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Every business should have a strategic plan—but the number of businesses that try to operate without a defined plan (or at least a clearly communicated one) might surprise you. Research from OnStrategy shows that 86% of executive teams spend less than one hour per month discussing strategy, and 95% of a typical workforce doesn’t understand its organization’s strategy. Because so many businesses lack in these regards, you can get ahead of the game by using strategic planning. In this article, we will explain what the strategic planning process looks like and the steps involved. What is the strategic planning process?In the simplest terms, the strategic planning process is the method that organizations use to develop plans to achieve overall, long-term goals. This process differs from the project planning process, which is used to scope and assign tasks for individual projects, or strategy mapping, which helps you determine your mission, vision, and goals. The strategic planning process is broad—it helps you create a roadmap for which strategic objectives you should put effort into achieving and which initiatives would be less helpful to the business. Strategic planning process stepsBefore you begin the strategic planning process, it is important to review some steps to set you and your organization up for success. 1. Determine your strategic positionThis preparation phase sets the foundation for all work going forward. You need to know where you are to determine where you need to go and how you will get there. Involve the right stakeholders from the start, considering both internal and external sources. Identify key strategic issues by talking with executives at your company, pulling in customer insights, and collecting industry and market data. This will give you a clear picture of your position in the market and customer insight. It can also be helpful to review—or create if you don’t have them already—your company’s mission and vision statements to give yourself and your team a clear image of what success looks like for your business. In addition, review your company’s core values to remind yourself about how your company plans to achieve these objectives. To get started, use industry and market data, including customer insights and current/future demands, to identify the issues that need to be addressed. Document your organization's internal strengths and weaknesses, along with external opportunities (ways your organization can grow in order to fill needs that the market does not currently fill) and threats (your competition). As a framework for your initial analysis, use a SWOT diagram. With input from executives, customers, and external market data, you can quickly categorize your findings as Strengths, Weaknesses, Opportunities, and Threats (SWOT) to clarify your current position. An alternative to a SWOT is PEST analysis. Standing for Political, Economic, Socio-cultural, and Technological, PEST is a strategic tool used to clarify threats and opportunities for your business. As you synthesize this information, your unique strategic position in the market will become clear, and you can start solidifying a few key strategic objectives. Often, these objectives are set with a three- to five-year horizon in mind. Use PEST analysis for additional help with strategic planning. Learn how 2. Prioritize your objectivesOnce you have identified your current position in the market, it is time to determine objectives that will help you achieve your goals. Your objectives should align with your company mission and vision. Prioritize your objectives by asking important questions such as:
Objectives should be distinct and measurable to help you reach your long-term strategic goals and initiatives outlined in step one. Potential objectives can be updating website content, improving email open rates, and generating new leads in the pipeline. 3. Develop a planNow it's time to create a strategic plan to reach your goals successfully. This step requires determining the tactics necessary to attain your objectives and designating a timeline and clearly communicating responsibilities. Strategy mapping is an effective tool to visualize your entire plan. Working from the top-down, strategy maps make it simple to view business processes and identify gaps for improvement. Truly strategic choices usually involve a trade-off in opportunity cost. For example, your company may decide not to put as much funding behind customer support, so that it can put more funding into creating an intuitive user experience. Be prepared to use your values, mission statement, and established priorities to say “no” to initiatives that won’t enhance your long-term strategic position. 4. Execute and manage the planOnce you have the plan, you’re ready to implement it. First, communicate the plan to the organization by sharing relevant documentation. Then, the actual work begins. Turn your broader strategy into a concrete plan by mapping your processes. Use key performance indicator (KPI) dashboards to communicate team responsibilities clearly. This granular approach illustrates the completion process and ownership for each step of the way. Set up regular reviews with individual contributors and their managers and determine check-in points to ensure you’re on track. 5. Review and revise the planThe final stage of the plan—to review and revise—gives you an opportunity to reevaluate your priorities and course-correct based on past successes or failures. On a quarterly basis, determine which KPIs your team has met and how you can continue to meet them, adapting your plan as necessary. On an annual basis, it’s important to reevaluate your priorities and strategic position to ensure that you stay on track for success in the long run. Track your progress using balanced scorecards to comprehensively understand of your business's performance and execute strategic goals. Over time you may find that your mission and vision need to change — an annual evaluation is a good time to consider those changes, prepare a new plan, and implement again. Achieve your goals and monitor your progress with balanced scorecards. Learn how Master the strategic planning process stepsAs you continue to implement the strategic planning process, repeating each step regularly, you will start to make measurable progress toward achieving your company’s vision. Instead of constantly putting out fires, reacting to the competition, or focusing on the latest hot-button initiative, you’ll be able to maintain a long-term perspective and make decisions that will keep you on the path to success for years to come. Use a strategy map to turn your organization's mission and vision into actionable objectives. Learn how What are the five steps of strategy formulation?5 steps of the strategic planning process. Determine your strategic position.. Prioritize your objectives.. Develop a strategic plan.. Execute and manage your plan.. Review and revise the plan.. How many steps are there in strategy formulation?Strategy formulation refers to the process of choosing the most appropriate course of action for the realization of organizational goals and objectives and thereby achieving the organizational vision. The process of strategy formulation basically involves six main steps.
What are the 7 steps of strategic management process?How to Strategic Plan in 7 Steps. Step 1: Environmental Scan. ... . Step 2: Internal Analysis. ... . Step 3: Strategic Direction. ... . Step 4: Develop Goals and Objectives. ... . Step 5: Define Metrics, Set Timelines, and Track Progress. ... . Step 6: Write and Publish a Strategic Plan. ... . Step 7: Plan for Implementation and the Future.. What are the three basic steps in strategy formulation?Successful strategic management involves three steps: Planning, Execution and Monitoring Developments & Progress.
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