Strategic planning is a process in which organizational leaders determine their vision for the future as well as identify their goals and objectives for the organization. The process also includes establishing the sequence in which those goals should fall so that the organization is enabled to reach its stated vision.
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Strategic planning process
Organizations generally look three to five years ahead when engaged in strategic planning.
The strategic planning process results in a strategic plan, a document that articulates both the decisions made about the organization's goals and the ways in which the organization will achieve those goals. The strategic plan is intended to guide the organization's leaders in their decision-making moving forward.
The strategic planning framework and committee
A strategic planning committee typically leads this process. Experts in the strategic planning discipline say the strategic planning committee should include representatives from all areas within the enterprise and it should work in an open and transparent way where information is documented from start to finish.
The strategic planning committee works by researching and gathering the information required to understand the organization's current status as well as the factors that will impact it in the future. The committee should solicit input and feedback to validate or challenge its assessment of the information.
The strategic planning committee can opt to use one of many different methodologies that have been developed to guide leaders through this process. These methodologies, or frameworks, move the strategic planning committee through a series of steps that include an analysis or assessment stage; the formulation of the actual strategy; and the articulation and communication of the actions needed to move the organization toward its strategic vision.
Another piece of this process is the creation of benchmarks that will allow the organization to determine how well it is performing against goals and objectives as it implements the strategic plan.
In addition, this planning process should determine which executives are accountable for ensuring that benchmarking activities take place at planned times and also for ensuring that certain and specific objectives are met.
Organizations that are most effective in aligning their ongoing actions with their strategic plans are those that actively engage in strategic management. Strategic management establishes a set of ongoing practices to ensure that the organization's processes and allotment of resources support the vision established in the strategic plan. In the simplest terms, strategic management is the implementation of the strategy; as such, strategic management is also sometimes referred to as strategy execution.
Strategic planning is more than a step-by-step exercise, however. It requires individuals capable of strategic thinking, that is, individuals who can take information and offer insights on how that information can influence or impact the future organization.
Moreover, strategic planning differs from long-range planning. Although the terms are sometimes used interchangeably, long-range planning is based on the idea that the organization's present understanding of the future is reliable enough to ensure that the stated long-range plan can be achieved. Strategic plans, on the other hand, recognize that many elements in the future are unknown and that the organization needs to be flexible while still working toward achieving the strategic plan's stated vision.
Given that distinction, successful organizations opt to view their strategic plans not as static roadmaps but as living documents that need to be revisited on a regular timetable as determined by the organization.
Benefits of strategic planning
Strategic planning has many benefits. It forces organizations to be aware of future opportunities and challenges. It also forces organizations to understand what resources will be needed to seize upon or overcome those opportunities and challenges. Additionally, strategic planning gives individuals a sense of direction and marshals them around a common mission. It creates standards and accountability. Strategic planning also helps organizations limit or avoid time spent on crisis management, where they're reacting to unexpected changes that they failed to anticipate and/or prepare for.