Reasonable is the key word here, as that depends on your organization’s maturity level with regard to strategic planning. You cannot set an effective plan for your business unless you truly understand what you are up against from an industry and competition perspective. Next, you need to work out a timeline in which you can complete your strategic plan and move through the process. A SWOT analysis critically evaluates your company's Strengths, Weaknesses, Opportunities and Threats.

This post will give you the step-by-step process … It is a structured approach to establishing an organization’s direction and to anticipating the future. For this reason, care must be taken to communicate the strategy and the reasoning behind it. Strategic planning clearly defines the purpose of the organization and establishes realistic goals and objectives consistent with that mission in a defined time frame within the organization’s capacity for implementation. They can help keep the process organized and managers focused on the stuff that really matters.

The firm must engage in strategic planning that clearly defines objectives and assesses both the internal and external situation to formulate strategy, implement the strategy, evaluate the progress, and make adjustments as necessary to stay on track. Once you know where you are heading, at the 30,000 foot view, and what you are up against from an industry and competition perspective, now you are in a position to start drilling down into specific business goals that will enable  you to achieve that vision. Given the information from the environmental scan, the firm should match its strengths to the opportunities that it has identified, while addressing its weaknesses and external threats. It communicates those goals and objectives to the organization’s constituents. Strategic planning is essential and continues the process for public organizations that wish to determine their own vision and mission. Operations | But this was more of an external document to use with third parties like venture capitalists or banks. It is a lot more detailed and can take months to create. Any macro-economic trends at play? Strategic planning forms the basis of other planning jobs of the firm. 1. This could include things like changes to product offering, sales & marketing strategies, financial resources, operational efficiency, employee culture, financial targets and beyond. Marketing | It is a lot more detailed and can take months to create. 5. These issues can be problems, opportunities, market shifts or anything else that is keeping you awake at night and begging for a solution or decision. Getting Ready/Determine the Strategic Intent: An industry analysis can be performed using a framework developed by Michael Porter known as Porter's five forces. Effectiveness is not random; it begins with a clear vision, mission, and goals. In a large company, those who implement the strategy likely will be different people from those who formulated it. During this time, the U.S. government introduced program budgeting as a way of recording detailed information on costs associated with specific activities covered by a budget. These steps are a recommendation, but not the recipe for creating a strategic plan. Determine Staffing, Budget and Financing Needs. form without the prior express written permission of QuickMBA.com. There are many components of the process which are spread throughout strategic planning stages. Often times, it is helpful to engage an outside business coach or advisor, like Red Rocket, to help facilitate these internal discussions between the managers building the plan. And Threats around the economy, losing key staff, lack of financial resources, limited cash flow, disintermediation, falling prices, etc. This is typically done department-by-department within the company--setting specific objectives for the product team, sales & marketing, operations, technology, finance and human resources. We suggest at least once a quarter. Management | Evaluation and control consists of the following steps: Bradford, Robert W., Duncan, Peter J., Tarcy, Brian, Simplified Strategic Planning: A No-Nonsense Guide for Busy People Who Want Results Fast! Something like "We plan on driving $50MM in revenues from our industry-leading social listening platform within 3 years". By setting priorities, strategic planning implies that some organizational decisions and actions are more important than others. Once the external and internal evaluation is done, you are in a good position to begin crafting your high-level  mission statement and vision statement. In the absence of a plan, work still gets done on a day-to-day basis but often lacks a sense of purpose and priority. Otherwise, the implementation might not succeed if the strategy is misunderstood or if lower-level managers resist its implementation because they do not understand why the particular strategy was selected. How big is the industry? Most well-known models of public and nonprofit strategic planning have their roots in the Harvard policy model developed at the Harvard Business School at Harvard University in the United States. 6. The way that a strategic plan is developed depends on the nature of the organization’s leadership, the culture of the organization, the complexity of the organization and its environment, and the size of the organization. What high level things need to happen to make your vision a reality. What are pricing trends? I am a Managing Partner at Chicago-based Red Rocket Ventures, a growth consulting, executive coaching, shared executive and financial advisory firm based in Chicago. A competitive advantage can be based on cost or differentiation. Strengths in your staff, customer base, market position, financial resources, sales channels, products, profitability, growth, etc. These are the "North Star" statements that will guide all detailed decisions from there. 2. I write about growth strategy, execution & financing.

Typically, the strategy encompasses activity over several years and needs to be altered over the course of time.

Think about this as an "external" evaluation of overall market trends that impact your business.
Think about this as an "internal" evaluation of your business.
The firm must engage in strategic planning that clearly defines objectives and assesses both the internal and external situation to formulate strategy, implement the strategy, evaluate the progress, and make adjustments as necessary to stay on track. The pattern of strategy in an organization is determined not only by the plans and actions of its leaders but also by forces in its external environment.


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