What is Strategic Planning?

Strategic planning is an organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, ensure thatemployees andother stakeholdersare working toward common goals, establish agreementaroundintended outcomes/results, and assess and adjust the organization's direction in response to a changing environment. It is a disciplined effort that produces fundamental decisions and actions that shape and guide what an organization is, who it serves, what it does, and why it does it, with a focus on the future. Effective strategic planning articulates not only where an organization is going and the actions needed to make progress, but also how it will know if it is successful.

What is a Strategic Plan?

A strategic plan is a document used to communicate with the organization the organizations goals, the actions needed to achieve those goals and all of the other critical elements developed during the planning exercise.

What is Strategic Management? What is Strategy Execution?

Strategic managementis thecomprehensive collection ofongoing activities andprocessesthat organizations use to systematicallycoordinate and alignresources andactions with mission, vision and strategy throughout anorganization.Strategic managementactivities transform thestatic plan into asystem thatprovides strategicperformance feedback to decision makingand enables the plan to evolve and grow as requirements and other circumstances change. Strategy Execution is basically synonymous with Strategy Management and amounts to the systematic implementation of a strategy.

What Are the Steps in Strategic Planning & Management?

There are many different frameworks and methodologies for strategic planning and management.While there are no absolute rules regarding the right framework, most follow a similar pattern and have common attributes.Many frameworkscycle through some variation onsome verybasic phases:1)analysis or assessment, where an understanding of the current internal and external environments is developed, 2)strategyformulation,where high level strategy is developed and a basic organization level strategic plan is documented3) strategy execution, where the high level plan is translated into more operationalplanning and action items,and 4)evaluation or sustainment / management phase, where ongoing refinement and evaluation of performance, culture, communications, data reporting, and other strategic management issues occurs.

What Are the Attributes of a Good Planning Framework?

TheAssociation for Strategic Planning (ASP), a U.S.-based, non-profit professional association dedicated to advancing thought and practice in strategy development and deployment, has developed a Lead-Think-Plan-Act rubric and accompanying Body of Knowledge to capture and disseminate best practice in the field of strategic planning and management.ASP has also developed criteria for assessing strategic planning and management frameworks against the Body of Knowledge.

These criteria are used for three primary purposes:

Ensure that the ASP Body of Knowledge is continuously updated to include frameworks that meet these criteria.

Maintain a list of qualifying commercial and academic frameworksrecommended for study and training, to prepare participants to sit for the three ASP certification examinations.

Provide a resource and check list for practitioners as they refine and improve their organizations systems and for consultants as they improve their product and service offerings.

Thecriteriadeveloped by the ASPare:

1. Uses a Systems Approach that starts with the end in mind.

2. Incorporate Change Management and Leadership Development to effectively transform an organization to high performance.

3. Provide Actionable Performance Information to better inform decision making.

4. Incorporate Assessment-Based Inputs of the external and internal environment, and an understanding of customers and stakeholder needs and expectations.

5. Include Strategic Initiatives to focus attention on the most important performance improvement projects.

6. Offer a Supporting Toolkit, including terminology, concepts, steps, tools, and techniques that are flexible and scalable.

7. Align Strategy and Culture, with a focus on results and the drivers of results.

8. Integrate Existing Organization Systems and Align the Organization Around Strategy.

9. Be Simple to Administer, Clear to Understand and Direct, and Deliver Practical Benefits Over the Long-Term.

10. Incorporate Learning and Feedback, to Promote Continuous Long-term Improvement.

http://balancedscorecard.org/Resources/Strategic-Planning-BasicsStrategic planning

From Wikipedia, the free encyclopedia

Not to be confused with Strategic thinking.

It has been suggested that Long range planning be merged into this article. (Discuss) Proposed since June 2012.

It has been suggested that Strategy implementation be merged into this article. (Discuss) Proposed since March 2015.

Part of a series on Strategy

Strategy

Major dimensions[hide] Strategy Strategic management Military strategy Strategic thinking Strategic planning Game theory Strategic studies

Thought leaders[hide] Michael Porter Henry Mintzberg Bruce Henderson Gary Hamel Jim Collins Liddell Hart Carl Von Clausewitz Sun Tzu Chris Zook Adrian Slywotzky

Concepts[hide] Business model Competitive advantage Experience curve Value chain Portfolio theory Core competency Generic strategies

Frameworks & Tools[hide] SWOT Five Forces Balanced scorecard Strategy map PEST analysis Growthshare matrix

v t e

Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. It may also extend to control mechanisms for guiding the implementation of the strategy. Strategic planning became prominent in corporations during the 1960s and remains an important aspect of strategic management. It is executed by strategic planners or strategists, who involve many parties and research sources in their analysis of the organization and its relationship to the environment in which it competes.[1]Strategy has many definitions, but generally involves setting goals, determining actions to achieve the goals, and mobilizing resources to execute the actions. A strategy describes how the ends (goals) will be achieved by the means (resources). The senior leadership of an organization is generally tasked with determining strategy. Strategy can be planned (intended) or can be observed as a pattern of activity (emergent) as the organization adapts to its environment or competes.

Strategy includes processes of formulation and implementation; strategic planning helps coordinate both. However, strategic planning is analytical in nature (i.e., it involves "finding the dots"); strategy formation itself involves synthesis (i.e., "connecting the dots") via strategic thinking. As such, strategic planning occurs around the strategy formation activity.[1]Contents

1 Process

1.1 Overview 1.2 Inputs 1.3 Activities 1.4 Outputs 1.5 Outcomes 2 Tools and approaches 3 Strategic planning vs. financial planning 4 Criticism

4.1 Strategic planning vs. strategic thinking 5 See also 6 References 7 Strategic plan examples 8 Further readingProcess

Strategic management processes and activities

OverviewStrategic planning is a process and thus has inputs, activities, outputs and outcomes. This process, like all processes, has constraints. It may be formal or informal and is typically iterative, with feedback loops throughout the process. Some elements of the process may be continuous and others may be executed as discrete projects with a definitive start and end during a period. Strategic planning provides inputs for strategic thinking, which guides the actual strategy formation. The end result is the organization's strategy, including a diagnosis of the environment and competitive situation, a guiding policy on what the organization intends to accomplish, and key initiatives or action plans for achieving the guiding policy. [2]Michael Porter wrote in 1980 that formulation of competitive strategy includes consideration of four key elements:

1. Company strengths and weaknesses;

2. Personal values of the key implementers (i.e., management and the board);

3. Industry opportunities and threats; and

4. Broader societal expectations.[3]The first two elements relate to factors internal to the company (i.e., the internal environment), while the latter two relate to factors external to the company (i.e., the external environment).[3] These elements are considered throughout the strategic planning process.

InputsData is gathered from a variety of sources, such as interviews with key executives, review of publicly available documents on the competition or market, primary research (e.g., visiting or observing competitor places of business or comparing prices), industry studies, etc. This may be part of a competitive intelligence program. Inputs are gathered to help support an understanding of the competitive environment and its opportunities and risks. Other inputs include an understanding of the values of key stakeholders, such as the board, shareholders, and senior management. These values may be captured in an organization's vision and mission statements.

ActivitiesThe essence of formulating competitive strategy is relating a company to its environment.

Michael Porter[3]Strategic planning activities include meetings and other communication among the organization's leaders and personnel to develop a common understanding regarding the competitive environment and what the organization's response to that environment (its strategy) should be. A variety of strategic planning tools (described in the section below) may be completed as part of strategic planning activities.

The organization's leaders may have a series of questions they want answered in formulating the strategy and gathering inputs, such as:

What is the organization's business or interest?

What is considered "value" to the customer or constituency?

Which products and services should be included or excluded from the portfolio of offerings?

What is the geographic scope of the organization?

What differentiates the organization from its competitors in the eyes of customers and other stakeholders?

Which skills and resources should be developed within the organization?[1]

HYPERLINK "https://en.wikipedia.org/wiki/Strategic_planning" \l "cite_note-Drucker1954-4" [4]OutputsThe output of strategic planning includes documentation and communication describing the organization's strategy and how it should be implemented, sometimes referred to as the strategic plan. The strategy may include a diagnosis of the competitive situation, a guiding policy for achieving the organization's goals, and specific action plans to be implemented.[2] A strategic plan may cover multiple years and be updated periodically.

The organization may use a variety of methods of measuring and monitoring progress towards the objectives and measures established, such as a balanced scorecard or strategy map. Companies may also plan their financial statements (i.e., balance sheets, income statements, and cash flows) for several years when developing their strategic plan, as part of the goal setting activity. The term operational budget is often used to describe the expected financial performance of an organization for the upcoming year. Capital budgets very often form the backbone of a strategic plan, especially as it increasingly relates to Information and Communications Technology (ICT).

OutcomesWhilst the planning process produces outputs, as described above, strategy implementation or execution of the strategic plan produces Outcomes. These outcomes will invariably differ from the strategic goals. How close they are to the strategic goals and vision will determine the success or failure of the strategic plan. There will also arise unintended Outcomes, which need to be attended to and understood for strategy development and execution to be a true learning process.

Tools and approachesPlay mediaVideo explaining the strategic plan of the Wikimedia Foundation

Wikimedia Movement Strategic Plan (PDF)

A variety of analytical tools and techniques are used in strategic planning.[1] These were developed by companies and management consulting firms to help provide a framework for strategic planning. Such tools include:

PEST analysis, which covers the remote external environment elements such as political, economic, social and technological (PESTLE adds legal/regulatory and ecological/environmental);

Scenario planning, which was originally used in the military and recently used by large corporations to analyze future scenarios;

Porter five forces analysis, which addresses industry attractiveness and rivalry through the bargaining power of buyers and suppliers and the threat of substitute products and new market entrants;

SWOT analysis, which addresses internal strengths and weaknesses relative to the external opportunities and threats;

Growth-share matrix, which involves portfolio decisions about which businesses to retain or divest; and

Balanced Scorecards and strategy maps, which creates a systematic framework for measuring and controlling strategy.

The Nine Steps to Success(TM)[5] - The Balanced Scorecard Institute's framework for Strategic Planning and Management.

Strategic planning vs. financial planningSimply extending financial statement projections into the future without consideration of the competitive environment is a form of financial planning or budgeting, not strategic planning. In business, the term "financial plan" is often used to describe the expected financial performance of an organization for future periods. The term "budget" is used for a financial plan for the upcoming year. A "forecast" is typically a combination of actual performance year-to-date plus expected performance for the remainder of the year, so is generally compared against plan or budget and prior performance. The financial plans accompanying a strategic plan may include 35 years of projected performance.

McKinsey & Company developed a capability maturity model in the 1970s to describe the sophistication of planning processes, with strategic management ranked the highest. The four stages include:

1. Financial planning, which is primarily about annual budgets and a functional focus, with limited regard for the environment;

2. Forecast-based planning, which includes multi-year financial plans and more robust capital allocation across business units;

3. Externally oriented planning, where a thorough situation analysis and competitive assessment is performed;

4. Strategic management, where widespread strategic thinking occurs and a well-defined strategic framework is used.

Categories 3 and 4 are strategic planning, while the first two categories are non-strategic or essentially financial planning. Each stage builds on the previous stages; that is, a stage 4 organization completes activities in all four categories.[6]CriticismStrategic planning vs. strategic thinkingStrategic planning has been criticized for attempting to systematize strategic thinking and strategy formation, which Henry Mintzberg argues are inherently creative activities involving synthesis or "connecting the dots" which cannot be systematized. Mintzberg argues that strategic planning can help coordinate planning efforts and measure progress on strategic goals, but that it occurs "around" the strategy formation process rather than within it. Further, strategic planning functions remote from the "front lines" or contact with the competitive environment (i.e., in business, facing the customer where the effect of competition is most clearly evident) may not be effective at supporting strategy efforts.[1] What is VMOSA?

Why should your organization use VMOSA?

When should you use VMOSA?

Like everyone else, community organizers often dream about goals they would like to accomplish, such as an end to drug abuse; every child being wanted, cared for, and nurtured; a home for everyone; peace in our lifetime. These are just a few of many people's visions for our community. Unfortunately, like many individual dreams, we think these objectives are too lofty and unattainable to ever be realized.

But, in fact, realizing these dreams is possible. Look, for example, at our global success in eradicating small pox, or how far we have come since the 1950s in the United States towards reaching racial and gender equality. As Henry David Thoreau said over a century ago, "If you have built castles in the air, your work need not be lost; there is where they should be. Now, put foundations under them."

Building foundations for your community dreams is what VMOSA, the strategic planning process that is the focus of this chapter, is all about. It's about groups of people deciding together what they want to accomplish, and how they are going to get there.

http://ctb.ku.edu/en/table-of-contents/structure/strategic-planning/vmosa/mainWhat is VMOSA?

One way to make that journey is through strategic planning, the process by which a group defines its own "VMOSA;" that is, its Vision, Mission, Objectives, Strategies, and Action Plans. VMOSA is a practical planning process that can be used by any community organization or initiative. This comprehensive planning tool can help your organization by providing a blueprint for moving from dreams to actions to positive outcomes for your community.

In this section, we will give a general overview of the process, and touch briefly on each of the individual parts. In Examples, we'll show you how an initiative to prevent adolescent pregnancy used the VMOSA process effectively. Then, in Tools, we offer you a possible agenda for a planning retreat, should your organization decide to use this process. Finally, the remaining sections in this chapter will walk you through the steps needed to fully develop each portion of the process.

Why should your organization use VMOSA?

Why should your organization use this planning process? There are many good reasons, including all of the following:

The VMOSA process grounds your dreams. It makes good ideas possible by laying out what needs to happen in order to achieve your vision.

By creating this process in a group effort (taking care to involve both people affected by the problem and those with the abilities to change it), it allows your organization to build consensus around your focus and the necessary steps your organization should take.

The process gives you an opportunity to develop your vision and mission together with those in the community who will be affected by what you do. That means that your work is much more likely to address the communitys real needs and desires, rather than what you think they might be. It also means community ownership of the vision and mission, putting everyone on the same page and greatly increasing the chances that any effort will be successful.

VMOSA allows your organization to focus on your short-term goals while keeping sight of your long-term vision and mission.

When should you use VMOSA?

So, when should you use this strategic planning process? Of course, it always makes sense for your organization to have the direction and order it gives you, but there are some times it makes particularly good sense to use this process. These times include:

When you are starting a new organization.

When your organization is starting a new initiative or large project, or is going to begin work in a new direction.

When your group is moving into a new phase of an ongoing effort.

When you are trying to invigorate an older initiative that has lost its focus or momentum.

When youre applying for new funding or to a new funder. Its important under these circumstances to clarify your vision and mission so that any funding you seek supports what your organization actually stands for. Otherwise, you can wind up with strings attached to the money that require you to take a direction not in keeping with your organizations real purpose or philosophy.

Let's look briefly at each of the individual ingredients important in this process. Then, in the next few sections we'll look at each of these in a more in-depth manner, and explain how to go about developing each step of the planning process.

Vision (the dream)

Your vision communicates what your organization believes are the ideal conditions for your community how things would look if the issue important to you were perfectly addressed. This utopian dream is generally described by one or more phrases or vision statements, which are brief proclamations that convey the community's dreams for the future. By developing a vision statement, your organization makes the beliefs and governing principles of your organization clear to the greater community (as well as to your own staff, participants, and volunteers).

There are certain characteristics that most vision statements have in common. In general, vision statements should be:

Understood and shared by members of the community

Broad enough to encompass a variety of local perspectives

Inspiring and uplifting to everyone involved in your effort

Easy to communicate - for example, they should be short enough to fit on a T-shirt

Here are a few vision statements which meet the above criteria:

Healthy children

Safe streets, safe neighborhoods

Every house a home

Education for all

Peace on earth

Mission (the what and why)

Developing mission statements are the next step in the action planning process. An organization's mission statement describes what the group is going to do, and why it's going to do that. Mission statements are similar to vision statements, but they're more concrete, and they are definitely more "action-oriented" than vision statements. The mission might refer to a problem, such as an inadequate housing, or a goal, such as providing access to health care for everyone. And, while they don't go into a lot of detail, they start to hint - very broadly - at how your organization might go about fixing the problems it has noted. Some general guiding principles about mission statements are that they are:

Concise. Although not as short a phrase as a vision statement, a mission statement should still get its point across in one sentence.

Outcome-oriented. Mission statements explain the overarching outcomes your organization is working to achieve.

Inclusive. While mission statements do make statements about your group's overarching goals, it's very important that they do so very broadly. Good mission statements are not limiting in the strategies or sectors of the community that may become involved in the project.

The following mission statements are examples that meet the above criteria.

"To promote child health and development through a comprehensive family and community initiative."

"To create a thriving African American community through development of jobs, education, housing, and cultural pride.

"To develop a safe and healthy neighborhood through collaborative planning, community action, and policy advocacy."

While vision and mission statements themselves should be short, it often makes sense for an organization to include its deeply held beliefs or philosophy, which may in fact define both its work and the organization itself. One way to do this without sacrificing the directness of the vision and mission statements is to include guiding principles as an addition to the statements. These can lay out the beliefs of the organization while keeping its vision and mission statements short and to the point.

Objectives (how much of what will be accomplished by when)

Once an organization has developed its mission statement, its next step is to develop the specific objectives that are focused on achieving that mission. Objectives refer to specific measurable results for the initiative's broad goals. An organization's objectives generally lay out how much of what will be accomplished by when. For example, one of several objectives for a community initiative to promote care and caring for older adults might be: "By 2015 (by when), to increase by 20% (how much) those elders reporting that they are in daily contact with someone who cares about them (of what)."

There are three basic types of objectives. They are:

Behavioral objectives. These objectives look at changing the behaviors of people (what they are doing and saying) and the products (or results) of their behaviors. For example, a neighborhood improvement group might develop an objective around having an increased amount of home repair taking place (the behavior) or of improved housing (the result).

Community-level outcome objectives. These are related to behavioral outcome objectives, but are more focused more on a community level instead of an individual level. For example, the same group might suggest increasing the percentage of decent affordable housing in the community as a community-level outcome objective.

Process objectives. These are the objectives that refer to the implementation of activities necessary to achieve other objectives. For example, the group might adopt a comprehensive plan for improving neighborhood housing.

It's important to understand that these different types of objectives aren't mutually exclusive. Most groups will develop objectives in all three categories. Examples of objectives include:

By December 2010, to increase by 30% parent engagement (i.e., talking, playing, reading) with children under 2 years of age. (Behavioral objective)

By 2012, to have made a 40% increase in youth graduating from high school. (Community -level outcome objective)

By the year 2006, increase by 30% the percentage of families that own their home. (Community-level outcome objective)

By December of this year, implement the volunteer training program for all volunteers. (Process objective)

Strategies (the how)

The next step in the process of VMOSA is developing your strategies. Strategies explain how the initiative will reach its objectives. Generally, organizations will have a wide variety of strategies that include people from all of the different parts, or sectors, of the community. These strategies range from the very broad, which encompass people and resources from many different parts of the community, to the very specific, which aim at carefully defined areas.

Examples of broad strategies include:

A child health program might use social marketing to promote adult involvement with children

An adolescent pregnancy initiative might decide to increase access to contraceptives in the community

An urban revitalization project might enhance the artistic life of the community by encouraging artists to perform in the area

Five types of specific strategies can help guide most interventions. They are:

Providing information and enhancing skills (e.g., offer skills training in conflict management)

Enhancing services and support (e.g., start a mentoring programs for high-risk youth)

Modify access, barriers, and opportunities (such as offering scholarships to students who would be otherwise unable to attend college)

Change the consequences of efforts (e.g., provide incentives for community members to volunteer)

Modify policies (e.g., change business policies to allow parents and guardians and volunteers to spend more time with young children)

Action plan (what change will happen; who will do what by when to make it happen)

Finally, an organization's action plan describes in great detail exactly how strategies will be implemented to accomplish the objectives developed earlier in this process. The plan refers to: a) specific (community and systems) changes to be sought, and b) the specific action steps necessary to bring about changes in all of the relevant sectors, or parts, of the community.

Action StepPerson(s) ResponsibleDate to be CompletedResources RequiredPotential Barriers or ResistanceCollaborators

Draft a social marketing planTerry McNeil (from marketing firm)April 2006$15,000 (remaining donated)None anticipatedMembers of the business action group

Ask local corporations to introduce flex-time for parents and mentorsMaria Suarez (from business action group)September 20085 hours; 2 hour proposal prep; 3 hours for meeting and transportationCorporation: may see this as expensive; must convince them of benefit of the plan for the corporationMembers of the business action group and the school action group

The key aspects of the intervention or (community and systems) changes to be sought are outlined in the action plan. For example, in a program whose mission is to increase youth interest in politics, one of the strategies might be to teach students about the electoral system. Some of the action steps, then, might be to develop age-appropriate materials for students, to hold mock elections for candidates in local schools, and to include some teaching time in the curriculum.

Action steps are developed for each component of the intervention or (community and systems) changes to be sought. These include:

Action step(s): What will happen

Person(s) responsible: Who will do what

Date to be completed: Timing of each action step

Resources required: Resources and support (both what is needed and what's available )

Barriers or resistance, and a plan to overcome them!

Collaborators: Who else should know about this action

Here are two examples of action steps, graphed out so you can easily follow the flow:

Of course, once you have finished designing the strategic plan or "VMOSA" for your organization, you are just beginning in this work. Your action plan will need to be tried and tested and revised, then tried and tested and revised again. You'll need to obtain feedback from community members, and add and subtract elements of your plan based on that feedback.

In Summary

Everyone has a dream. But the most successful individuals - and community organizations - take that dream and find a way to make it happen. VMOSA helps groups do just that. This strategic planning process helps community groups define their dream, set their goals, define ways to meet those goals, and finally, develop practical ways bring about needed changes.

In this section, you've gained a general understanding of the strategic planning process. If you believe your organization might benefit from using this process, we invite you to move on to the next sections of this chapter, which explain in some depth how to design and develop your own strategic plan.

Strategic planning the basic idea

From the Support Center for Nonprofit Management in San Francisco(see note at end)

Strategic planning can be used to determine mission, vision, values, goals, objectives, roles and responsibilities, timelines, etc.

Strategic planning is a management tool, period.

As with any management tool, it is used for one purpose only: to help an organization do a better job to focus its energy, to ensure that members of the organization are working toward the same goals, to assess and adjust the organization's direction in response to a changing environment. In short, strategic planning is a disciplined effort to produce fundamental decisions and actions that shape and guide what an organization is, what it does, and why it does it, with a focus on the future. (Adapted from John M. Bryson, Strategic Planning in Public and Nonprofit Organizations; you can order the book with this link and a small royalty will be paid that supports this site.)

A word-by-word dissection of this definition provides the key elements that underlie the meaning and success of a strategic planning process:

The process is strategic because it involves preparing the best way to respond to the circumstances of the organization's environment, whether or not its circumstances are known in advance; nonprofits often must respond to dynamic and even hostile environments. Being strategic, then, means being clear about the organization's objectives, being aware of the organization's resources, and incorporating both into being consciously responsive to a dynamic environment.

The process is about planning because it involves intentionally setting goals (i.e., choosing a desired future) and developing an approach to achieving those goals.

The process is disciplined in that it calls for a certain order and pattern to keep it focused and productive. The process raises a sequence of questions that helps planners examine experience, test assumptions, gather and incorporate information about the present, and anticipate the environment in which the organization will be working in the future.

Finally, the process is about fundamental decisions and actions because choices must be made in order to answer the sequence of questions mentioned above. The plan is ultimately no more, and no less, than a set of decisions about what to do, why to do it, and how to do it. Because it is impossible to do everything that needs to be done in this world, strategic planning implies that some organizational decisions and actions are more important than others and that much of the strategy lies in making the tough decisions about what is most important to achieving organizational success.

Strategic planning can be complex, challenging, and even messy, but it is always defined by the basic ideas outlined above and you can always return to these basics for insight into your own strategic planning process.

Strategic Planning and Long-Range Planning

Although many use these terms interchangeably, strategic planning and long-range planning differ in their emphasis on the "assumed" environment. Long-range planning is generally considered to mean the development of a plan for accomplishing a goal or set of goals over a period of several years, with the assumption that current knowledge about future conditions is sufficiently reliable to ensure the plan's reliability over the duration of its implementation. In the late fifties and early sixties, for example, the US. economy was relatively stable and somewhat predictable, and, therefore, long-range planning was both fashionable and useful.

On the other hand, strategic planning assumes that an organization must be responsive to a dynamic, changing environment (not the more stable environment assumed for long-range planning). Certainly a common assumption has emerged in the nonprofit sector that the environment is indeed changeable, often in unpredictable ways. Strategic planning, then, stresses the importance of making decisions that will ensure the organization's ability to successfully respond to changes in the environment.

Strategic Thinking and Strategic Management

Strategic planning is only useful if it supports strategic thinking and leads to strategic management the basis for an effective organization. Strategic thinking means asking, "Are we doing the right thing?" Perhaps, more precisely, it means making that assessment using three key requirements about strategic thinking: a definite purpose be in mind; an understanding of the environment, particularly of the forces that affect or impede the fulfillment of that purpose; and creativity in developing effective responses to those forces.

It follows, then, that strategic management is the application of strategic thinking to the job of leading an organization. Dr. Jagdish Sheth, a respected authority on marketing and strategic planning, provides the following framework for understanding strategic management: continually asking the question, "Are we doing the right thing?" It entails attention to the "big picture" and the willingness to adapt to changing circumstances, and consists of the following three elements:

formulation of the organization's future mission in light of changing external factors such as regulation, competition, technology, and customers

development of a sustainable strategy to achieve the mission

creation of an organizational structure which will deploy resources to successfully carry out its competitive strategy.

Strategic management is adaptive and keeps an organization relevant. In these dynamic times it is more likely to succeed than the traditional approach of "if it ain't broke, don't fix it."

What Strategic Planning Is Not

Everything said above to describe what strategic planning is can also provide an understanding of what it is not. For example, it is about fundamental decisions and actions, but it does not attempt to make future decisions. Strategic planning involves anticipating the future environment, but the decisions are made in the present. This means that over time, the organization must stay abreast of changes in order to make the best decisions it can at any given point it must manage, as well as plan, strategically.

Strategic planning has also been described as a tool but it is not a substitute for the exercise of judgment by leadership. Ultimately, the leaders of any enterprise need to sit back and ask, and answer, "What are the most important issues to respond to?" and "How shall we respond?" Just as the hammer does not create the bookshelf, so the data analysis and decision-making tools of strategic planning do not make the organization work they can only support the intuition, reasoning skills, and judgment that people bring to their organization.

Finally, strategic planning, though described as disciplined, does not typically flow smoothly from one step to the next. It is a creative process, and the fresh insight arrived at today might very well alter the decision made yesterday. Inevitably the process moves forward and back several times before arriving at the final set of decisions. Therefore, no one should be surprised if the process feels less like a comfortable trip on a commuter train, but more like a ride on a roller coaster. But even roller coaster cars arrive at their destination, as long as they stay on track!

Copyright 1994-95 Support Center, 706 Mission Street, 5th Floor, San Francisco, CA, USA 94103-3113. Distribution and reprinting permitted as long as this copyright notice is included. All Rights Reserved. (Note: The Support Center changed its name to Compasspoint some time ago. This article is no longer available in its original location.)

Its hard to accomplish anything without a plan. Whether youre coaching a football team, cooking Thanksgiving dinner, or running a small business, you need a strategic plan.

A strategic plan looks at all the things your small business could do and narrows it down to the things it is actually good at doing. A strategic plan also helps business leaders determine where to spend time, human capital, and money.

But, how should small businesses approach strategic planning? There are hundreds of business books dedicated to the topic. Weve read most of them. We put the others on our bookshelf just for show.

Developing a strategic plan might seem like an overwhelming process, but if you break it down, its easy to tackle. Heres our five-step approach:

1. Determine where you are. This is harder than is looks. Some people see themselves how they WANT to see themselves, not how they actually appear to others. Many small businesses get snared in this same trap.

For an accurate picture of where your business is, conduct external and internal audits to get a clear understanding of the marketplace, the competitive environment, and your organizations competencies (your realnot perceivedcompetencies).

2. Identify whats important. Focus on where you want to take your organization over time. This sets the direction of the enterprise over the long term and clearly defines the mission (markets, customers, products, etc.) and vision (conceptualization of what your organizations future should or could be).

http://www.forbes.com/sites/aileron/2011/10/25/five-steps-to-a-strategic-plan/From this analysis, you can determine the priority issuesthose issues so significant to the overall well-being of the enterprise that they require the full and immediate attention of the entire management team. The strategic plan should focus on these issues.

3. Define what you must achieve. Define the expected objectives that clearly state what your organization must achieve to address the priority issues.

4. Determine who is accountable. This is how youre going to get to where you want to go. The strategies, action plans, and budgets are all steps in the process that effectively communicates how you will allocate time, human capital, and money to address the priority issues and achieve the defined objectives.

5. Review. Review. Review. Its not over. Its never over. To ensure the plan performs as designed, you must hold regularly scheduled formal reviews of the process and refine as necessary. We suggest at least once a quarter.

A strategic plan is a wonderful thing. It can help you take your small business to places you never thought possible. If you havent already done so, take the time to lay out a strategic plan now. It will help keep your small business on track and you focused on the future.

What is Strategic Planning?

Simply put, strategic planning determines where an organization is going over the next year or more and how it's going to get there. Typically, the process is organization-wide, or focused on a major function such as a division, department or other major function. (The descriptions on this page assume that strategic planning is focused on the organization.)

How to Get a Feel for Strategic Planning -- There's No Perfect Way to Do It

Planning typically includes several major activities or steps in the process. Different people often have different names for these major activities. They might even conduct them in a different order. Strategic planning often includes use of several key terms. Different people might use apply different definitions for these terms, as well.

Don't be concerned about finding the "perfect way" to conduct strategic planning. You'll soon notice that each writer seems to have their own particularly interpretation of the activities in strategic planning. However, as you read the materials linked from the topic Strategic Planning in this library, you'll begin to notice some information that is common to most writers.

Read the basic description described below on this page. Then review the various materials linked from the library in the topic Strategic Planning. Once you start strategic planning, you'll soon find your own particular approach to carrying out the process.

One Way to Look at Strategic Planning

One interpretation of the major activities in strategic planning activities is that it includes:

1. Strategic Analysis

This activity can include conducting some sort of scan, or review, of the organization's environment (for example, of the political, social, economic and technical environment). Planners carefully consider various driving forces in the environment, for example, increasing competition, changing demographics, etc. Planners also look at the various strengths, weaknesses, opportunities and threats (an acronym for this activity is SWOT) regarding the organization.

(Some people take this wide look around after they've identified or updated their mission statement, vision statement, values statement, etc. These statements are briefly described below. Other people conduct the analysis before reviewing the statements.)

(Note that in the past, organizations usually referred to the phrase "long-range planning". More recently, planners use the phrase "strategic planning". This new phrase is meant to capture the strategic (comprehensive, thoughtful, well-placed) nature of this type of planning.)

2. Setting Strategic Direction

Planners carefully come to conclusions about what the organization must do as a result of the major issues and opportunities facing the organization. These conclusions include what overall accomplishments (or strategic goals) the organization should achieve, and the overall methods (or strategies) to achieve the accomplishments. Goals should be designed and worded as much as possible to be specific, measurable, acceptable to those working to achieve the goals, realistic, timely, extending the capabilities of those working to achieve the goals, and rewarding to them, as well. (An acronym for these criteria is "SMARTER".)

At some point in the strategic planning process (sometimes in the activity of setting the strategic direction), planners usually identify or update what might be called the strategic "philosophy". This includes identifying or updating the organization's mission, vision and/or values statements. Mission statements are brief written descriptions of the purpose of the organization. Mission statements vary in nature from very brief to quite comprehensive, and including having a specific purpose statement that is part of the overall mission statement. Many people consider the values statement and vision statement to be part of the mission statement. New businesses (for-profit or nonprofit) often work with a state agency to formally register their new business, for example, as a corporation, association, etc. This registration usually includes declaring a mission statement in their charter (or constitution, articles of incorporation, etc.).

It seems that vision and values statements are increasingly used. Vision statements are usually a compelling description of how the organization will or should operate at some point in the future and of how customers or clients are benefiting from the organization's products and services. Values statements list the overall priorities in how the organization will operate. Some people focus the values statement on moral values. Moral values are values that suggest overall priorities in how people ought to act in the world, for example, integrity, honesty, respect, etc. Other people include operational values which suggest overall priorities for the organization, for example, to expand marketshare, increase efficiency, etc. (Some people would claim that these operational values are really strategic goals. Don't get hung up on wording for now.)

3. Action Planning

Action planning is carefully laying out how the strategic goals will be accomplished. Action planning often includes specifying objectives, or specific results, with each strategic goal. Therefore, reaching a strategic goal typically involves accomplishing a set of objectives along the way -- in that sense, an objective is still a goal, but on a smaller scale.

Often, each objective is associated with a tactic, which is one of the methods needed to reach an objective. Therefore, implementing a strategy typically involves implementing a set of tactics along the way -- in that sense, a tactic is still a strategy, but on a smaller scale.

Action planning also includes specifying responsibilities and timelines with each objective, or who needs to do what and by when. It should also include methods to monitor and evaluate the plan, which includes knowing how the organization will know who has done what and by when.

It's common to develop an annual plan (sometimes called the operational plan or management plan), which includes the strategic goals, strategies, objectives, responsibilities and timelines that should be done in the coming year. Often, organizations will develop plans for each major function, division department, etc., and call these work plans.Usually, budgets are included in the strategic and annual plan, and with work plans. Budgets specify the money needed for the resources that are necessary to implement the annual plan. Budgets also depict how the money will be spent, for example, for human resources, equipment, materials, etc.

(Note there are several different kinds of budgets. Operating budgets are usually budgets associated with major activities over the coming year. Project budgets are associated with major projects, for example, constructing a building, developing a new program or product line, etc. Cash budgets depict where cash will be spent over some near term, for example, over the next three months (this is very useful in order to know if you can afford bills that must be paid soon. Capital budgets are associated with operating some major asset, for example, a building, automobiles, furniture, computers, etc.

Basic Overview of Variety of Planning Models

Here's a quick overview of a variety of strategic planning. This overview will help you get a feel for the variety of perspectives on strategic planning. Basic Overview of Various Models

Now that you have some basic sense about what strategic planning is, you can go on to polish your understanding by returning to the topic Strategic Planning, starting with in the section Basic Overviews of Strategic Planning Process (basics, special topics and sample plans)http://managementhelp.org/strategicplanning/basics.htm