Strategic planning involves a series of processes to define and achieve organizational goals. Here's a breakdown of these processes:
Key Processes in Strategic Planning
The processes of strategic planning are iterative and often overlap. They involve a thorough understanding of the current state, future aspirations, and the steps required to bridge the gap. These steps ensure the organization is aligned, focused, and equipped to achieve its vision.
1. Defining Mission and Vision
- Mission: This defines the organization's purpose, what it does, and why it exists.
- Vision: This outlines the desired future state – what the organization aspires to become.
Example: A company's mission might be to provide affordable and accessible healthcare, while its vision could be to create a world where everyone has access to quality healthcare.
2. Conducting a Comprehensive Assessment
This involves analyzing both the internal and external environments.
- Internal Analysis: Identifying strengths and weaknesses.
- External Analysis: Identifying opportunities and threats (often using a PESTLE or SWOT analysis).
Example: Conducting a SWOT analysis to identify internal strengths like innovative technology and weaknesses like high employee turnover. External opportunities could include emerging markets, while threats might involve new regulations.
3. Forecasting
Forecasting involves making predictions about the future based on current trends and data. This helps in anticipating potential challenges and opportunities.
Example: Projecting market growth rates, technological advancements, or changes in consumer behavior.
4. Setting the Organizational Direction
This involves defining the overall direction of the business and aligning it with the mission and vision.
Example: Deciding to focus on sustainable practices or expanding into new geographic regions.
5. Creating Strategic Objectives
These are specific, measurable, achievable, relevant, and time-bound (SMART) goals that support the overall strategic direction.
Example: Increasing market share by 15% within the next three years.
6. Aligning with Key Stakeholders
Ensuring that the strategic plan considers the needs and expectations of key stakeholders, including employees, customers, investors, and the community.
Example: Communicating the strategic plan to employees and gathering their feedback, or engaging with investors to ensure their support.
7. Beginning Strategy Mapping
Visually representing the strategic objectives and their relationships, often using a balanced scorecard approach.
Example: A strategy map might show how improving employee skills (learning and growth perspective) leads to better processes (internal business processes perspective), which leads to higher customer satisfaction (customer perspective), ultimately resulting in increased profitability (financial perspective).
8. Determining Strategic Initiatives
These are specific actions or projects that will be undertaken to achieve the strategic objectives.
Example: Launching a new product, entering a new market, or implementing a new technology.
| Process | Description | Example |
|---|---|---|
| Define Mission and Vision | Establish the organization's purpose and future aspirations. | Mission: To provide clean energy solutions. Vision: A world powered by renewable energy. |
| Conduct a Comprehensive Assessment | Analyze internal strengths/weaknesses and external opportunities/threats. | SWOT analysis revealing a strength in R&D, a weakness in marketing, an opportunity in government incentives for green energy, and a threat from established fossil fuel companies. |
| Forecast | Predict future trends and potential impacts on the organization. | Projecting a 20% increase in demand for renewable energy over the next five years. |
| Set Organizational Direction | Define the overall strategic path aligned with the mission and vision. | Deciding to become the leading provider of solar energy solutions in the region. |
| Create Strategic Objectives | Establish SMART goals to support the strategic direction. | Increase solar panel sales by 25% in the next year. |
| Align with Key Stakeholders | Ensure the plan meets the needs and expectations of stakeholders. | Consulting with local communities about the placement of solar farms. |
| Begin Strategy Mapping | Visually represent strategic objectives and their relationships. | Creating a strategy map that shows how employee training leads to improved installation efficiency, resulting in increased customer satisfaction and higher sales. |
| Determine Strategic Initiatives | Identify specific projects to achieve strategic objectives. | Launching a new marketing campaign to promote solar panels, developing a training program for installers, and partnering with local governments to install solar panels on public buildings. |
