What is Strategic Planning?
“In preparing for battle I have always found that plans are useless, but planning is indispensable.” – Dwight D. Eisenhower
Based on the news headlines, entrepreneurs are battling for survival every day. Economists and business leaders agree that we are in the midst of the most challenging business climate in 25 years.
How do we “win the battle?” As Eisenhower said, we must plan effectively. In business, that entails developing a comprehensive strategic plan. So what is a strategic plan?
First, let me define what a strategic plan entails. Often, the term business plan and strategic plan are used interchangeably. They are not the same. Typically, when bankers or entrepreneurs, for instance, talk about a business plan, they are referring to a start-up or an early stage plan.
Both business and strategic plans have detailed products/services, marketing, operations, management and financial sections, which are all key components to the plans. Strategic plans add additional components: the mission, vision and SWOT analysis (Strengths-Weaknesses-Opportunities-Threats).
That is not the only difference between these plans. The timeframe for a business plan is typically for one year into the future. A strategic plan entails developing a series of goals and action steps for up to three years into the future.
Strategic planning is a four-step process that involves the following activities: (1) analyze the competitive environment; (2) develop goals that support the organizational mission; (3) implement action steps to achieve goals; and (4) monitor, measure and evaluate results. The entire team should be involved in this process.
Analyze the Competitive Environment
This is the SWOT analysis, as mentioned above. The company should assess its internal strengths and weaknesses. Honesty is critical in this process. Listing strengths and dismissing weaknesses is harmful to the strategic planning process. Strengths and weaknesses have an internal organizational focus. The opportunities and threats involve an external scan of the environment. The entire SWOT analysis should have a focus on the organizational mission and core competencies of that organization.
Develop Goals
Goals should dovetail with the company mission, vision and values. In this step, brainstorming is crucial in order to leverage strengths (core competencies) and opportunities while mitigating weaknesses and threats.
It is crucial to develop smart goals that can be measured. SMART goals are Specific, Measurable, Attainable, Relevant and Time-based.
Implement Action Steps
The specific action steps (tactics) to achieve organizational goals are developed. Listing action steps is just part of the process. Action steps should also include a timeline for accomplishment, name or names of people responsible for implementing the action steps, and the resource commitments, such as time or money.
Monitor, Measure and Evaluate
As the old saying goes, “What gets measured gets managed.” This is why goals must be measurable. Someone must then monitor results. How often should you monitor goals? For some goals, quarterly monitoring is sufficient. For other goals, monthly, weekly or even daily monitoring is crucial. Then the team evaluates the results.
Conclusion
Planning is a necessary process that all entrepreneurs should undertake. While at the Small Business Development Center (SBDC), I saw amazing progress by companies when leaders took time to develop a strong plan. Since joining TKT & Associates, Inc., I have facilitated six FastTrac® GrowthVenture™ strategic planning programs, and participants have not only evolved from a reactive mode to a proactive mode, but participants’ goals have been attained at a stunning level of success.
Strategic planning is crucial in this tough economic environment. Eisenhower understood that, and successful entrepreneurs do as well.
