Try for free
Product
For who
Pricing
Company
Resources
Login
Productivity

Strategic Planning: What it is & How to Improve it

Maggie Tully
|
March 3, 2023
Light mode

Long-term goals are essential for the sustained success of any organization. However, many struggle to excel without a solid strategy to achieve those goals. 

But even once you’ve decided on your organization’s strategy, executing it is an entirely different task. 74% of executives don’t have faith that their company’s transformative strategies will succeed – likely because they don’t have a strategic plan in place. 

This is where strategic planning comes in. Strategic planning allows businesses of all sizes to meet their most ambitious objectives – whether that might be refocusing branding efforts, increasing social impact, or driving profitability.

Having a plan of action makes it easier to accelerate team performance, enhance communication, and empower employees, all while driving profitability and moving your organization forward. 

So, what exactly is strategic planning, and how can your organization improve it?

What is strategic planning?

Strategic planning is the process of defining a vision for the future of an organization and identifying relevant goals and objectives before crafting a plan of action for achieving them. 

When creating a strategic plan, leaders and key stakeholders typically come together to evaluate the current state of the business and may define or redefine the organization’s mission as part of the strategic planning cycle. 

A strategic plan is usually meant to guide achieving organizational goals over a long period. All objectives should be clear and measurable so that progress can be tracked efficiently. 

A successful strategic plan should also include how goals should be achieved to maximize impact. These mid- to long-term goals should focus on transformational changes rather than short-term profits. 

Strategic planning in project management

Although you might associate strategic planning with C-suite executives and high-level stakeholders, developing and implementing a strategic plan is also an important task for project managers looking to successfully manage their projects through to completion. 

It’s worth noting that strategic planning is different than business planning, which focuses on short-term objectives. A robust strategic plan is crucial for ensuring that improvements and transformational changes occur within an organization, which is also the objective of many projects. 

90% of businesses fail to meet their strategic targets, so having a solid strategic plan is beneficial to project managers for several reasons, including:

  • Better communication: Discussing project strategy with team members helps to ensure that employees feel involved and understood. Not to mention, a strong flow of dialogue helps to ensure that departmental strategies are aligned with overall organizational strategies.
  • Improved resource management: A strategic plan helps project managers determine the available resources for a project and how to best delegate responsibilities to optimize project success.
  • Team engagement: With a comprehensive strategic plan in place, employees are more likely to remain engaged with their work throughout the duration of the project. Because the plan has been clearly defined, team members know what’s expected of them or the next step in the process, which can help accelerate team performance.

How often should strategic planning be performed?

While you should certainly start your strategic plan during the planning phase of your project, there’s no real requirement for how often your team should review and update your strategic plan. The frequency depends on the nature of the business and the particular components of the strategic plan. 

That said, there are generally two main times that a strategic plan should be reevaluated:

  • Quarterly: Most competitive organizations conduct quarterly reviews of their strategic plans. Integrating an evaluation of your strategic planning system into quarterly reviews is a great way to track progress and ensure that objectives are being achieved.
  • Annually: While quarterly reviews can provide insights into monthly progress, annual reviews let senior leadership, key stakeholders, and business leaders see the bigger picture. The combined metrics from all four quarters may reveal trends and insights not visible in quarterly reviews.

The maturity of a business can also dictate the frequency of the strategic planning cycle. A small startup in a competitive industry may need to reevaluate its plan on a monthly basis, while a more established business may only need to revisit plans once every few years.

It's also important to note that a strategic plan is meant to be ongoing. In his Harvard Business School Online course, Professor Clayton Christensen points out that most businesses with successful long-term strategies tend to change their plans as time goes on. Unforeseen threats and opportunities arise and organizations must adapt their plans accordingly – which may also mean frequently revisiting and revising existing strategic plans.

Related: Benchmarking in Project Management: Definition, Approaches, and Best Practices

The different types of strategic plans

Every method has its particular pros and cons, but the real magic of strategic planning is that different types can be combined. 

Let’s take a closer look at some of the most common types of strategic planning.

SWOT Analysis

A strategic plan that is the most effective is also the most straightforward. In a SWOT Analysis, an organization evaluates its current Strengths, Weaknesses, Opportunities, and Threats. These components are fairly simple to understand but may be quite comprehensive depending on the size and nature of the organization.

SWOT Analysis is a great way to gain a new perspective on current operations. And best of all, SWOT is highly cost-effective and doesn’t usually require the expertise of a consultant or business analyst. Really, any experienced member of an organization can conduct a SWOT analysis.

However, this strategic plan approach does have its limits. Biases and preconceived notions can influence the analysis and result in inaccurate data or poor recommendations. 

Illustration of a SWOT analysis

PEST Model

When businesses want to understand the external market in which they operate, they turn to the PEST Model. Using PEST, a business examines the external Political, Economic, Social, and Technological factors that influence its market segment. Although applying PEST to domestic markets is not necessarily uncommon, it’s usually most useful when implemented before entering a foreign market. 

The PEST Model only considers outside factors and doesn’t include internal variables. It’s best used in combination with another strategic plan.

OKRs

Objectives and Key Results is another fairly straightforward method. A specific objective is chosen with three to five corresponding key results. The objective needs to be clearly defined and results must be accurately measured to determine success. 

Setting OKRs is a great way to help push an organization forward but setting too many OKRs can lead to difficulties in prioritization and workload balance. 

Porter’s Five Forces

Organizations seeking to increase their competitive advantage can look to Porter’s Five Forces to understand their position in the market and the factors impacting their profitability. The Five Forces include:

  1. Competition in the industry
  2. The potential of new market entrants
  3. The power of suppliers
  4. The power of customers
  5. The threat of substitute products

While Porter’s Five Forces can help to identify opportunities, these factors may not be completely comprehensive, depending on the particular business. For example, there are usually more than just five forces at play in a given industry. Governmental regulations and technological disruption also influence an organization’s competitive advantage but aren’t included in Porter’s model. 

Illustration of Porter's Five Forces

VRIO Framework

The VRIO Framework is based on Value, Rarity, Imitability, and Organization. This type of strategic plan helps organizations to evaluate their competitive potential by considering each of the four aspects of VRIO and leveraging their unique advantages. 

The VRIO Framework is similar to SWOT but is more focused on an organization's particular value rather than broad strengths and weaknesses. 

Balanced Scorecard (BSC)

The Balanced Scorecard is used to communicate goals, ensure that daily tasks and responsibilities align with those goals, and accurately measure progress and performance. The BSC combines a mixture of perspectives, including:

  • Financial Stewardship
  • Customer/stakeholder
  • Internal process
  • Organizational capacity

The BSC approach to the strategic planning process is great for ensuring that employees are working toward achieving organizational goals. However, this method requires collecting and analyzing large amounts of data and can become complicated. 

Blue Ocean Strategy

The Blue Ocean Strategy focuses on untapped opportunities and uncontested spaces, delineating the boundaries between known markets and new markets as a “red ocean” or “blue ocean,” respectively.

In a red ocean, businesses in the same industry clamor to gain and retain customers, resulting in high competition. Conversely, the blue ocean represents emerging markets with no competition, only the need to establish demand. 

The Blue Ocean Strategy includes six main components that organizations must examine:

  • Alternative industries
  • Strategic groups within your industry
  • Buyer groups
  • Complementary product and service offerings
  • Functional-emotional orientation of an industry
  • Historical trends

What does the strategic planning process look like?

As we’ve seen, there are many different approaches to and benefits of strategic planning. Some of these methods work well on their own, while others can be combined with other robust strategic techniques. 

Regardless of the specific framework or methodology an organization uses as the basis of its strategic action plan, creating a strategic plan can generally be summarized in a few steps.

Let's use a fictitious educational business called LearnSMRT as an example.

Identify your current market position

When the strategic planning process starts, senior leadership and key stakeholders at LearnSMRT must examine their current position in the market and identify all necessary improvements that must be made in order to reach long-term strategic goals. 

Maybe LearnSMRT is being outpaced by educational software offerings provided by competitors in their niche. Maybe they're suffering from a recruitment and retention problem.

Whatever the current issues facing the business are, this stage of the process is best for implementing a SWOT Analysis or similar assessment to gauge the state of the organization and determine the appropriate path forward. An existing mission statement or previous long-term goals are often helpful in assessing the current state of the organization and providing necessary recommendations.

Determine your priorities and objectives 

Following a thorough evaluation of the organization, the next step in the strategic planning process is to set specific objectives. It’s rare that a business will have just one objective, so it’s crucial to prioritize which goals and objectives are most important.

Factors like available resources and project timelines can influence how strategic planners at LearnSMRT will prioritize their organization's objectives.

Develop a plan of action

In this stage of the strategic planning process, LearnSMRT stakeholders dive into the specific steps required to achieve their long-term goals. This may involve the development of many short-term business plans that support the overall strategic plan. Tools like a business strategy map may be used to help visualize and plot the connections between strategic objectives on the path to your organization's goals of their fictitious educational business.

Implement your plans 

After the strategic action plan has been completely developed, it needs to be implemented. This stage of strategic planning brings in team members from across the LearnSMRT organization to determine responsibilities, make operational adjustments, and establish the specific metrics for measuring success.

Communication is indispensable at this stage, and all employees should know what they are doing to achieve strategic objectives and why they are doing it. Aligning strategic plans with company culture can help employees feel a sense of purpose when long-term plans are implemented.

Update your strategic plan accordingly 

No plan is perfect, and regular reviews and revisions are often necessary to ensure that the strategy remains strong. Changes in the market can happen unexpectedly, putting established plans in peril. Reevaluate strategic goals as the business environment evolves. Regular metrics reviews are important, and the Balanced Scorecard method can be hugely useful in identifying any shortcomings and making updates accordingly.

5 ways to improve your strategic planning

We’ve looked at the different types of strategic plans and the broad steps involved in executing most strategic plans. But what about improving your strategic planning? Here are a few key steps to consider:

1. Put planning first 

Make sure that your organization devotes enough time to map out your path to achieving long-term goals. This includes everything from resource allocation to consulting with stakeholders.

2. Include employees 

Including employees in the strategic planning system is more than just playing nice, it’s a practical step to improve internal operations. Involving employees can help to ensure that strategies are achievable and potential obstacles can be avoided. Issues regarding recruitment, retention, equipment, and technology are often best understood on the shop floor rather than the C-suite. 

After all, 30% of people surveyed cited failure to coordinate across units as the main challenge to executing their company’s strategy. Including everyone in your strategic planning process can help better facilitate this coordination. 

3. Encourage collaboration

To give your organization the best chance of success when implementing your strategic plans, it’s important to encourage close collaboration between teams. This is usually easier said than done, but broad adoption of strategic plans depends on the participation of all employees across departments. 

4. Recognize achievement 

Your strategic plan won’t get very far without recognizing and rewarding those responsible for implementing them every day. As your long-term plans are set into motion, be sure to give employees and teams the credit they deserve for driving success. This can be anything from a company meeting with an informal award ceremony to a gift card or cash bonus. 

5. Always evaluate 

Be sure to evaluate progress toward your strategic goals on a regular basis. Without continuous monitoring of key metrics, you won’t know if your teams are actually achieving their intended objectives. 

Rodeo Drive's projects report

Get additional help with Rodeo Drive

If you’re interested in robust strategic planning as part of your strategic management efforts, see what Rodeo Drive can do for you.

Rodeo Drive is an all-in-one tool that equips creative professionals with the features you need to make managing projects easy. Our robust software can support your projects at every stage, meaning you can spend more time creating and less time on annoying administrative work. 

Rodeo Drive can streamline your project management workflows by helping you: 

With budgeting, estimating, invoicing, planning, time-tracking, and reporting all combined in one user-friendly tool, Rodeo Drive gives you a truly comprehensive strategic management solution. No need to invest in additional third-party software to make your team more productive and your projects more profitable.

Frequently Asked Questions (FAQs)

What are the 5 steps in strategic planning?

The 5 steps in strategic planning are identification, prioritization, development, implementation, and updating. 

What are 3 types of strategic plans?

Three key types of strategic plans include SWOT Analysis, Balanced Scorecard, and Blue Ocean Strategy. 

What is the main purpose of strategic planning?

Strategic planning sets organizational goals and implements a plan to achieve those goals in order to improve profitability and productivity.