Strategic Planning

strategic planning session

A guide to strategic planning

For many of the world’s most powerful organizations, the answer lies in strategic planning, a deliberate approach to analyzing the present and charting a path forward. In contrast to reactive management, this method empowers companies to assert their own values and goals. 

This guide unpacks the core concepts of strategic planning, including its potential benefits and possible risks. You’ll learn if and when strategic planning makes sense for your business and how to effectively engage your team in the process.

From there, we’ll present four specific phases of strategic planning, from preparation to execution to constructive evaluation. This four-step process makes it easier to plan strategically with your team and helps you avoid common pitfalls that might hinder your efforts. 

To understand and implement strategic planning for your organization, start by familiarizing yourself with its core concepts and characteristics.

Strategic planning: key definitions and concepts

In the language of modern business, the terms “strategic” and “planning” are used so widely that their meanings can become unclear. 

So, when we discuss the strategic planning process, what are we talking about exactly? How does it differ from other forms of planning that businesses and individuals engage in every day? Which people and resources does it require?

To answer these questions and avoid potential confusion, the following section describes strategic planning in more detail. 

What is strategic planning?

Strategic planning is the process of defining your business’s direction, outlining a path from your present toward a preferred future. A strategic plan captures an organization’s mission and core principles, envisioning the fulfillment of these ideals. Strategic planning is both conceptual and practical, presenting the big-picture goals and specific ways to achieve them.

While strategic plans can be shaped to suit each organization’s needs, they typically include the following elements:

  • A comprehensive assessment of the organization’s present, including current successes and struggles

  • A clear articulation of the organization’s core purpose and values

  • A specific vision of how the organization can change for the better in the future

  • A practical plan for achieving change and overcoming potential obstacles

In essence, a strategic plan provides a coherent set of targets with which to align your organization’s efforts. In moments of difficulty or indecision, it can be a guiding light. 

Why is strategic planning important for a business?

Without a strategic plan, an organization cannot proceed collectively toward a shared set of goals. This limitation can impede morale, productivity, and innovation, among other key aspects of organizational success.

In the absence of strategic clarity, teams may focus on individual indicators, such as revenue, profit, or market share. But none of these metrics are inherently motivating on their own, and colleagues may clash over how to prioritize them. 

Strategic planning provides a common vision, enabling team members to separate themselves from their daily duties and consider larger questions. When workers get bogged down in the minutia of their roles, the risk of burnout increases. Strategic discussions help each person contextualize their work within a larger purpose, driving higher levels of engagement and meaning

In addition, strategic planning entails a thorough assessment of strengths and weaknesses. Rather than continuing ineffective tactics out of habit, teams that engage in strategic planning are able to pivot toward what actually works.

But perhaps the most important benefit of strategic planning is your organization’s chance to determine its destiny. By candidly assessing its present and collectively embracing a different vision, a company can chart its own course. The alternative is a strategy determined by default: Your organization will be shaped by external forces, not its own aims and principles.

Is strategic planning right for my business?

If the benefits above sound appealing, you’ll be glad to know that strategic planning can work in any industry, for companies large and small. The advantages of a strategic plan can be equally evident at a Fortune 500 company and a recently founded startup.

That being said, strategic planning requires certain conditions and levels of commitment to succeed. Moreover, certain misconceptions can cloud the process from the beginning, and counterproductive team dynamics can undermine its results. Here’s how to set your team up for success.

Strategic planning prerequisites.

To successfully engage in strategic planning, you’ll need to create the following dynamics within your team:

  • Dedicated time and space: Expect your strategic planning session to take several hours of undivided attention from multiple (if not all) team members. 

  • Respectful and transparent communication: Encourage team members to openly voice constructive criticism and truthfully discuss strengths and weaknesses. If respectful but honest communication patterns aren’t in place, this dialogue can be derailed by hard feelings or pulled punches. 

  • Accountability and acceptance: Your teams will need to assess their own shortcomings and identify room for improvement. Accordingly, participants must be willing to take accountability for what is not working and listen to others’ struggles without shaming or blaming them.

  • Inclusive approach: A strategy determined by a small cohort within your company may not resonate with the larger group. Incorporate perspectives from all corners of your organization to enhance the scope and efficacy of your strategy. 

  • Data and fact-finding: Much of the strategic planning process revolves around analyzing shared information to draw new conclusions. To inform your strategic planning, develop key metrics and make them accessible to all involved.

Potential risks in the strategic planning process.

If the conditions above can help strategic planning succeed, the following misconceptions or liabilities can hinder its positive impacts. Before beginning strategic planning, consider how to mitigate or prevent these challenges:

  • Rigid planning: Expect to revisit and update your strategic plans over time. Remind participants that strategic plans aren’t binding commitments, but flexible documents that can be adapted down the road. 

  • One-and-done thinking: On a similar note, team members shouldn’t think of strategic planning as a one-time deal. Set the expectation that strategic plans and reviews will happen periodically. 

  • Unrealistic goals: Strategic planning should produce a vision for change, but not one so lofty that it can never actually happen. Root your goals firmly in reality.

  • Unmeasurable goals: Likewise, choose goals that are concrete enough to be measured through clear metrics. Avoid intangible ambitions (such as “become an industry leader”) by tying each goal to specific outcome measures.

  • Lack of trust: To honestly assess assets and liabilities, team members can’t be jockeying for promotions or throwing each other under the bus. Help the team focus on collective success, not individual advancement.

  • Lack of leadership commitment: For strategic planning to produce real change, company leaders must commit to the process and its conclusions. Gain buy-in from leaders at various levels, or your strategic planning will largely be a theoretical exercise.

Who should be involved in the strategic planning process? 

Generally speaking, the strategic planning process benefits from inclusivity. When varied perspectives are represented, new insights and possibilities emerge. However, in larger organizations, it may not be feasible or practical for all team members to participate in strategic planning discussions. 

In cases where a set of company leaders will compose a strategic plan, gather the unvarnished opinions from your broader team by other means, such as surveys or interviews. In a later section, we’ll discuss the importance of this data in more detail.

Additionally, you may wish to look beyond your full-time team to inform your strategy. The experiences of clients, customers, and collaborators can shed new light on an organization’s strengths and weaknesses. 

As you consider all potential sources of input, make sure your core strategic planning team includes leaders from across your organizational structure. These stakeholders could include:

  • Department heads, directors, or team leads

  • Executives at the VP or C-level

  • Founders, board members, and major investors

Clearly, there’s no universal playbook: the form and degree of involvement from all of these different parties will vary from company to company, depending on your structure and needs.

When should strategic planning occur? 

Strategic planning is not a close-ended exercise: A strategic plan is meant to evolve continually, and strategic thinking can be valuable in a company’s daily activities. Moreover, the stages of implementation and evaluation can keep your team constantly engaged in forward-thinking dialogue. 

However, because creating a strategic plan requires significant organizational commitment, most teams find it helpful to conduct formal strategic planning at specific intervals. Consistently scheduling strategic planning also helps resist the urge to put it off.

Annual planning.

For many companies, conducting strategic planning at a set time every year is a natural scheduling cadence. The annual planning approach lends itself to reassessing the last year before moving forward into the next one. 

That being said, it’s important to preserve the distinct emphasis and elements of strategic planning, separating it from other annual reviews. If your team conducts financial reviews or performance evaluations annually, for example, your strategic planning should be separated from these undertakings. 

Quarterly planning.

In light of the rapid pace of modern businesses, many companies find it helpful to conduct strategic planning on a quarterly basis, rather than just once a year. A more frequent planning cadence can help ensure continuous alignment with identified goals and surface new areas of opportunity.

Another option is to use quarterly planning meetings to evaluate the status of the initiatives described in your strategic plan. In this approach, a strategic plan is developed once a year and assessed or updated in each subsequent quarter.

The strategic planning process: 4 essential stages

Now that we’ve covered general aspects of strategic planning, we can discuss its specific stages more thoroughly. The strategic planning process is best understood in terms of four specific phases, each with important constituent elements. The sections below provide detailed guidance on generating, implementing, and evaluating a strategic plan.

1. Preparing for strategic planning.

In the strategic planning process, plotting future successes requires an accurate understanding of your present. You can’t plan a journey without knowing where you’re starting from. 

Preparation is crucial and can set the tone for all your subsequent discussions. To analyze your organization’s present, you’ll need data. As much of it as possible, including statistical, anecdotal, and historical information.

Experts call these kinds of data “inputs”—information sources that shed light on some dimension of the strategic planning process. To figure out which inputs might help you prepare for strategy planning, look inside your organization as well as beyond it.

Internal inputs.

Internal inputs are data sources that describe some aspect of your organization’s performance. Generally, these measures are generated by your team during the course of their typical duties or in a special effort to prepare for strategic planning.

Internal inputs might be qualitative or quantitative, although some combination of these types will probably provide a richer picture. If you suspect that you lack insight into key aspects of your team, consider taking the time to generate new metrics. Internal inputs might include:

  • Surveys of the team regarding successes, challenges, frustrations, and hopes

  • Customer satisfaction surveys

  • Interviews with executives and other key team members

  • Financial performance data and current projections

  • Other key internal metrics (e.g., customer growth, client retention)

External inputs.

External inputs refer to data pertaining to factors outside of your organization, such as the competitive landscape or broader economic trends. They describe the circumstances in which your organization is striving to succeed, contextualizing your efforts in important ways. External inputs might include:

  • Information about competitors and their activities

  • Demographic data pertaining to your target audience

  • Technological advances pertinent to your work

  • Legal and regulatory factors that may affect your business

  • Relevant cultural attitudes and trends

Organizing your inputs: SWOT and PESTLE methods.

Once you’ve gathered internal and external inputs to inform your strategic planning, it’s helpful to assess them through structured frameworks, which can identify overarching themes within a bunch of diverse data points, separating the signal from the noise. 

The SWOT and PESTLE methods are two approaches that teams regularly use in preparing for strategic planning. These techniques allow organizations to evaluate where they stand and clarify areas of emphasis for their subsequent strategic plans. 

SWOT method.

SWOT is an acronym for strengths, weaknesses, opportunities, and threats, the four elements of this method of analysis. As a team, you’ll be asked to identify inclusions for each category. For purposes of discussion and visual clarity, these can be arrayed in a table format: 

 

 

Strengths

 

Weaknesses

 

Opportunities

 

Threats

 

The SWOT method can be applied to your organization as a whole or to specific aspects of your work. And while it can be a helpful tool for organizing your data, it may also help you draw important conclusions. 

For example, you may identify four or five separate problem areas, as evidenced by your internal inputs. However, when you consider these together, which organizational weaknesses do they indicate? Asking these kinds of questions can lead to important higher-level analysis.

PESTLE method.

PESTLE is also an acronym, focused mainly on external factors that shape the context in which your organization does business. To conduct a PESTLE analysis, examine the following elements with your team:

  • Political factors: Which aspects of legislation, policy, or the political climate might affect your business at the federal, state, or local level? 

  • Economic factors: From interest and exchange rates to unemployment figures, how might macroeconomic trends affect your business?

  • Sociocultural factors: Which demographic factors define your target audience? How might their views, preferences, and priorities evolve?

  • Technology: Which new technologies are redefining your industry?

  • Legal factors: From potential legal disputes to regulations governing your activities, how do legal concerns shape your work?

  • Environmental factors: How do issues such as climate change or pollution currently impact your business or threaten to shape its future?

PESTLE is an excellent means to pull back and consider how your organization can adapt to broader forces. Additionally, it bridges an important gap between assessing where you stand and anticipating future changes. By identifying current trends, PESTLE positions your team to begin strategic planning in earnest. 

2. Creating a strategic plan.

With the right data at your disposal and valuable insights about where you stand, your team is ready to craft its strategic plan. While the format of strategic plans can differ somewhat, most include a few key elements: a vision, mission, goals, and contingency plans for what may lie ahead.

Create a mission statement.

A strategic plan should capture the very heart of a business, articulating its distinct character. Accordingly, a mission statement is a crucial inclusion in any strategic plan.

Simply put, a mission statement describes what your organization does and how it differs from competitors. A strong mission statement can also convey a business’s reason for being and the distinct value it provides. While there are several ways to express an organization’s mission, it’s best not to overcomplicate the concept. 

Most mission statements are concise, efficiently characterizing a company in a paragraph or less. This clarity is helpful both internally and externally. Team members can align their efforts with this mission, and the public can quickly comprehend what you’re all about.

Create a mission statement: What to ask yourself.

In developing a mission statement, consider the following questions with your team:

  • What is the purpose of the business?

  • What problems do we solve?

  • What value do we provide?

  • How are we different from our competitors?

  • What do we do particularly well?

  • What motivates us to keep the business going?

Create a vision statement.

A vision statement describes your organization’s preferred future—a state of affairs you seek to achieve in time. A vision statement may reflect a continuation of current strategies or a reimagined sense of what your company can be. 

Your vision statement should be bold but firmly rooted in the realm of reality. It should be possible, if not immediately so. In creating a vision statement, you’re presenting specific aspirations and pointing the way forward. This vision must be attainable, rather than an abstract fantasy no one takes seriously.

Create a vision: What to ask yourself.

In creating a vision statement, consider the following questions with your team:

  • Where would we like our company to be in five years? Or ten?

  • How can we do more of what we do well?

  • What is holding us back? What would our future look like without those problems?

  • What seeds of success have we planted, and how can we nourish them?

  • What areas of opportunity are we overlooking?

  • Where can we match or outdo our competitors?

Mission vs. vision: Important distinctions.

As you create or refine your mission and vision statements, it’s important to make a clear distinction between them. Confusing the two will detract from the value they provide.

One common mistake is confusing a specific vision of the company for a mission statement. These concepts are closely linked but not interchangeable. For example, “To become one of the highest-selling car dealerships in Los Angeles County” is not a mission, but a vision of what a car dealership can be. On the other hand, “To deliver a trustworthy car-buying experience by providing affordable, high-quality automobiles and unparalleled service” is an actual mission statement, capturing the business’s purpose. Crucially, by honoring its mission, this theoretical dealership could achieve its vision of sales success. 

Set strategic goals.

With your mission statement and vision statements in hand, you’ll have a clear view of your company’s character and preferred future. So how do you get from your present circumstances (revealed by the SWOT analysis) to the vision you’ve created—while honoring your mission?

The key is creating strategic, well-formed goals. By translating your vision into specific metrics and milestones, you can create a practical path to change. Goal-setting is arguably the most important component of strategic planning, as it transforms abstract aspirations into specific actions your team can take.

Cascading goals.

In order to hit ambitious targets, your entire organization needs to be pulling in the same direction, with each individual contributing to a broader vision through their specific roles. Cascading goals is one way to help align your team’s efforts.

This term refers to translating a company’s overarching goals into smaller component objectives for specific departments and even smaller objectives for specific teams, with yet smaller objectives assigned to individuals. In this approach, each contributor delivers some piece of a larger plan, “cascading” from top-level goals. 

This is the meat and potatoes of strategic planning—identifying the cascading goals to help a company achieve its vision. When done successfully, cascading goals ensure alignment between an organization’s actions and its ambitions.

Ways to set goals.

In developing business goals for your organization, for specific teams, or for individual workers, you may find it helpful to use one or more specific techniques. Here are some popular approaches to goal-setting.

  • OKR goals: Short for Objectives and Key Results, OKR is a popular approach among Silicon Valley’s tech giants. It involves setting broad objectives (e.g., “increase customer satisfaction to the highest level we’ve ever recorded”) and specific “key results” that will indicate progress toward those objectives. Key results are measurable metrics, such as “respond to 100% of customer support tickets within one hour of the time they were submitted” or “reduce customer complaints by 25% this quarter.” 

  • SMART goals: SMART goals are specific, measurable, attainable, realistic, and time-bound. These criteria keep an organization’s aims rooted in reality and promote accountability through easy assessment. “Improve customer satisfaction,” for example, isn’t SMART. “Increase the average score on our customer satisfaction survey to 8.5 by March 31” certainly is. Note that the OKR and SMART approaches are complementary: Key results should meet SMART criteria.

  • MBO: Management by Objectives has much in common with the concept of cascading goals. You use the company’s top-level goals to set specific benchmarks for teams and individuals. These specific objectives are quantitative, promoting accountability and clarifying expectations for each employee.

  • BHAG: A “big hairy audacious goal” is a bold vision of what a company can achieve, not a modest, interim benchmark. A BHAG is intended to foreground big-picture possibilities, rather than daily concerns. Because of their ambitious nature, BHAGs can be useful in creating a company vision or mission.

Project for the future.

You’re not setting goals in a vacuum. As you develop plans for your team, acknowledge the full array of possibilities that the future might hold. If your PESTLE analysis turned up potential barriers, or your SWOT analysis generated possible threats, account for these contingencies in your strategic planning.

You can’t anticipate every possible outcome. But there are some smart ways to ensure that your strategic plan is strong enough to endure potential setbacks.

Scenario planning.

Scenario planning is the process of identifying multiple possible outcomes and developing appropriate response plans to each one. This approach is especially helpful in cases where external factors present considerable uncertainty. 

As part of your strategic planning, consider how you would continue to pursue your vision if various events unfolded. Develop your plan with the flexibility necessary to adapt if undesirable outcomes come to pass. 

Ask, “what if?” 

Similar to scenario planning for external circumstances, don’t be afraid to imagine possible challenges or opportunities within your team. Ask “what if” questions about how you might encounter difficulty in translating your strategy to reality. 

What if your marketing and product teams have misaligned timelines? What if an important team member takes a new job elsewhere? By asking these questions in advance, you can anticipate and avert many setbacks.

Budget for your strategic plan.

It should come as no surprise that an effective strategy requires real investment. You can’t expect your team to embrace new initiatives if you don’t give them the necessary resources and support to execute their new duties. And if they’re so strapped for time that they can barely keep up, don’t expect them to do much innovating.

Back your strategic plan up with a real budget, whether it’s used for hiring new team members or investing in new tools. When it comes to strategic commitment, money talks. 

3. Executing the strategic plan.

Strategic planning isn’t an academic exercise. You do it to generate real results. Once you’re comfortable with your strategic plan, it’s time to put it into action. 

Execution is never perfect. Even the most talented teams encounter roadblocks when implementing strategic plans. In fact, if your organization can enact your strategic plan flawlessly, you probably weren’t ambitious enough.

So, take a different view of execution: In the daily Scrum of getting work done, how do you keep strategic goals in view? 

When it comes to executing a strategic plan successfully, here are some key ideas to keep in mind:

Goal-tracking.

You can’t set cascading goals and simply hope they’ll be accomplished within specified time frames. For purposes of collaboration and accountability, you need to track progress toward identified goals as well as times when your team falls short. Without this insight, you’ll be flying blind.

A huge component of goal-tracking is utilizing appropriate platforms to monitor and coordinate the activities of your team. With the right tools, your entire workforce can seamlessly report what they’ve accomplished to their colleagues and managers. For those in leadership roles, identifying successes and roadblocks becomes far simpler, as well. 

As the world’s leader in enterprise work management, Workfront builds tools for precisely this purpose. We help companies track their efforts in real time, offering both big-picture insights and granular detail. If you need the perfect platform for tracking your team’s goals, we have a customizable solution ready to suit your organization’s needs. 

Communication and alignment.

As you execute your strategic plan, ongoing communication will be critical. Don’t let strategic thinking stop once your plan is complete. Actively discuss how the implementation is unfolding with stakeholders

Communication issues can arise between individuals or whole departments, jeopardizing the teamwork necessary to achieve an ambitious vision. To avoid miscues, create recurring opportunities to check in on strategic priorities, such as a regular meeting or chat channel. By building communication opportunities into the work experience, you’ll keep your team members aligned and moving toward shared goals.

Internal vs. external communication.

Often, businesses are thoughtful about communicating their strategies to those outside their teams, such as investors, stockholders, journalists, or industry experts. This external communication aims to project a positive image publicly, with the assumption that favorable impressions will yield desirable business outcomes.  

Yet, internally communicating your strategy is at least as important as conveying it to outsiders. When discussing your strategic plan with your team members, communicate how their duties and roles relate to your organization’s larger mission and vision. Doing this will not only ensure that everyone is on the same page, it can also be highly motivating

Common roadblocks to execution success.

If you’re consistently encountering problems in executing your strategic plan, here are some common culprits to consider. Look over the following issues and consider which would be most likely to occur within  your organization. 

  • Unaddressed organizational issues: Did your strategic plan overlook barriers to success, such as training shortcomings, poor morale, or mistrust between colleagues? Take a step back, diagnose these problems, and incorporate solutions into an updated strategic plan.

  • Leadership challenges: Maybe the executives at your company are thrilled about your strategic plan, but leaders in each department don’t quite get it. Or perhaps they like the strategy, but don’t know how to rally their team around it. Equip leaders at all levels with the information and training to resolve these issues.

  • Lack of buy-in: In addition to those in leadership roles, your whole team needs to buy into your strategic plan. A lack of buy-in can result from poor internal communication, but it might also reflect some missing input at the preparation stage. Did your strategic planning process neglect to incorporate key perspectives from your team? If so, you might need to gather this information retroactively.

  • Lack of time/resources: Once again, a strategy must be matched by real investment. If you’re not giving your team the tools or time to implement meaningful improvements, no strategic plan can be expected to succeed.

4. Evaluating the strategic plan execution.

The final stage of the strategic planning process involves evaluating the execution of your strategic plan in retrospect. This kind of post-mortem assessment can be extremely informative and help shape future strategic planning. After all, the results of your last strategic planning make great inputs for your next one.

In fact, evaluation could be considered part of a continuous process, in which the execution triumphs and failures show the way to a better strategy. To make the most of your evaluation process, keep the following ideas in mind.

Review regularly.

As mentioned earlier, many companies revisit their strategic plans on a quarterly basis, checking progress toward identified goals. This cadence is valuable in keeping strategic priorities fresh and making adjustments to achieve important benchmarks. 

Whether or not quarterly reviews sound right for your company, regularly revisiting goals is a good idea. When you do, create space for a real discussion about what’s been going well and what hasn’t, rather than just noting where you stand.

If a department is falling short, interview key members to gather insights about their challenges. If a team member is excelling, explore the factors that account for their success. Importantly, separate these conversations from other performance reviews so that other topics don’t overshadow strategic considerations. 

Revisit goals and reassess.

When you set concrete goals using the processes outlined above, you can easily assess whether they’ve been met. Review which cascading goals for your team have been completed, which are still in progress, and which seem to be totally stuck. This approach increases accountability and signals the importance of these goals to your entire team. 

This doesn’t require an all-or-nothing mindset. Where partial success occurs, celebrate it. And don’t presume that someone who’s offering context is really trying to make excuses.. If a team member’s goals were truly impacted by external factors, adjust your plan accordingly. The point of revisiting these goals is to prompt further constructive discussion and find ways to improve outcomes going forward. 

Utilize the right tools.

In order to review your team’s progress toward established goals, you’ll need the right technological tools to track their results. Otherwise, following up on even basic performance metrics can be a time-consuming process. 

With flexible and customizable tools that integrate directly with the applications you already use, Workfront is your ideal partner for monitoring progress and performance. Check out our offerings to see just how simple generating these insights can be.

From Strategy to Reality

As you use this high-level overview of the strategic planning process to guide your organization’s efforts, remember that there’s no one-size-fits-all approach for such an important undertaking. Be sure to tailor each element  to the nature of your business and your particular team. 

The power of strategic planning lies in its universal applicability and adaptability. No matter your obstacles and opportunities, these principles and practices can help move your company forward.

See Workfront in action

In this interactive tour, you will get hands-on experience using Workfront. You will learn how Workfront enables the enterprise to:

  • Connect strategy to delivery
  • Iteratively plan and prioritize work
  • Collaborate across teams and divisions to get work done
  • Streamline and optimize processes
  • Measure and report on progress
  • Deliver against your strategy