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What is strategic planning?
Strategic planning, as the name implies, is creating a plan for the future based on more than just guesses or whim. When applied to a company, strategic planning involves charting a focus for the company’s future, including the direction in which the company will go and how it will get there. In order to be effective and viable, a strategic plan should not be a wish list or a miracle plan. Rather, strategic planning should be based on the company’s present state and it should include a goal to be met within a certain time period, as well as a plan for how the company will meet that goal, including a breakdown of needs, goals, shortcomings, and so on by department and for the company as a whole.
A company is not limited to having one strategic plan in place at any given time. A new or growing company can make one strategic plan for the upcoming year, one for a five-year period, one for a ten-year period, and so on. This type of strategic planning provides a framework for the company’s immediate goals, as well as long-term goals. The various strategic plans can be viable documents if the company continually refers to them, tweaks them as needed, and makes them part of the corporate culture. A strategic plan that is allowed to sit untouched on a shelf will likely never come to fruition; however, a strategic plan that is part of the corporate culture is more apt to be borne out. The reasoning behind this is simple and hearkens back to a familiar adage: out of sight, out of mind. When employees are familiar with the strategic plan to the point of examining it or referring to it during the course of business, it serves as a constant reminder of the company’s goals. Conversely, a strategic plan that sits on a shelf is merely gathering dust without reminding anyone of what they should be working toward on a daily basis.
Any strategic plan, whether it is for the immediate future or for a longer period, should include an SWOT analysis. This acronym, which stands for Strengths, Weaknesses, Opportunities, and Threats, is familiar to business school students for a good reason: it forms the basis for solid, well-thought-out strategic plans. This type of analysis is so useful because it involves an in-depth look at the company at the present time and a careful examination of how the company can capitalize on its strengths, improve its weak areas, make the most of opportunities, and mitigate threats.
Although some people assume that strategic planning occurs exclusively at the management level, this is a dangerous assumption. Strategic planning should include people at all levels of the company. This is important for two reasons. The first is that strategic planning that occurs only among managers may not be realistic in terms of expectations, goals, or other factors. The second is that involving employees at all levels in strategic planning makes them part of the process. It gives them a vested interest in creating a viable plan and working toward its goals.
Strategic planning can happen in many different ways; there is no set way to do it. However, regardless of how it is done, strategic planning should be realistic and goal-oriented. In this way, it provides a viable plan for the future.