions on a team level that counteract its efforts. With one vision to unite around, everyone at your organization can act with a broader strategy in mind.

2. Draw Attention to Biases and Flaws in Reasoning

The decisions you make come with inherent bias. Taking part in the strategic planning process forces you to examine and explain why you’re making each decision and back it up with data, projections, or case studies, thus combatting your cognitive biases.

A few examples of cognitive biases are:

  • The recency effect: The tendency to select the option presented most recently because it’s fresh in your mind
  • Occam’s razor bias: The tendency to assume the most obvious decision to be the best decision
  • Inertia bias: The tendency to select options that allow you to think, feel, and act in familiar ways

One cognitive bias that may be more difficult to catch in the act is confirmation bias . When seeking to validate a particular viewpoint, it's the tendency to only pay attention to information that supports that viewpoint.

If you’re crafting a strategic plan for your organization and know which strategy you prefer, enlist others with differing views and opinions to help look for information that either proves or disproves the idea.

Combating biases in strategic decision-making requires effort and dedication from your entire team, and it can make your organization’s strategy that much stronger.

Related: 3 Group Decision-Making Techniques for Success

3. Track Progress Based on Strategic Goals

Having a strategic plan in place can enable you to track progress toward goals. When each department and team understands your company’s larger strategy, their progress can directly impact its success, creating a top-down approach to tracking key performance indicators (KPIs) .

By planning your company’s strategy and defining its goals, KPIs can be determined at the organizational level. These goals can then be extended to business units, departments, teams, and individuals. This ensures that every level of your organization is aligned and can positively impact your business’s KPIs and performance.

It’s important to remember that even though your strategy might be far-reaching and structured, it must remain agile. As Christensen asserts in Disruptive Strategy , a business’s strategy needs to evolve with the challenges and opportunities it encounters. Be prepared to pivot your KPIs as goals shift and communicate the reasons for change to your organization.

Which HBS Online Strategy Course is Right for You? | Download Your Free Flowchart

Improve Your Strategic Planning Skills

Strategic planning can benefit your organization’s vision, execution, and progress toward goals. If strategic planning is a skill you’d like to improve, online courses can provide the knowledge and techniques needed to lead your team and organization.

Strategy courses can range from primers on key concepts (such as Economics for Managers ), to deep-dives on strategy frameworks (such as Disruptive Strategy ), to coursework designed to help you strategize for a specific organizational goal (such as Sustainable Business Strategy ).

Learning how to craft an effective, compelling strategic plan can enable you to not only invest in your career but provide lasting value to your organization.

Do you want to formulate winning strategies for your organization? Explore our portfolio of online strategy courses and download the free flowchart to determine which is the best fit for you and your goals.

define the concept of strategic planning

About the Author

What is strategic planning

what is strategic planning cover photo

Imagine you're ready to expand your thriving business to another market. Would you choose that market based on where you'd like to vacation, or just ask ChatGPT to decide for you? That wouldn’t be strategic, and it could backfire. The smart business move would be to assess risks, opportunities, regulations, competition, and the local business landscape—then use your analysis to plan your next move.

For businesses, strategic planning can make all the difference between expanding market share and closing up shop. Read on to find out how to excel at strategic planning.

What is strategic planning?

Whether your organization is a startup or established business charting the way forward, a strategic plan is a vital tool for success—and you can lead the charge. Strategic planning is the process of putting your best business theories to the test in the marketplace. Your strategic planning process starts with defining a mission/vision statement and setting key goals. To achieve those goals, you create a detailed plan, or strategy map .

Once you put that strategic plan into motion, you're no longer just reacting to market forces. You're proactive, blazing your own trail to your desired destination. There’s no better way to ensure that decisions are evidence-based, forward-looking, collaborative, and aligned with your entire organization’s long-term objectives.

Think of your business as an orchestra. No matter how skilled your musicians are, if they all play a different tune, you won't like what you hear. Wouldn’t you rather start out with sheet music and a brilliant conductor? An organization can make decisions without a strategic plan in place, just like an orchestra can play without a conductor. But when individuals or departments make decisions based on opinion, guesswork, or instinct, you can end up with disorganized, inefficient use of time and resources—and that’s not music to anyone’s ears.

How is strategic planning different from other plans?

Roger Martin, one of the world’s leading thinkers on strategy, cautions that “a plan is not a strategy.” A plan is comfortable because you control the levers, like time and costs. But strategic planning challenges you to put strategy to the test, making “an integrative set of choices that positions you on a playing field of your choice in a way that you win .”

Benefits of strategic planning

A strategic plan can be a competitive advantage. Harvard Business Review found that up to 67% of HR and IT departments have strategies of their own that don’t align with the larger corporate strategy. The bad news gets worse: 95% of employees don’t understand their organization’s strategy. Clear, effectively communicated strategic plans position organizations to outperform competitors struggling to articulate cohesive strategies to their employees.

With a strategic plan, you can help your organization to:

  • Communicate priorities to employees at all levels
  • Allocate resources appropriately to meet goals
  • Track progress objectively
  • Make clear decisions more efficiently
  • Avoid mistakes caused by short-term thinking

3 strategic planning best practices

  • Consider it a learning process. Creating strategic plans teaches teams to think more strategically, preparing decision-makers to make choices rationally under pressure.
  • Make comprehensive plans. Research shows a thorough, comprehensive planning process yields strong results. Consider a variety of viewpoints and multiple options before setting your strategic objectives.
  • Conduct regular updates. The most successful organizations are nimble, making wise strategic decisions in real time as circumstances change. Revisiting plans frequently with key decision-makers helps keep your strategy relevant and responsive.

Who belongs on strategic planning teams?

Strategic planning teams tackle key responsibilities: defining company mission/vision statements, setting goals, identifying opportunities, evaluating risks, and plotting a course to meet objectives. To achieve this ambitious agenda,  your team should cover a broad spectrum of viewpoints and roles, including:

  • VPs and C-suite executives who must be consulted, according to your RACI matrix
  • Representatives from various departments, team leads, and department heads who are responsible or accountable for outcomes
  • Other key stakeholders to keep informed, such as board members or investors

Not sure who your key stakeholders are? Check out the FigJam stakeholder analysis template to identify valuable collaborators right from the start, but make sure the group doesn’t get too big. Large groups can get bogged down in strategic planning discussions.

Strategic planning in 5 steps

Your organization's strategic planning process may take slightly different steps depending on its size and needs, but most organizations follow these five basic steps.

1. Define the organization's mission, vision, and values .

These elements of strategic planning inform all of your objectives and the overall direction of the business strategy from here on out. What does your organization intend to do? What does it stand for, and why?

2. Conduct a situational analysis.

SWOT analysis is a time-tested tool to assess the opportunities and risks your organization faces. Cover internal and external factors, including your resources, competition, and changes in the market.

3. Set goals and objectives .

Pinpoint what you want to achieve, then set realistic and achievable targets. You  could focus on  specific objectives  (“reduce customer acquisition costs by 5% next quarter”) or address broader strategic goals (“increase customer satisfaction” ) . Articulate goals and objectives clearly , and define your measurements for success.

4. Develop and launch your action plan .

Outline the steps to take, and break down steps into tasks. Then decide who is responsible for each task, and when each task needs to be completed. With every decision, aim to minimize risk and maximize opportunity to achieve your goal.

To get your strategic plan on track for success, communicate the plan to everyone in the organization. You may want to launch your plan at an all-hands meeting, or break it up into meetings with separate departments.

5. Evaluate the results.

Establish a timeline of regular assessments to check  plan progres. Assign responsibilities to monitor and assess outcomes, and make course corrections as needed.

Pro tips and tools for strategic planning

The strategic planning process involves gathering data, documents, and team input to define timelines with multiple steps and dependencies. Figma's makes this complex process easier with these collaborative strategic planning tools:

  • Balanced scorecard. Organizations as diverse as Chrysler and the U.S. Army use the  Balanced Scorecard to take performance to the next level. A Balanced Scorecard assigns weighted values to various options to remove bias from decision-making, guide plan implementation, and help you communicate your strategy clearly.
  • SWOT analysis . Identify your company's strengths, weaknesses, opportunities, and threats with a SWOT analysis . This tool offers a comprehensive, objective overview of company  resources and its internal and external working environment. You’ll draw on the data you collect during your SWOT analysis many times during your strategic planning process.
  • KPI tracking dashboard. Key performance indicators (KPIs) quantify success measurements and establish the timeline for achieving specific financial, strategic, or operational milestones. A shared KPI dashboard template will get your KPI tracking system up and running fast, boosting visibility and collaboration.
  • RACI matrix. Identify all the key stakeholders on your strategic plan and group them according to their level of involvement: R esponsible, A ccountable, C onsulted, and I nformed. Figma’s RACI template can get you started quickly.
  • Gantt chart . To capture your strategic plan timeline and steps at a glance, try a Gantt chart . This bar chart highlights start dates, deadlines, resource allocations, assignments, and other key planning elements. Use a Gantt chart to sequence tasks and show your team exactly which steps need to be completed when.

Strategize for success with Figma

The keys to strategic planning are collaboration, effective teamwork, and comprehensive information-gathering—and Figma has you covered with online collaboration tools . Figma's easy, engaging strategic plan template   gets your team started with tools for brainstorming, diagramming, and sharing data and feedback—all in one space.

Go to next section

Keep reading

define the concept of strategic planning

Strategic planning process in 6 steps

Every business needs a great strategic plan to achieve their long term goals.

define the concept of strategic planning

What is a strategy map

A strategy map is a visual representation of how a company can achieve their long-term goals and objectives.

define the concept of strategic planning

Strategic vs. tactical planning

While strategic planning involves big-picture thinking, tactical planning covers the nitty-gritty of turning strategy into action.

Strategic planning — what it is and how to do it well

Strategic planning guide

It can be difficult to reach your business goals and ambitions, regardless of what preparation you’ve done. But if you have a strategic plan in place, you’ll be more likely to achieve a favorable outcome.

This post will explain the importance of strategic planning, when and how to make a strategic plan, and how to manage it and stay on course. It will allow the audience to move forward with their planning efforts.

Read on to learn:

  • What strategic planning is

Benefits of strategic planning

  • When you should do strategic planning

Steps in strategic planning

  • What strategic management is

Strategic mapping

What is strategic planning.

Strategic planning is the process of defining your business’s direction and outlining a path toward a preferred future. The goal of a strategic plan is to capture an organization’s mission and core principles — to envision the fulfillment of these ideals. Strategic planning is both conceptual and practical, as it presents both high-level goals and specific approaches to achieve them.

A strategic plan needs to answer the following questions:

  • Where are we now?
  • Where are we going?
  • How do we get there?

Strategic planning helps businesses set and maintain a clear vision and ensure they’re moving in the right direction. Once the plan has been put in place, it helps maintain alignment between various stakeholders and teams within your business. This plan can make resource allocation simpler — by determining if certain resources are being used in ways that don’t align with the broader strategic plan.

Running a business without a strategic plan is like planning a vacation with no destination in mind. How will you get there? What do you need to bring with you? The same applies to planning for your business. Strategic planning:

  • Gives a sense of purpose and direction. A strategic plan provides a clear goal and end result so all other business functions can work to get you closer to that outcome. This clarity helps keep employees aligned on their efforts, make better decisions, and work towards a shared goal.
  • Makes you aware of opportunities for success. Tying your plans to strategy helps your organization identify opportunities that you discover along your journey. If you find an opportunity that aligns with your strategy — and desired outcomes — you can more easily adapt to take advantage of the situation.
  • Alerts you to risks to avoid. Part of the strategic planning process is scanning the external environment and competitive landscape, which allows you to identify potential roadblocks you may encounter.
  • Helps you understand what resources you will need. When you have a strategic plan in place, you can more effectively allocate your resources. By aligning resources with strategic goals, businesses can focus on the initiatives, projects, and investments that maximize their ROI.
  • Helps prioritize critical tasks. When deciding which tasks are most important and which can be put on hold, a strategic plan streamlines that decision making. Tasks that don’t contribute to your mission can wait, while mission-critical tasks get prioritized.
  • Fosters teamwork and communication. Without a strategic plan, team members can feel isolated and siloed. However, when that strategic plan is clearly communicated to everyone, your team will feel more connected as they work towards a common goal.
  • Increases motivation. And when your team understands the desired outcomes and bigger goals behind their daily tasks, they’ll be more motivated to do high-quality work in a timely manner.
  • Helps measure and evaluate results. Because you’ve likely identified key performance indicators (KPIs) in your planning process, you’ll have an easier time tracking your progress. When you measure your progress, you can more easily identify areas for improvement and make changes on the fly.

When should you do strategic planning?

When and how often your business does strategic planning depends on the size and stage of your company, the speed of your business, and the scope of the projects you’re working on. Strategic planning should not be a one-time event. It should be an iterative process with continuous monitoring, evaluation, and adjustment.

If you’re a new business, you’ll want to create a business plan first, before you move into strategic planning. Once your business is established you can then set a strategic plan to outline your goals and manage your business’s strategic direction. For planning more short-term projects, use a project plan .

Once you’ve created a strategic plan, you should review it regularly — quarterly and yearly, for example — to make sure it is still aligned with your business’s goals and industry landscape. Generally, you should create a new strategic plan every 3–5 years. However, newer or faster-moving companies may need to create a new strategic plan every 1–2 years. Another scenario when you should rework your strategic plan is when you’re preparing to make a major pivot in your business.

How to write a strategic plan for a project

Learn how to write a strategic plan, why you need to create one, and the topics it should cover.

Steps in strategic planning

While every strategic plan might look a little different depending on the organization, industry, and other context, there is still a general outline of the process that you can follow to get you started.

Before you get started, there are a few preliminary steps you can take to make sure your planning process goes smoothly. You need to decide who is involved in the process and what documentation they’ll need. You’ll also want to revisit your company’s vision and mission statements which define where your business is aiming to go.

These are the steps you can take to create a strategic plan for your business:

1. Identify and assess your current position

To understand where you’re headed, you first need to look at where you are now. I n this stage you should:

  • Collect customer and employee feedback to understand what is working well for you and what could use improvement.
  • Perform a needs assessment or SWOT analysis to understand more about the current state of your business.
  • Assess your available resources so you can understand what you have enough of and what you may need to reach your goals.

2. Set goals

Next, you can set goals that you’d like your business to achieve over the short and long term. It’s important to choose goals that align with your company mission and vision. You can use marketing and sales forecasts to give you an idea of what types of goals are realistic. In this phase you’ll also want to prioritize the goals you set — so you know which to choose if conflicts arise.

When setting goals, remember to set SMART goals that are specific, measurable, attainable, relevant, and time bound.

3. Develop your plan

In this phase it’s time to put your plan together and map out a project roadmap. This is where your plan becomes clearer both to your planning committee and to your team members who will execute based on the plan.

You want to make sure that your plan is achievable with your current resources — so that you aren’t setting yourself up for failure. You’ll also want to set measurable milestones so you can track your progress along the way. You also need to set KPIs so you have objective numbers to determine if you’re heading in the right direction.

When developing your plan, you should make sure that any short-term action items align with long-term goals. And finally, you’ll need to get approval from leadership and stakeholders.

4. Implement your plan

Now that you’ve created your strategic plan it’s time to act. In fact, the first step of implementation is creating a strategic action plan. Your action plan will outline the specific tactics you’ll use to execute your strategic plan.

In this phase, you’ll also assign tasks to your team members so everyone knows what they are responsible for and what they will be contributing to your mission. It’s important to distribute and communicate your plan across your organization. This helps encourage transparency and will drive buy-in from everyone on your team.

As you are executing on your plan, you should rely on metrics and KPIs to track your performance.

5. Revise your plan as necessary

Next, you’ll want to revise your plan as you encounter roadblocks or market changes. Even the best strategic plans will change as you gather more data or feedback. Using tools — like a project management solution — can help you monitor the progress your team is making. You should schedule periodic evaluations to see which parts of the plan are going well and which need to be revised or reevaluated.

You can conduct reviews on a quarterly basis, so you have information at the end of the year to revise your plan if needed. Even if things are going well, you should make minor adjustments every year to keep your teams aligned and your strategy up to date. Any major revisions you make will require a new planning process — because a major adjustment could derail the rest of your strategic plan.

What is strategic management?

Strategic management is the process of formulating, implementing, and evaluating strategies to achieve the larger goals and objectives of an organization. It can sometimes be used interchangeably with the term strategic planning — but within strategic planning, strategic management means managing the plan being put into action.

Part of strategic management is being adaptive and adjusting to headwinds or organizational changes. You’ll also need to maintain a strong team culture, so your plan stays on track and team members stay engaged.

There are several models that strategic management can follow. Each takes a different approach to the management process, and how it solves problems that may arise.

One of these frameworks is the balanced scorecard method. This method looks at the strategic measures of a business beyond just financial metrics to get a more “balanced” look at performance. The phrase “balanced scorecard” refers to the management report that leaders may use to drive decision making within the business, since this approach looks at more than just numbers, it provides a more wholistic view of a business.

A strategic map is a visual representation of a business’s strategic objectives and their cause-and-effect relationships between each objective. This diagram helps visualize the strategic plan and understand which tasks are dependent on others. This map should be drawn during the development of the strategic plan to get a better understanding of how things should get done and in what order.

Strategic mapping can turn complex strategic plans into easily understandable visual representations. These can be helpful tools for communicating your strategy more clearly to team members and stakeholders within your organization. Strategic maps also help organizations identify success factors, prioritize initiatives, allocate resources, and monitor progress.

A strategic map can be designed in several ways, but needs to address the four main facets of business:

Strategic mapping

  • Financial. This section of the map should identify how the strategy helps meet the financial goals of the business.
  • Customer. This section should address the benefits that the customer will see from the specific strategy.
  • Internal business processes (IBPs). This section shares the benefits of the strategy to the processes of the business and their efficiency.
  • Learning and growth. This section will address how the business’s capabilities and knowledge will improve by using a given strategy.

Getting started with strategic planning

Strategic planning is a helpful tool for aligning everyone in your organization with your objectives and long-term goals. It can also help you gain a better understanding of your place in the market and how you can improve your business outcomes.

When you’re ready to get started, assemble your leadership team, draft your mission and vision statements, and begin by assessing the current state of your business. But you can’t get the most out of your strategic plan without a platform to drive the process forward.

That’s where Adobe Workfront can help. Workfront is an enterprise work management tool that connects work to strategy and drives better collaboration to deliver measurable business outcomes. It integrates people, data, processes, and technology across an organization so you can manage the entire lifecycle of projects from start to finish. By centralizing digital projects, cross-functional teams can connect, collaborate, and execute from anywhere to help them do their best work.

Take a product tour or watch an overview video to see how Workfront can help you execute on your strategic plan to improve your business outcomes.

https://business.adobe.com/blog/perspectives/workfront-and-the-employee-experience

https://business.adobe.com/blog/perspectives/get-the-most-out-of-workfront-discovery-by-avoiding-common-challenges

https://business.adobe.com/blog/basics/annual-planning

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Strategic Planning

What is strategic planning.

What is a strategic plan? Strategic planning in small business management is the process of documenting and establishing a direction—by assessing both where you are and where you’re going . So, what is the purpose of a strategic plan? And what does an effective strategic plan consist of? A company’s strategic plan consists of it’s:

  • Long-term goals
  • Action plans

A well-written strategic business plan can play a pivotal role in your small business’s growth and success because it tells you and your employees how best to respond to opportunities and challenges.

In recent years, many small business owners have been focusing on long-term planning. In fact, in 2020, there were three business areas that small businesses focused on strategy for, including:

  • 46% in sales
  • 41% in advertising
  • 36% in customer service

organizational strategic planning

If you haven’t been focusing on a long-term strategic planning process, it’s not too late to think differently. Your future success depends on effective organizational strategic planning. It’s also important to remember that a strategic planning process model involves your entire business. The discussions that result can lead to meaningful changes in your business. The purpose of small business strategic planning is to also analyze your operation and set realistic goals and objectives. This leads to the creation of a formal document that lays out the company’s views and strategic goals for the future.

Ready to learn more about strategic management and planning? Keep reading through the next sections.

The 3 Step Strategic Planning Process

What are the 3 steps in strategic planning for small businesses? When it comes to the strategic planning process, think of it as having three phases:

  • Development
  • Review and updating

The goal of developing a strategic plan is to ensure everyone in the business is aligned when it comes to your small business’s goals and objectives, as well as to create a formal strategic plan document.

examples of strategic plans

1. Discussion Phase

The discussion phase is meant to gather as much information, opinions, and input as possible. Set up a regularly scheduled meeting with the employees and any other staff in your business who will be involved with strategic planning. Make sure you have an agenda and clear expectations of what you want to accomplish in each meeting. This will keep discussions on track and help prevent distractions. In the first few meetings, try to answer questions that will help you define the business’s current status, such as, “Where are we now?” and “Where are our competitors?” Once you have a good idea of where the business is, you can focus in on specific details in future meetings.

In addition to regular meetings with your employees at your business, you can also gather information from people outside your company, like:

External people will have a unique perspective on not only your business, but also the industry you’re operating in. Getting their opinions on where they think the industry is going and what they think will change in the future can help you put together your strategic plan and determine where you want your business to be down the road.

You can also conduct a SWOT analysis. SWOT stands for strengths, weaknesses, opportunities and threats.

When you’re conducting a SWOT analysis, you and your employees will examine what your business does well, where it can improve, any future opportunities to pursue that could help facilitate growth and success, and any competitors or external factors that could prevent the business from succeeding.

Your strengths should be pretty easy to identify. When you’re discussing your business’s weaknesses, don’t be afraid to be candid. Every business has weaknesses and things to work on. Any weakness you and your employees note means it’s something you’ll aim to improve on in the future with a detailed initiative outlined in the strategic plan.

Opportunities available to your business may be pretty clear, while identifying threats to your business can be more difficult. Speaking with people outside of the company should give you a good idea of where the industry could be heading and if there are any major competitors or challenges coming. If you can identify a number of threats and challenges to your business early on, it puts you in a better position to address them if and when you encounter them down the road.

strategic planning templates

2. Development Phase

After you’ve collected all of the information, it’s time for the development phase. This is when you’ll start putting together your business’s strategic plan. A strategic plan consists of five key components:

  • A vision statement
  • A mission statement
  • Goals and objectives
  • An action plan
  • Details on how often the strategic plan will be reviewed and updated

Decide with your employees what you will use to create the strategic plan. Are you going to purchase software to help you create and house the plan? Or are you going to create the plan yourself and save it in the cloud for easier access?

When you’re creating goals and objectives for your business, make sure they’re realistic and measurable. Work with your employees to create goals and objectives for at least the next one to three years. And discuss how these goals and objectives will be measured and tracked.

For example, if you have a goal of increasing sales by 10% in the next year, you can track this by measuring sale numbers. Equally important is having an action plan to achieve these goals and objectives. If you’re trying to increase your sales by 10% in a year, you can pursue more marketing and social media outreach as part of your action plan. If an action plan doesn’t help your business achieve its goals, the plan needs to be rewritten.

developing a strategic plan

3. Review and Updating Phase

A critical part of the strategic plan should address how often it will be reviewed and updated. Designate someone to be responsible for reviewing, updating, and sharing any changes with the rest of the company. Whether it’s you or another employee, you’ll want to make sure everyone in the business is aware of the changes and how they affect the overall strategic plan.

The strategic plan is meant to be a fluid document; don’t fall into the trap of creating the document and letting it sit on a shelf for years. If you developed meaningful objectives and action plans, they should help with regularly checking the strategic plan. For example, if your action plan requires you to put in sales numbers every quarter to track revenue, you could take that time to review the rest of the plan.

You can also set an alert to check the strategic plan on a regular basis. Whether it’s every few months, every quarter, or every year, a recurring alert can help you review and update the document.

When you’re reviewing your strategic plan, you may find that you’re not on track to meet an objective or goal that you previously set up. Don’t panic. Reassess the situation and, if you need to, discuss the issues with your employees. Figure out what went wrong and why your business isn’t on pace; maybe the goal was too ambitious or not realistic. Change the goal or objective and update the action plan to help you get back on track.

You also may find that your small business has met a goal or objective earlier than you thought you would. If so, you can create a new goal or objective to work toward, or try to maintain the progress you’ve already made. Discuss the ideas with your employees to see what they think is possible.

Strategic Plan Examples

Strategic plans can vary, depending on the type of business you operate or the industry you’re in. Here are a few examples of different strategic plans:

Strategic Planning Examples for Business

A strategic plan for a business will include the company’s mission and vision statement, as well as its goals and objectives and the action plans to achieve them.

The strategic plan is different from a business plan. The business plan is typically used to help start the business and acquire the necessary funds to open the doors. A strategic plan outlines the strategy for growth and success in the future by using existing resources.

The Canadian Soccer Association’s strategic plan for 2014 to 2018 is full of information and details. It includes an examination of the organization’s current status and what the focus in the future will be. It includes the goals and objectives of the Canadian Soccer Association, as well as the strategies it’ll use to achieve them.

According to a recent report, the top challenges for small businesses in 2021 are:

  • 23% said a lack of capital and/or cash flow
  • 15% said they anticipate marketing and advertising struggles
  • 19% said they expect challenges with recruiting and retaining employees

steps in strategic planning

Nonprofit Strategic Plan Examples

A strategic plan for a nonprofit organization will include the same key components. A nonprofit strategic plan may focus more on the internal and external factors that can pose any threats or challenges to the organization. Because the structure of a nonprofit organization can change rapidly due to different factors, the strategic plan takes this into account and aims to address possible changes ahead of time.

The  Minnesota Council of Nonprofits’  strategic plan for 2010 through 2014 outlines the organization’s:

  • Community it serves
  • Goals for the four-year period

Each goal includes an in-depth description of why it’s important to the Minnesota Council of Nonprofits, as well as the strategies involved to achieve those goals. The plan also lists the people responsible for working on the strategic plan.

IT Strategic Plans

The IT industry is constantly changing. This means a strategic plan for an IT business should identify and address the changes in the future as well as possible. While other business strategic plans may focus on the next three to four years, it’s not uncommon for an IT strategic plan to look at the next year to year-and-a-half.

When it comes to developing, reviewing, and updating your IT strategic plan, it’s important to involve your business’s Chief Information Officer. This person’s knowledge and skill set is useful in putting together a strategic plan for your tech business. In addition to the Chief Information Officer, you and your employees can look at whether you need to upgrade any part of your infrastructure to meet the goals and objectives you’ve outlined in your strategic plan.

Because of the rapidly changing circumstances, you may be reviewing your IT strategic plan more frequently than with other businesses. Adjust your plan as necessary to put your business on the best path to success. The plan also should include details on how to make a decision when it comes to investing in new equipment or technology.

strategic planning framework

Marketing Strategic Plans

A marketing strategic plan’s goal should be to generate sales for the business. Whether it’s increasing sales numbers by 15% or increasing the number of customers in the next quarter, a marketing strategic plan helps businesses generate more revenue and increase their customer base.

A marketing strategic plan can include marketing technology, software, or web-based platforms to help track your business’s progress toward its goals. The plan also could address the specific types of marketing the business will pursue—for example, whether your business will pursue traditional print advertising or digital ads.

Because a marketing strategic plan aims to increase your business’s exposure and numbers through different techniques and methods, it’s a good idea to include the budget in the document. This way, you and your employees will work toward the marketing goals and objectives you want to achieve without spending too much money.

Strategic Planning Template Checklist

Should you use strategic planning models or templates? Yes, in fact, a good strategic plan template, sometimes called a strategy mapping template is like a checklist. The template will include different sections for you to complete and help you cover a variety of topics. Using a thorough template will help ensure you have a comprehensive strategic plan for your business.

You can use computer software for your strategic planning template, or you can create your own with Microsoft Word or Excel. You can also download our Strategic Plan Example Template to use.

strategic planning process

  • What does a strategic plan include? At the top of your template, label it “Executive Summary” and provide an overview of your business. Include the time period you’re looking at for your business’s strategic plan; for example, if the strategic plan provides a three- to five-year outlook.
  • Underneath this section would be information on “Your Company.” This is where you’ll put in your mission statement, vision, values, and information on leadership.
  • A section on “Research” will include information on your clients and customers, competitors and the industry.
  • You can also create a section on “Products and Services,” which will detail any products you sell, pricing strategy, delivery systems and capabilities, and suppliers.
  • A section of your template should focus on “Measurable Goals.” These should be realistic goals or objectives that you want your business to achieve within the time period you set. Don’t forget to include details on how the progress of each goal or objective will be measured.
  • Whether you include it within the Measurable Goals section or as a stand-alone group in the template, don’t forget about your “Action Plans.” This provides an overview of how you and your employees are going to achieve your business goals and operational plans.
  • You also can put your SWOT analysis into the template. List the identified strengths, weaknesses, opportunities, and threats with your business. Remember to be honest and candid. When you are reviewing your strategic plan in the future, you can reference the initial SWOT analysis and check to see what has changed.
  • The last section should detail “Reviews and Updating.” Explain how often the plan should be checked (every few months, quarterly, annually, etc.). Provide a list of people who should be responsible for reviewing and updating the strategic plan, as well as communicating any changes with the broader business.

what is strategic planning

Why Is Strategic Planning Important?

The strategic planning process can take some time, but it’s beneficial for everyone involved. As the small business owner, you’ll have a better idea of the organizational goals and objectives you’ll want to accomplish and a path to do that. For your employees, the process can foster an increase in productivity—contributing to the success of the business.

strategic plan example

Communicating Your Strategic Plan

In a business environment, strategic planning requires you to involve your employees. Your employees are involved in the day-to-day operations and can provide you with a unique view of the company. Employees can share with you what they think is and isn’t working with the business today, which can inform your planning for the future.

In addition to your employees, it’s beneficial to reach out to people outside of your company to get their opinions. Like your employees, vendors have a unique perspective on your industry. Talk to them about the business, and get their thoughts on how they think the business landscape can change in the future.

The U.S. Small Business Administration recommends that the strategic planning process be a flexible one. When you meet with your employees and any people outside of the company, remember that the discussions should encourage new ideas and thoughts.

what is a strategic plan

Increase Productivity

Involving your employees in the strategic planning process also means they receive a sense of accountability that can increase productivity. Whether they contributed in the process or were informed of the business’s long-term goals and objectives after the strategic plan was created, they’ll be more likely to want to help you achieve those targets.

strategic plan template

Identifying Strengths and Weaknesses

As part of the strategic planning process model, you’ll examine and analyze your entire business. You’ll take a look at what your business does well and the areas where it still needs to improve. By identifying your business’s current strengths and weaknesses, the process gives you and your employees an opportunity to improve in the future and become a durable business by minimizing risks.

Although you may have a good idea about what your business excels at and areas that need to be improved upon, don’t forget to involve your employees. They may tell you something you didn’t think of.

strategy mapping

Setting the Direction of the Business and Fostering a Proactive Environment

By the end of the strategic planning process, you and your employees should have a clear direction of where you want the business to go in the future. These discussions and the planning process itself help put the business in the best position to succeed in the future.

Strategic planning gives you and your business time to figure out how to grow over the next few years and how to address new opportunities and challenges. Think about the challenges or issues your business may face in four or five years and plan accordingly, so your business doesn’t stumble down the road.

Strategic Planning Misconceptions

There are many strategic planning misconceptions. From not having enough time or thinking it only benefits larger businesses, to fearing you’ll put your business on the wrong path, there are a variety of reasons why business owners may be wary of strategic planning. But don’t be alarmed; strategic planning can help your business—big or small—and the benefits far outweigh any perceived negatives.

Regardless of the size of your business, a strategic plan is beneficial. Whether you are a small business or a large corporation with hundreds or thousands of employees, strategic planning helps you make sure the company is headed in the right direction.

But how do you know if you’re steering the company in the right direction? The beginning phases of strategic planning focus on research and discussions. The decisions you make during strategic planning aren’t based on assumptions; they’re based on research and information you’ve gathered while talking with your employees and people outside of your company.

The strategic planning process may seem daunting at first, but when you understand what’s involved and how to do it, it’s not that complicated. It takes time, but the amount you invest in the process pays off when everyone in your company works toward accomplishing the goals and objectives you’ve laid out.

The process doesn’t stymie creativity either. When you meet with your employees for strategic planning, you’re asking everyone to have a discussion and brainstorm ideas. The strategic planning process puts everyone’s minds together to think of creative ideas.

If you go through the strategic planning process once, don’t think you won’t have to do it again. The strategic plan is a living document; it should change over time. It’s not uncommon for business owners to create a strategic plan with their employees and rarely—or never—revisit the document. Reviewing and evaluating your strategic plan regularly will help keep you accountable and on track to achieve your goals and objectives.

What Makes Strategic Planning Successful?

Successful strategic planning involves a team effort among you and your employees, as well as among you and your vendors and other outside people. The more you engage your employees with strategic planning, the better they’ll understand the strategy you want to have for your business.

Strategic planning concepts also need to be flexible. While it’s necessary to have goals and objectives for your business, you also have to be able to adapt to changes. For instance, 44% of small businesses without a website, plan to create one in 2021 to adapt to the growing online shopping trend brought on by COVID-19.

strategic mapping

When strategic planning is successful, everyone in your business is on the same page with the business’s direction and goals. Each individual understands what makes the business stronger and what needs to be worked on. And it’s more likely that each person wants to contribute to the business’s growth and success.

When Should Strategic Planning Be Done?

When it comes to strategic planning, you want to start it sooner rather than later . It doesn’t necessarily have to be done in the first few days or weeks of the company’s life—you may want to be in business for a few months to give yourself a better idea of what is and isn’t working.

But even if you’ve owned your business for a long time, it’s not too late to get started on strategic planning. It’s never a bad time to sit down and think about the current status of your company and where you want to be in the next five to 10 years. When you’re ready, gather your team together and schedule regular meetings dedicated to strategic planning.

Where Do Strategic Plans Go Wrong?

Strategic planning is an ongoing commitment. Even if you go through an initial round of strategic planning and it leads to the development of your business’s first strategic plan, it’s still not finished. The plan has to be implemented.

Strategic plans also can go wrong if the goals and objectives you set are unrealistic. Every business owner wants to see their business grow and succeed, but if you set an overly ambitious growth rate, it could discourage you and your employees.

A successful strategic plan requires commitment. Your entire team needs to be focused on the business and carrying out the strategic plan. If the strategic plan isn’t being used regularly or as the foundation of the business, you and your employees can lose sight of the company’s direction and goals.

What Is Strategic Planning Implementation Leadership

The top three reasons strategy implementation fails:

  • Poor communication
  • Lack of leadership
  • Using wrong measures

Reviewing and Updating Your Strategic Plan

A strategic plan is a living document. Don’t spend the time to create a strategic plan and then put it on the shelf to collect dust. Live by it. And regularly update your strategic plan. How often you should update your strategic plan depends on how your business works.

If your business works in a fast-paced industry and can be affected by changing outside factors, you should review and update your strategic plan on a more frequent basis. For example, if your business operates within the ever-evolving tech industry, you will probably want to check on your strategic plan after each quarter.

At the very least, you should review your strategic plan every year. When you review your strategic plan, you’re looking at the assumptions made and checking to see where your business stands in relation to those assumptions. What you thought would be challenges and threats to your business a year ago may not be the same now.

Don’t be afraid to change any part of the strategic plan. In fact, only 77% of small business owners are somewhat or very confident in their ability to execute their strategy but 95% still fall short of meeting all their goals. Updating your plan can help you stay on track with your goals. And if outside factors are having a bigger impact on your business than you initially thought, you may have to change your objectives or goals.

strategic business plan

The regular review is a good opportunity to check back in with your employees. Your employees helped you create the business’s strategic plan and they’re as invested in the success of it as you are. Give them a summary of where the business currently stands. Talk with them to see if things have improved or if they still have concerns with the business—or if any of their initial concerns have changed.

After you review the strategic plan, share any changes with your team. Even if you didn’t make any changes, it’s a good opportunity to give the rest of your company your thoughts on the business’s status and confirm that things are on the right track. You also can encourage your employees to continue working hard to achieve the goals and objectives in the strategic plan.

Focusing on the long-term strategy of your business is also essential. Long-term strategic planning is as important as having a business plan and can lead to the success of your business. You and your employees will understand the current status of the company, productivity will increase as everyone works toward achieving the business goals, and you’ll put yourself in a better position to address any potential issues that may come up in the future.

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Great article, and I will be taking points for my year end strategy session. One thing that would be helpful to add here, and which I will be conducting, is the idea to present your plan to key partners or mentors to garner feedback. In my case, I am a 1-person organization and I need to hear the voice of other to assure that my plan is well rounded and not missing key elements. Again, great read! ~M~

Thank you for commenting, Michelle! We appreciate the feedback and are glad you liked the article!

It’s really helpful

We’re glad you found the article, helpful! Thanks for commenting!

This was helpful and have grown to work better as a manager.

That’s great to hear, Samuel! Thanks for commenting!

This was great and helpful. Thanks. 👍

I gained great knowledge. Thanks for teaching us about strategic planning and its benefit.

You’re welcome! We’re glad you found the article helpful.

I really needed this.

We’re glad the article was helpful!

Hi, the article is well written and worth reading. Thank you for sharing the valuable information. Please keep sharing more.

We’re glad you liked it, John! You can read more about Strategic Planning in the articles below:

https://sba.thehartford.com/business-management/strategic-planning-process/ https://sba.thehartford.com/business-management/key-components-of-strategic-plan/ https://sba.thehartford.com/business-management/develop-a-strategic-plan/

Very innovative and thought provoking…..interesting read….

Thanks for commenting, Reena! We’re glad you found the article interesting.

Thoroughly enjoyed this…

That’s great to hear, Melanie! You can also check out our other strategic planning articles, here:

Loved it all

That’s great to hear, Jean!

I really enjoyed this notice. Be blessed.

We’re glad you enjoyed it!

I’m very much interested in your support with the information. Thank you very much as it will help me develop my organization.

Thank you for reaching out, John! You can learn more about strategic planning with these articles from SBA: https://sba.thehartford.com/business-management/strategic-planning-process/ https://sba.thehartford.com/business-management/develop-a-strategic-plan/ https://sba.thehartford.com/business-management/why-is-strategic-planning-necessary/

Thanks for commenting!

Very good notes. Easy to understand.

That’s great to hear, Samuel! Check out our other strategic planning articles to learn more:

lnterested in learning more about this subject.

That’s great to hear, Linnet! You can learn more by checking out these other SBA articles on strategic planning:

https://sba.thehartford.com/business-management/strategic-planning-process/ https://sba.thehartford.com/business-management/why-is-strategic-planning-necessary/ https://sba.thehartford.com/business-management/develop-a-strategic-plan/

Good write up, very informative.

Thank you! We’re glad you enjoyed it.

Really liking this website!

That’s great to hear, Lise!

I really enjoyed reading the article about the strategy planning. There are many things I was not aware before.

We’re so glad you enjoyed it! Thank you for the nice comment!

Good stuff. Straight forward.

We’re glad you liked it!

Great article. keep it up.

Will do, thank you for the nice comment and for reading SBA!

Insightful.

Thank you, Stella!

Fantastic article!! Done with clarity. But my question has always been, at what point does the goals and objectives come in the strategic Planning process? Do we establish the goals and objectives after defining the Mission and Vision statements or do we develop goals and objectives after the analytic tool is utilized (SWOT, PEST,)? etc

Thanks for reaching out! This can depend on the business owner. While some business owners may have initial goals and objectives early on, it can also make sense to this after doing the analysis (SWOT, PEST). The information from these analyses can help create meaningful goals and objectives. The idea behind goals and objectives (both short- and long-term) is that they’re supposed to support/ladder up to the mission and vision statements.

Good article and very interesting.

Thanks for the comment! We’re happy to hear you found it interesting.

Thank you, this is a great article!

You’re welcome, Muhammad!

It was a great. Very helpful.

We’re glad you found it helpful! Thank you for the comment!

Great article. I really enjoyed reading it.

We’re glad you enjoyed reading it! Thanks for leaving a comment, Samana!

I need your coaching.

Thanks for reaching out! Check out this SBA article: https://sba.thehartford.com/business-management/small-biz-owner/build-stronger-mindset/

Under #8 in the article, you can sign up for a free 1-hour consultation!

Excellent piece of information on strategic planning!

We’re so glad you liked it! Thanks!

I appreciate this greatly. It’s helpful for small businesses especially for new initiatives and those at the mature business stage. Thank you!

We’re glad you liked it. Thank you for commenting, Adolf!

It is better to make some terms like vision, goal and mission clear.

Appreciated article.

We’re glad you liked it. Thanks for commenting!

Very informative! It helps me a lot as a student. Thank you 😊

You’re welcome, Joice! We’re always happy to help and glad to hear you find our articles informative.

I enjoyed reading the article. Thank you for providing the overview about the topic. Examples and links are very useful too.

That’s great to hear! Thank you!

Any discussion on Strategic Planning is good discussion – it is such a critical element of any organisation that aspires to be good and dares to be great.

Great point, Steve!

A very interesting article.

We’re glad you liked it! Thanks for commenting!

Informative article! You have made strategic planning so easy to understand. But how do i reference this article in an academic paper?

One way to cite this article in an academic paper is like this:

Vo, Eric. “What Is Strategic Planning.” Small Biz Ahead Blog , 2 Sept. 2020, sba.thehartford.com/business-management/what-is-strategic-planning/

I fully agree with you. The article is useful, but mostly for beginners and students. But it is informative and I liked it as well.

Thank you for sharing this very informative article. It will definitely guide me in conducting our own Strategic Planning at our office.

Thanks for the comment. We’re glad the article could help!

I definitely enjoyed every little bit of it. It is a great website and nice share. I want to thank you. Good job! You guys do a great blog and have some great content. Keep up the good work. SEO canada

That’s great to hear! Thanks for the comment!

This is helpful. Thank you.

Thanks for the comment, Patricia!

Really helpful… thanks alot.

Glad you enjoyed the article!

What is the difference between Policy development & Strategic planning?

Companies first come up with strategic plan to establish their long term goals and objectives along with general actions to be taken to support those goals and objectives. You then establish policies to ensure that your team is staying within those actions. For example, your strategic plan may say you want to increase revenues 20 percent next year in the aerospace market. Your actions will include marketing campaigns and outreach events. Your policies will then ensure that your team are not undertaking actions that are not included in these campaigns and events.

Thanks for your educative explanation on the preparation of strategic business plan.

Thank you for this article. It helped me to understand the strategic planning process, which is something I am studying and this was straightforward and to the point.

Thank you Emily!

This article is a good basic overview. Something that must be emphasized is translating the strategic plan into specific actions with measurable outcomes. If you go into work on Monday after completing your plan and do your work the way you did before the plan, then the plan has already failed. I see this frequently in the businesses with which I work. Another key is to clearly tie individual staff roles and performance expectations and goals to the strategic goals. When effectively done, you begin to harness the very real power of employees’ intimate knowledge of their work and how to do it better.

Thanks for sharing. This is very helpful to business owners and managers. As it is said, the strategic plan need to be flexible, same applies to getting knowledge of strategic plan as business environments keep changing.

Glad to hear this was helpful. Thanks for reading!

Thanks for so much for the this exciting read. I can’t wait to start doing the stuff with my team

Strategic planning is important to an organization because it provides a sense of direction and outlines measurable goals. Strategic planning is a tool that is useful for guiding day-to-day decisions and also for evaluating progress and changing approaches when moving forward. Found an another website Evolvetraining.ac.nz it has lots of valuable information for everyone

Thanks for sharing such an informative blog.

I really enjoyed reading the article.it motivates and gives direction in the business Thanks

I thank you for this platform because it is updating my knowledge on Strategic Planning

I really enjoyed reading the article. It was written in simple language and in a manner that helped me identify key points under each subtitle. I am going to use this as a guide to some strategic plans am working on, thanks.

This teaching is educative.

That’s good to hear. Glad you liked it!

This is a good and educative article. It’s very informative. Thanks.

I actually appreciate this piece. The writing is incredibly beneficial. my start up manufacturering business seems to be in better position with articles like this! My gratitude to the masterminds behind this program, Cheers.

Your article is helpful if you have employees, but how does this work if you have sub-contractors? Do you get them involved?

Now i have an insight of what strategic planning is. So what can be the sub-topics to include when writing an essay?

Great article. Thanks for the detailed information. Your blog is by far the best source I’ve found. Thanks!

Thank you, Victoria!

This is a comprehensive Strategic Planning manual.

Very interesting and valuable document. Enjoyed reading the participatory role of employees. Thanks a lot.

Thank you for the comment, Gemechu.

Love this article!! Thanks.

We are so glad you enjoyed this article! Thank you for the comment, Vanessa!

I send it to Beby.

Interesting read.

Thank you Bert!

Very practical article- thankyou very much

Thank you for reading!

Howdy! Great article on strategic planning for small businesses. I agree with the statistic you quote from Constant Contact. In my work, I find that most business owners can only think and plan about a year out. There are a couple of contributing factors to that ‘limited’ sight. For many business owners, this is the first time they have ever been where they are. They are suffering from ‘not knowing what they do not know.’ They are smart enough to recognize it, but they are cautious about the outlook because of it. The second is the rate of change in the economy, which only speeds up each year; it is just that very few businesses have the tools and expertise to keep pace with the change. Both factors lead to a general hesitation to look out too far or to dream too big.

I love the fact that you see that strategic planning needs to flexible and inclusive. It’s crucial to have a framework but to be flexible to incorporate learnings and shifts along the way. When you involve all the people who work in and on your business, there is more engagement, better ideas and a higher rate of success.

Great insights. Thank you, Leslie!

Thanks a lot for this wonderful article, Eric. You have resolved my problem of trying to know what strategic planning really is. I look forward to more up building articles. Thank you!

Thank you for the comment, Melvin!

Hi Christyne,

Your question about involving subcontractors is an interesting one. To me, a plan should involve as many of those that are strategic to your business and getting as much feedback as possible – as long at it’s relevant – should be the goal. So if you have a few good contractors (like my company does) that you think could contribute some value to the formation of your plan I say go for it.

Your article is helpful if you have employees, but how does this work if you have sub-contractors. Do you get them involved.

Hi Cristyne- please see the response below from Gene Marks.

Great job. This was very helpful.

Thank you for your feedback, John!

You have the BEST newsletter! This article was another great one. I shared it on all my social media platforms. I offer strategic planning services and this article is helpful in promoting my services. As well, most people think a strategic plan is ONLY for nonprofits. Thank you!

Hi Leslie, thanks so much for sharing!

Great summary “how-to” article for busy business owners. I often encourage our clients to start simple and achieve! This road map is an excellent way to jump in to real-life strategy setting!

Thank you, Patti!

This is an explicit, yet simple, post on strategic planning.

Thanks deeply for sharing this!

You’re welcome! We’re so glad you liked it and found it informative.

Great article, thanks for spelling this out in such easy-to-read terms.

Thanks for your feedback, Wende!

It’s a great eye opener into strategic planning process. Thank you for the great efforts.

Glad you liked the article! Thanks for the comment!

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Home » What Is Strategic Planning? (Definition and Examples)

What Is Strategic Planning? (Definition and Examples)

July 1, 2022 max 7min read.

Strategic Planning

This Article Covers :-

What Is Strategic Planning?

What are the elements of strategic planning, why is strategic planning important, what are the examples of strategic planning, definition of strategic planning.

Strategic planning refers to developing specific business plans, putting them into action, and analyzing the results regarding a company’s overarching long-term goals or objectives.

Strategic planning is another buzzword that businesses and startups revolve around. However, most of them are only stuck on strategic thinking.

There’s a difference between strategic thinking and strategic planning . The latter gets things done.

But what is strategic planning, and what does it involve? 

Strategic planning is the process of developing a defined business strategy that helps your company’s direction. 

It involves prioritization , efficient resource capacity planning , the optimization of operations, and the assurance that all employees and stakeholders align towards the same goals. 

It reaffirms a company’s direction and how it will measure its success. 

What Are the Types of Strategic Planning?

There are three main types of strategic planning:

Annual planning

Annual planning is a process that takes place over one year. It involves setting goals and objectives for the year and developing strategies to achieve those goals. 

Annual planning is best suited for stable businesses with a predictable sales cycle.

Rolling planning

Rolling planning involves setting goals and objectives on a rolling basis and developing strategies to achieve those goals. 

Rolling planning is best suited for businesses in a growth phase or an unpredictable sales cycle.

Crisis planning

Crisis planning is a process in response to a specific crisis. 

It involves developing a plan to address the crisis and implementing that plan. 

In addition to these, there are specific strategic planning models that you can adopt while approaching your strategic plan. 

Some of the strategic planning models are as follows: 

SWOT Analysis

The SWOT analysis is a rising model that companies frequently employ at the start of the strategic planning process. 

It highlights the internal and external factors that help or hinder the achievement of a corporate goal.

Strengths – Factors of the company that can assist in achieving the goal.

Weaknesses – Factors of the business that may obstruct the achievement of the goal

Opportunities – External variables that could assist in achieving the goal.

Threats – External variables that may obstruct the achievement of the goal.

SWOT analysis might assist you in figuring out what you’re good at and where you could improve. 

Take a look at our SWOT analysis guide .

PESTLE Analysis

PESTLE divides the business environment into four categories:

Political – Changes in taxation, trading agreements, or grant support for enterprises are examples of political factors.

Economic – Interest rates, inflation, and changes in consumer demand are all economic factors.

Social – Factors such as altering lifestyle patterns or demographic trends

Technological – Emerging technology or equipment that boosts productivity are examples of technological advancements.

Legal – Changes in employment law or the way your industry is controlled are examples of legal changes.

Environmental – Customers, regulators, and employees’ expectations of sustainable development evolve.

Now that you know how to approach your strategic planning process, look at the elements of strategic planning.

There are four essential elements of strategic planning that you must pay attention to. They are as follows:

Your Mission

Strategic planning begins with a mission statement that gives a business a feeling of direction and purpose. 

An organization’s mission statement describes who it is, what it does, and where it wants to go. Mission statements are usually broad but specific. 

A company in the education field, for example, might aim to be the market leader in online virtual instructional tools and services.

Selecting goals is an integral part of strategic planning. Most teams use SMART goals or other objectively quantifiable goals.  

Measurable goals are vital because they allow business leaders to assess how well the company meets its objectives and achieves its overall mission.

You can begin your SMART goal-setting journey by reading our guide on it.

Alignment is a crucial yet often neglected element of strategic planning. Here are some things to keep in mind: 

  • Do your short-term goals align with your long-term goals? 
  • How do you plan on aligning your cross-functional teams ? 
  • How will you manage your stakeholder expectations ? 

Alignment matrix tool in Chisel's Team Radar pillar

You can always get started with your internal team alignment and make your way up. At Chisel , we use the Team Radar feature to grasp which page each team is on. 

The strategic planning process is essential for several reasons. 

It helps you take a step back, assess your business or organization’s current situation, and identify areas that need improvement. 

Furthermore, it gives you a roadmap to follow as you work to achieve your goals.

Good strategic planning will keep you focused and help ensure that you make decisions aligned with your overall goals.

If you’re unsure where to start, there are many product and business strategy templates and tools we discuss in our blogs . 

What Are the Steps in the Strategic Planning Process?

You can carry out strategic planning through the following steps:

Identifying 

The first step in strategic planning is identifying a company’s present strategic position. 

This is where stakeholders examine the organization and its environment using the existing strategic plan, including the mission statement and long-term strategic goals.

Prioritizing

The strategic planners then develop targets and objectives that align with the organization’s mission and goals to help the company achieve them.  

There could be a lot of potential goals; thus, prioritizing the most important, relevant, and immediate ones is crucial.

You may employ any prioritization matrix or establish OKRs in this step.

Developing 

This is the crux of strategic planning, in which stakeholders work together to develop the stages or strategies required to achieve a specified strategic goal. 

This may entail developing short-term tactical business strategies that align with the overall strategy. 

Stakeholders participating in the development use tools like a mind-map to visualize and alter the plan.

Implementing

It’s time to put the strategic plan into action after being prepared. 

To set roles, make investments, alter policies and processes, and develop measurement and reporting, you must communicate well across the business. 

Strategic management and regular strategic reviews are usually part of the implementation process to ensure that objectives stay on track.

As company conditions change and new possibilities arise, you should regularly evaluate and update your strategic planning to alter priorities and reconsider goals. 

Quarterly evaluations of KPIs are possible, as are annual revisions to the strategic plan. 

Stakeholders can review performance against goals using balanced scorecards and other tools.

Now you know the fundamental steps involved in the strategic planning process. However, you can take it one step forward by instilling some best practices.

What Are the Best Practices for Strategic Planning?

A few best practices for strategic planning can help businesses get the most out of this process.

Team Alignment

The first best practice for strategic planning is ensuring that the entire team is involved. 

From the CEO to the entry-level employees, everyone should have a say in the company’s goals and how you can achieve them. This ensures everyone is on the same page and working towards the same objectives.

Using product roadmap software ‘s that align all teams and stakeholders in one place can come in handy.

Chisel's Team Participation tool

Periodic Review

Another best practice for strategic planning is reviewing and adjusting the plan as needed. 

The business landscape is constantly competitive , so it’s essential to ensure that the strategic plan is still relevant and achievable. 

Adjusting the plan as needed will help keep the business on track and ensure that the goals are still realistic.

Transparent Communication

Finally, one of the most essential best practices for strategic planning is communicating the plan to everyone in the company. 

Employees need to know the goals and how they can help achieve them. By communicating the plan clearly, businesses can ensure that everyone is working towards the same objectives.

By following these best practices for strategic planning, businesses can ensure that they get the most out of this essential process.

Some of the most popular companies globally are known for their strategic planning. 

Nike, for example, has a well-defined strategic plan that has helped them become one of the most successful companies in the world. 

Another great example is Google, which has a clear strategic plan that has helped them become a global powerhouse. 

Regarding social media giants, Facebook is one of the top dogs. With over 2.23 billion monthly active users, the platform boasts incredible reach.

Given its size and scope, it’s no surprise that Facebook takes a very strategic approach to its planning. The company has a whole team dedicated to strategic planning and execution.

Well, now you have everything you need. Let’s embark on your strategic planning journey with Chisel’s free-forever all-rounder product management tools ! 

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Strategic committee usually leads the strategic planning. This committee may include stakeholders, corporate executives, product owners and managers , and other strategic consultants.

Goals and objectives are two critical components of strategic planning. Goals are the broad, long-term aspirations that an organization hopes to achieve. Objectives are the specific, measurable steps an organization will take to achieve its goals.

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What Is Strategic Management? Benefits, Process, and Careers

Discover what strategic management is, along with the benefits of applying it to an organization, the five-step process, and careers to choose from.

[Featured image] A product strategist in a blue shirt works in front of a large computer monitor.

Strategic management is the process of defining and implementing procedures and objectives that set a company apart from its competition. Strategic management is also a skill that can be developed as someone gains experience and adopts a strategic mindset. It is considered part of business acumen, though it can also apply to fields like non-profit, government, and the public sector.

In this article, you will learn all about strategic management, including its benefits, process, and career paths, as well as steps for becoming a strategy manager.

What is strategic management?

Strategic management involves developing and implementing plans to help an organization achieve its goals and objectives. This process can include formulating strategy, planning organizational structure and resource allocation, leading change initiatives, and controlling processes and resources. 

Strategic planning involves identifying business challenges, choosing the best strategy, monitoring progress, and then making adjustments to the executed strategy to improve performance. Tools like SWOT (strengths, weaknesses, opportunities, and threats) analysis are used to assess where opportunities and threats lie between the organization, its competition, and the overall market.

Strategic management happens at broader levels like organization-wide leadership, but it can also be implemented at a department or team level.

Approaches to strategic management

There are two main approaches to strategic management: prescriptive and descriptive. A prescriptive approach to strategic management focuses on how strategies should be developed, while a descriptive approach focuses on how strategies should be put into practice. The prescriptive model is more top-down, based on SWOT analysis. The descriptive model is more guided by experimenting with different methods to find solutions and learning from experience. It applies Agile methodology to strategic management.

Read more: What Is Agile? And When to Use It

Types of strategy

One way of thinking about strategic management is to classify the management focus into three types of strategy:

• A business strategy is a high-level plan where you outline how your organization will achieve its objectives.

• Operational strategies are much more specific plans where you detail what actions to take to achieve the desired results.

• Transformational strategies involve making radical changes to your organization to achieve significant improvements.

Benefits of strategic management

The strategic management process helps an organization's leadership plan for its future goals. Setting a roadmap and actionable plan ensures that employees and leaders know where they're going and how to get there in the most efficient, cost-effective manner. It is a work in progress, so strategic plans should continuously be evaluated and adjusted as the market outlook changes.

Financial benefits:

Increase market share and profitability.

Prevent legal risk.

Improve revenue and cash flow.

Non-financial benefits:

Relieves the board of directors of responsibilities.

Allows for an objective review and assessment.

Enables an organization to measure progress throughout time.

Provides a big-picture perspective of the organization's future.

5 steps of the strategic management process

It's common to view the strategic management process as a five-step process. The steps are identification, analysis, formation, execution, and evaluation.

1. Define the direction.

Identifying the direction and specific goals is the initial stage of the strategic management process. This step involves identifying goals and determining what needs to happen to achieve them.

2. Analyze the current situation.

The second step is analysis and research. Using tools like SWOT analysis and examining the organization's resources, including budget, time, people (staff), and more, you'll gain a better understanding of how to leverage what's working and get rid of what's not.

3. Outline the strategy and plan of action.

Next is formulating a strategy and plan of action based on situational analysis. This step involves crafting a specific and realistic plan to help the organization achieve its goals.

4. Execute the plan.

Executing the plan is the fourth step in the strategic management process. This step involves putting the plan into action and monitoring its progress. You may have to adjust the plan as circumstances change, especially if you take a more descriptive approach to strategy.

5. Evaluate the plan.

Evaluation is the fifth and final step in the strategic management process. Here, you'll assess whether the organization has achieved its goals. If not, you can adjust your plan and implement it in innovative ways. Feedback and analysis are essential to evaluation and preparing for an optimal business future.

Examples of strategic management in practice

Implementing and overhauling information systems and technology

Let's say Company A is a startup that has been scaling rapidly. They hired a strategy consultant to come in and conduct an audit. The consultant finds that the company is paying for apps and tools that it doesn't use. They conduct survey research to understand employee needs and compile a list of 20 apps (out of 100) that can be discontinued with little negative impact. After implementation, the company surveys employees again in two months to gauge their needs. Overall it turned out to be an efficient, cost-cutting strategy.

Shifting resources (budget) toward more successful revenue streams

Company B's Chief Marketing Officer asked its department to assess its brand marketing strategy. The head of marketing found that their email marketing efforts were generating more conversions than any other channel, so they diverted some of their print budget toward investing in expanding the email marketing team. The email marketing team developed a strategy and plan to reach new audience segments. After six months, more budget was shifted toward email to support the program's success.

Careers that apply strategic management

To some extent, strategy is necessary for plenty of management and leadership roles in nearly any industry. But strategic management is slightly different since it involves managing the evolution of strategies that are important to an organization's bottom line. These are a few careers that apply strategic management as a core part of the role:

Management consultant

Corporate strategy advisor

Business analyst

Strategy manager

Business development manager

What industries use strategic management?

Strategy managers, and roles that use the strategic management framework, such as management consultants, may work in different industries. Companies seek out strategic management professionals because they deeply understand business, finance, corporate planning, and more. Sectors may include: finance, insurance, technology, public administration, manufacturing, health care, government, and more.

Pursue strategic management

A career in strategic management can be challenging and rewarding, offering a unique perspective on how businesses operate. If you're ready to take the next step in a career in strategic management, you might consider the Strategic Management and Innovation Specialization offered by the Copenhagen Business School on Coursera.

Keep reading

Coursera staff.

Editorial Team

Coursera’s editorial team is comprised of highly experienced professional editors, writers, and fact...

This content has been made available for informational purposes only. Learners are advised to conduct additional research to ensure that courses and other credentials pursued meet their personal, professional, and financial goals.

  • Business strategy |
  • 7 strategic planning models, plus 8 fra ...

7 strategic planning models, plus 8 frameworks to help you get started

Team Asana contributor image

Strategic planning is vital in defining where your business is going in the next three to five years. With the right strategic planning models and frameworks, you can uncover opportunities, identify risks, and create a strategic plan to fuel your organization’s success. We list the most popular models and frameworks and explain how you can combine them to create a strategic plan that fits your business.

A strategic plan is a great tool to help you hit your business goals . But sometimes, this tool needs to be updated to reflect new business priorities or changing market conditions. If you decide to use a model that already exists, you can benefit from a roadmap that’s already created. The model you choose can improve your knowledge of what works best in your organization, uncover unknown strengths and weaknesses, or help you find out how you can outpace your competitors.

In this article, we cover the most common strategic planning models and frameworks and explain when to use which one. Plus, get tips on how to apply them and which models and frameworks work well together. 

Strategic planning models vs. frameworks

First off: This is not a one-or-nothing scenario. You can use as many or as few strategic planning models and frameworks as you like. 

When your organization undergoes a strategic planning phase, you should first pick a model or two that you want to apply. This will provide you with a basic outline of the steps to take during the strategic planning process.

[Inline illustration] Strategic planning models vs. frameworks (Infographic)

During that process, think of strategic planning frameworks as the tools in your toolbox. Many models suggest starting with a SWOT analysis or defining your vision and mission statements first. Depending on your goals, though, you may want to apply several different frameworks throughout the strategic planning process.

For example, if you’re applying a scenario-based strategic plan, you could start with a SWOT and PEST(LE) analysis to get a better overview of your current standing. If one of the weaknesses you identify has to do with your manufacturing process, you could apply the theory of constraints to improve bottlenecks and mitigate risks. 

Now that you know the difference between the two, learn more about the seven strategic planning models, as well as the eight most commonly used frameworks that go along with them.

[Inline illustration] The seven strategic planning models (Infographic)

1. Basic model

The basic strategic planning model is ideal for establishing your company’s vision, mission, business objectives, and values. This model helps you outline the specific steps you need to take to reach your goals, monitor progress to keep everyone on target, and address issues as they arise.

If it’s your first strategic planning session, the basic model is the way to go. Later on, you can embellish it with other models to adjust or rewrite your business strategy as needed. Let’s take a look at what kinds of businesses can benefit from this strategic planning model and how to apply it.

Small businesses or organizations

Companies with little to no strategic planning experience

Organizations with few resources 

Write your mission statement. Gather your planning team and have a brainstorming session. The more ideas you can collect early in this step, the more fun and rewarding the analysis phase will feel.

Identify your organization’s goals . Setting clear business goals will increase your team’s performance and positively impact their motivation.

Outline strategies that will help you reach your goals. Ask yourself what steps you have to take in order to reach these goals and break them down into long-term, mid-term, and short-term goals .

Create action plans to implement each of the strategies above. Action plans will keep teams motivated and your organization on target.

Monitor and revise the plan as you go . As with any strategic plan, it’s important to closely monitor if your company is implementing it successfully and how you can adjust it for a better outcome.

2. Issue-based model

Also called goal-based planning model, this is essentially an extension of the basic strategic planning model. It’s a bit more dynamic and very popular for companies that want to create a more comprehensive plan.

Organizations with basic strategic planning experience

Businesses that are looking for a more comprehensive plan

Conduct a SWOT analysis . Assess your organization’s strengths, weaknesses, opportunities, and threats with a SWOT analysis to get a better overview of what your strategic plan should focus on. We’ll give into how to conduct a SWOT analysis when we get into the strategic planning frameworks below.

Identify and prioritize major issues and/or goals. Based on your SWOT analysis, identify and prioritize what your strategic plan should focus on this time around.

Develop your main strategies that address these issues and/or goals. Aim to develop one overarching strategy that addresses your highest-priority goal and/or issue to keep this process as simple as possible.

Update or create a mission and vision statement . Make sure that your business’s statements align with your new or updated strategy. If you haven’t already, this is also a chance for you to define your organization’s values.

Create action plans. These will help you address your organization’s goals, resource needs, roles, and responsibilities. 

Develop a yearly operational plan document. This model works best if your business repeats the strategic plan implementation process on an annual basis, so use a yearly operational plan to capture your goals, progress, and opportunities for next time.

Allocate resources for your year-one operational plan. Whether you need funding or dedicated team members to implement your first strategic plan, now is the time to allocate all the resources you’ll need.

Monitor and revise the strategic plan. Record your lessons learned in the operational plan so you can revisit and improve it for the next strategic planning phase.

The issue-based plan can repeat on an annual basis (or less often once you resolve the issues). It’s important to update the plan every time it’s in action to ensure it’s still doing the best it can for your organization.

You don’t have to repeat the full process every year—rather, focus on what’s a priority during this run.

3. Alignment model

This model is also called strategic alignment model (SAM) and is one of the most popular strategic planning models. It helps you align your business and IT strategies with your organization’s strategic goals. 

You’ll have to consider four equally important, yet different perspectives when applying the alignment strategic planning model:

Strategy execution: The business strategy driving the model

Technology potential: The IT strategy supporting the business strategy

Competitive potential: Emerging IT capabilities that can create new products and services

Service level: Team members dedicated to creating the best IT system in the organization

Ideally, your strategy will check off all the criteria above—however, it’s more likely you’ll have to find a compromise. 

Here’s how to create a strategic plan using the alignment model and what kinds of companies can benefit from it.

Organizations that need to fine-tune their strategies

Businesses that want to uncover issues that prevent them from aligning with their mission

Companies that want to reassess objectives or correct problem areas that prevent them from growing

Outline your organization’s mission, programs, resources, and where support is needed. Before you can improve your statements and approaches, you need to define what exactly they are.

Identify what internal processes are working and which ones aren’t. Pinpoint which processes are causing problems, creating bottlenecks , or could otherwise use improving. Then prioritize which internal processes will have the biggest positive impact on your business.

Identify solutions. Work with the respective teams when you’re creating a new strategy to benefit from their experience and perspective on the current situation.

Update your strategic plan with the solutions. Update your strategic plan and monitor if implementing it is setting your business up for improvement or growth. If not, you may have to return to the drawing board and update your strategic plan with new solutions.

4. Scenario model

The scenario model works great if you combine it with other models like the basic or issue-based model. This model is particularly helpful if you need to consider external factors as well. These can be government regulations, technical, or demographic changes that may impact your business.

Organizations trying to identify strategic issues and goals caused by external factors

Identify external factors that influence your organization. For example, you should consider demographic, regulation, or environmental factors.

Review the worst case scenario the above factors could have on your organization. If you know what the worst case scenario for your business looks like, it’ll be much easier to prepare for it. Besides, it’ll take some of the pressure and surprise out of the mix, should a scenario similar to the one you create actually occur.

Identify and discuss two additional hypothetical organizational scenarios. On top of your worst case scenario, you’ll also want to define the best case and average case scenarios. Keep in mind that the worst case scenario from the previous step can often provoke strong motivation to change your organization for the better. However, discussing the other two will allow you to focus on the positive—the opportunities your business may have ahead.

Identify and suggest potential strategies or solutions. Everyone on the team should now brainstorm different ways your business could potentially respond to each of the three scenarios. Discuss the proposed strategies as a team afterward.

Uncover common considerations or strategies for your organization. There’s a good chance that your teammates come up with similar solutions. Decide which ones you like best as a team or create a new one together.

Identify the most likely scenario and the most reasonable strategy. Finally, examine which of the three scenarios is most likely to occur in the next three to five years and how your business should respond to potential changes.

5. Self-organizing model

Also called the organic planning model, the self-organizing model is a bit different from the linear approaches of the other models. You’ll have to be very patient with this method. 

This strategic planning model is all about focusing on the learning and growing process rather than achieving a specific goal. Since the organic model concentrates on continuous improvement , the process is never really over.

Large organizations that can afford to take their time

Businesses that prefer a more naturalistic, organic planning approach that revolves around common values, communication, and shared reflection

Companies that have a clear understanding of their vision

Define and communicate your organization’s cultural values . Your team can only think clearly and with solutions in mind when they have a clear understanding of your organization's values.

Communicate the planning group’s vision for the organization. Define and communicate the vision with everyone involved in the strategic planning process. This will align everyone’s ideas with your company’s vision.

Discuss what processes will help realize the organization’s vision on a regular basis. Meet every quarter to discuss strategies or tactics that will move your organization closer to realizing your vision.

6. Real-time model

This fluid model can help organizations that deal with rapid changes to their work environment. There are three levels of success in the real-time model: 

Organizational: At the organizational level, you’re forming strategies in response to opportunities or trends.

Programmatic: At the programmatic level, you have to decide how to respond to specific outcomes or environmental changes.

Operational: On the operational level, you will study internal systems, policies, and people to develop a strategy for your company.

Figuring out your competitive advantage can be difficult, but this is absolutely crucial to ensure success. Whether it’s a unique asset or strength your organization has or an outstanding execution of services or programs—it’s important that you can set yourself apart from others in the industry to succeed.

Companies that need to react quickly to changing environments

Businesses that are seeking new tools to help them align with their organizational strategy

Define your mission and vision statement. If you ever feel stuck formulating your company’s mission or vision statement, take a look at those of others. Maybe Asana’s vision statement sparks some inspiration.

Research, understand, and learn from competitor strategy and market trends. Pick a handful of competitors in your industry and find out how they’ve created success for themselves. How did they handle setbacks or challenges? What kinds of challenges did they even encounter? Are these common scenarios in the market? Learn from your competitors by finding out as much as you can about them.

Study external environments. At this point, you can combine the real-time model with the scenario model to find solutions to threats and opportunities outside of your control.

Conduct a SWOT analysis of your internal processes, systems, and resources. Besides the external factors your team has to consider, it’s also important to look at your company’s internal environment and how well you’re prepared for different scenarios.

Develop a strategy. Discuss the results of your SWOT analysis to develop a business strategy that builds toward organizational, programmatic, and operational success.

Rinse and repeat. Monitor how well the new strategy is working for your organization and repeat the planning process as needed to ensure you’re on top or, perhaps, ahead of the game. 

7. Inspirational model

This last strategic planning model is perfect to inspire and energize your team as they work toward your organization’s goals. It’s also a great way to introduce or reconnect your employees to your business strategy after a merger or acquisition.

Businesses with a dynamic and inspired start-up culture

Organizations looking for inspiration to reinvigorate the creative process

Companies looking for quick solutions and strategy shifts

Gather your team to discuss an inspirational vision for your organization. The more people you can gather for this process, the more input you will receive.

Brainstorm big, hairy audacious goals and ideas. Encouraging your team not to hold back with ideas that may seem ridiculous will do two things: for one, it will mitigate the fear of contributing bad ideas. But more importantly, it may lead to a genius idea or suggestion that your team wouldn’t have thought of if they felt like they had to think inside of the box.

Assess your organization’s resources. Find out if your company has the resources to implement your new ideas. If they don’t, you’ll have to either adjust your strategy or allocate more resources.

Develop a strategy balancing your resources and brainstorming ideas. Far-fetched ideas can grow into amazing opportunities but they can also bear great risk. Make sure to balance ideas with your strategic direction. 

Now, let’s dive into the most commonly used strategic frameworks.

8. SWOT analysis framework

One of the most popular strategic planning frameworks is the SWOT analysis . A SWOT analysis is a great first step in identifying areas of opportunity and risk—which can help you create a strategic plan that accounts for growth and prepares for threats.

SWOT stands for strengths, weaknesses, opportunities, and threats. Here’s an example:

[Inline illustration] SWOT analysis (Example)

9. OKRs framework

A big part of strategic planning is setting goals for your company. That’s where OKRs come into play. 

OKRs stand for objective and key results—this goal-setting framework helps your organization set and achieve goals. It provides a somewhat holistic approach that you can use to connect your team’s work to your organization’s big-picture goals.  When team members understand how their individual work contributes to the organization’s success, they tend to be more motivated and produce better results

10. Balanced scorecard (BSC) framework

The balanced scorecard is a popular strategic framework for businesses that want to take a more holistic approach rather than just focus on their financial performance. It was designed by David Norton and Robert Kaplan in the 1990s, it’s used by companies around the globe to: 

Communicate goals

Align their team’s daily work with their company’s strategy

Prioritize products, services, and projects

Monitor their progress toward their strategic goals

Your balanced scorecard will outline four main business perspectives:

Customers or clients , meaning their value, satisfaction, and/or retention

Financial , meaning your effectiveness in using resources and your financial performance

Internal process , meaning your business’s quality and efficiency

Organizational capacity , meaning your organizational culture, infrastructure and technology, and human resources

With the help of a strategy map, you can visualize and communicate how your company is creating value. A strategy map is a simple graphic that shows cause-and-effect connections between strategic objectives. 

The balanced scorecard framework is an amazing tool to use from outlining your mission, vision, and values all the way to implementing your strategic plan .

You can use an integration like Lucidchart to create strategy maps for your business in Asana.

11. Porter’s Five Forces framework

If you’re using the real-time strategic planning model, Porter’s Five Forces are a great framework to apply. You can use it to find out what your product’s or service’s competitive advantage is before entering the market.

Developed by Michael E. Porter , the framework outlines five forces you have to be aware of and monitor:

[Inline illustration] Porter’s Five Forces framework (Infographic)

Threat of new industry entrants: Any new entry into the market results in increased pressure on prices and costs. 

Competition in the industry: The more competitors that exist, the more difficult it will be for you to create value in the market with your product or service.

Bargaining power of suppliers: Suppliers can wield more power if there are less alternatives for buyers or it’s expensive, time consuming, or difficult to switch to a different supplier.

Bargaining power of buyers: Buyers can wield more power if the same product or service is available elsewhere with little to no difference in quality.

Threat of substitutes: If another company already covers the market’s needs, you’ll have to create a better product or service or make it available for a lower price at the same quality in order to compete.

Remember, industry structures aren’t static. The more dynamic your strategic plan is, the better you’ll be able to compete in a market.

12. VRIO framework

The VRIO framework is another strategic planning tool designed to help you evaluate your competitive advantage. VRIO stands for value, rarity, imitability, and organization.

It’s a resource-based theory developed by Jay Barney. With this framework, you can study your firmed resources and find out whether or not your company can transform them into sustained competitive advantages. 

Firmed resources can be tangible (e.g., cash, tools, inventory, etc.) or intangible (e.g., copyrights, trademarks, organizational culture, etc.). Whether these resources will actually help your business once you enter the market depends on four qualities:

Valuable : Will this resource either increase your revenue or decrease your costs and thereby create value for your business?

Rare : Are the resources you’re using rare or can others use your resources as well and therefore easily provide the same product or service?

Inimitable : Are your resources either inimitable or non-substitutable? In other words, how unique and complex are your resources?

Organizational: Are you organized enough to use your resources in a way that captures their value, rarity, and inimitability?

It’s important that your resources check all the boxes above so you can ensure that you have sustained competitive advantage over others in the industry.

13. Theory of Constraints (TOC) framework

If the reason you’re currently in a strategic planning process is because you’re trying to mitigate risks or uncover issues that could hurt your business—this framework should be in your toolkit.

The theory of constraints (TOC) is a problem-solving framework that can help you identify limiting factors or bottlenecks preventing your organization from hitting OKRs or KPIs . 

Whether it’s a policy, market, or recourse constraint—you can apply the theory of constraints to solve potential problems, respond to issues, and empower your team to improve their work with the resources they have.

14. PEST/PESTLE analysis framework

The idea of the PEST analysis is similar to that of the SWOT analysis except that you’re focusing on external factors and solutions. It’s a great framework to combine with the scenario-based strategic planning model as it helps you define external factors connected to your business’s success.

PEST stands for political, economic, sociological, and technological factors. Depending on your business model, you may want to expand this framework to include legal and environmental factors as well (PESTLE). These are the most common factors you can include in a PESTLE analysis:

Political: Taxes, trade tariffs, conflicts

Economic: Interest and inflation rate, economic growth patterns, unemployment rate

Social: Demographics, education, media, health

Technological: Communication, information technology, research and development, patents

Legal: Regulatory bodies, environmental regulations, consumer protection

Environmental: Climate, geographical location, environmental offsets

15. Hoshin Kanri framework

Hoshin Kanri is a great tool to communicate and implement strategic goals. It’s a planning system that involves the entire organization in the strategic planning process. The term is Japanese and stands for “compass management” and is also known as policy management. 

This strategic planning framework is a top-down approach that starts with your leadership team defining long-term goals which are then aligned and communicated with every team member in the company. 

You should hold regular meetings to monitor progress and update the timeline to ensure that every teammate’s contributions are aligned with the overarching company goals.

Stick to your strategic goals

Whether you’re a small business just starting out or a nonprofit organization with decades of experience, strategic planning is a crucial step in your journey to success. 

If you’re looking for a tool that can help you and your team define, organize, and implement your strategic goals, Asana is here to help. Our goal-setting software allows you to connect all of your team members in one place, visualize progress, and stay on target.

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Strategic planning : concept and process | business management.

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Read this article to learn about Strategic Planning in an Organisation. After reading this article you will learn about:- 1. Concept of Strategic Planning 2. Process of Strategic Planning.

Concept of Strategic Planning:

Planning is related with future. A planning process involves different degrees of futurity.

Some parts of the organisation require planning for many years into the future while others require planning over a short period only.

For instance, capital expenditure is related to long- term period while budget for a year is of short-term nature. The former is called strategic planning or long-range planning.

‘Strategic planning’ may be defined as the process of determining the objectives of the organisation and the resources to be used to attain these objectives, as also the policies to govern the acquisition, utilisation and disposition of these resources.

Examples of strategic planning in an organisation are—diversification of business into new lines, planned growth rate in sales, type of products to be offered, etc. Strategic planning encompasses all the functional areas of business and is affected within the existing and long- term framework of economic, technological, social and political factors.

It also involves the analysis of various environmental factors—particularly with regard to how an organisation relates to its environment. Generally, for most of the organisations, strategic planning period ranges between three to five years.

Process of Strategic Planning:

The process of strategic planning consists of the following steps:

1. Determination of Mission and Objectives:

Strategic planning starts with the determination of the mission for the organisation. The principal objectives for which the organisation has been set up should be clearly defined. Strategic planning is concerned with an organisation’s long-term relationship to its external environment. So, the business mission should be fixed in terms of social impact of the organisation.

2. Environmental Analysis:

In order to identify the opportunities and threats, the external environment of the organisation is analysed. A list of important factors likely to affect the organisation’s activities is prepared.

3. Self-appraisal:

In the next step, the strengths and weaknesses of the organisation are analysed. Such an analysis will enable the enterprise to capitalize on its strengths and to minimise its weaknesses. The enterprise can utilise the external opportunities by concentrating on its internal capacity. By matching its strengths with the environmental opportunities, an enterprise can face competition and achieve growth.

4. Strategic Decision-making:

Strategic alternatives are then generated and evaluated. After that, a strategic choice is made to reduce the performance gap. The organisation must select the alternative that is best suited to its capabilities. For instance, in order to grow, an enterprise may enter into new markets or develop new products or sell more in the present markets.

Choice of strategy depends upon external environment, managerial perception, the managers’ attitude towards risk, past strategies and managerial power and efficiency.

5. Strategy Implementation and Control:

Once the strategy is determined, it must be translated into tactical operational plans. Programmes and budgets are developed for each function. Short term operational plans are prepared to use the resources. Control should be developed to evaluate performance as the strategy is put into use.

Wherever actual results are below the expectation, the strategy should be reviewed or reappraised. It must be modified and adapted to the changes in the external environment.

Related Articles:

  • Difference between Strategic and Operational Planning!
  • Planning Types: Corporate, Strategic and Operational Planning

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National Academies Press: OpenBook

Strategic Planning in the Airport Industry (2009)

Chapter: part 1 - introduction and definition of strategic planning.

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Introduction and Definition of Strategic Planning P A R T 1

ACRP Report 20: Strategic Planning in the Airport Industry (hereafter referred to as the Guide- book) guides readers through a step-by-step process for developing a strategic approach to air- port planning. The Guidebook provides information, tools, and techniques that can be used by airport professionals, airport policymakers, and related industry associations to develop or understand strategic plans that guide airport-related decisions and actions. The key content of the Guidebook is set forth in Exhibit 1-1. This Guidebook is based on the knowledge, expertise, opinions, and recommendations of air- port executives and other airport industry professionals gained through focus group discussions, an online survey, one-on-one interviews, and workshops. As with other subject areas, the body of knowledge regarding strategic planning rests with the practitioners who apply and advance it. The Guidebook includes proven traditional techniques and tools that have been effectively applied by some airport executives, as well as innovative practices that are emerging in the air- port and other industries. For example, the Guidebook addresses the concepts of strategic agility and acuity, which define how an organization can remain strategically adaptable to an ever- changing environment and, to the extent possible, be proactive in identifying opportunities, unforeseen events, and changing conditions. The Guidebook also draws on a number of articles, reports, research efforts, books, and studies that address strategic planning and/or airport planning. 1.1 Purpose of the Guidebook The primary purpose of this Guidebook is to provide a comprehensive, user-friendly manage- ment tool that can be used by airport professionals, airport policymakers, and related industry associations to implement or understand the strategic planning process leading to the develop- ment of an airport strategic plan. Nearly three-quarters of respondents to the online survey con- ducted as part of the research for this Guidebook viewed the development of a strategic plan as “a necessity” for their airport organization. The Guidebook sets forth a common process and key considerations for applying strategic planning in an airport setting. 1.1.1 Historical Context for the Guidebook The perspectives, priorities, and strategic planning techniques contained in the Guidebook are a reflection of the U.S. airport industry as it exists at the time of this research effort (2007 to 2009)—an environment in which airports are independent of national control and are typically owned and operated by local municipalities or regional/state authorities. However, other North 3 C H A P T E R 1 Introduction

American airports with operational structures similar to those airports in the United States, such as Vancouver International Airport in Canada, are also represented in the Guidebook. 1.1.2 Intended Audience for the Guidebook The Guidebook is intended to present the airport strategic planning process, related context, and facilitating tools and techniques to a variety of readers. In preparing the Guidebook, every effort was made to present the material in a simple and easy-to-follow style, while focusing on important and sometimes complex elements of the strategic planning process that are commonly overlooked in the day-to-day management of airports. The Guidebook provides a foundational reference for readers, who are expected to include, but not be limited to the following: • Airport board members • Airport directors • Airport department leaders • Airport employees • Aviation industry associations • Airport stakeholders • Consultants and other specialists in strategic planning, airport planning, and related fields • Educators in airport planning and related subjects • Individuals facilitating strategic planning sessions 4 Strategic Planning in the Airport Industry ACRP Report 20: Strategic Planning in the Airport Industry Best Practices For conducting the strategic planning process and assessing the organization’s internal resources and external situation. Includes best practices from corporations, nonprofit organizations, and public entities. Provides Information about: Benchmarking Practices Used in the airport and other industries. Presents recommendations for obtaining meaningful benchmarking comparisons with other airports. Includes: Sample Tools and Techniques For assessing strengths, weaknesses, opportunities, and threats (SWOT); creating a Balanced Scorecard; etc. Integrates: Online Survey Findings Into each Guidebook section. Outlines: The Definition of Strategic Planning Defines strategic planning. The Strategic Planning Framework Defines the framework for strategic planning in an airport setting. The Key Benefits of Strategic Planning Highlights the benefits of strategic planning. The Airport Planning Process Provides a comparative analysis of the procedural similarities and differences between airport strategic planning and other forms of airport planning. Exhibit 1-1. ACRP Report 20: Strategic Planning in the Airport Industry—key content.

• Researchers analyzing airport planning or strategic planning in the airport industry • Regulatory agencies • Other aviation professionals 1.2 The Guidebook Structure The Guidebook is organized into two main parts: Part 1: Introduction and Definition of Strategic Planning (Chapters 1 and 2) and Part 2: The Strategic Planning Sequence (Chapters 3 through 10). The eight chapters in Part II (highlighted in Exhibit 1-2) are as follows: • Chapter 3: Creating a Process Plan and Road Map • Chapter 4: Evaluating and Understanding the Organization • Chapter 5: Defining and Articulating the Organization’s Mission, Vision, and Values • Chapter 6: Scanning the Environment and Predicting Developments • Chapter 7: Identifying Strategic Issues, Strategies, and Long-Term Objectives • Chapter 8: Formulating Short-Term Objectives and Creating Action Plans • Chapter 9: Writing, Communicating, and Executing the Plan • Chapter 10: Monitoring, Evaluating, and Modifying the Plan These chapters cover steps that airport operators are recommended to follow when develop- ing a strategic plan. The steps were designed based on a literature review, the research team’s experience in strategic planning, and feedback from airport executives. These steps are recom- mended, but do not represent the only approach to developing a strategic plan. Other sources for strategic planning may recommend slightly different steps or variations of these steps. The chapters were developed to enable airport operators and aviation industry professionals to tai- lor their approach to strategic planning according to their specific organizational needs. Note that in Chapters 3 through 10 readers will encounter three icons: the worksheet icon, the question mark icon, and the exclamation point icon (icons are displayed in Exhibit 1-3). The worksheet icon refers readers to a numbered worksheet designed to assist them in the steps under discussion in each chapter. The worksheets are available on the CD-ROM that is bound into the Guidebook. Readers should insert this CD-ROM in their computer and click on the appropriate worksheet. The question mark indicates important questions that need to be asked and answered at par- ticular points in the strategic planning process. The exclamation point icon indicates a tip about the information being given. Throughout the Guidebook, brief case studies provide real-world examples of how managers of airports of different sizes and characteristics are dealing with chal- lenges presented by the strategic planning process. Following Chapter 10 are Appendices A and B. Appendix A is a glossary of terms and concepts referenced in Parts 1 and 2 of the Guidebook. These definitions are only applicable to the terms and concepts as they are used in the Guidebook. These terms and concepts may have different meanings in other contexts. Appendix B lists contributors to the focus groups and online survey conducted as part of the research reported herein. Introduction 5 Creating a Process Plan and Road Map (Chapter 3) Evaluating and Understanding the Organization (Chapter 4) Defining and Articulating the Organization’s Mission, Vision, and Values (Chapter 5) Scanning the Environment and Predicting Developments (Chapter 6) Identifying Strategic Issues, Strategies, and Long-Term Objectives (Chapter 7) Formulating Short-Term Objectives and Creating Action Plans (Chapter 8) Writing, Communicating, and Executing the Plan (Chapter 9) Monitoring, Evaluating, and Modifying the Plan (Chapter 10) Exhibit 1-2. The strategic planning sequence as defined in Part 2. Worksheet Exclamation Point Question Mark Exhibit 1-3. Guidebook icons.

62.1 Definition In general terms, strategic planning is defined as the process undertaken by an organization to define its future and formulate a road map to guide the organization from its current state to its vision for the future.1 Strategic planning is based on the fundamental concept that aspects of an organization’s future can be influenced by actions taken in the present. Strategic planning requires a review of existing and potential challenges that an organization is, or may be, facing; develop- ment of a vision for how the organization will look in the future; and definition of the steps and actions that must be executed to achieve the organization’s vision. Exhibit 2-1 illustrates some key questions that need to be answered during the strategic planning process. The strategic planning framework includes the following key elements: • A mission statement that identifies the organization’s purpose and its core values (a separate values statement may also be created); • A vision statement that portrays the organization’s future goal(s); • Identification of the organization’s strengths, weaknesses, and opportunities, as well as threats that may affect the organization; • Definition of strategic issues that must be addressed over the course of the strategic plan; • A set of generic and grand strategies, long- and short-term objectives, and action plans that provide a road map for addressing the gaps between the organization’s current state and its vision; and • Definition of key performance indicators (measures and targets) to evaluate the progress made toward achieving long- and short-term objectives. 2.2 The Airport Strategic Planning Framework Over the years, corporations, nonprofit organizations, academic institutions, and governmen- tal entities have tailored the strategic planning framework to fit their specific needs. While certain publications have addressed airport strategic planning at a conceptual level, no “how-to” guide- book has been developed specifically to assist airport operators with the strategic planning process. In light of this deficiency, the research team has reviewed the models developed by others and con- ducted focus groups and an online survey to gather input from airport executives and industry professionals. This information was used to develop a process that is specifically applicable to an airport setting. C H A P T E R 2 What Is Strategic Planning? 1 This preferred definition of strategic planning was corroborated by respondents to the online survey conducted as part of this research.

What Is Strategic Planning? 7 Strategic planning for airports consists of more than just ensuring the safety and security of the traveling public and achieving a strong financial performance. In the case of either a single airport or a multiple-airport system, strategic planning for airports projects a future vision for the airport orga- nization, determines strategies and objectives for the growth or prosperity of the organization (includ- ing the type of products and services it should provide), and defines how the vision and objectives can be accomplished. 2.2.1 Elements That Influence the Process The primary product offered by all airports is an infrastructure system and transportation hub that facilitates the safe and efficient movement of people and goods traveling from “Point A” to “Point B.” The product evolves over time, but its purpose essentially remains the same. Similarly, airlines offer a comparable product (i.e., they transport passengers from their origin [Point A] to their destination [Point B]). But airlines such as Southwest Airlines and JetBlue Air- ways have proven that product differentiation is possible, even for companies that offer a compa- rable product. Southwest Airlines, which typically focuses on point-to-point service to midsize cities and secondary airports in larger metropolitan areas, offers limited amenities and few addi- tional service fees and primarily serves price-sensitive travelers. JetBlue Airways has placed itself in a different strategic position by offering upscale amenities (including assigned seating, real-time television, and a choice of snacks) and a somewhat more hub-and-spoke-focused route network while also serving price-sensitive travelers. Over the years, airport organizations have also sought product differentiation. Vancouver International Airport, for instance, has been reinvented from a regional airport serving the local community to a gateway airport connecting the Asia-Pacific Region, North America, Europe, and Latin America. This transformation occurred following the 1992 transfer of airport management and operational authority from the Canadian government (Transport Canada) to a not-for-profit corporation (Vancouver International Airport Authority). The airport’s simple strategic planning “formula” for product differentiation is: “Low Cost × High Service = Excellent Customer Value.”2 Exhibit 2-1. Strategic planning process—key questions. Ho w Do We Wan t Our Organization to Look in the Future? Present Organization’s Mission Organization’s Vision Future Wha t is Our Chartered Mission? W ha t A re th e Un iqu e Ch ar ac ter isti cs of O ur Or ganizatio n, Our Competition, and the Environm ent in Which W e Operate? W ha t N ee ds to Be D one to Accomplish O ur Visio n? What Challenges Might We Face? 2 Vancouver International Airport Authority, Strategic Plan, http://www.yvr.ca/pdf/authority/yvr_strategicplan.pdf (accessed May 28, 2009).

8 Strategic Planning in the Airport Industry Other airport operators differentiate their airports by focusing on unique products and ser- vices that competing airports do not provide. General aviation airports have offered services ranging from low-cost hangars to full-service fixed base operations. Diverse service offerings ranging from wine bars and day spas to flexible gate use policies have been developed at com- mercial service airports. Thus, strategic planning in an airport setting is possible, but many factors, including product differentiation, influence the process. Some of these factors are similar to those that apply to cor- porations and nonprofit organizations, while others are specific to the airport industry. When planning strategically, airport management solicits the opinions of a diverse group of stakeholders. Stakeholder roles in the process are generally diverse as well. Corporations and non- profit organizations also involve a variety of stakeholders in executing their strategic plans, but the airport strategic planning process includes added representation from the local community, such as local government, business and community leaders, and local public interest organiza- tions. This stakeholder diversity is highlighted in Exhibit 2-2. Airports serve a broad and diverse group of customers that consists of two key categories: air- port tenants (airlines, concessionaires, fixed base operators [FBOs], air cargo operators, and other airport business owners) and passengers (meeters/greeters and well-wishers, and other businesses or individuals that are users of, or dependent on, the airport). Governing entities must account for the needs and priorities of these customers when defining a vision for their airports. In contrast to corporations, airports serve the community at large and generally are economic development engines for the communities they serve. Airport operators must be responsive to the needs of both their customers and communities. While the management team of a corporation or nonprofit organization can decide what type of customers it wants to serve, the same cannot typi- cally be said for airports. Furthermore, local entities may be able to make operational and devel- opment decisions based on local needs and priorities that affect an airport’s future. In contrast, communities typically have less control over a corporation’s operations. The competitive environment in which airports operate is not consistent. In some instances, competition comes from other airports located in close proximity or from an airport that offers better service or pricing options. In other instances, more applicable to connecting hub airports, an airline’s consolidation strategies may result in competition for new service opportunities among the airports in the airline’s hub network. In addition, other modes of transportation and economic factors, such as the cost of fuel, affect the competitive environment for airports. Strategic planning in the airport industry is challenging because the aviation industry is contin- ually changing. Engaging in structured and thoughtful speculation about what the future may hold is complex. Events such as airline bankruptcies and restructuring, economic slowdowns, the intro- duction of new regulatory requirements, the emergence of low-cost carriers, or the consolidation of airlines through mergers force airport governing entities to constantly rethink how they do busi- ness and how to maintain flexibility and adaptability. Almost two-thirds of the respondents to the online survey conducted in this research stated that they try to account for the myriad of events that may influence their organization’s future as part of the strategic planning process. Strategic planning also requires consideration of the airport regulatory environment. While planning for the future, trying to match capacity with the demand for airline service, and meeting the needs of airport tenants and users and the public at large, airport operators must ensure that they satisfy the regulatory requirements imposed by federal, state, and local agencies. Agencies of particular relevance to the airport industry are the Federal Aviation Administration (FAA) and the Department of Homeland Security (DHS), including both the Transportation Security Adminis- tration (TSA) and U.S. Customs and Border Protection (CBP). In addition, airports are required

Exhibit 2-2. Stakeholders in the strategic planning process. INTERNAL EXTERNAL BOARD OF DIRECTORS/POLICY MAKERS SENIOR MANAGEMENT TEAM DEPARTMENT LEADERS AIRPORT STAFF AIRLINES OTHER AIRPORT TENANTS PASSENGERS VENDORS FEDERAL/STATE/REGIONAL/LOCAL GOVERNMENT REPRESENTATIVES FEDERAL AVIATION ADMINISTRATION (FAA) & U.S. DEPARTMENT OF TRANSPORTATION (U.S. DOT) DEPARTMENT OF HOMELAND SECURITY (DHS) STATE AND LOCAL REGULATORY AGENCIES NON-GOVERNMENTAL/PUBLIC INTEREST ORGANIZATIONS LOCAL BUSINESS/COMMUNITY LEADERS STRATEGIC PLANNING PROCESS STAKEHOLDERS Note: Stakeholders that should actively participate in the strategic planning process should be differentiated from those that will be consulted as part of the process on a case-by-case basis. What Is Strategic Planning? 9

10 Strategic Planning in the Airport Industry to comply with various state and local regulations that protect airports and the surrounding com- munities from incompatible development, define airport design and construction standards, and provide environmental guidelines. Respondents to the online survey indicated that the reporting and regulatory environment of airports is what most differentiates formulating a strategic plan for an airport from formulating a strategic plan in other industries. In addition, strategic planning in an airport setting is influenced by the “uniqueness” of airports, with the operation of each airport differing from that of any other. Airports vary in size, location, type of operations and passengers that they accommodate, and governing structure, among other factors. Each airport organization also has its own values and culture. Such uniqueness makes it difficult to benchmark airport organizations.3 Because of this uniqueness, the airport strategic plan- ning process must be tailored to each airport to account for its individual characteristics. 2.2.2 The Airport Strategic Planning Process The airport strategic planning process begins with preplanning activities. The strategic plan- ning process then proceeds to assessment and development of (1) the organization’s historical context, mission, vision, and core values; (2) the internal and external environment in which the organization operates; (3) the organization’s strategic issues and strategies for creating competi- tive advantage; (4) specific long- and short-term objectives and action plans that must be imple- mented for the organization’s vision to be successfully achieved; and (5) an evaluation plan using key performance indicators and targets. The framework of the strategic planning process is high- lighted in Exhibit 2-3. The airport strategic planning process can also be segmented into four main phases: (1) pre- planning, (2) analysis/evaluation, (3) implementation/execution, and (4) monitoring. Many of the steps within these phases are common to all airport strategic plans irrespective of airport size or the type of airport being considered. However, the amount of data to be collected, reviewed, and analyzed, as well as the outcomes of the process, will vary depending on the airport organi- zation’s size and complexity, the amount of time and the level of effort invested in the strategic planning process, and the number of stakeholders involved in the process. MI SS ION , VIS ION, VA LUES, AND ENVIRONMENT ST RA TE GIC ISSU ES AND LEADING STRATEGIES P E R FO RM ANC E AND EVALUATIO N SP EC IFI C O BJE CTIVES AND ACTION PLANS PREP LANNING ACTIVITIES STRATEGIC PLANNING FRAMEWORK Exhibit 2-3. The airport strategic planning process framework. 3 Despite the difficulty of benchmarking, 68 percent of respondents to the online survey stated that their organization was engaged in some form of benchmarking.

Similar to the strategic planning process for other types of organizations, the airport strategic planning process is dynamic and continuous. Airport strategic planning is a classic example of a “wicked problem,” or a “problem that has innumerable causes, morphs constantly and has no cor- rect answer.”4 Wicked problems require (1) broader participation of parties affected either directly or indirectly by planned outcomes and (2) gathering a broad spectrum of data from a large and diverse range of sources.5 It should be noted that, in an airport setting, the strategic planning process typically incorporates elements of a “bottom-up” approach, in which stakeholder needs and wishes are considered and consensus among different interest groups is achieved to the extent possible. A change in the environment in which an airport operates may necessitate a change in various elements of the strategic plan. The process is perpetual, and the organization’s strategic plan is fre- quently updated to align its key objectives, performance measures, and targets with the environ- ment and uncertainties that arise. A flow chart of the steps to be taken in each of the four main phases of the airport strategic planning process is presented in Exhibit 2-4. The first, or preplanning, phase establishes the pur- pose and method for undertaking the strategic planning process. This phase includes identifica- tion of the need and reasons for developing the strategic plan, an assessment of the organization’s readiness to participate in strategic planning activities, development of the scope and schedule for the planning process, identification of planning team members and the roles that other stake- holders should play in the process, and determination of whether there is a need to select an external facilitator. The analysis/evaluation phase develops the airport organization’s mission, vision, and values statements. This phase also includes an evaluation of the historical context and culture of the orga- nization and a scan of the environment in which the organization operates, including a review of the organization’s internal strengths and weaknesses and external threats and opportunities. The findings of these evaluations and reviews provide a means for the organization to assess and ana- lyze critical gaps between current performance and established vision. The review of the critical gaps may also lead the organization to reassess its vision so that it is harmonized with the organi- zation’s internal strengths and weaknesses and is adaptable to a range of future environments in which the organization may operate. The implementation/execution phase provides the vital link between an organization’s mission and vision, resulting in the formulation and communication of strategies and objectives that must be implemented for the vision to become reality. In this phase, strategic issues are identified, generic and grand strategies are developed, and long- and short-term objectives are set, prioritized, assigned, and implemented throughout the entity’s organizational structure. The process for formulating objectives includes weighing resource requirements (e.g., capital and personnel) against the poten- tial benefits that may result from achievement of the objective. Formulation of an action plan for each short-term objective guides the day-to-day activities of staff at the departmental level. The implementation/execution phase also includes determining how to best communicate the content of the strategic plan to stakeholders and developing key performance measures and tar- gets for each of the objectives set in the strategic planning process. Key performance indicators are used to measure and evaluate incremental performance improvement and the achievement of objectives established through the strategic planning process. This phase also includes imple- mentation of an incentives/rewards program to ensure that individual performance is linked to 4 John C. Camillus, “Strategy as a Wicked Problem,” Harvard Business Review, 86 (2008): 98–101. 5 Harry T. Dimitriou and Robin Thompson, Strategic Planning for Regional Development in the UK (Abingdon, UK: Routledge/ Taylor & Francis Group, 2007). What Is Strategic Planning? 11

12 Strategic Planning in the Airport Industry organizational performance and creation of training and development programs to ensure proper implementation of the plan. Monitoring, although listed as the final phase in the planning process, needs to occur through- out the process. In this phase, the key performance indicators defined during the implementation/ execution phase are monitored to assess the effectiveness of the strategic plan and the need for any adjustments. The steps and considerations required to complete these four phases are the subject of this Guidebook and are discussed in detail in the remaining chapters. The definition and development • Evaluate and Understand the Organization • Articulate Mission, Vision, and Values • Scan the Environment and Predict Developments • Analyze Critical Gaps and Reassess the Vision • Identify the Need and Reasons for Developing a Strategic Plan • Assess the Organization’s Readiness for Strategic Planning • Define the Scope of the Process and a Schedule for Planning Activities • Identify the Planning Team • Determine the Stakeholders That Should Participate in the Process and Their Roles • Decide Who Should Be Responsible for Monitoring Implementation • Determine How Frequently Implementation Status Should Be Monitored and How Results Should Be Reported • Establish a Process for Conducting Periodic Reviews of Implementation of the Strategic Plan Objectives and for Modifying the Strategic Plan When Necessary • Identify Strategic Issues • Determine Generic and Grand Strategies • Set Long-term Objectives, Formulate Short-term Objectives, and Create Action Plans • Determine How to Communicate the Strategic Plan to Stakeholders • Define Deadlines and Responsibilities • Select Key Performance Measures and Targets • Implement Incentives/Rewards Programs • Create Training and Development Programs ANALYSIS/EVALUATION PREPLANNING MONITORING IMPLEMENTATION/ EXECUTION Exhibit 2-4. Four phases of the airport strategic planning process.

What Is Strategic Planning? 13 of these steps is based on a review of relevant literature, research conducted for this project, pub- lished practical guidance, and previously implemented techniques. The strategic planning process generally results in the development of one key document, the strategic plan, which can be accompanied by a communications plan and a monitoring plan. Key inputs to the process include internal and external stakeholder views, information relative to the organization’s competition and internal strengths and weaknesses, key industry trends, and exist- ing constraints that are likely to impact the organization’s future. Exhibit 2-5 graphically depicts the inputs and outputs of the strategic planning process. The strategic plan, the communications plan, and the monitoring plan constitute the main outputs of the process. A comparison of the con- tents included in the interrelated plans is provided below: • A strategic plan provides a high-level statement of strategic directions and priorities. The strate- gic plan generally includes generic and grand strategies, long- and short-term objectives, an action plan that defines what needs to be accomplished and who is responsible for each action, and corresponding expected results or performance targets. The strategic plan serves as the basis of comparison for the monitoring plan. • A communications plan establishes the processes for (1) gathering feedback/input from stake- holders and informing all stakeholders of the progress of the strategic planning process and (2) distributing the strategic plan to stakeholders. The first part of the communications plan is developed during the preplanning (first) phase of the strategic planning process and the second part is developed during the implementation/execution (third) phase. A communications plan sets the rules to ensure that communication is maintained among the various individuals or enti- ties involved in the planning process and maximizes opportunities to engage all stakeholders. Development of a communications plan as part of the strategic planning process is particularly relevant for organizations that interact and collaborate with many stakeholders. • A monitoring plan details how to evaluate implementation of the strategic plan and helps ensure that the organization is following the action plan established during the strategic planning process. Management generally benefits from the monitoring process by learning how its orga- nization reacts to specific events. The process helps “trigger” needed adjustments to the strate- gic plan to effectively respond to unanticipated events or business opportunities. Monitoring of strategic plan implementation also allows management to document the evolution of the orga- Exhibit 2-5. Inputs and outputs of the strategic planning process. Strategic Plan Mission and Vision Statements Strategic and Objectives Action Plans and Responsibility Assignments Key Performance Indicators and Targets Communications Plan Monitoring Plan Internal and External Stakeholder Views Competition Information Internal Performance Industry Trends Existing Constraints (environmental, operational, financial) STRATEGIC PLANNING PROCESS INPUTS OUTPUTS

14 Strategic Planning in the Airport Industry nization’s historical performance, which can generally be used to predict how future risks and uncertainties could affect the organization’s future performance. 2.3 The Key Benefits of Strategic Planning The feedback received by the research team from airport executives and aviation industry pro- fessionals through three focus group sessions indicates that a variety of benefits are achieved from engaging in the strategic planning process. These benefits range from increased efficiency result- ing from the establishment of airport performance metrics to gaining stakeholder buy-in for the management team or board of directors’ vision for the airport. Corporate strategic planning activities tend to be more quantitatively focused and are directed toward modification of the organization’s internal and external environment through asset acqui- sition and disposal, market share, and growth. Public sector (e.g., airports) strategic planning activ- ities tend to be more qualitatively focused and are directed toward improving internal operating efficiency, setting and achieving objectives, and financial performance. Several strategic planning benefits were specifically mentioned by participants in each of the three focus groups: the Large Hub/Gateway International Airports Focus Group; the Medium Hub, Small Hub, and Non-Hub Airports Focus Group; and the Corporate/General Aviation Airports Focus Group. Exhibit 2-6 shows these benefits and groups them into four categories: organizational ben- efits, operational/managerial benefits, community/stakeholder benefits, and economic benefits. Organizational benefits of strategic planning mentioned by the focus groups were the following: • Codifying a set of minimum standards or guiding policies that will be supported by the gov- erning body of the airport • Bringing order and a long-term focus to a chaotic business • Allowing management to tie performance evaluations at all organizational levels to a common set of strategic objectives • Providing an important motivational tool to enable employees at all organizational levels and in all departments to understand the mission and vision of the organization Operational/managerial benefits of strategic planning mentioned by the focus groups were the following: • Facilitating the development of metrics to help measure airport performance, leading to increased efficiency • Creating a blueprint for prioritizing the projects that should move forward • Enabling airport management to examine, in a more comprehensive manner, bold initiatives, strategies, and alternatives more easily than during the master planning process Community/stakeholder benefits of strategic planning mentioned by the focus groups were the following: • Helping to diffuse tensions between an airport’s public policy priorities and tenants’ economic development priorities (e.g., an increase in rates and charges to offset the costs associated with construction of a new passenger terminal or automobile parking garage) • Helping to build community support and explain to elected officials how the airport con- tributes to the community’s economic development • Being a tool for soliciting input and buy-in from stakeholders on a particular course of development • Preventing future conflicts by building consensus for a future action that needs to be initiated at the present time (e.g., the acquisition of land parcels that will allow for the long-term devel- opment of airport facilities)

Provides Airport Blueprint and Guiding Policies Brings Order to the Organization and a Long-term Focus Assists in the Creation of Performance Metrics Integrates Performance Evaluations with a Common Set of Objectives Helps Communicate Mission and Goals Creates a Blueprint for Prioritizing Projects Helps Obtain Stakeholder Buy-In on Specific Development and Other Airport Improvement Initiatives Helps Nurture Community Support Builds Consensus Organizational Benefits Operational/Managerial Benefits Community/Stakeholder Benefits Economic Benefits Helps Maintain Financial Stability Helps Diffuse Tensions Between Entities with Different Set of Priorities Enables Airport Management to Examine Bold Initiatives, Strategies, and Alternatives Facilitates Decision Making Leads to Efficiency BENEFITS OF STRATEGIC PLANNING IN THE AIRPORT INDUSTRY Exhibit 2-6. Key benefits of strategic planning in the airport industry. What Is Strategic Planning? 15

16 Strategic Planning in the Airport Industry • Helping to build consensus on core business issues before proceeding with the master plan- ning process The main economic benefit of strategic planning cited by the focus groups was that it allows airport management to shape its strategic response to structural changes in the business envi- ronment (e.g., change in traffic mix from general aviation to corporate) to maintain financial stability A common benefit of the strategic planning process in both airport and corporate settings is that the process is useful for establishing metrics to measure performance. Another common benefit is the usefulness of the process for communicating the mission and vision of the orga- nization to employees. Participants in the three airport focus groups formed by the research team consistently men- tioned the benefits of using the strategic planning process as a tool for reconciling the compet- ing demands of policymakers, the community, and airport tenants and users.6 The usefulness of the strategic planning process for building community support and explaining to elected offi- cials how the airport contributes to the community’s economic development, for instance, was mentioned by participants in more than one focus group. During the focus group discussions, airport executives also stressed the importance of strate- gic planning as a motivational tool to help employees at all operating levels and in all depart- ments to understand the vision for the organization. They also indicated that the airport strategic planning process is oriented toward empowering stakeholders and addressing their needs. The academic literature on corporate strategic planning highlights the usefulness of the strate- gic planning process in enabling corporations to develop strategies for building a competitive advantage that leads to sustained growth in profits. The public utility nature of airports makes airport management less likely to focus on the economic benefits of the strategic planning process. Airport management has limited control over its customer base, and the emphasis for airport organizations is on financial stability (i.e., revenues offsetting costs and a lower rate struc- ture), not profitability. 2.4 The Airport Planning Processes The differences and similarities between airport strategic planning and other forms of airport planning are discussed in this section. An overview of the correlations between these airport planning processes and how their combination provides an essential, if not required, tool for air- port management and planning is also provided. As illustrated in Exhibit 2-7, the airport strategic plan should guide all other airport planning analyses (input from the focus group participants also supported this view). The airport strate- gic plan sets forth the foundation for planning initiatives and defines the road map that the organization should follow to achieve its vision. All other planning analyses should be aligned with and support the strategic plan. Strategic planning differs from long-term planning. In long-term planning, it is generally assumed that the environment in which the organization operates will remain unchanged over time or that trends and patterns from the past will continue in the future. Goals and objectives defined as part of the long-term planning process are based on an extrapolation of current busi- ness trends. Strategic planning, on the other hand, enables an organization to react to a dynamic 6 These benefits were echoed by respondents to the online survey.

and continually changing environment. Strategic planning is about proactively thinking about and mapping the future and developing a creative plan that will enable the organization to reach its objectives in a non-static environment. A review of the external environment to determine whether emerging issues may pose threats or opportunities to the organization is a key compo- nent of strategic planning. Often, many other airport planning analyses are developed prior to development of a strate- gic plan and provide critical inputs to the airport strategic planning process. However, once an airport strategic plan is developed, these planning analyses must be adjusted to align with the strategic plan objectives. The airport business plan and strategic plan are closely related and may even be prepared simul- taneously. An airport strategic plan sets the direction for the airport in the medium- to long-term future, defines generic and grand strategies and long- and short-term objectives, and defines the specific steps necessary for implementing those strategies and objectives. The business plan iden- tifies the short- to medium-term steps that must be implemented to move the organization toward realizing its vision. The business plan should be the department-level action plan that guides the day-to-day implementation of the strategic plan’s specific objectives (i.e., the action plan section of the strategic plan should be consistent with, and integrated into, the department-level business plan). Results of the online survey indicated that there may be a lack of clarity about the relation- ship between an airport’s business and strategic plans. Results of the online survey indicated that Business/Finance Planning and Development Administration RISK IDENTIFICATION OPPORTUNITIES AIRPORT STRATEGIC PLAN BUSINESS PLAN RESOURCE AND STAFFING PLAN TRAINING AND DEVELOPMENT PLAN RISK MANAGEMENT PLAN MARKETING PLAN MASTER PLAN FACILITIES ACQUISITIONSAIR SERVICEINSURANCE CONTRACTS LAND USE PLAN Exhibit 2-7. Interrelationship of airport planning processes. What Is Strategic Planning? 17

18 Strategic Planning in the Airport Industry there may be a lack of clarity about the relationship between an airport’s business and strategic plans, as 44 percent of respondents to the online survey stated that they consider their business and strategic plans to be the same. Airport marketing plans should also reflect the goals set during the strategic planning process. For example, if the goal of the strategic plan for a non-hub airport is to attract a total of 500,000 passengers by 2012, the marketing plan should detail the air service development strategies that will lead to accomplishment of that goal. The master planning process typically defines the airport facilities needed and when they will be needed. Master planning is primarily focused on facilities, while strategic planning has a much broader scope. The master plan relies on the strategic planning process for definition of the air- port’s vision, its customer base (e.g., business aircraft operators vs. general aviation pilots flying for leisure), and services to be provided (e.g., general aviation vs. cargo). On the basis of that infor- mation, the master planning process leads to review and evaluation of several development alter- natives. These alternatives are then ranked and a preferred development alternative is identified. The master plan provides a means to ensure that the facilities required to meet the vision for the airport are identified and that space is reserved for the siting of those facilities, if needed. Over three-quarters of respondents to the online survey indicated that their master plan is linked to their strategic plan. The long-term strategies contained in an airport’s strategic plan are also reinforced and pro- moted in more detailed land use or environmental plans. For example, the most recent strategic plan for Bradley International Airport states that “[t]he Board has identified ‘being an excellent neighbor to the Airport’s surrounding communities through consistent communication and responsiveness’ as a primary supporting element to the Airport’s mission.”7 In support of this objective, airport management will “[i]nclude, inform and request feedback from surrounding communities regarding future development activities on and off the Airport.” Additionally, air- port management will “[a]cquire state-of-the-art noise monitoring equipment, and implement the findings of the FAR Part 150 Study.” The strategic planning process is a useful tool for identifying business risks that may need to be further managed or mitigated through implementation of an enterprise risk management plan. In its Strategic Plan 2007–2011, the Metropolitan Airports Commission (operator of Minneapolis- St. Paul International Airport) identified one of its five most critical issues as the need to address its exposure to the financial risks presented by the rapidly changing economic health of the airlines.8 An action item under this issue is to “develop financial and operational contingency plans.” An airport’s resource and staffing plan and training and development plan are often indirectly tied to the strategic plan through the business plan. As described above, the business plan should include specific department-level objectives that are based on the strategic plan. By measuring each department’s progress toward achieving these objectives, airport management is able to determine the appropriate number of staff needed and their training requirements. An airport’s strategic plan may also establish goals that directly affect the airport’s human resources plans. For example, the Metropolitan Airports Commission’s strategic plan identified one of its 5-year strategies as “match[ing] employee talent with key business needs.” Specific ini- tiatives supporting this strategy were to ensure that employee wages and benefits remained com- petitive and to expand employee training programs. The majority (70 percent) of online survey respondents indicated that their training and development plan is linked to their strategic plan. 7 Connecticut Department of Transportation, Bradley International Airport, Strategic Plan 2009, www.bradleyairport.com/docs/ StrategicPlan2009.doc (accessed May 28, 2009). 8 The most recent version of this airport’s strategic plan is available online at www.metroairports.org/mac/docs/2009- 2013_Strategic_Plan.pdf (accessed May 28, 2009).

TRB’s Airport Cooperative Research Program (ACRP) Report 20: Strategic Planning in the Airport Industry explores practical guidance on the strategic planning process for airport board members, directors, department leaders, and other employees; aviation industry associations; a variety of airport stakeholders, consultants, and other airport planning professionals; and aviation regulatory agencies.

A workbook of tools and sequential steps of the strategic planning process is provided with the report as on a CD. The CD is also available online for download as an ISO image or the workbook can be downloaded in pdf format .

Links to the ISO image and instructions for burning a CD-ROM from an ISO image are provided below.

Help on Burning an .ISO CD-ROM Image

Download the .ISO CD-ROM Image

(Warning: This is a large file and may take some time to download using a high-speed connection. Any software included is offered as is, without warranty or promise of support of any kind either expressed or implied. Under no circumstance will the National Academy of Sciences or the Transportation Research Board (collectively “TRB”) be liable for any loss or damage caused by the installation or operation of this product. TRB makes no representation or warranty of any kind, expressed or implied, in fact or in law, including without limitation, the warranty of merchantability or the warranty of fitness for a particular purpose, and shall not in any case be liable for any consequential or special damages.)

An ACRP Impacts on Practice released to ACRP Report 20 is available online.

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define the concept of strategic planning

Objectives And Goals Of Strategic Planning

In an overly competitive business world, it’s highly crucial for organizations to consistently ace up their game to stay relevant….

Strategic Planning Objectives

In an overly competitive business world, it’s highly crucial for organizations to consistently ace up their game to stay relevant. A part of it comes from effective strategic planning that involves crafting long-term strategic goals , and formulating a strategic plan that outlines the organization’s process to achieve these goals. Strategic Planning not only builds a competitive advantage for an organization, but also removes uncertainty and confusion. Let’s dive deep into the topic and build a deeper understanding of it.

What Is Strategic Planning?

How is strategic planning different from business planning, purpose of strategic planning and importance, the strategic planning process, effective strategic goals, what is strategic planning .

Strategic planning is the systematic process of defining an organization’s long-term goals and proposing strategies to achieve them. This is essential to elucidating the organization’s long-term vision and its process of making that vision a reality. The strategic planning process is used to effectively allocate resources, prioritize work, and ensure that organizational goals are backed by statistical data and sound reasoning.

In a nutshell, the process of strategic planning includes answering questions like:

  • Where are we now?
  • Where are we going?
  • What is going to get in our way?
  • What do we need to do to get to where we want to go?

Strategic planning differs greatly from business planning. Strategic planning requires you to withhold your general day-to-day activities and enunciate where your organization is heading. It also requires crafting strategic goals and objectives for the future and setting up milestones and steps required to achieve those goals. A business plan , on the other hand, is more concerned with creating and working on short- or mid-term goals. It focuses on goals that are not more than a year long and serves a specific purpose, such as directing operations, launching a product and acquiring funding.

The main purpose of strategic planning is to set clearly defined goals for the growth and success of your organization and achieve them with the help of an effective strategic plan. It establishes a connection between your organization’s mission, its long-term vision and the established plan. 

It’s important because of a variety of factors:

  • It’s crucial to determine the direction and focus of an organization. 
  • It ensures organizational alignment, allowing everyone to work towards shared goals. 
  • It helps an organization understand its weaknesses and analyze potential risks.
  • It boosts productivity and builds a positive work environment. 

Following are the steps involved in the development and execution of a strategic plan:

  • Understanding your organization’s mission and defining its ultimate purpose.
  • Describing your organization’s vision.
  • Crafting long-term goals and objectives that are clearly aligned with the organization’s vision.
  • Formulating a strategic plan that outlines how the organization will achieve its goals in the next 3–5 years.

Big Picture thinking is a critical aspect of the strategic planning process. Furthermore, the strategic planning process might look a bit simple at first, but the challenges start creeping in over time. It’s important for your organization to persistently stick to its plan, and leverage short term implementation to reach its goals.

Objectives of strategic planning are detailed statements of direction that indicate what all is necessary and important in an organizational strategy. Specifically, these are clear goals that the organization strives to achieve in the near future. Ideally, these are statements for the next 3-5 years that address the core competency and functional areas of an organization. These objectives help you draft strategies that include effective measures and initiatives. 

The following are some characteristics of effective strategic goals: 

Purpose-driven

Focused on the long term.

Some of the key aspects that you should focus on while drafting the right goals and objectives of strategic planning for your organization, include understanding your industry, and what your organization is seeking to achieve.

Objectives of Strategic Planning differ greatly based on the industry your organization is operating in. For instance, if you’re in IT, construction or technical services, which are fast-paced industries, you should focus on creating objectives that work for your organization’s growth goals. Launching a new range of products or investing in marketing and customer acquisition can be a few appropriate strategies. Organizations operating in slow-growing industries, such as coal power production and steel manufacturing, should bank on objectives that focus on stability, by managing expenses and protecting assets.

For creating goals of strategic planning , always begin with a label. The label must clearly define your organization’s long-term goals. For example, if customer retention is what your organization is eyeing, the objectives should focus on offering more value-for-money products and better customer services. But if your organization is seeking to improve employee retention rate, crafting objectives such as enhancing the recruitment process, streamlining the onboarding process and creating a better culture would help.

It’s essential to understand that while some organizations may require a comprehensive strategic plan for the future, others might just want to update their existing strategic plan, or specifically revise some elements of the plan. A lot of organizations focus on crafting a plan that tackles a particular strategic issue such as an unexpected competitive initiative, the latest technological trends or a possible M&A transaction. 

Let’s look at a few examples of strategic goals to understand them better.

Financial Objectives

  • Increase revenue
  • Maintain profitability
  • Grow shareholder value
  • Ensure favorable bond ratings
  • Ensure financial stability

Internal Objectives

  • Grow sales percentage for new products.
  • Decrease employee turnover rate.
  • Improve customer service and relationships.
  • Invest in total quality management.
  • Reduce a certain amount of cost annually.
  • Streamline core business processes.

Customer Objectives

  • Offer the best value for money.
  • Cross-sell more products.
  • Provide the best service.
  • Increase market share.
  • Expand product offerings.

Learning And Growth Objectives

  • Enhance technical and analytical knowledge.
  • Improve staff productivity.
  • Build a performance-focused culture.
  • Invest in productivity tools.
  • Maintain alignment across the organization.

Strategic planning is important, and one can readily assume that with a good plan, any business will prosper. Harappa’s Making Decisions course that includes effective strategies, frameworks and mental models that will help you avoid uncertainty and make smarter strategic goals. Check it out now!

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COMMENTS

  1. What is Strategic Planning? Definition and Steps

    Strategic planning is a process in which an organization's leaders define their vision for the future and identify their organization's goals and objectives. The process includes establishing the sequence in which those goals should be realized so that the organization can reach its stated vision.

  2. Strategic Planning

    Strategic planning is the art of creating specific business strategies, implementing them, and evaluating the results of executing the plan, in regard to a company's overall long-term goals or desires.

  3. What is Strategic Planning? Definition, Importance, Model, Process and

    Strategic planning is defined as a pivotal organizational endeavor, meticulously charting the mission, goals, and objectives over a strategic timeframe, typically spanning 2-5 years.

  4. What is strategic planning? A 5-step guide

    Strategic planning is a process through which business leaders map out their vision for their organization's growth and how they're going to get there. In this article, we'll guide you through the strategic planning process, including why it's important, the benefits and best practices, and five steps to get you from beginning to end.

  5. Strategic planning

    Strategic planning is an organization 's process of defining its strategy or direction, and making decisions on allocating its resources to attain strategic goals. Furthermore, it may also extend to control mechanisms for guiding the implementation of the strategy.

  6. What Is Strategic Planning? Definition, Steps and Examples

    1. Clarify the company's vision One of the first steps in strategic planning is defining the vision, values and mission for the organization. The vision is the long-term objective of the business, and you should base it on ambitious but realistic goals.

  7. PDF KEY CONCEPTS: STRATEGIC PLANNING

    KEY CONCEPTS: STRATEGIC PLANNING Vision, Mission & Values Develop a process for shared agreement on mission, vision and values from key stakeholders. Mission = A statement of why the organization exists, at the most meaningful level. It is aspirational, in that it can never be fully achieved.

  8. Strategic Planning: A Guide to Develop a Strategic Plan

    Strategic planning is an organization's process of defining its direction and long-term goals, creating specific plans to achieve them, implementing those plans, and evaluating the results. On one hand, that definition makes strategy planning sound like a Business 101 concept—define your goals and a plan to achieve them.

  9. Strategic Planning: A Definition

    More specifically, the definition of strategic planning is the development of an organization's purpose and goals, beyond the immediate future, and actions to achieve those goals. The best way to understand strategic planning is to learn how it's done. Read on and we'll walk you through the entire process. The 5 Steps Of Strategic Planning

  10. Why Is Strategic Planning Important?

    Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees on the organization's goals, and ensure those goals are backed by data and sound reasoning. It's ...

  11. What is the Strategic Planning Process?

    Strategic planning is the process of putting your best business theories to the test in the marketplace. Your strategic planning process starts with defining a mission/vision statement and setting key goals. To achieve those goals, you create a detailed plan, or strategy map. Once you put that strategic plan into motion, you're no longer just ...

  12. Demystifying Strategic Planning: Process and Benefits

    In short, strategic planning is the process of breaking up the company mission statement into achievable goals for the organization to work towards. We will explain in more detail what strategic planning is and how to understand the process, define strategic objectives and goals, conduct a SWOT analysis, create an action plan, roadmap, and more.

  13. Strategic planning

    Strategic planning is the process of defining your business's direction and outlining a path toward a preferred future. The goal of a strategic plan is to capture an organization's mission and core principles — to envision the fulfillment of these ideals.

  14. Strategic planning

    strategic planning, disciplined effort to produce decisions and actions that shape and guide an organization's purpose and activities, particularly with regard to the future. Strategic planning is a fundamental component of organizational management and decision making in public, private, and nonprofit organizations.

  15. What is Strategic Planning: A Definition

    Strategic planning is a process used by organizations to identify their goals, the strategies necessary to accomplish those goals and the internal performance management system used to monitor and evaluate progress. Most organizations use a SWOT or gap analysis to identify the underlying factors driving their current performance.

  16. What Is Strategic Planning?

    The goal of developing a strategic plan is to ensure everyone in the business is aligned when it comes to your small business's goals and objectives, as well as to create a formal strategic plan document. 1. Discussion Phase. The discussion phase is meant to gather as much information, opinions, and input as possible.

  17. What Is Strategic Planning? (Definition and Examples)

    Strategic planning is the process of developing a defined business strategy that helps your company's direction. It involves prioritization, efficient resource capacity planning, the optimization of operations, and the assurance that all employees and stakeholders align towards the same goals.

  18. Why is Strategic Planning Important? & Top 4 Benefits

    Increased Operational Efficiency: Strategic planning improves operational efficiency by providing a roadmap for all activities. It reduces ambiguity, promotes alignment, and ensures that all efforts are coordinated and pointed in the same direction. Enhanced Market Responsiveness: Strategic planning allows organizations to be proactive rather ...

  19. What Is Strategic Management? Benefits, Process, and Careers

    Types of strategy. One way of thinking about strategic management is to classify the management focus into three types of strategy: • A business strategy is a high-level plan where you outline how your organization will achieve its objectives. • Operational strategies are much more specific plans where you detail what actions to take to achieve the desired results.

  20. 7 Strategic Planning Models and 8 Frameworks To Start [2023] • Asana

    1. Basic model. The basic strategic planning model is ideal for establishing your company's vision, mission, business objectives, and values. This model helps you outline the specific steps you need to take to reach your goals, monitor progress to keep everyone on target, and address issues as they arise.

  21. Strategic Planning : Concept and Process

    'Strategic planning' may be defined as the process of determining the objectives of the organisation and the resources to be used to attain these objectives, as also the policies to govern the acquisition, utilisation and disposition of these resources.

  22. Full article: Getting strategic about strategic planning research

    What is strategic about public-sector strategic planning?. The historic roots of public-sector strategic planning are mostly military and tied to statecraft, meaning the art of managing government affairs and involving the use of state power (Freedman Citation 2013).Starting in the 1960s, however, the development of the concepts, procedures, tools and practices of strategic planning has ...

  23. Part 1

    The strategic planning framework includes the following key elements: â ¢ A mission statement that identifies the organizationâ s purpose and its core values (a separate values statement may also be created); â ¢ A vision statement that portrays the organizationâ s future goal(s); â ¢ Identification of the organizationâ s strengths ...

  24. Objectives And Goals Of Strategic Planning

    The main purpose of strategic planning is to set clearly defined goals for the growth and success of your organization and achieve them with the help of an effective strategic plan. It establishes a connection between your organization's mission, its long-term vision and the established plan. It's important because of a variety of factors ...