A process of setting goals and objectives over a defined period of time, strategic planning is a leadership tool that executives and board members of for-profit businesses and not-for-profit organizations can use to guide their organization into the future. Plans using a strategic method should focus on the whole organization. There are several approaches to creating a strategic plan, including goals-based, issues-based, and organic or holistic approaches.
Vision and Goals-Based Planning
According to the Free Management Library, many organizations use goals and vision-based planning. The first step in a goals-based plan is to develop a holistic vision for the organization and its stakeholders which management wants to achieve in a defined time frame, usually from one to five years. Managers and directors then set defined, quantifiable goals within the time frame, and planning steps are articulated. Goals-based planning usually works backward from the future to the present to identify specific steps and benchmarks.
Issues-based planning takes a different approach from goals-based planning. Issues-based planning usually occurs in response to current issues. Instead of articulating a business or organization-wide vision across all departments and stakeholders, an issues-based strategic process will focus on immediate or easily foreseen issues. As an example, a business may learn of a new law that will require it to change significant parts of its operations. An issues-based plan will start in the present and identify objectives that can be achieved to successfully comply with the law while keeping a strong profit margin.
Basic Elements of the Strategic Plan
Strategic plans for any kind of organization, whether they are short-term or longer-term, involve an organization’s basic mission or purpose. The strategic plan should also include organizational values and vision, which should be articulated by founders, executives, and other stakeholders. The plans should also include an analysis of external factors influencing the organization, such as legal considerations or raw materials costs, as well as internal factors which are under the organization’s control. Next, organizations should identify specific, measurable goals and match them with strategies or action steps which can help to achieve the goals.
Enacting the Strategic Plan
Whether or not the organization is a large business or a small not-for-profit charity, a strategic plan isn’t very effective if it can’t be achieved. Action planning includes writing down and monitoring the actions necessary to achieve each goal. In large organizations, divisions or departments will be identified. In smaller businesses, an individual may be responsible for the action steps. Budgeting is also crucial for a successful strategic plan. Each objective should have a monitored budget.
SWOT Analysis and Strategic Plans
Strategy plans aren’t effective if businesses or nonprofits don’t take their abilities into account. Managers can identify which action steps will be most effective, and which strategies may be necessary by conducting a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. The SWOT analysis will show which parts of the organization can best achieve goals and objectives, and may also help to identify other objectives for improvement.
Many people have heard the adage, “if you fail to plan, you plan to fail.” Strategic planning can assist many different types of organizations to not only survive economic downturns or changes in mission, they can direct businesses large and small to succeed.