What Is Strategic Planning and How To Do It in 6 Steps

By Indeed Editorial Team

Published 30 August 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Companies often have goals, both broad and specific, of how they want to achieve success in their industry. Strategic planning helps businesses determine objectives and set timelines to accomplish those goals. It provides a focus for how a company operates. In this article, we discuss what strategic planning is, how it can benefit an organisation and outline the steps to create an effective plan.

What is strategic planning?

Strategic planning is a part of creating achievable goals through several factors, such as time management and resource allocation. Done well, strategic planning improves operations, provides focus, sets priorities and increases collaboration. It can guide and shape the future of an organisation. If a company is new or experiencing significant change, team members may work together to create or update the strategic plan. Decision-makers may be managers, department leaders or team leaders.

A strategic plan sets up measurable goals that outline the steps employees and management can take to achieve the desired growth for the company. These goals can be small things that change day to day, like increasing the number of cold calls per salesperson, or they can be large goals that affect the direction of the company, like moving into a new market.

Related: Human Resource Planning: Meaning, Importance and Key Steps

Why is strategic planning important?

Strategic planning helps an organisation decide what direction to pursue with its business goals. Your plan creates a structure for how and when you implement changes. It also provides a record of the purpose of each change and measurable benchmarks to gauge your success. This can create a guide through which you can manage business growth.

Related: What Is the Role of a Manager?

Benefits of strategic planning

Here are some benefits of strategic planning:

Organisation

Using a strategic plan to organise your goals and develop a single direction can improve your company's performance. You can use your plan to create a common goal and identity for your company. This streamlined sense of purpose can have a positive effect on your business, regardless of the goals you set.

Related: Organisational Skills: Definition and Examples

Communication

Creating a strategic plan requires communication between employees and managers and between departments. Your plan can also establish clear goals and expectations that your employees can reference in the future. Stating these goals explicitly can help your employees develop a stronger understanding of their roles in the company and what you expect of them.

Related: 4 Types of Communication (With Tips)

Efficiency

A strategic plan provides instruction to each level of management and operations within your company. By creating a common goal and establishing the plans by which you can achieve that goal, you can cut down on inefficient procedures. You can also refer to your strategic plan when making management decisions, cutting down on costly business risks.

Related: Business Strategy Components and Examples

How to create a strategic plan

You can follow these steps to create a strategic plan:

1. Clarify the company's vision

One of the first steps in strategic planning is defining the vision, values and mission of the organisation. The vision is the long-term aim of the business, and you need to base it on ambitious but realistic goals. Values are beliefs that create the foundation for the company and affect every part of the business, from marketing strategies to workplace culture. Values are beliefs you want employees to practise regularly, while the mission defines your purpose as a company.

This could be one of the lengthier processes since your group needs to agree on the same definitions for all high-level components of the organisation.

2. Make an outline

Once you have agreed on your purpose, you can construct an outline of the benchmarks you want to meet. Heads of departments can do research to determine what department-level goals they want to set that are in line with the company's purpose. Each department may have a better understanding of the needs and capabilities of their employees and how their department can best serve the overall purpose. This outline can be a guide for the development of your strategic plan.

3. Create detailed goals

For each department, you can set detailed goals that advance your company towards its stated purpose. Consider using the SMART method, meaning you set goals that are:

  • Specific: Think of every detail of the goal you want to set so there is no confusion about what you can consider a success. For example, a salesperson may have a goal of converting 10% more of their cold calls into sales.

  • Measurable: Make sure each of your goals has a result that is quantifiable so you can measure success objectively. For example, a production team wants to produce 100 more units. If they make 98 more units, they have improved but they have not met their goal.

  • Attainable: To build morale and accurately scale your growth projections, it is important to set goals that are attainable for your current position. Set goals you can build upon in the future and encourage your team to continue to improve.

  • Relevant: Set goals that move you closer to your overall goal or purpose. This can help with efficiency because it can keep you from devoting your energy and resources to initiatives that do not contribute to the overall mission of the company.

  • Time-bound: Set deadlines for each of your goals to establish a timeline for each goal. Having a time-bound goal can also help you measure how close you are to success, which can be a powerful motivator.

Consider the goals for each department, initiative and employee. The more detailed your plan is, the better you can communicate the expectations to the other members of the company.

Read more: SMART Goals: Definition and Examples

4. Track your progress

Each goal can have a measurement of success that is specific to that goal, so it can be easy to compile data to reflect your progress. An important part of successful strategic planning is to monitor success and make adjustments based on performance and market changes. When setting up your plan, set aside times and intervals for reviewing and reporting on progress. Consider establishing regular review periods for managers to review the progress of employees. You can also review reports on measurable goals like sales numbers.

5. Involve all employees

Everyone working at your company plays an important role. Once you have created a strategic plan, share it with all employees so they can understand the mission of your company. Sharing the plan at every level ensures that managers and employees have the same objectives. This can minimise confusion between employees and create a more positive and open atmosphere. Encourage managers and other employees to create goals for each member of their team, so that they can implement your strategic plan on every level. This can make your strategic plan feel more like a group effort towards improvement.

Related: How To Write an Action Plan (With Template and Example)

6. Follow up routinely

Once you have finished creating and sharing your strategic plan, it is up to each member of the company to create the plan's success. Different factors can affect a strategic plan's success that may be completely out of your control. You can change your strategic plan if circumstances change and your original outline is no longer helpful.

Continue to evaluate the performances of your employees to make sure your plan is serving their needs, while also advancing the overall goals of the company. For example, if goals are consistently not being met by a variety of employees, consider resetting that department's goals to make sure they are attainable.

Strategic planning example

Here is an example of a strategic plan to improve customer satisfaction:

You are part of a strategic planning team that sets a goal at the beginning of January to have clients consider you as a trusted partner. You also would like to increase their satisfaction rate from 80% to 85% by the end of the quarter. To accomplish this goal, you want to improve your annual client conference. There are various tasks you must achieve, such as identifying the venue and date, creating the agenda, inviting speakers, developing social events, creating menus and sending out invitations.

Your strategic team assigns specific departments in the company to complete each task. You hold weekly meetings to ensure there are no delays in the plan. You also plan a company-wide meeting at the beginning of February and March so you can get opinions from the team and share developments. The team schedules one final meeting on March 30 to review any last-minute details.

One week after the conference, your team sends your clients a survey to evaluate the satisfaction rate. One month after the conference, you must compile the results and share them with the entire company.

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