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Strategic planning is how most successful organizations get things done. It is a relatively simple process — just choose goals, and build a plan to achieve them. That it is simple does not mean it is obvious, though, so in this article we’ll be going over the strategic planning process.
If you haven’t already done so, it’s definitely worth going over our article “What Is Strategic Planning?” before continuing.
Every good strategic plan has a few basic elements over which various different tools and techniques can be applied as necessary. Here are all the essential steps to the strategic planning process of developing a worthwhile strategic plan.
Visioning is the broad term which describes the process of asking yourself where you want your organization to be after some period of time (“Where do we want to go? What do we want to do?”). This step encompasses developing your organization’s mission, values, and, for lack of a better word, vision. For more information about this step, be sure to check out our recent article about strategic planning tools, where it was also included.
- Choosing Goals
To ensure your organization’s success, it’s important to set clear and achievable goals. In general, this step is relatively self-explanatory, but very useful in progressing from just having a destination (“Where do we want to be?”) to also having a route (“How will we get there?”). Moreover, this is how you will know that you are making progress in reaching your end destination, and will also help to keep spirits high within your company. Some of your goals should also be associated directly with the vision that you should have developed in the previous step — that is to say that you should also extrapolate a set of clear, tangible goals from your vision.
- Adding Milestones
Similarly to goals, milestones help to provide a precise measurement of how far along your organization’s current ‘journey’ you are. Milestones don’t necessarily have to represent points at which a clear project or subproject has been completed, though. If a writer’s goal is to complete a 10,000 word eBook, a suitable milestone might be to reach the halfway point of 5,000 words. Without a doubt, milestones should be introduced in the strategic planning process.
- Circumstance Analysis
How can one predict how a company will be faring in the market 20 years from now, without at least an estimation of what the market will look like then? Circumstance analysis — in the form of SWOT analyses, PEST analyses, or even sometimes Five Forces analyses — is essential for setting achievable goals and finding routes towards them. Should you like to know more about this step, be sure to read our article about strategic planning tools (linked above) to learn the roles of the various analyses, or check out competitor analysis tools if you find your organization in competitive seas.
This step can mean two things. Firstly, at this point you should go back over your entire plan to make sure that the goals you set and your means to reaching them are still valid, with your new knowledge about present and future circumstances (straight from step 4). Secondly, you should revise — if not completely re-make — your strategic plan a few times a year to guarantee your organization will get the maximum benefit possible.
In conclusion, the process of developing a profitable strategic plan can be split up into 5 simple steps. All of these should help your organization to choose an ambitious (but still realistic) destination, find an effective way to get there, stay firmly on track, and overall: make considerable progress.
SWOT Analysis in the Strategic Planning Process
SWOT analysis is an important tool that assists businesses in the evaluation and discovery phase of the strategic planning process. Since it provides an all-round view of the current and forward-looking situation of a business, the term SWOT is often correlated with the strategic planning process.
Both play a vital role in the high-level planning of businesses as they involve important data, which once identified and analyzed, can help to achieve long-term business growth and success. However, though they are related, both concepts are different elements in the process of business planning.
What is a Strategic Plan
It’s a high-level plan that provides a framework for a business’s overall strategy for success. It is used by business owners and managers to provide the organization with a clear focus. The process of creating a strategic plan involves analyzing the prevailing business market, setting goals, and mapping out a course that will indicate how the business would work to achieve those goals.
What is SWOT Analysis
SWOT analysis is a tool designed to put strengths, weaknesses, opportunities and threats of a business into perspective. It provides businesses a clear view of the advantages they have over competitors and their possible vulnerabilities. It is mainly used by businesses to create effective business plans/strategies and for comparison with its competitors.
The Main Difference
As mentioned above, SWOT analysis is just one element of a strategic plan. The main difference between the concepts is that SWOT analysis is a business planning tool while a strategic plan is an overall business proposal which provides directions regarding how the business will find success.
How Does SWOT Analysis Help in Strategic Planning Process?
Since a SWOT analysis provides a proper look at a business’s current situation and assesses its strengths, weaknesses, opportunities and threats in a thorough manner, it plays an important part in the strategic planning process.
Here is how:
In a strategic planning process that involves SWOT analysis, a business will be able to discover the advantages it has over other competitors in the marketplace. These advantages serve as the focal point of the business’s operation and strategic planning.
How can SWOT analysis contribute towards strategic planning by accessing weaknesses? Well, with the strategic planning process that incorporates SWOT analysis, a business can gain better understanding of its weaknesses and come up with effective solutions in the strategic plan.
Identifying opportunities is an important part of developing any strategies which would help a business to improve and grow. The strategic planning process assesses the opportunities a business has via SWOT analysis, which is then used to create a roadmap for success through strategic planning.
Analyzing the threats a business faces might not be a fun part of SWOT analysis but it does help a business to insulate itself against threats. The strategic planning process will allow businesses to identify the possible factors that could threaten or hamper growth and success via SWOT analysis so they can be better dealt with.
So, as you can see, SWOT analysis and strategic planning are distinct concepts, however, both involve the use of essential data about the business to create effective solutions for success.