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What Is Strategic Planning And How To Do It Right In 5 Key Steps

The strategic planning process is a bit like charting a course across the ocean before leaving port. Though you’ll surely encounter surprises once you embark, your strategy map will help you get back on track and keep your eyes on your destination no matter what the journey throws your way.

In this article, I’ll explain what strategic planning is and help you understand how to implement the strategic planning process in 5 steps.

What Is Strategic Planning?

In the words of Dwight Eisenhower:

Plans are worthless. But planning is everything.

Strong leaders understand that while things rarely go according to plan in the real world, the act of planning enhances our goal-setting, solidifies our mission and vision, and gives us a competitive advantage by clarifying what truly matters most.

Strategic planning is a process in which leaders map out their vision for an organization and establish the steps that will ensure that this vision becomes a reality. Strategic planning helps leaders communicate goals to the rest of the team, and make sure that everyone understands their role in achieving them.

A strategic plan generally covers the organization’s direction for the next three to five years. It will typically include both long-term and short-term day-to-day goals, your mission statement and vision for the company, and an action plan outlining the tactics you’ll use to make progress toward your goals.

What's the Difference Between a Strategic Plan and a Business Plan?

A business plan is generally created when a business is launched or dramatically changes how they operate. A startup will typically need to make a business plan before approaching a bank for funding. A business plan includes basic information like:

  • How you generate revenue
  • Your industry and market
  • Key stakeholders, including owners
  • Financial projections

A strategic plan is typically created after the business is launched. It includes detailed strategic information about the business environment, including:

  • Long term goals
  • Key performance indicators (KPIs)
  • Vision statement
  • Mission statement
  • SWOT analysis (including new opportunities)
  • Strategic objectives 
  • Strategy execution plan
  • How you will track progress
  • A rough time frame for achievement of business goals

In short, your business plan will contain foundational information about how you operate, and your strategic plan will be an in-depth roadmap demonstrating your primary operational plans and how senior leadership plans to execute them.

Why is Strategic Planning Important?

There are several benefits of strategic planning:

Establish Direction

Strategic planning assists you in goal setting and helps you develop a business strategy against which all your other decisions can be checked.

Move from Reactive to Proactive

Having a strategic plan allows you to proactively take steps toward your objectives and adapt to industry trends rather than reacting to catastrophes and making shortsighted decisions.

Improve Operational Efficiency

When your organization understands its priorities and the initiatives that will support them, you can set aside budgetary resources accordingly.

Enhance Resiliency

Companies that keep their strategic goals front of mind are more likely to bounce back and return to their roadmap after a setback.

Increase Profitability

Your strategic plan should be monitored, and actions checked against a variety of metrics to ensure that sales and marketing efforts are aligned with your organizational goals and enhance your market share.

What are the 5 Steps to the Strategic Planning Process?

5 steps to the strategic planning process infographic

Ideally, your strategic plan will be created by a small group of five to ten key stakeholders. This group is generally referred to as your management committee. Though you will involve other team members in the process, your management committee will be responsible for the primary decision-making along the way. 

Step 1 - Define your Strategic Position

In order to decide where you want to go, you need to fully understand where you are. Some key elements you’ll want to focus on here include:

  • Market and industry data, including trends and any potential threats.
  • Customer feedback, including areas for improvement and suggestions for additional services.
  • Employee feedback, including company culture, business processes, and product information.
  • SWOT analysis (strengths, weaknesses, opportunities, and threats).

Step 2 - Confirm your Goals and Objectives

Determining your strategic goals will set the stage for the remaining steps of the strategic planning process. You’ll want to return to your business plan and re-acquaint yourself with the destination you initially set for the business. Revisit the following:

  • Long-term goals: Where do you want to be in five to ten years?
  • Organizational values: What matters to your team?
  • Mission statement: What is your primary purpose?
  • Vision statement: How do you execute your purpose in the market?
  • Competitive advantage: What does your organization uniquely have to offer?
  • Financial projections: Where do you expect to be in the next three years? Look at cash flow and potential growth and investment opportunities.

Step 3 - Create a Plan

With the information you’ve gleaned from steps one and two, you can now begin creating your plan document. This is the phase where your senior leadership, represented by your management committee, has the opportunity to share how you plan to achieve your goals. In this strategy formulation stage, consider:

  • Your SWOT analysis and what priorities it revealed.
  • Objectives for the first year. You will be updating this annually as time goes on, with new objectives each year based on your progression toward the organization’s goals.
  • How will you measure your progress? Determine KPIs and key results using input from the management committee and the individual teams who will carry out the work. 
  • Clarify which initiatives are most important and determine a budget for them over the next few years.
  • A high-level roadmap of your timeline. When do you anticipate that certain activities will be completed? Map it out quarter by quarter as best you can.

Step 4 - Begin Implementation

When putting your plan into action, the key to success is communication. Does everyone understand the organization’s mission and strategic framework? Do they know what role they will individually play in achieving your long-term goals? From there, establish your KPIs for each phase, and ensure that everyone in the organization understands the metrics on which their performance will be measured.

Step 5 - Review and Revise

Effective strategic planning involves frequent monitoring and revising. Share your plan document with the organization and check back in with relevant teams to understand the progress you’ve made. Remember: This is a living document that can be altered and improved. Use your strategic plan to inform your short-term decision-making, and continue to tweak the plan as new insights arise.

Final Thoughts

Successful strategic planning has ripple effects that take hold throughout the organization. In determining and implementing the methodology required to meet your goals, adopting a business model that streamlines their achievement, and employing strategic thinking to meet or exceed the KPI targets, you’re ensuring that everyone in your organization is aligned with a singular vision. 

If your company is looking for support in creating your strategic plan, consider working with a tool that can help. Check out our list of the best strategic planning software platforms on the market today.

For more information on effective strategic planning, don’t miss these articles from our subject matter experts:

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By Kyra Evans

Kyra Evans is a Staff Writer for People Managing People. She has over 15 years of experience writing about finance, technology, and corporate wellness for many of Canada’s largest brands. In addition to writing, Kyra provides keynotes and workshops in mindfulness and holistic wellbeing to companies ranging from startups to multinational corporations. She writes for an engaged community of more than 30,000 readers on Instagram and TikTok, and her work has been featured by publications such as HuffPost and Authority Magazine. She lives on Vancouver Island with her family.