What are the benefits of strategic planning? What are its stages?

The benefits of strategic planning are that it allows you to define and present the course your company will follow in the next three to five years. It includes the vision and mission, as well as the goals and actions to be taken to achieve them. In this article, we explain how a strategic plan differs from other business or project tools. You’ll also find four steps to follow to create an effective plan.

What is strategic planning?

Every business needs a strategic plan to prepare for change and build a strong, unified team.

Strategic planning is a must for all businesses, big or small. It’s a process that determines where your business is going and how it’s going to get there, but it’s also so much more than that.

A strategic plan defines your business and lists concrete steps to achieve your goals. When the unexpected happens, this plan helps you survive and find new opportunities, while staying true to your values ​​and mission.

In addition, developing a strategic plan is a team building exercise that brings employees together like never before and changes the way they communicate.

What is the schedule?

The planning period for the strategic plan used to be three to five years, but it is now common for a company to choose a shorter period, two to three years, due to the increasing speed of technological and market change.

For companies with multiple business units or holding companies that control several stand-alone businesses, the business plan’s time horizon may be longer. In fact, a plan can cover a period of three to 10 years and describe broader goals for the entire organization and any service involved, such as marketing, human resources, and finance. Availability workplan A framework for strategic planning within each unit or business of the organization.

What are the benefits of strategic planning?

Some of the benefits of strategic planning are proactively adapting to change, creating effective work teams or improving decision making.

This is defined as a systematic process in which a vision of the future is translated into broadly defined goals or objectives. It also involves designing a series of steps to achieve it.

In contrast to long range planning, strategic planning starts with the desired goal and goes back to the current situation.

This also contrasts with tactical planning as it is more expansive and flexible. On the contrary, it does not focus on intermediate goals which are specified in a precise manner and by predetermined means.

Proactive adaptation to change

Change is happening faster and more pervasive than ever before. This can affect many organizations and jeopardize their survival in the medium and long term.

One of the advantages of strategic planning is that it helps leaders creatively and intelligently deal with the challenges of uncertainty about how to change.

In this way, the strategic management activities are designed to transform the fixed plan into a system that provides strategic performance information for decision-making.

This flexibility allows the plan to evolve and grow as circumstances change.

Formation of highly efficient work teams

And from The most important benefits of strategic planning supported by Strategic Management, teaches leadership teams to work with high efficiency by participating in building and supporting the team’s strategic plan.

Thus, the involvement of each team member in planning reinforces their commitment to achieving the goals and objectives of the organization.

This increases individual and group actions, improving their effectiveness and accountability.

Improving the decision-making process

The strategic planning process involves making difficult decisions. This represents an opportunity for organizations to improve their decision-making processes.

Planning includes the management team, management and, in general, all those with managerial responsibilities.

Therefore, one of the advantages of strategic planning is that it becomes an opportunity to rally the organization around business goals and refine how decisions are made.

Better use of time and resources

All organizations have limits in terms of time, financial resources andHR[1].

Strategic planning can determine the best way to dispose of these resources and make the most of them.

From this point of view, it is necessary to evaluate all the expenditures of the organization in order to determine how these will contribute to the achievement of the main results.

Create an internal communication framework

One of the great benefits of strategic planning is that it helps create an internal communication framework.

Through effective communication, differences are negotiated and interests are united to achieve consensus.

Effective internal communication ensures that members of the organization work together to achieve set strategic goals.

Moreover, it helps to develop a cohesive culture and provides the tools to make the right decisions in accordance with the objectives of the organization. All of the above increases efficiency and productivity.

Strategic planning process

The creation of the strategic plan should be supported by a team of a few key stakeholders. This group, sometimes called a management committee, consists of five to ten stakeholders and decision-makers in the company. These will not be the only people involved, but they will lead the business.

Once the management committee has been assembled, you can begin the strategic planning process.

Step 1: Determine your current position

Before creating your strategic plan and setting your goals, you need to know where you stand. To do this, your management committee will collect various information from other stakeholders (employees and customers, for example), including:

• Relevant industry and market data to identify potential business opportunities and imminent threats.
• Customer feedback to understand what your customers expect from your business (product improvements, additional services, etc.).
• Comments from employees about the product, business practices, or company culture.

SWOT analysis To assess current and future opportunities for your business. SWOT is an acronym from the English language: Strengths, Weaknesses, Opportunities and Threats. You will consult this analysis regularly throughout the operational planning process.

To evaluate each parameter of a SWOT analysis, your management committee will answer a whole series of questions:

strength point:

• At present, what areas does your organization excel in?
• What sets you apart from your competitors?
• What are your most important internal resources?
• What material possessions do you own?
• What is your greatest strength?

Weaknesses:

• What are the areas that your organization struggles with?
• What are you currently missing (product, supplier, process)?
• In what areas are your competitors doing better than you?
• What are the potential constraints holding your organization back?
• What processes or products need improvement?

Opportunities:

• What opportunities can your organization seize?
• How can you leverage the unique strengths of your business?
• Are there trends you can take advantage of?
• How can you take advantage of marketing opportunities or media coverage?
• Does your product or service meet an emerging need?

Threats:

• Who are the new competitors you should be watching?
• Does your organization have vulnerabilities that put it at risk?
• Have you been exposed to, or likely to be, the subject of bad press that will reduce your market share?
• What are the chances of changing customer attitudes towards your business?

Step two: Develop your strategy

This is where the magic happens. To develop your strategy, consider your current situation. Next, take inspiration from your original business documents, which outline your end goal. To develop your strategy, the idea is to take a compass and ask yourself “Where do we go now?” .” This is how you can determine the exact procedure to follow.

During this stage of the planning process, take inspiration from your company’s key documents to make sure it’s on the right track. Pay special attention to the following documents:

• Your mission statement, to see how you can continue to move towards the main goal of your organization.
• Your vision statement, to determine how your strategic plan fits into your long-term vision.
• Your company values ​​that you respect what matters most to your business.
• Your competitive advantages to understand the unique advantage you offer in the market.
• Your long-term goals, to determine where you want to be in five or ten years.
• Your financial projections, to determine your expectations for the next three years: financial statements, cash flow and new opportunities in which you can invest.

Step 3: Create your strategic plan

Now that you’ve assessed your current situation and goals, it’s time to put your thoughts on paper. Your organization-wide plan for the next three to five years should take into account your current situation and strategy. Keep in mind that even if you are implementing a long-term plan, the different elements of your strategic plan must be created over quarters and years.

When creating your strategic plan, determine the following:

• Your business priorities for the next three to five years, based on your SWOT analysis and strategy.
• Your annual goals for the first year. No need to define your goals for all years of your strategic plan. Over the years, you will create new annual goals that align with your overall strategic goals.
• Key results and KPIs linked to your goals for the first year. Part of these should be decided by the management committee and the other part by each of the teams involved, who are familiar with the project. Ensure that key results and KPIs are measurable and actionable.
• Your budget for the next year or a few years. This budget should be based on your financial projections and strategy. Do you plan to incur significant expenses to develop your product? Expand your team? Getting into excessive marketing? Determine your key initiatives and where they fit into your budget.
• global roadmap. In project management, a roadmap is a tool that helps you visualize the progress of a complex initiative. You can also create a very large project roadmap for your strategic plan. To make the plan more feasible and understandable, define the tasks that you plan to work on during certain periods or years.

Step 4: Share, monitor and manage your strategic plan

At this point, you should have created your strategic plan. The final step in the planning process: monitoring and managing your plan.

Share your strategic plan: Don’t just put it away in the back of a drawer. Give access to your team members and help them understand how their work contributes to the business goals and your overall strategic plan. We recommend sharing your plan in the tool you use to monitor and manage your work, so you can easily link your overall goals to your daily tasks. If you haven’t already, consider using a job management tool.

Update your plan regularly (quarterly and annually): Put your short-term goals into your strategic plan. Be aware that the latter is not static: you will definitely need to update it if your company decides to change course or make new investments. In the event that new business opportunities or threats arise, you will definitely need to adjust your strategic plan to steer your organization in the best possible direction for the next few years.

Remember that your plan won’t last forever, even if you update it frequently. Once you’ve achieved your most strategic goals, or if your strategy has evolved significantly since you created your plan, it may be time to create a new one.

How is the plan implemented?

Many strategic plans fail due to poor execution. Problems often arise when the plan is not adequately communicated by the company and employees do not have enough time, support, and resources to implement the action plan. Sometimes the plan itself is the culprit: Your plan may contain unrealistic goals or vague action items.

It is essential to hold regular team meetings to monitor the progress of the action plan, hold employees accountable and celebrate successes. The meetings are an opportunity to take corrective action and improve the action plan to account for changing circumstances.

How often should you meet to review the strategic plan?

Monthly meetings are common, and a more in-depth review takes place quarterly. A more in-depth review should take place each year to update the plan, assess what worked and what didn’t, and develop a new action plan for the next 12 months. The penultimate year of the plan is the time to set new targets for renewing the strategic plan for the next two or three years.

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