What is strategic planning? This is a question that is mostly common among individuals who own and manage businesses across different industries. This post will provide detailed answers as to what a strategic plan is, its benefits, key components and how to come up with one.
Strategic planning refers to a management element used by business leaders and planners to set objectives, highlight priorities, assess performance, focus energy and resources, strengthen operations and adjust goals in response to changing business environments. It is also carried out to ensure that the employees and stakeholders are working towards a common goal and established agreements on intended results. Effective planning outlines the direction an organization will take towards realizing its goals and the actions required to achieve success.
Key Components of a Strategic Plan
The key components of a strategic plan include vision, mission, objectives, strategies and action plans. The vision is a statement that articulates where the company aspires to be in the future. This could be in three to ten years. The vision sets the overall direction the company will follow.
The mission describes what the company is currently doing to achieve its objectives. It describes what the company does and for who and how. Focusing on the mission on a daily basis helps the company reach its vision.
Objectives refer to the short and long-term goals that the company hopes to achieve. The duration could be in six months, one year or ten years. Each objective should be specific, measurable, achievable, realistic and time-based (SMART).
The strategies outline the techniques the company will employ to achieve the set objectives. The strategies should involve items that will work without requiring too many resources or operational adjustments.
The action plans refer to the specific tasks that will be undertaken to meet various objectives. They detail all the steps that will be taken, including the amount of time allocated for each task.
Benefits of Having a Strategic Plan
There are several benefits associated with developing a strategic plan. The key components of the plan ground your dreams and make ideas possible. You get insights and guidelines on how to distinguish between a bad and good idea. This helps you make wise decisions regarding what projects to invest in and how to get the employees to work towards exploring the ideas put in place. A strategic plan will also uncover various customer segments, markets and product offerings that are in the best interest for your company. This can lead to an increase in profitability and market share.
How to Make a Strategic Plan
The first step you need to take is to determine where you are. This could be through performing external and internal audits to obtain an intuitive understanding of the market conditions, competitive environments and the organization’s competencies. The next step is to identify what is important. Prioritize issues that are significant for the overall well-being of the company. After that, decide where you want to be. This should clearly outline what the company must achieve to address the items prioritized. The final step is to determine who is accountable and review the plans you have made to keep you on track.
A strategic plan is an important tool for companies who want to succeed. The items discussed above will help you know more about strategic planning and how to use it to take your business to places you never thought possible.