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Essential Guide to the Strategic Planning Process

By Joe Weller | April 3, 2019 (updated March 26, 2024)

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In this article, you’ll learn the basics of the strategic planning process and how a strategic plan guides you to achieving your organizational goals. Plus, find expert insight on getting the most out of your strategic planning.

Included on this page, you'll discover the importance of strategic planning , the steps of the strategic planning process , and the basic sections to include in your strategic plan .

What Is Strategic Planning?

Strategic planning is an organizational activity that aims to achieve a group’s goals. The process helps define a company’s objectives and investigates both internal and external happenings that might influence the organizational path. Strategic planning also helps identify adjustments that you might need to make to reach your goal. Strategic planning became popular in the 1960s because it helped companies set priorities and goals, strengthen operations, and establish agreement among managers about outcomes and results.

Strategic planning can occur over multiple years, and the process can vary in length, as can the final plan itself. Ideally, strategic planning should result in a document, a presentation, or a report that sets out a blueprint for the company’s progress.

By setting priorities, companies help ensure employees are working toward common and defined goals. It also aids in defining the direction an enterprise is heading, efficiently using resources to achieve the organization’s goals and objectives. Based on the plan, managers can make decisions or allocate the resources necessary to pursue the strategy and minimize risks.

Strategic planning strengthens operations by getting input from people with differing opinions and building a consensus about the company’s direction. Along with focusing energy and resources, the strategic planning process allows people to develop a sense of ownership in the product they create.

“Strategic planning is not really one thing. It is really a set of concepts, procedures, tools, techniques, and practices that have to be adapted to specific contexts and purposes,” says Professor John M. Bryson, McKnight Presidential Professor of Planning and Public Affairs at the Hubert H. Humphrey School of Public Affairs, University of Minnesota and author of Strategic Planning for Public and Nonprofit Organizations: A Guide to Strengthening and Sustaining Organizational Achievement . “Strategic planning is a prompt to foster strategic thinking, acting, and learning, and they all matter and they are all connected.”

What Strategic Planning Is Not

Strategic planning is not a to-do list for the short or long term — it is the basis of a business, its direction, and how it will get there.

“You have to think very strategically about strategic planning. It is more than just following steps,” Bryson explains. “You have to understand strategic planning is not some kind of magic solution to fixing issues. Don’t have unrealistic expectations.”

Strategic planning is also different from a business plan that focuses on a specific product, service, or program and short-term goals. Rather, strategic planning means looking at the big picture.

While they are related, it is important not to confuse strategic planning with strategic thinking, which is more about imagining and innovating in a way that helps a company. In contrast, strategic planning supports those thoughts and helps you figure out how to make them a reality.

Another part of strategic planning is tactical planning , which involves looking at short-term efforts to achieve longer-term goals.

Lastly, marketing plans are not the same as strategic plans. A marketing plan is more about introducing and delivering a service or product to the public instead of how to grow a business. For more about marketing plans and processes, read this article .

Strategic plans include information about finances, but they are different from financial planning , which involves different processes and people. Financial planning templates can help with that process.

Why Is Strategic Planning Important?

In today’s technological age, strategic plans provide businesses with a path forward. Strategic plans help companies thrive, not just survive — they provide a clear focus, which makes an organization more efficient and effective, thereby increasing productivity.

“You are not going to go very far if you don’t have a strategic plan. You need to be able to show where you are going,” says Stefan Hofmeyer, an experienced strategist and co-founder of Global PMI Partners . He lives in the startup-rich environment of northern California and says he often sees startups fail to get seed money because they do not have a strong plan for what they want to do and how they want to do it.

Getting team members on the same page (in both creating a strategic plan and executing the plan itself) can be beneficial for a company. Planners can find satisfaction in the process and unite around a common vision. In addition, you can build strong teams and bridge gaps between staff and management.

“You have to reach agreement about good ideas,” Bryson says. “A really good strategy has to meet a lot of criteria. It has to be technically workable, administratively feasible, politically acceptable, and legally, morally, and ethically defensible, and that is a pretty tough list.”

By discussing a company’s issues during the planning process, individuals can voice their opinions and provide information necessary to move the organization ahead — a form of problem solving as a group.

Strategic plans also provide a mechanism to measure success and progress toward goals, which keeps employees on the same page and helps them focus on the tasks at hand.

When Is the Time to Do Strategic Planning?

There is no perfect time to perform strategic planning. It depends entirely on the organization and the external environment that surrounds it. However, here are some suggestions about when to plan:

If your industry is changing rapidly

When an organization is launching

At the start of a new year or funding period

In preparation for a major new initiative

If regulations and laws in your industry are or will be changing

“It’s not like you do all of the thinking and planning, and then implement,” Bryson says. “A mistake people make is [believing] the thinking has to precede the acting and the learning.”

Even if you do not re-create the entire planning process often, it is important to periodically check your plan and make sure it is still working. If not, update it.

What Is the Strategic Planning Process?

Strategic planning is a process, and not an easy one. A key is to make sure you allow enough time to complete the process without rushing, but not take so much time that you lose momentum and focus. The process itself can be more important than the final document due to the information that comes out of the discussions with management, as well as lower-level workers.

“There is not one favorite or perfect planning process,” says Jim Stockmal, president of the Association for Strategic Planning (ASP). He explains that new techniques come out constantly, and consultants and experienced planners have their favorites. In an effort to standardize the practice and terms used in strategic planning, ASP has created two certification programs .

Level 1 is the Strategic Planning Professional (SPP) certification. It is designed for early- or mid-career planners who work in strategic planning. Level 2, the Strategic Management Professional (SMP) certification, is geared toward seasoned professionals or those who train others. Stockmal explains that ASP designed the certification programs to add structure to the otherwise amorphous profession.

The strategic planning process varies by the size of the organization and can be formal or informal, but there are constraints. For example, teams of all sizes and goals should build in many points along the way for feedback from key leaders — this helps the process stay on track.

Some elements of the process might have specific start and end points, while others are continuous. For example, there might not be one “aha” moment that suddenly makes things clear. Instead, a series of small moves could slowly shift the organization in the right direction.

“Don’t make it overly complex. Bring all of the stakeholders together for input and feedback,” Stockmal advises. “Always be doing a continuous environmental scan, and don’t be afraid to engage with stakeholders.”

Additionally, knowing your company culture is important. “You need to make it work for your organization,” he says.

There are many different ways to approach the strategic planning process. Below are three popular approaches:

Goals-Based Planning: This approach begins by looking at an organization’s mission and goals. From there, you work toward that mission, implement strategies necessary to achieve those goals, and assign roles and deadlines for reaching certain milestones.

Issues-Based Planning: In this approach, start by looking at issues the company is facing, then decide how to address them and what actions to take.

Organic Planning: This approach is more fluid and begins with defining mission and values, then outlining plans to achieve that vision while sticking to the values.

“The approach to strategic planning needs to be contingent upon the organization, its history, what it’s capable of doing, etc.,” Bryson explains. “There’s such a mistake to think there’s one approach.”

For more information on strategic planning, read about how to write a strategic plan and the different types of models you can use.

Who Participates in the Strategic Planning Process?

For work as crucial as strategic planning, it is necessary to get the right team together and include them from the beginning of the process. Try to include as many stakeholders as you can.

Below are suggestions on who to include:

Senior leadership

Strategic planners

Strategists

People who will be responsible for implementing the plan

People to identify gaps in the plan

Members of the board of directors

“There can be magic to strategic planning, but it’s not in any specific framework or anybody’s 10-step process,” Bryson explains. “The magic is getting key people together, getting them to focus on what’s important, and [getting] them to do something about it. That’s where the magic is.”

Hofmeyer recommends finding people within an organization who are not necessarily current leaders, but may be in the future. “Sometimes they just become obvious. Usually they show themselves to you, you don’t need to look for them. They’re motivated to participate,” he says. These future leaders are the ones who speak up at meetings or on other occasions, who put themselves out there even though it is not part of their job description.

At the beginning of the process, establish guidelines about who will be involved and what will be expected of them. Everyone involved must be willing to cooperate and collaborate. If there is a question about whether or not to include anyone, it is usually better to bring on extra people than to leave someone out, only to discover later they should have been a part of the process all along. Not everyone will be involved the entire time; people will come and go during different phases.

Often, an outside facilitator or consultant can be an asset to a strategic planning committee. It is sometimes difficult for managers and other employees to sit back and discuss what they need to accomplish as a company and how they need to do it without considering other factors. As objective observers, outside help can often offer insight that may escape insiders.

Hofmeyer says sometimes bosses have blinders on that keep them from seeing what is happening around them, which allows them to ignore potential conflicts. “People often have their own agendas of where they want to go, and if they are not aligned, it is difficult to build a strategic plan. An outsider perspective can really take you out of your bubble and tell you things you don’t necessarily want to hear [but should]. We get into a rhythm, and it’s really hard to step out of that, so bringing in outside people can help bring in new views and aspects of your business.”

An outside consultant can also help naysayers take the process more seriously because they know the company is investing money in the efforts, Hofmeyer adds.

No matter who is involved in the planning process, make sure at least one person serves as an administrator and documents all planning committee actions.

What Is in a Strategic Plan?

A strategic plan communicates goals and what it takes to achieve them. The plan sometimes begins with a high-level view, then becomes more specific. Since strategic plans are more guidebooks than rulebooks, they don’t have to be bureaucratic and rigid. There is no perfect plan; however, it needs to be realistic.

There are many sections in a strategic plan, and the length of the final document or presentation will vary. The names people use for the sections differ, but the general ideas behind them are similar: Simply make sure you and your team agree on the terms you will use and what each means.

One-Page Strategic Planning Template

“I’m a big fan of getting a strategy onto one sheet of paper. It’s a strategic plan in a nutshell, and it provides a clear line of sight,” Stockmal advises.

You can use the template below to consolidate all your strategic ideas into a succinct, one-page strategic plan. Doing so provides you with a high-level overview of your strategic initiatives that you can place on your website, distribute to stakeholders, and refer to internally. More extensive details about implementation, capacity, and other concerns can go into an expanded document.

Download One-Page Strategic Planning Template Excel | Word | Smartsheet

The most important part of the strategic plan is the executive summary, which contains the highlights of the plan. Although it appears at the beginning of the plan, it should be written last, after you have done all your research.

Of writing the executive summary, Stockmal says, “I find it much easier to extract and cut and edit than to do it first.”

For help with creating executive summaries, see these templates .

Other parts of a strategic plan can include the following:

Description: A description of the company or organization.

Vision Statement: A bold or inspirational statement about where you want your company to be in the future.

Mission Statement: In this section, describe what you do today, your audience, and your approach as you work toward your vision.

Core Values: In this section, list the beliefs and behaviors that will enable you to achieve your mission and, eventually, your vision.

Goals: Provide a few statements of how you will achieve your vision over the long term.

Objectives: Each long-term goal should have a few one-year objectives that advance the plan. Make objectives SMART (specific, measurable, achievable, and time-based) to get the most out of them.

Budget and Operating Plans: Highlight resources you will need and how you will implement them.

Monitoring and Evaluation: In this section, describe how you will check your progress and determine when you achieve your goals.

One of the first steps in creating a strategic plan is to perform both an internal and external analysis of the company’s environment. Internally, look at your company’s strengths and weaknesses, as well as the personal values of those who will implement your plan (managers, executives, board members). Externally, examine threats and opportunities within the industry and any broad societal expectations that might exist.

You can perform a SWOT (strengths, weaknesses, opportunities, and threats) analysis to sum up where you are currently and what you should focus on to help you achieve your future goals. Strengths shows you what you do well, weaknesses point out obstacles that could keep you from achieving your objectives, opportunities highlight where you can grow, and threats pinpoint external factors that could be obstacles in your way.

You can find more information about performing a SWOT analysis and free templates in this article . Another analysis technique, STEEPLE (social, technological, economic, environmental, political, legal, and ethical), often accompanies a SWOT analysis.

Basics of Strategic Planning

How you navigate the strategic planning process will vary. Several tools and techniques are available, and your choice depends on your company’s leadership, culture, environment, and size, as well as the expertise of the planners.

All include similar sections in the final plan, but the ways of driving those results differ. Some tools are goals-based, while others are issues- or scenario-based. Some rely on a more organic or rigid process.

Hofmeyer summarizes what goes into strategic planning:

Understand the stakeholders and involve them from the beginning.

Agree on a vision.

Hold successful meetings and sessions.

Summarize and present the plan to stakeholders.

Identify and check metrics.

Make periodic adjustments.

Items That Go into Strategic Planning

Strategic planning contains inputs, activities, outputs, and outcomes. Inputs and activities are elements that are internal to the company, while outputs and outcomes are external.

Remember, there are many different names for the sections of strategic plans. The key is to agree what terms you will use and define them for everyone involved.

Inputs are important because it is impossible to know where you are going until you know what is around you where you are now.

Companies need to gather data from a variety of sources to get a clear look at the competitive environment and the opportunities and risks within that environment. You can think of it like a competitive intelligence program.

Data should come from the following sources:

Interviews with executives

A review of documents about the competition or market that are publicly available

Primary research by visiting or observing competitors

Studies of your industry

The values of key stakeholders

This information often goes into writing an organization’s vision and mission statements.

Activities are the meetings and other communications that need to happen during the strategic planning process to help everyone understand the competition that surrounds the organization.

It is important both to understand the competitive environment and your company’s response to it. This is where everyone looks at and responds to the data gathered from the inputs.

The strategic planning process produces outputs. Outputs can be as basic as the strategic planning document itself. The documentation and communications that describe your organization’s strategy, as well as financial statements and budgets, can also be outputs.

The implementation of the strategic plan produces outcomes (distinct from outputs). The outcomes determine the success or failure of the strategic plan by measuring how close they are to the goals and vision you outline in your plan.

It is important to understand there will be unplanned and unintended outcomes, too. How you learn from and adapt to these changes influence the success of the strategic plan.

During the planning process, decide how you will measure both the successes and failures of different parts of the strategic plan.

Sharing, Evaluating, and Monitoring the Progress of a Strategic Plan

After companies go through a lengthy strategic planning process, it is important that the plan does not sit and collect dust. Share, evaluate, and monitor the plan to assess how you are doing and make any necessary updates.

“[Some] leaders think that once they have their strategy, it’s up to someone else to execute it. That’s a mistake I see,” Stockmal says.

The process begins with distributing and communicating the plan. Decide who will get a copy of the plan and how those people will tell others about it. Will you have a meeting to kick off the implementation? How will you specify who will do what and when? Clearly communicate the roles people will have.

“Before you communicate the plan [to everyone], you need to have the commitment of stakeholders,” Hofmeyer recommends. Have the stakeholders be a part of announcing the plan to everyone — this keeps them accountable because workers will associate them with the strategy. “That applies pressure to the stakeholders to actually do the work.”

Once the team begins implementation, it’s necessary to have benchmarks to help measure your successes against the plan’s objectives. Sometimes, having smaller action plans within the larger plan can help keep the work on track.

During the planning process, you should have decided how you will measure success. Now, figure out how and when you will document progress. Keep an eye out for gaps between the vision and its implementation — a big gap could be a sign that you are deviating from the plan.

Tools are available to assist with tracking performance of strategic plans, including several types of software. “For some organizations, a spreadsheet is enough, but you are going to manually enter the data, so someone needs to be responsible for that,” Stockmal recommends.

Remember: strategic plans are not written in stone. Some deviation will be necessary, and when it happens, it’s important to understand why it occurred and how the change might impact the company's vision and goals.

Deviation from the plan does not mean failure, reminds Hofmeyer. Instead, understanding what transpired is the key. “Things happen, [and] you should always be on the lookout for that. I’m a firm believer in continuous improvement,” he says. Explain to stakeholders why a change is taking place. “There’s always a sense of re-evaluation, but do it methodically.”

Build in a schedule to review and amend the plan as necessary; this can help keep companies on track.

What Is Strategic Management?

Strategic planning is part of strategic management, and it involves the activities that make the strategic plan a reality. Essentially, strategic management is getting from the starting point to the goal effectively and efficiently using the ongoing activities and processes that a company takes on in order to keep in line with its mission, vision, and strategic plan.

“[Strategic management] closes the gap between the plan and executing the strategy,” Stockmal of ASP says. Strategic management is part of a larger planning process that includes budgeting, forecasting, capital allocation, and more.

There is no right or wrong way to do strategic management — only guidelines. The basic phases are preparing for strategic planning, creating the strategic plan, and implementing that plan.

No matter how you manage your plan, it’s key to allow the strategic plan to evolve and grow as necessary, due to both the internal and external factors.

“We get caught up in all of the day-to-day issues,” Stockmal explains, adding that people do not often leave enough time for implementing the plan and making progress. That’s what strategic management implores: doing things that are in the plan and not letting the plan sit on a shelf.

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Strategic Planning: How to Write a Strategic Plan That Works

Learn the essential steps to writing a strategic plan that delivers real results and aligns with your business objectives. Contact us for more information!

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“Why isn’t my strategy working?”

Statistics around the failure rates of corporate strategies vary—some put it as high as 9 out of 10 while others say nearly 7 out of 10.

It doesn’t matter which number is right; both estimates are higher than they should be. That means the majority of organizations are floundering when it comes to crafting and executing their strategy. Many executives, when faced with these stats, are wondering, “How do I avoid coming up short in my strategy?”

But don’t worry—these abysmal statistics don’t mean you’re doomed to failure. You can be in the small percentage of businesses that actually achieve the goals in their strategic plans, and we’re here to tell you how. (You’re already a step ahead of your competitors simply by taking the time to research the problem!)

Over the years, we’ve helped hundreds of clients beat the odds using the steps outlined in the guide below. It covers everything you need to know about strategy planning and execution, from beginning to end, in each of the three critical phases:

• Preparing for strategic planning
• Creating your strategic plan
• Putting your strategic plan into practice

Based on our experience, we know that following this three-phase approach will significantly increase your odds of getting high-quality results. ‍

So let’s get started.

What is Strategic Planning and Why is It Important?

Strategic planning is an organization's process of defining its direction and long-term goals, creating specific plans to achieve them, implementing those plans , and evaluating the results. On one hand, that definition makes strategy planning sound like a Business 101 concept—define your goals and a plan to achieve them. Unfortunately, the strategic planning process isn’t as straightforward as it seems, especially for large companies.

Some experts say there’s a simple explanation behind the dismal statistics mentioned above: companies are failing to strategize at all. They may talk a good game and be able to explain an innovative new mission, but they cannot articulate the processes and business models that will make it happen.

As a result, nothing about their way of doing business—including their priorities, projects, or culture—changes. Months or years later, strategic leaders are left wondering why the company never achieved what was intended.

This absence of a strategic plan demonstrates why having one is so important.

The strategic planning process is about looking forward, outside the immediate future for your organization, to reach a particular set of goals. But as noted in the definition above, it also involves laying out—step-by-step—how you’re going to get there. Without this foundation in place, you’ll either continue on a path to nowhere, or get caught up in a tornado of urgent activities that may not actually benefit your organization in the long term. Neither of these scenarios will give you the competitive edge you hoped for.

Why Strategic Planning Fails

There are also plenty of organizations that do take steps to fulfill the requirements of strategic planning, yet still fail to see results. These strategies fail for many reasons, including:

• Lack of communication : This is a big one. Research shows that 95% of most companies’ employees don’t understand their organization’s strategy, and 85% of executive leadership teams spend less than one hour per month discussing strategy.
• Poor research around customer trends, organizational threats, and market opportunities : Companies tend to spend more time on internal issues (resolving conflicts and reconciling budgets) than they do analyzing important external information.
• Lack of management support : Organizations neglect to rally support for middle managers, who are key to making sure strategy is executed on a daily basis.
• Ineffective or inefficient performance evaluations : Organizations dedicate all their time to coming up with a plan, but either forget to follow through by tracking progress or have no organized, reliable way to track performance data.
• Lack of clear priorities : Organizations try to do too much at once and/or fail to identify the right activities that will help them achieve their strategy.
• Insufficient resources : Companies don’t acquire new resources, or shift existing resources, to support identified priorities.
• Disjointed departmental goals and activities : There’s no alignment of departmental goals with organizational strategy. Without everyone working together, goals become more difficult to reach.

Whatever is preventing you from meeting your strategic goals—whether it’s the absence of a strategic plan altogether or an imperfect plan execution—it’s worth your time to address the issue.

Analysis has shown that strategic planning has a positive and significant impact on organizational performance. Most importantly, it enhances an organization’s ability to achieve its goals, but there’s more to it than that. Because strategic planning forces companies to adopt a long-term view, it helps them better prepare for the future, setting them up to initiate influence instead of just responding to situations.

It also strengthens communication between employers and employees. The participation and dialogue that takes place among managers and employees throughout the strategic planning process improves transparency and engagement on everyone’s part.

However, the same team that conducted the above analysis also noted that, for strategic planning to work, it requires some specific ingredients, including formal analysis of the internal and external environment, consideration of several strategic options, and careful consideration around whom to involve during the different steps of the strategic planning process. We’ll go through all these ingredients—and more—in the strategic planning guide that follows.

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1. preparing for strategic planning, - gather your team, set up meetings, and create a timeline, get the right people involved.

Let’s get one thing straight right now: If your organization has turned to you (or your department, a colleague, etc.) and requested that you “make a strategic plan and then report back to the leadership team when you’re done”—stop right where you are. That’s not an effective plan. Why? You need to have buy-in across your organization, and so you need leadership involvement from the beginning.

Now let’s talk about the major player needed for this process: The strategic planner. The strategic planner’s job is to align thoughts from the leadership team with a process the organization can use to execute on their strategy. If this is your role (or even if you’re just highly involved in the process), this guide will be immensely helpful as you navigate the coordination of the strategy.

The strategic planner will also need the help of a cross-functional team that involves members of the board or leadership, along with representatives from finance, human resources, operations, sales, and any other critical functions. We’ll discuss this further when we talk through the Office of Strategy Management.

Set up your strategy review meetings

This is also a good time to think about your strategy review meetings, which are a necessity for staying on track over the long haul. However, try to avoid adding yet another meeting onto everyone’s plates; instead, there may be a current meeting you can replace or redesign to make time for strategy discussion.

For now, decide how often you’ll meet and who should be involved. As for timing, there are three types of strategy review meetings:

• Monthly , where you review progress on projects and initiatives
• Quarterly , where you review progress on strategy and discuss key action items
• Annually , where you review year-to-date performance and adjust the strategy as needed

For each of these, you’ll want to send out calendar invites in advance and make sure people know these meetings are a top priority.

Monthly meetings typically include department heads and subject matter experts. Quarterly review meetings may include department heads and upper management. Annual refresh meetings may include upper levels of management and occasionally board members.

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Create a reasonable timeline.

Next, you need to work out a timeline in which you can complete your strategic plan and move through the process. Reasonable is the key word here, as that depends on your organization’s maturity level with regard to strategic planning.

• If you refresh your strategic plan every year, you might be able to work through this process in 4-5 weeks .
• If you’ve never done strategic planning before, 6 months could be more realistic.

Whatever the case, don’t expect this to be done by the end of the week. You’ll be disappointed.

It’s important to understand strategy vs. tactics . Strategy is focused on the destination and how you are going to get there, and tactics are focused on the specific actions you plan to take along the way.

So while this whole process is focused on your overall strategy (i.e. your long-term goals and how you’ll achieve them), we’ll be placing a lot of emphasis on the smaller steps (i.e. practices, resources, initiatives) you’ll take to get there. Make sure your leadership team knows the difference between strategy and tactics going forward!

Sometimes it is smart to keep leadership out of the tactics, but other times, you might need a strong hand to guide the organization through some details.

- Gather the inputs to your Strategic Plan

Get appropriate background information for your strategic plan.

Now it’s time to dig into your internal and external information.

• Internal inputs : Do you know if one branch of your business is growing faster than another? If so, does this mean you’ll focus more energy on the faster growing area, or shift to help the underperforming areas? These are key questions you’ll have to assess. ‍
• External inputs : You may find that parts of your business have shifted, or outside factors are playing a role in where your business is headed. For example, in the late 1990s, the music industry evolved from albums to streaming, impacting many businesses who were associated with the industry. Or if you’re in the manufacturing industry and do a great deal of business overseas, political unrest or a trade dispute between your country and the foreign one you operate in could impact your strategy.

Once you’ve gathered up the quantitative data from the sources above, you’ll also want to get feedback from a number of different sources:

• Discuss the above findings with your leadership team and managers to see what their thoughts are about the future of the business.
• Talk with board members, customers, and industry experts to see what they think your organization is doing well and what needs improvement. These suggestions could deal with anything from operations to company culture.

Combined, all of this data will help you get a better grasp on the future of the business.

‍ Don’t reinvent the wheel—use our assortment of strategic planning templates to get your strategy up and running more easily. See our most popular templates here.

‍ A SWOT Analysis stands for Strengths, Weaknesses, Opportunities, and Threats. This exercise offers a helpful way to think about and organize your internal and external data.

• What are your organization’s strong points?
• What are your organization’s weak points?
• Where are your biggest opportunities in the future?
• What are the largest threats to your business?

Sometimes it is helpful to use the SWOT analysis framework to organize your interview questions for your qualitative data gathering.

‍ Porter’s Five Forces is another tool used to find these inputs. It’s a time-honored strategy execution framework built around the competition in your industry. Who are your rivals? What are they doing? You then need to look at the threat of substitutes. Is there another product consumers could purchase instead of your industry’s product, for example, substituting natural gas or solar for coal when it comes to electricity generation?

Now that you’ve prepared for your strategy...

• You have a team of people who can help you with the strategic planning process.
• You have the raw material for strategy evaluation, including internal and external data.
• You can organize your raw data into a SWOT analysis, Porter’s Five Forces, or another strategy planning framework as you begin to create your strategic plan.

Pro tip You may have researched risk assessments, core competencies, scenario planning, or industry scans as part of your strategic planning. If you’re wondering where these tools fit, they’re all relevant to this first stage of strategic planning. They help you prepare to create the strategic plan. If you have worked through one of these tools before, the results can act as inputs to help you in the next stage.

2. Creating your strategic plan

You now have all the background information necessary to create your strategic plan! But this plan doesn’t live in a vacuum—so we’ll start by revisiting your mission and vision statements and then get into the nuts and bolts of the planning process.

- Confirm your mission and vision statements.

Mission & vision.

If you haven’t created formal mission and vision statements, this is the time to do so.

• Your mission statement describes what your company does and how it is different from other organizations in your competitive space
• Your vision statement describes a future state of what your organization wants to achieve over time.

Where the mission is timeless, your vision is time-bound and more tangible.

‍ Two tools that will help build your mission and vision statements:

• OAS statement : OAS stands for Objective, Advantage, Scope. Talking through these concepts as they apply to your organization will help formulate a vision that is tangible and interactive. Note that while this exercise may be helpful to you, it is optional. You can read more about creating your OAS statement here .
• Strategic shifts: A second tool some people find helpful is called Strategic Shifts. These are exercises for the leadership team to help them define today’s strategic priorities vs. tomorrow’s . For example, your leadership team may say, “We want to shift from central control to autonomy when it comes to our decision-making capability.” If the whole team can get on the same page with these shifts, it can help tremendously once you define your objectives, measures, and projects.

If you’ve already created mission and vision statements, confirm that both are aligned with your current strategy before proceeding to the next step.

During your search for strategic planning tools, you’ve almost certainly come across a Strategy Pyramid (shown below). This pyramid can be visualized in countless different ways, the order of the pyramid isn’t what’s important. The importance lies in ensuring you’ve chosen the elements in the pyramid that work best for your organization, and making sure those components are going to help you achieve strategic success.

- Build out your five-year plan

Develop the framework that will hold your high-level priorities.

You can use your OAS or Strategic Shift exercises to help you define your priorities and objectives—but more importantly, you need a way to manage these elements. The way to do that is by selecting and developing a strategy management framework that will bring all your priorities together in one cohesive format.

Using a framework such as Balanced Scorecard (BSC), Theory of Change (TOC), or Objectives and Key Results (OKR) is critical to your strategic success. Many management teams fail at this point simply because of their disorganization!

Note: Choose only one of these three frameworks, as they have numerous similarities!

The Balanced Scorecard

The Balanced Scorecard , developed by Robert S. Kaplan and David P. Norton, has been one of the world’s top strategy management frameworks since its introduction in the early 1990s. Those who use the BSC do so to bring their strategy to life, communicate it across their organization , and track their strategy progress and performance.

‍ The BSC divides up your objectives by perspectives—financial, customer, process, and people—and themes, like innovation, customer management, operational excellence, etc. (The idea of perspectives is fully developed in Norton and Kaplan’s book The Balanced Scorecard: Translating Strategy into Action .) Here’s an example:

• Financial goals —“What financial goals do we have that will impact our organization?”
• Customer goals —“What things are important to our customers, which will in turn impact our financial standing?”
• Process goals —“What do we need to do well internally, to meet our customer goals, that will impact our financial standing?”
• People (or learning and growth) goals —“What skills, culture, and capabilities do we need to have in our organization to execute on the process that would make our customers happy and ultimately impact our financial standing?”

For an in-depth look at how your organization could use the BSC, check out this Full & Exhaustive Balanced Scorecard Example .

Claim your FREE Balanced Scorecard Excel template for better strategic management

Theory Of Change (TOC)

The Theory of Change is a logic model that describes a step-by-step approach to achieving your vision. The TOC is focused on how to achieve the change you’re looking for , and is popular amongst mission-driven organizations who are describing a change they’re making in the world instead of putting change in their pockets.

The idea behind TOC is that if you have the right people doing the right activities, they’ll affect change on your customers, which will impact your financials, and bring you closer to your vision. A great example of a this theory of change is the nonprofit RARE .

According to the Harvard Family Research Project , the steps to create a TOC are:

• Identify a long-term goal.
• Conduct “backwards mapping” to identify the preconditions necessary to achieve that goal.
• Identify the interventions that your initiative will perform to create these preconditions.
• Develop indicators for each precondition that will be used to assess the performance of the interventions.
• Write a narrative that can be used to summarize the various moving parts in your theory.

Objectives & Key Results (OKR)

OKR was originally created by Intel and is used today in primarily two ways: At the enterprise/department level and at the personal performance level.

• Objectives are goals.
• Key results are quantitative measures that define whether goals have been reached.

Claim your FREE Excel OKR template to set and achieve key objectives here

The idea is that your defined objectives and measurements help employees, managers, and executives link to and align with overall strategic priorities. Not only does OKR strive to measure whether objectives are successful, but also how successful they are.

Define your objectives, measures, and projects.

‍ The strategic planning frameworks above are all meant, in different ways, to help you organize your objectives, measures, and projects. So it’s critical that these elements are well thought-out and defined.

Here’s how objectives, measures, and projects interact:

‍ You have a high-level goal in mind—your objective. Your measures answer the question, “How will I know that we’re meeting our goal?” From there, initiatives, or projects, are put in place to answer the question, “What actions are we taking to accomplish our goals?”

‍ We’ve defined each of these concepts more thoroughly below with a few business strategy examples:

• Objectives are high-level organizational goals. The typical BSC has 10-15 strategic objectives .

Examples include:

• Increase Market Share Through Current Customers (Financial)
• Be Service Oriented (Customer)
• Achieve Order Fulfillment Excellence Through On-Line Process Improvement (Internal)
• Align Incentives And Rewards With Employee Roles For Increased Employee Satisfaction (Learning & Growth)
• Measures help you understand if you’re accomplishing your objectives strategically. They force you to question things like, “How do I know that I’m becoming an internationally recognized brand?” Note that while your measures might change, your objectives will remain the same. You may select 1-2 measures per objective, so you are aiming to come up with 15-25 measures at the enterprise level.
• Cost Of Goods Sold
• Customer Satisfaction & Retention
• Percentage Of Product Defects
• Percentage Of Response To Open Positions
• Initiatives are key action programs developed to achieve your objectives. You’ll see initiatives referred to as “projects,” “actions,” or “activities outside of the Balanced Scorecard.” Most organizations will have 0-2 initiatives underway for every objective (with a total of 5-15 strategic initiatives).
• Develop Quality Management Program
• Install ERP System
• Revamp Supply Chain Process
• Develop Competencies Mode

- Create your strategy map or graphic strategic model

Whether or not you’re using a Balanced Scorecard as your strategy framework, you’ll benefit from using a graphic model to represent your strategic plan. While many people use a strategy map (shown in the example below), you could also use icons or a color-coding system to visually understand how the elements of your strategy work together.

If you’re just becoming familiar with how strategy mapping works, this article will teach you exactly how to read one—and what you need to do to create one.

Get your FREE eBook with Balance Scorecard strategy maps for better strategic visualization

Now that you’ve created your strategic vision...

• You have a fully-defined mission and vision to use as you move forward with your strategy implementation process.
• You have chosen a strategic framework that will hold your five-year strategic plan.
• You have defined objectives, measures, and projects, and you know how they work together.
• You have a graphic representation of your strategic model.

Feeling the strategic fatigue? It’s okay! This is a tiring process—so be careful to tailor everything in this section to what those in your organization will tolerate. Putting your strategic plan into practice (our final step) is the key to making it all work during the strategy implementation plan, and getting these details 80% right in a timely fashion is much more important than getting them 100% right in a year.

3. Putting your strategic plan into practice

You’ve made it this far—now you have to be sure you launch correctly! To do so, you need someone from the Office of Strategy Management to push that process, ensure resources are aligned to your strategy, put a solid strategy communication program in place, and get technology to keep you organized.

- Launch your strategy

Ensure the office of strategy management (osm) is pushing things forward.

The Office of Strategy Management is comprised of a group of people responsible for coordinating strategy implementation. This team isn’t responsible for doing everything in your strategy, but it should oversee strategy execution across the organization. Typically, the OSM lives in the finance department—or it could be its own separate division that reports directly to the CEO.

Create your internal and external strategy communication plan

Internal— Be sure all elements of your strategy—like strategy maps or logic models—are contained within a larger strategic plan document. (If you use strategy software , the strategic plan document will likely be contained there.) A great way to be sure your leadership team has a firm grasp on your strategy is to ensure they each have a copy of this document, and they can describe the strategy easily to someone who wasn’t involved in the creation process .

More broadly, the strategy must be communicated throughout your organization. You should be shouting it from the rooftops to keep it top-of-mind across your organization. People won’t give it a passing thought unless you engage them—so every department head should be charged with explaining how their team fits into the strategy and why it matters. For actionable tips, check out this article that highlights how you can effectively communicate your strategic plan across your organization.

‍ External— You also need to be sure you have a plan for communicating your strategy outside the organization—with board members, partners, or customers (particularly if your organization is municipal or nonprofit). Think through how it will be shared, and which parts of it are relevant to outside parties.

Align your resources to your strategy

In the short term—which would be your next budgeting cycle or something similar—work to structure the budget around the key components of your strategy. You don’t need to completely rewire your budget, but you do need to create direct linkages between how your resources are allocated and how those efforts support your strategy. Over time, the areas that contribute less directly to strategic goals will become clear, and you can work on gradually aligning everything you fund.

But even if your budget only extends through the fiscal year, consider how you’ll align your strategy to projects in the future. For future resource allocation, link your operations (what some refer to as the “work planning process”) to your strategy. Your expectation should be that the process of aligning your resources to your strategy can happen within year two of your strategic planning execution.

- Evaluate your strategy

At this point, your strategy has been launched: Now you need to know whether or not you’re making progress! Here’s how to do that.

Claim your FREE Measure & Goal Evaluation Toolkit for streamlined analysis

Create reports to highlight your results

Ten years ago, you may have evaluated your strategy annually. But in today’s business environment, that’s not a feasible option. At a minimum, you should be reporting on your entire strategy on a quarterly basis, or breaking down your strategy into pieces and reporting on one of those pieces each month.

The report you use should highlight progress on your measures and projects, and how those link to your objectives. The point is to show how all these elements fit together and relate to the strategic plan as a whole.

Hold regular strategy meetings

Report on strategy progress via the quarterly or monthly review meetings you scheduled early in the process.

It’s important to note that throwing together an impromptu meeting to go over results isn’t going to get you anywhere. Instead, your strategy review meetings should be meticulously organized and accompanied by an agenda. (See this article for a sample agenda.)

‍ Your meetings should revolve around three key issues:

• What is your organization trying to accomplish? This may include reiterating your mission and vision to add context around the conversation.
• Are you making progress toward these goals? You might review key metrics and the status of initiatives and milestones.
• What actions need to be taken to continue making progress? If metrics are off-track, for example, what can be done to get back on course.

Encourage candid dialogue and make sure the discussion stays focused.

You may want a facilitator for the first few meetings, and you may want to script a few open discussions where a goal owner explains why they are behind schedule (red) on their goal, and the business leader offers support, not criticism. This will generate the atmosphere you need for everyone to start reporting honestly and working together to achieve the organization’s goals.

Deploy strategy reporting software (if you haven’t already)

To make strategy execution work, reporting is unavoidable. While you might be able to track your first strategy meeting in Excel or give your first presentation via PowerPoint, you’ll quickly realize you need some kind of software to track the continuous gathering of data, update your projects, and keep your leadership team on the same page.

If you want to learn more about the major areas of responsibility you should be covering in your strategy management process—and how strategy software can help with that— take a look at our ClearPoint tour .

Here are two additional helpful pieces of content as you move forward:

You’ve probably seen reference to the “Plan, Do, Check, Act” framework before. If you want to integrate this checklist, this is the time to do so. Here’s a breakdown on what it means:

• Plan refers to creating your strategic plan.
• Do refers to making progress on or executing on the plan.
• Check refers to the reporting and monitoring process.
• Act refers to taking action through projects, work plans, or the budgeting process to continue to manage and execute on the strategy.

The Benefits Of Strategic Planning (& Challenges You Should Be Aware Of)

Done right, strategy planning can benefit your business tremendously, but a certain degree of stick-to-itiveness is required to get the job done. (As we noted at the beginning of this guide, organizations that actually meet their strategic objectives are in the minority. Don’t worry, though, yours can be one of the success stories.) But those that develop a disciplined approach to both planning and execution have been shown to improve performance significantly.

‍ Why is strategic planning so effective? Because it fosters healthy organizational practices that drive better outcomes. Engaging in strategic planning will benefit you in multiple ways:

1. You have quality data available to support better decisions

Setting goals and choosing the relevant metrics to track progress toward achieving them means you always have meaningful data to reference. That naturally leads to faster, more efficient decision-making, especially when that data is readily accessible to employees at every level.

Timely, valid, and actionable information is especially valuable in situations where organizations need to react quickly, so they can make the best decisions possible for all their stakeholders.

2. You allocate resources more effectively

In Chapter 3, we discussed structuring the budget around the key components of your strategy. Doing so helps ensure resources are allocated correctly, and in a way that aligns with your goals.

Tying the budget directly to goals also makes it easy to adjust when necessary, if circumstances change and new goals are prioritized over old. For example, a local government may have had a goal to develop a green infrastructure plan at the beginning of 2020, but then had to pivot with the onset of COVID-19.

To support a new goal of developing a COVID-19 response plan, they could simply review the resources used by current projects, evaluate those projects’ priorities and budget needs in comparison to the new goal, and reallocate funds as necessary.

3. You maintain focus

Having a strategic plan brings your main focus points to the forefront, so you don’t have to dig into the details of everything your organization is doing. That means there’s no time wasted analyzing irrelevant and extensive data points in strategic meetings; instead, everyone stays focused on what is most important or where improvements need to be made.

4. You improve communication and build employee engagement.

Strategic planning is intended to create a single, focused vision of where an organization is headed. When that shared vision is communicated clearly and consistently, it inspires employees to take ownership over their role in the plan, and they are typically more motivated to do their best work. High engagement will directly impact your organization’s financial health and profitability.

3 Things To Consider Before You Embark On A Strategic Plan

Having helped hundreds of organizations—for-profit, nonprofit, and local governments included—navigate through the strategic planning and implementation process, we’ve seen firsthand the many challenges that arise along the way. There’s no “typical” scenario, but there are some common pitfalls that have the power to make or break your chances of success. Below are three things you should be aware of going into the process.

1. Everything about strategic planning takes time

Don’t expect your plan to materialize after a few meetings. The initial planning activities usually unfold over the space of several months, but strategy execution itself is an ongoing process. Anticipate devoting extensive time and effort in particular to:

• Choosing the appropriate planning model . Before you can even begin to articulate your strategy, you need to choose a strategy framework that fits your organization’s needs. All models can be customized to suit the way your business works, but this is a key decision that will shape all your efforts going forward.
• Creating a plan that everyone agrees on. It’s crucial for your leadership team to support the plan’s objectives if you want it to be adopted. Making sure everyone on the team has been heard and gaining a consensus is a time-consuming process.
• Getting “buy-in” for the plan. Research shows that, on average, 95% of an organization’s employees don’t understand its strategy—there’s no surer way to guarantee failure than to neglect communicating your goals to your employees. You must continuously keep your strategy top-of-mind in a creative and meaningful way over the long term to gain the buy-in you need to succeed.

2. There is a danger of “analysis paralysis”

Data and analytics are an integral part of strategic planning. And while it may be tempting to use all your available metrics, charts, and graphs for every business decision, doing so unnecessarily can be a detriment to the decision-making process. It’s easy to find yourself drilling deeper into data when perhaps only a high-level view of the information is needed. Avoid squandering time and energy on excessive analysis by making sure the right people are focusing on the right data and actions:

Leadership should focus on organization-wide goals and progress. Teams should focus on the individual projects and daily tasks that are helping to accomplish those goals (and the data that goes with them).

3. Having a plan doesn’t mean your organization will execute on it

Good planning is only half the battle; the lion’s share of forward progress is in executing that plan. But the execution stage is where many organizations stumble. They aren’t prepared for the work involved with follow-through, both in terms of the time commitment and the tools necessary to support performance improvement. Strategy consultants are excellent guides for plan creation, but most offer no guidance on how to carry it out; as a result, organizations are left floundering.

It’s imperative to have a system in place that will measure and monitor your progress toward goals during the execution phase. Performance management tools like ClearPoint allow organizations to track a variety of metrics related to strategic projects, helping to maintain focus over the long term. And our team of strategy implementation experts is always available to provide guidance on every aspect of execution, from setting up an efficient management process to using our reporting tools optimally.

With the right plan in place, tools to support it, and committed leadership, every organization has a good chance of seeing their strategy come to life.

See ClearPoint Strategy in action! Click here to watch our quick 6-minute demo

You’ve made it through these steps…..

...but be sure to place a great deal of emphasis on rightsizing this process for your own organization.

Did you recently do a SWOT analysis and create new vision and mission statements? Don’t do it again.

Do you already manage with a robust set of KPIs ? Use them.

Do you currently create reports for your board and management team? Modify them or use a strategy evaluation framework to make sure they’re focused and move on.

Rather than doing everything, it’s more important to realize there is overlap between these steps. Understand how they all fit into your own strategic planning process, and then move forward with the sections you’re missing.

And if you have any questions along the way, get in touch with us. We live and breathe strategic planning and are here to help!

Transform Your Strategic Planning with ClearPoint Strategy Software

Struggling with the execution of your strategic plans? You’re not alone. ClearPoint Strategy is here to turn your strategic planning around.

Our software is designed to address the common pitfalls in strategy execution, such as poor communication, misaligned goals, and ineffective tracking. By booking a demo with us, you’ll see firsthand how ClearPoint can enhance transparency, improve alignment, and boost execution efficiency across your organization.

Don't let your strategic efforts fail—discover how ClearPoint Strategy empowers you to be among the few who successfully achieve their strategic goals. Book your demo today and start making your strategy work for you!

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What are strategic planning tools.

Strategic planning tools are methodologies and frameworks that help organizations formulate, implement, and monitor their strategic plans. Common strategic planning tools include:

- SWOT Analysis: Identifies strengths, weaknesses, opportunities, and threats. - PESTEL Analysis: Examines political, economic, social, technological, environmental, and legal factors. - Balanced Scorecard: Links strategic objectives to performance metrics across financial, customer, internal processes, and learning and growth perspectives. - Porter’s Five Forces: Analyzes competitive forces within an industry to understand its attractiveness. - Scenario Planning: Envisions different future scenarios to plan for uncertainties. - Gap Analysis : Identifies the gap between current performance and desired goals.

What are strategic planning techniques?

Strategic planning techniques are methods used to develop and implement strategies effectively. These include:

- Visioning: Creating a clear, compelling vision of the future state. - Benchmarking: Comparing performance against industry leaders or best practices. - Stakeholder Analysis: Identifying and understanding the needs and influences of stakeholders. - Environmental Scanning: Systematically analyzing external and internal environments. - Strategy Mapping: Visualizing the relationships between different strategic objectives and actions. - Resource Allocation: Determining the best use of resources to achieve strategic goals.

How can strategic planning improve the performance of an organization?

Strategic planning can improve the performance of an organization by:

- Providing Direction: Clarifies the long-term vision and mission, guiding all organizational activities. - Aligning Resources: Ensures that resources are allocated efficiently and effectively to priority areas. - Enhancing Coordination: Fosters better communication and collaboration across departments. - Facilitating Decision-Making: Supports informed, data-driven decisions aligned with strategic goals. - Tracking Progress: Establishes benchmarks and performance metrics to monitor progress and make necessary adjustments. - Encouraging Innovation: Promotes creative thinking and innovation to achieve competitive advantage.

What is strategic planning in healthcare?

Strategic planning in healthcare involves developing long-term goals and strategies to improve healthcare delivery, patient outcomes, and operational efficiency. It includes:

- Assessing Needs: Evaluating patient demographics, healthcare trends, and community needs. - Setting Objectives: Defining specific goals related to patient care, quality, and efficiency. - Resource Management: Allocating resources such as staff, technology, and funding to meet healthcare goals. - Implementing Policies: Developing and implementing policies and procedures to enhance healthcare services. - Monitoring Outcomes: Continuously tracking performance metrics to ensure goals are being met and to identify areas for improvement.

Why is strategic planning important in business?

Strategic planning is important in business because it:

- Provides Clarity and Focus: Establishes clear goals and priorities, aligning efforts toward achieving them. - Enhances Competitiveness: Helps businesses identify opportunities and threats, enabling them to stay competitive. - Improves Resource Allocation: Ensures that resources are used efficiently to achieve the most significant impact. - Fosters Long-Term Thinking: Encourages a forward-looking approach, preparing the organization for future challenges and opportunities. - Increases Accountability: Sets clear expectations and performance metrics, holding individuals and teams accountable for results. - Drives Growth and Innovation: Supports the development of new products, services, and processes to drive growth and innovation.

Ted Jackson

Ted is a Founder and Managing Partner of ClearPoint Strategy and leads the sales and marketing teams.

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Strategic Planning Guide: Definition, Process, and Importance

Do you want to unlock the full potential of your organization? Understanding and implementing strategic planning could be the key to achieving your long-term goals.

Strategic planning is not just about setting goals—it’s about crafting a comprehensive roadmap that guides your entire organization toward success. From enhancing alignment across departments to fine-tuning your operational tactics, the benefits of strategic planning touch every aspect of your business.

In this guide, we'll explore the essential elements of strategic planning: what it is, how it works, and why it’s crucial for your organization's growth and sustainability. You’ll gain insights into processes that can transform theoretical strategies into practical outcomes, and learn how to avoid common pitfalls that could derail your planning efforts.

Main Takeaways From This Article:

• Strategic planning helps organizations define clear goals and measure progress effectively to achieve long-term success.
• A comprehensive strategic plan includes the organization's vision, mission, objectives, strategies, and action plans.
• Effective strategic execution ensures that strategic plans are implemented smoothly, aligning all roles and enhancing communication.
• Using advanced tools like Spider Impact can streamline strategic planning and execution, improving stakeholder communication and engagement.
• Regular review and adjustment of the strategy are crucial for maintaining adaptability and continuous improvement in a dynamic market environment.

What Is Strategic Planning?

Strategic planning involves setting long-term goals and determining the best strategies to achieve them. This process is crucial for any organization looking to thrive and adapt in a dynamic business environment.

What Is a Strategic Plan?

A strategic plan is a document that outlines an organization's long-term goals and the strategies it will use to achieve them. It serves as a roadmap, guiding decision-making and aligning resources across the organization to ensure that every department and employee is working toward common objectives.

A strategic plan typically includes these key components:

• Vision Statement : This describes the ideal future state of the organization. It provides a clear and inspiring long-term goal for all members of the organization to strive towards.
• Mission Statement : This defines the organization's purpose and primary objectives. It answers the question of why the organization exists and what it seeks to accomplish.
• Core Values are the fundamental beliefs and guiding principles that dictate behavior and action within the organization. Core values help ensure that all activities and strategies align with the organization's ethos.
• SWOT Analysis : A strategic plan often includes a SWOT analysis , which identifies the organization's Strengths, Weaknesses, Opportunities, and Threats. This analysis evaluates internal and external factors to help make informed strategic decisions.
• Strategic Objectives : These are specific, measurable goals that the organization aims to achieve within a certain timeframe. Objectives should be SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.
• Strategies and Tactics : These are the approaches and actions that will be taken to achieve the strategic objectives. Strategies represent the overall direction or method, while tactics are the specific actions or steps to implement these strategies.
• Performance Metrics : To measure progress toward strategic objectives, key performance indicators (KPIs) are established. These metrics provide a way to assess the effectiveness of the strategies employed and help adjust tactics as needed.
• Implementation Timeline : This includes a schedule of major activities and milestones. It outlines when and how each part of the plan will be executed, ensuring that all efforts are coordinated and timely.
• Resource Allocation : This details the resources (financial, human, technological) that will be allocated to achieve each goal, ensuring that efforts are supported adequately to succeed.
• Review and Adaptation Process : A strategic plan is a dynamic document. It includes provisions for regular reviews and adaptations based on performance metrics and external changes in the environment, allowing the organization to remain flexible and responsive.

What Is Strategic Execution?

Strategic execution is the stage where your strategic plans are put into action. This is the "doing" phase, involving the allocation of resources, mobilization of your team, and taking concrete steps to reach your goals. It's about turning your strategy into reality by ensuring everyone in your organization is aligned and working toward the same objectives.

Successful execution needs clear communication, active management, and regular monitoring to keep everyone on track and accountable.

What Is Strategic Management?

Strategic management is the ongoing process of managing an organization’s approach to achieving its strategic goals. It involves a continuous cycle of planning, monitoring, analyzing, and assessing everything necessary for an organization to meet its objectives.

This process ensures that the organization's strategy remains aligned with its goals and can adapt to any changes in the internal and external environment.

Benefits of Strategic Planning

Strategic planning isn't just a box-ticking exercise. Here's how it can supercharge your organization:

Provides Clear Direction

Strategic planning establishes a clear framework that outlines the organization's vision (desired future state) and translates it into actionable goals. This shared roadmap ensures everyone in the organization understands the overall direction and how their individual tasks contribute to achieving the ultimate objective.

Improves Resource Allocation

Through strategic planning, you can plan resource allocation by focusing on the areas that need investment to meet your goals. This could mean allocating the budget to specific marketing campaigns, investing in new technologies, or hiring skilled people. By aligning resources with the plan, organizations can avoid wasting time and money on things that don't support their main objectives.

Enhances Organizational Efficiency

Clear strategies established through strategic planning can unlock greater efficiency across all levels of your organization . When everyone understands the organization's goals and their role in achieving them, they can concentrate on high-impact activities that move the needle forward.

Facilitates Better Decision-Making

Strategic planning gives your organization a solid decision-making framework . When you face a new opportunity or challenge, you can look at your strategic plan and ask: "Does this fit with our overall goals?" This helps you make decisions that support your long-term vision and keep you from getting sidetracked or making quick, miscalculated choices.

Increases Market Responsiveness and Competitiveness

The business world can be unpredictable. Strategic planning keeps your organization agile and ready for changing market conditions. By regularly checking your plan and analyzing the situation, you can spot new trends, foresee challenges, and tweak your strategies as needed.

Improves Stakeholder Communication and Engagement

Strategic planning promotes transparency and keeps stakeholders informed about the organization's journey. By involving key stakeholders in the planning process or sharing the strategic plan with them, organizations create a sense of ownership and buy-in. This builds trust and helps ensure that everyone is aligned with the organization's goals.

Facilitates Measurement and Evaluation

Strategic planning isn't just about setting goals—it's also about tracking progress and celebrating achievements. A well-defined strategic plan establishes clear metrics and key performance indicators (KPIs) that act as checkpoints to measure progress toward company objectives, identify areas that need improvement, and adjust your strategies as needed.

Supports Long-Term Sustainability and Growth

By focusing on the long term, strategic planning ensures your organization is built for sustainable growth . It encourages innovation by identifying areas where the organization needs to adapt and improve to stay relevant in the future.

The Step-by-Step Strategic Planning Process

Creating a winning strategic plan requires a structured approach. Here's a breakdown of the key steps involved in this process:

1. Define the Vision and Mission

Start by clearly defining your organization’s vision — what you aspire to achieve in the future. Pair this with a well-articulated mission statement that outlines your purpose and primary objectives. These foundational but key elements set the course and guide all other aspects of your strategic planning.

2. Conduct a Situational Analysis

Next, perform a SWOT analysis to assess internal capabilities and external market conditions. This thorough examination of strengths, weaknesses, opportunities, and threats helps you understand your organization's current state and its operating environment.

By evaluating these factors, you can pinpoint areas for improvement while leveraging your strengths to gain a competitive edge.

3. Define Strategic Objectives

With a clear vision and a thorough understanding of your internal and external landscape, you can now translate your aspirations into actionable objectives. These objectives should be SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.

Here's where the Balanced Scorecard framework comes into play. This framework ensures your objectives are well-rounded, considering the financial, customer, internal business process, and learning and growth perspectives of the organization. Spider Impact's Balanced Scorecard software helps organizations track performance against strategic goals, ensuring clear alignment across all levels.

4. Develop Strategies

Now it's time to chart the course! This step involves formulating specific strategies that outline how the organization will achieve its strategic objectives.

Developing strategies requires careful consideration of resource allocation, prioritization of initiatives, and planning the necessary actions that align with your overall vision and mission.

5. Create Action Plans

Strategy development provides an overall direction, but action plans translate them into actionable steps.

Here, you'll break down each strategy into detailed plans that specify the tasks required, resources needed, timelines for completion, and the individuals responsible for each task. This step transforms strategic goals from abstract concepts into clear, executable actions.

6. Establish Success Metrics

Establishing clear success metrics is essential for measuring progress and evaluating the effectiveness of your strategic plan.

Once again, the Balanced Scorecard can be a valuable tool for defining metrics that align with strategic objectives across organizational perspectives. These measurements are like markers along the way, helping you see how things are going, find ways to do better and celebrate when you reach milestones.

7. Finalize and Document the Plan

The final step in the strategic planning process is developing a detailed strategic plan document. This document compiles all the elements developed throughout the process, including the vision, mission, objectives, strategies, action plans, and success metrics.

The final plan serves as a central reference point for all stakeholders, providing a clear understanding of the organization's strategic direction and the specific steps required to achieve its goals.

Strategic Planning Tools

When it comes to strategic planning, having the right tools can make a world of difference. Here are some tools you can consider using for your strategic planning:

Spider Impact

Spider Impact is your go-to tool for taking the chaos out of strategic planning. It helps you clearly articulate your strategic plans, making it easy for everyone in your organization to stay aligned and focused. With its user-friendly interface and robust features, Spider Impact simplifies tracking progress, measuring success, and ensuring that every team member knows exactly what needs to be done.

Here's what you can do with this tool:

• Integrate long-term goals with daily operations.
• Visualize key metrics through customizable dashboards.
• Track performance in real-time, ensuring timely adjustments.
• Enhance communication and alignment across all organizational levels.
• Support balanced scorecards and other strategic frameworks.
• Automate reporting processes, saving time and reducing errors.

Microsoft Planner

Microsoft Planner is a versatile tool designed to assist teams in efficiently organizing tasks, projects, and workflows. It's particularly useful for strategic planning because it allows you to create detailed plans, assign tasks, and monitor progress with ease.

• Visualize project workflows with easy-to-use Kanban boards and cards.
• Set deadlines for tasks and receive reminders to stay on schedule.
• Facilitate team communication with integrated chat and file-sharing capabilities.
• Seamlessly integrate with other Microsoft apps like Teams, Outlook, and SharePoint for a unified work experience.
• Tailor your project plans to fit your strategic objectives and unique workflows.
• Monitor overall project progress through visual charts and reports.

Trello is a flexible and easy-to-use project management tool that can significantly enhance your strategic planning process. Its visual boards, lists, and cards make it simple to organize tasks and collaborate with your team.

Here's what you get with this tool:

• Intuitive drag-and-drop interface
• Customizable boards, lists, and cards
• Real-time collaboration and updates
• Integrations with other tools like Slack and Google Drive
• Features for setting deadlines and assigning tasks
• Progress tracking with visual indicators
• Automation capabilities with Butler

Asana is a versatile tool that can significantly enhance your strategic planning efforts, making it easy to stay on top of tasks and collaborate effectively.

• Detailed project mapping to visualize strategy execution.
• Team collaboration through task assignments and comments.
• Track timelines with Gantt charts for real-time progress monitoring.
• Set goals with clear milestones and progress indicators.
• Work with a plethora of apps to streamline workflows and data consolidation.

Smartsheet is a versatile tool that streamlines various aspects of strategic planning, ensuring that teams stay aligned and on track with their objectives.

• Organize tasks, set deadlines, and assign responsibilities efficiently.
• Communicate and collaborate easily with team members through shared sheets and comments.
• Automate repetitive tasks to save time and reduce the risk of human error
• Generate comprehensive and real-time reports to track progress and performance.
• Connect with other tools and platforms for a more cohesive workflow.
• Tailor sheets and templates to match the unique needs of your strategic plan.

Benefits of Using These Advanced Tools

Integrating advanced strategic planning tools like Spider Impact offers a multitude of benefits:

• Increased Efficiency: Streamline data collection and analysis for strategy formulation, saving valuable time and resources.
• Enhanced Collaboration: Foster a more collaborative planning process that leverages the expertise of your entire team.
• Improved Decision-Making: Gain data-driven insights to support informed decision-making throughout the planning and execution phases.
• Better Communication: Communicate your strategic plan more effectively with stakeholders through interactive presentations and customized reports.
• Greater Agility: Adapt your plan more readily to changing circumstances with real-time data and scenario planning capabilities.

By leveraging the power of strategic planning tools, you can transform your planning process from a cumbersome task to a dynamic and collaborative endeavor that propels your organization toward long-term success.

Strategic Plan Example

When designing a strategic plan, it often helps to ask a broad question. For example:

Q: How can we improve SaaS revenue?

"Improve" isn’t very specific, but at this stage, we’re looking for a vision. It represents the general direction of a goal. Next, narrow it down to a clear, measurable goal with a deadline:

Q: What does improving my SaaS revenue look like?

A: Increase gross earnings by 10% by the end of Q4.

Notice how the answer has three essential parts.

• A clear goal: Increase gross earnings
• A measurable metric: 10% increase
• A deadline: The end of the fourth quarter

Now, the question becomes how to make that happen. It could involve efforts to improve contract renewal or an aggressive marketing campaign and the allocation of resources to make it happen. New training for a service team, discounts for long-term customers, or a contract with a new marketing firm are all possibilities based on the most achievable objectives.

Regularly measuring your progress towards your goals makes it easy to see how well each task is going and the likelihood of meeting deadlines.

Key Steps for Strategy Implementation

The execution phase of strategy planning is critical: while you may have a smaller group of stakeholders that create your strategic plan, you need everyone in your organization to help execute it. Good communication and implementation are critical to getting everyone on board.

Here are some guidelines for implementing your strategic plan after it has been developed:

1. Secure Stakeholder Commitment

Make sure your key decision-makers understand and support the strategic plan. They’ll be helping you communicate the value to everyone at the organization – so if they have doubts or questions, it’s important to get clarification upfront.

2. Align Roles with Strategy

Each employee’s role needs to align with your strategy. That might mean adjusting job duties or changing how your teams are structured. Your people are your greatest asset, so make sure you have the right teams in place to support strategy execution.

3. Enhance Communication

Without clear messaging about your strategy plan, employees might not see how their daily tasks are connected to an overarching goal. Make sure managers have effective communication strategies in place, and celebrate big and small milestones company-wide. And communication needs to be two-way: accept feedback on your strategy and be open to ideas from rank-and-file employees.

4. Implement Monitoring Systems

Strategic planning requires setting clear and measurable Key Performance Indicators (KPIs). These should align with your goals to track progress effectively. Setting KPIs creates a roadmap that helps guide your organization toward its goals while also showing how you're doing and where you can improve.

Advanced tools and software like Spider Impact are incredibly valuable. They automate data collection, which reduces errors and saves time. More importantly, these tools provide real-time insights into how different strategies are performing. This helps organizations make quick, informed decisions and adjust their strategies to stay on track.

5. Foster Adaptability and Continuous Improvement

A strategy plan isn’t static – your leadership team should strive to balance innovation and control. While some parts of your plan may be non-negotiable, others may need revision or modification as you go. 6. Regularly Review and Revise the Strategy

Change is the only constant in the business environment, and your strategic plan should reflect that reality. Regularly reviewing and revising your strategy allows you to stay agile and responsive to new market conditions, emerging trends, and unforeseen challenges. This continual reassessment helps ensure that your plan remains relevant, achievable, and aligned with your organization's evolving goals.

Moreover, adapting your strategy based on new insights can uncover opportunities for innovation and improvement. It keeps your organization proactive rather than reactive, positioning you for sustained success. By embedding a culture of continuous improvement and flexibility, you empower your team to pivot when necessary and stay ahead of the competition.

Execute a Successful Strategic Plan with Spider Impact

Need expert support for strategy execution? Turn to Spider Strategies. Our Spider Impact platform is the go-to software for strategy execution , seamlessly integrating with any organization's performance management methodology. With Spider Impact, you can:

• Track performance across teams, departments, or even individual employees
• Monitor and report on KPIs
• Assign objectives to individuals or teams
• Create interactive presentations for briefings

See why companies across multiple industries, government agencies, and nonprofits choose Spider Impact for successful strategic planning and execution. For more information, take a a free assessment or schedule a demo today.

What Is the Primary Benefit of Using Spider Impact for Strategic Planning?

Spider Impact excels at clearly communicating strategic plans across all organizational levels. This ensures that everyone, from top-level management to individual team members, understands their roles and responsibilities, leading to better alignment and effective strategy execution.

How Does Spider Impact Improve Decision-Making?

With real-time data and performance metrics, Spider Impact empowers leaders to make informed decisions quickly. The tool provides actionable insights, helping organizations stay responsive and adapt their strategies as needed, which enhances overall decision-making efficacy.

Can Spider Impact be Customized for Different Industries?

Yes, Spider Impact is highly versatile and can be tailored to meet the unique needs of various industries, including corporate enterprises, government agencies, and nonprofits. This flexibility ensures that any organization's strategic goals and requirements are effectively addressed.

Is Training Required to Effectively Use Spider Impact?

While Spider Impact is user-friendly, some training may be beneficial to maximize the benefits of its features and capabilities. Many organizations find that investing in initial training helps their teams quickly adapt to the tool, leading to more successful strategic planning and execution.

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The 5 steps of the strategic planning process

Starting a project without a strategy is like trying to bake a cake without a recipe — you might have all the ingredients you need, but without a plan for how to combine them, or a vision for what the finished product will look like, you’re likely to end up with a mess. This is especially true when working with a team — it’s crucial to have a shared plan that can serve as a map on the pathway to success.

Creating a strategic plan not only provides a useful document for the future, but also helps you define what you have right now, and think through and outline all of the steps and considerations you’ll need to succeed.

What is strategic planning?

While there is no single approach to creating a strategic plan, most approaches can be boiled down to five overarching steps:

• Define your vision
• Assess where you are
• Determine your priorities and objectives
• Define responsibilities
• Measure and evaluate results

Each step requires close collaboration as you build a shared vision, strategy for implementation, and system for understanding performance.

Related: Learn how to hold an effective strategic planning meeting

Why do I need a strategic plan?

Building a strategic plan is the best way to ensure that your whole team is on the same page, from the initial vision and the metrics for success to evaluating outcomes and adjusting (if necessary) for the future. Even if you’re an expert baker, working with a team to bake a cake means having a collaborative approach and clearly defined steps so that the result reflects the strategic goals you laid out at the beginning.

The benefits of strategic planning also permeate into the general efficiency and productivity of your organization as a whole. They include: 

• Greater attention to potential biases or flaws, improving decision-making 
• Clear direction and focus, motivating and engaging employees
• Better resource management, improving project outcomes 
• Improved employee performance, increasing profitability
• Enhanced communication and collaboration, fostering team efficiency 

Next, let’s dive into how to build and structure your strategic plan, complete with templates and assets to help you along the way.

Before you begin: Pick a brainstorming method

There are many brainstorming methods you can use to come up with, outline, and rank your priorities. When it comes to strategy planning, it’s important to get everyone’s thoughts and ideas out before committing to any one strategy. With the right facilitation , brainstorming helps make this process fair and transparent for everyone involved.  

First, decide if you want to run a real-time rapid ideation session or a structured brainstorming . In a rapid ideation session, you encourage sharing half-baked or silly ideas, typically within a set time frame. The key is to just get out all your ideas quickly and then edit the best ones. Examples of rapid ideation methods include round robin , brainwriting , mind mapping , and crazy eights . 

In a structured brainstorming session, you allow for more time to prepare and edit your thoughts before getting together to share and discuss those more polished ideas. This might involve brainstorming methods that entail unconventional ways of thinking, such as reverse brainstorming or rolestorming . 

Using a platform like Mural, you can easily capture and organize your team’s ideas through sticky notes, diagrams, text, or even images and videos. These features allow you to build actionable next steps immediately (and in the same place) through color coding and tagging. 

Whichever method you choose, the ideal outcome is that you avoid groupthink by giving everyone a voice and a say. Once you’ve reached a consensus on your top priorities, add specific objectives tied to each of those priorities.

Related: Brainstorming and ideation template

1. Define your vision

Whether it’s for your business as a whole, or a specific initiative, successful strategic planning involves alignment with a vision for success. You can think of it as a project-specific mission statement or a north star to guide employees toward fulfilling organizational goals. 

To create a vision statement that explicitly states the ideal results of your project or company transformation, follow these four key steps: 

• Engage and involve the entire team . Inclusivity like this helps bring diverse perspectives to the table. 
• Align the vision with your core values and purpose . This will make it familiar and easy to follow through. 
• Stay grounded . The vision should be ambitious enough to motivate and inspire yet grounded enough to be achievable and relevant.
• Think long-term flexibility . Consider future trends and how your vision can be flexible in the face of challenges or opportunities. 

For example, say your vision is to revolutionize customer success by streamlining and optimizing your process for handling support tickets. It’s important to have a strategy map that allows stakeholders (like the support team, marketing team, and engineering team) to know the overall objective and understand the roles they will play in realizing the goals. 

This can be done in real time or asynchronously , whether in person, hybrid, or remote. By leveraging a shared digital space , everyone has a voice in the process and room to add their thoughts, comments, and feedback. 

Related: Vision board template

2. Assess where you are

The next step in creating a strategic plan is to conduct an assessment of where you stand in terms of your own initiatives, as well as the greater marketplace. Start by conducting a resource assessment. Figure out which financial, human, and/or technological resources you have available and if there are any limitations. You can do this using a SWOT analysis.

What is SWOT analysis?

SWOT analysis is an exercise where you define:

• Strengths: What are your unique strengths for this initiative or this product? In what ways are you a leader?
• Weaknesses: What weaknesses can you identify in your offering? How does your product compare to others in the marketplace?
• Opportunities: Are there areas for improvement that'd help differentiate your business?
• Threats: Beyond weaknesses, are there existing potential threats to your idea that could limit or prevent its success? How can those be anticipated?

For example, say you have an eco-friendly tech company and your vision is to launch a new service in the next year. Here’s what the SWOT analysis might look like: 

• Strengths : Strong brand reputation, loyal customer base, and a talented team focused on innovation
• Weaknesses : Limited bandwidth to work on new projects, which might impact the scope of its strategy formulation 
• Opportunities : How to leverage and experiment with existing customers when goal-setting
• Threats : Factors in the external environment out of its control, like the state of the economy and supply chain shortages

This SWOT analysis will guide the company in setting strategic objectives and formulating a robust plan to navigate the challenges it might face. 

Related: SWOT analysis template

3. Determine your priorities and objectives

Once you've identified your organization’s mission and current standing, start a preliminary plan document that outlines your priorities and their corresponding objectives. Priorities and objectives should be set based on what is achievable with your available resources. The SMART framework is a great way to ensure you set effective goals . It looks like this:  

• Specific: Set clear objectives, leaving no room for ambiguity about the desired outcomes.
• Measurable : Choose quantifiable criteria to make it easier to track progress.
• Achievable : Ensure it is realistic and attainable within the constraints of your resources and environment.
• Relevant : Develop objectives that are relevant to the direction your organization seeks to move.
• Time-bound : Set a clear timeline for achieving each objective to maintain a sense of urgency and focus.

For instance, going back to the eco-friendly tech company, the SMART goals might be: 

• Specific : Target residential customers and small businesses to increase the sales of its solar-powered device line by 25%. 
• Measurable : Track monthly sales and monitor customer feedback and reviews. 
• Achievable : Allocate more resources to the marketing, sales, and customer service departments. 
• Relevant : Supports the company's growth goals in a growing market of eco-conscious consumers. 
• Time-bound : Conduct quarterly reviews and achieve this 25% increase in sales over the next 12 months.

With strategic objectives like this, you’ll be ready to put the work into action. 

Related: Project kickoff template

4. Define tactics and responsibilities

In this stage, individuals or units within your team can get granular about how to achieve your goals and who'll be accountable for each step. For example, the senior leadership team might be in charge of assigning specific tasks to their team members, while human resources works on recruiting new talent. 

It’s important to note that everyone’s responsibilities may shift over time as you launch and gather initial data about your project. For this reason, it’s key to define responsibilities with clear short-term metrics for success. This way, you can make sure that your plan is adaptable to changing circumstances. 

One of the more common ways to define tactics and metrics is to use the OKR (Objectives and Key Results) method. By outlining your OKRs, you’ll know exactly what key performance indicators (KPIs) to track and have a framework for analyzing the results once you begin to accumulate relevant data. 

For instance, if our eco-friendly tech company has a goal of increasing sales, one objective might be to expand market reach for its solar-powered products. The sales team lead would be in charge of developing an outreach strategy. The key result would be to successfully launch its products in two new regions by Q2. The KPI would be a 60% conversation rate in those targeted markets.  

Related: OKR planning template  

5. Manage, measure, and evaluate

Once your plan is set into motion, it’s important to actively manage (and measure) progress. Before launching your plan, settle on a management process that allows you to measure success or failure. In this way, everyone is aligned on progress and can come together to evaluate your strategy execution at regular intervals.

Determine the milestones at which you’ll come together and go over results — this can take place weekly, monthly, or quarterly, depending on the nature of the project.

One of the best ways to evaluate progress is through agile retrospectives (or retros) , which can be done in real time or asynchronously. During this process, gather and organize feedback about the key elements that played a role in your strategy. 

Related: Retrospective radar template

Retrospectives are typically divided into three parts:

• What went well.
• What didn’t go well.
• New opportunities for improvement.

This structure is also sometimes called the “ rose, thorn, bud ” framework. By using this approach, team members can collectively brainstorm and categorize their feedback, making the next steps clear and actionable. Creating an action plan during a post-mortem meeting is a crucial step in ensuring that lessons learned from past projects or events are effectively translated into tangible improvements. 

Another method for reviewing progress is the quarterly business review (QBR). Like the agile retrospective, it allows you to collect feedback and adjust accordingly. In the case of QBRs, however, we recommend dividing your feedback into four categories:

• Start (what new items should be launched?).
• Stop (what items need to be paused?).
• Continue (what is going well?).
• Change (what could be modified to perform better?).

Strategic planners know that planning activities continue even after a project is complete. There’s always room for improvement and an action plan waiting to be implemented. Using the above approaches, your team can make room for new ideas within the existing strategic framework in order to track better to your long-term goals.

Related: Quarterly business review template

Conclusions

The beauty of the strategic plan is that it can be applied from the campaign level all the way up to organizational vision. Using the strategic planning framework, you build buy-in , trust, and transparency by collaboratively creating a vision for success, and mapping out the steps together on the road to your goals.

Also, in so doing, you build in an ability to adapt effectively on the fly in response to data through measurement and evaluation, making your plan both flexible and resilient.

Related: 5 Tips for Holding Effective Post-mortems

Why Mural for strategic planning

Mural unlocks collaborative strategic planning through a shared digital space with an intuitive interface, a library of pre-fab templates, and methodologies based on design thinking principles.

Outline goals, identify key metrics, and track progress with a platform built for any enterprise.

Learn more about strategic planning with Mural.

About the authors

Bryan Kitch

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How to Set Strategic Planning Goals

• 29 Oct 2020

In an ever-changing business world, it’s imperative to have strategic goals and a plan to guide organizational efforts. Yet, crafting strategic goals can be a daunting task. How do you decide which goals are vital to your company? Which ones are actionable and measurable? Which goals to prioritize?

To help you answer these questions, here’s a breakdown of what strategic planning is, what characterizes strategic goals, and how to select organizational goals to pursue.

Access your free e-book today.

What Is Strategic Planning?

Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees, and ensure organizational goals are backed by data and sound reasoning.

Research in the Harvard Business Review cautions against getting locked into your strategic plan and forgetting that strategy involves inherent risk and discomfort. A good strategic plan evolves and shifts as opportunities and threats arise.

“Most people think of strategy as an event, but that’s not the way the world works,” says Harvard Business School Professor Clayton Christensen in the online course Disruptive Strategy . “When we run into unanticipated opportunities and threats, we have to respond. Sometimes we respond successfully; sometimes we don’t. But most strategies develop through this process. More often than not, the strategy that leads to success emerges through a process that’s at work 24/7 in almost every industry."

Related: 5 Tips for Formulating a Successful Strategy

4 Characteristics of Strategic Goals

To craft a strategic plan for your organization, you first need to determine the goals you’re trying to reach. Strategic goals are an organization’s measurable objectives that are indicative of its long-term vision.

Here are four characteristics of strategic goals to keep in mind when setting them for your organization.

1. Purpose-Driven

The starting point for crafting strategic goals is asking yourself what your company’s purpose and values are . What are you striving for, and why is it important to set these objectives? Let the answers to these questions guide the development of your organization’s strategic goals.

“You don’t have to leave your values at the door when you come to work,” says HBS Professor Rebecca Henderson in the online course Sustainable Business Strategy .

Henderson, whose work focuses on reimagining capitalism for a just and sustainable world, also explains that leading with purpose can drive business performance.

“Adopting a purpose will not hurt your performance if you do it authentically and well,” Henderson says in a lecture streamed via Facebook Live . “If you’re able to link your purpose to the strategic vision of the company in a way that really gets people aligned and facing in the right direction, then you have the possibility of outperforming your competitors.”

Related: 5 Examples of Successful Sustainability Initiatives

2. Long-Term and Forward-Focused

While strategic goals are the long-term objectives of your organization, operational goals are the daily milestones that need to be reached to achieve them. When setting strategic goals, think of your company’s values and long-term vision, and ensure you’re not confusing strategic and operational goals.

For instance, your organization’s goal could be to create a new marketing strategy; however, this is an operational goal in service of a long-term vision. The strategic goal, in this case, could be breaking into a new market segment, to which the creation of a new marketing strategy would contribute.

Keep a forward-focused vision to ensure you’re setting challenging objectives that can have a lasting impact on your organization.

3. Actionable

Strong strategic goals are not only long-term and forward-focused—they’re actionable. If there aren’t operational goals that your team can complete to reach the strategic goal, your organization is better off spending time and resources elsewhere.

When formulating strategic goals, think about the operational goals that fall under them. Do they make up an action plan your team can take to achieve your organization’s objective? If so, the goal could be a worthwhile endeavor for your business.

4. Measurable

When crafting strategic goals, it’s important to define how progress and success will be measured.

According to the online course Strategy Execution , an effective tool you can use to create measurable goals is a balanced scorecard —a tool to help you track and measure non-financial variables.

“The balanced scorecard combines the traditional financial perspective with additional perspectives that focus on customers, internal business processes, and learning and development,” says HBS Professor Robert Simons in the online course Strategy Execution . “These additional perspectives help businesses measure all the activities essential to creating value.”

The four perspectives are:

• Internal business processes
• Learning and growth

The most important element of a balanced scorecard is its alignment with your business strategy.

“Ask yourself,” Simons says, “‘If I picked up a scorecard and examined the measures on it, could I infer what the business's strategy was? If you've designed measures well, the answer should be yes.”

Related: A Manager’s Guide to Successful Strategy Implementation

Strategic Goal Examples

Whatever your business goals and objectives , they must have all four of the characteristics listed above.

For instance, the goal “become a household name” is valid but vague. Consider the intended timeframe to reach this goal and how you’ll operationally define “a household name.” The method of obtaining data must also be taken into account.

An appropriate revision to the original goal could be: “Increase brand recognition by 80 percent among surveyed Americans by 2030.” By setting a more specific goal, you can better equip your organization to reach it and ensure that employees and shareholders have a clear definition of success and how it will be measured.

If your organization is focused on becoming more sustainable and eco-conscious, you may need to assess your strategic goals. For example, you may have a goal of becoming a carbon neutral company, but without defining a realistic timeline and baseline for this initiative, the probability of failure is much higher.

A stronger goal might be: “Implement a comprehensive carbon neutrality strategy by 2030.” From there, you can determine the operational goals that will make this strategic goal possible.

No matter what goal you choose to pursue, it’s important to avoid those that lack clarity, detail, specific targets or timeframes, or clear parameters for success. Without these specific elements in place, you’ll have a difficult time making your goals actionable and measurable.

Prioritizing Strategic Goals

Once you’ve identified several strategic goals, determine which are worth pursuing. This can be a lengthy process, especially if other decision-makers have differing priorities and opinions.

To set the stage, ensure everyone is aware of the purpose behind each strategic goal. This calls back to Henderson’s point that employees’ alignment on purpose can set your organization up to outperform its competitors.

Calculate Anticipated ROI

Next, calculate the estimated return on investment (ROI) of the operational goals tied to each strategic objective. For example, if the strategic goal is “reach carbon-neutral status by 2030,” you need to break that down into actionable sub-tasks—such as “determine how much CO2 our company produces each year” and “craft a marketing and public relations strategy”—and calculate the expected cost and return for each.

The ROI formula is typically written as:

ROI = (Net Profit / Cost of Investment) x 100

In project management, the formula uses slightly different terms:

ROI = [(Financial Value - Project Cost) / Project Cost] x 100

An estimate can be a valuable piece of information when deciding which goals to pursue. Although not all strategic goals need to yield a high return on investment, it’s in your best interest to calculate each objective's anticipated ROI so you can compare them.

Consider Current Events

Finally, when deciding which strategic goal to prioritize, the importance of the present moment can’t be overlooked. What’s happening in the world that could impact the timeliness of each goal?

For example, the coronavirus (COVID-19) pandemic and the ever-intensifying climate change crisis have impacted many organizations’ strategic goals in 2020. Often, the goals that are timely and pressing are those that earn priority.

Learn to Plan Strategic Goals

As you set and prioritize strategic goals, remember that your strategy should always be evolving. As circumstances and challenges shift, so must your organizational strategy.

If you lead with purpose, a measurable and actionable vision, and an awareness of current events, you can set strategic goals worth striving for.

Do you want to learn more about strategic planning? Explore our online strategy courses and download our free flowchart to determine which is right for you and your goals.

This post was updated on November 16, 2023. It was originally published on October 29, 2020.

About the Author

Strategic Planning

The art of formulating business strategies, implementing them, and evaluating their impact based on organizational objectives

What is Strategic Planning?

Strategic planning is the art of creating specific business strategies, implementing them, and evaluating the results of executing the plan, in regard to a company’s overall long-term goals or desires. It is a concept that focuses on integrating various departments (such as accounting and finance, marketing, and human resources) within a company to accomplish its strategic goals. The term strategic planning is essentially synonymous with strategic management.

The concept of strategic planning originally became popular in the 1950s and 1960s, and enjoyed favor in the corporate world up until the 1980s, when it somewhat fell out of favor. However, enthusiasm for strategic business planning was revived in the 1990s and strategic planning remains relevant in modern business.

CFI’s Course on Corporate & Business Strategy is an elective course for the FMVA Program.

Strategic Planning Process

The strategic planning process requires considerable thought and planning on the part of a company’s upper-level management. Before settling on a plan of action and then determining how to strategically implement it, executives may consider many possible options. In the end, a company’s management will, hopefully, settle on a strategy that is most likely to produce positive results (usually defined as improving the company’s bottom line) and that can be executed in a cost-efficient manner with a high likelihood of success, while avoiding undue financial risk.

The development and execution of strategic planning are typically viewed as consisting of being performed in three critical steps:

1. Strategy Formulation

In the process of formulating a strategy, a company will first assess its current situation by performing an internal and external audit. The purpose of this is to help identify the organization’s strengths and weaknesses, as well as opportunities and threats ( SWOT Analysis ). As a result of the analysis, managers decide on which plans or markets they should focus on or abandon, how to best allocate the company’s resources, and whether to take actions such as expanding operations through a joint venture or merger.

Business strategies have long-term effects on organizational success. Only upper management executives are usually authorized to assign the resources necessary for their implementation.

2. Strategy Implementation

After a strategy is formulated, the company needs to establish specific targets or goals related to putting the strategy into action, and allocate resources for the strategy’s execution. The success of the implementation stage is often determined by how good a job upper management does in regard to clearly communicating the chosen strategy throughout the company and getting all of its employees to “buy into” the desire to put the strategy into action.

Effective strategy implementation involves developing a solid structure, or framework, for implementing the strategy, maximizing the utilization of relevant resources, and redirecting marketing efforts in line with the strategy’s goals and objectives.

3. Strategy Evaluation

Any savvy business person knows that success today does not guarantee success tomorrow. As such, it is important for managers to evaluate the performance of a chosen strategy after the implementation phase.

Strategy evaluation involves three crucial activities: reviewing the internal and external factors affecting the implementation of the strategy, measuring performance, and taking corrective steps to make the strategy more effective. For example, after implementing a strategy to improve customer service, a company may discover that it needs to adopt a new customer relationship management (CRM) software program in order to attain the desired improvements in customer relations.

All three steps in strategic planning occur within three hierarchical levels: upper management, middle management, and operational levels. Thus, it is imperative to foster communication and interaction among employees and managers at all levels, so as to help the firm to operate as a more functional and effective team.

Benefits of Strategic Planning

The volatility of the business environment causes many firms to adopt reactive strategies rather than proactive ones. However, reactive strategies are typically only viable for the short-term, even though they may require spending a significant amount of resources and time to execute. Strategic planning helps firms prepare proactively and address issues with a more long-term view. They enable a company to initiate influence instead of just responding to situations.

Among the primary benefits derived from strategic planning are the following:

1. Helps formulate better strategies using a logical, systematic approach

This is often the most important benefit. Some studies show that the strategic planning process itself makes a significant contribution to improving a company’s overall performance, regardless of the success of a specific strategy.

2. Enhanced communication between employers and employees

Communication is crucial to the success of the strategic planning process. It is initiated through participation and dialogue among the managers and employees, which shows their commitment to achieving organizational goals.

Strategic planning also helps managers and employees show commitment to the organization’s goals. This is because they know what the company is doing and the reasons behind it. Strategic planning makes organizational goals and objectives real, and employees can more readily understand the relationship between their performance, the company’s success, and compensation. As a result, both employees and managers tend to become more innovative and creative, which fosters further growth of the company.

3. Empowers individuals working in the organization

The increased dialogue and communication across all stages of the process strengthens employees’ sense of effectiveness and importance in the company’s overall success. For this reason, it is important for companies to decentralize the strategic planning process by involving lower-level managers and employees throughout the organization. A good example is that of the Walt Disney Co., which dissolved its separate strategic planning department, in favor of assigning the planning roles to individual Disney business divisions.

An increasing number of companies use strategic planning to formulate and implement effective decisions. While planning requires a significant amount of time, effort, and money, a well-thought-out strategic plan efficiently fosters company growth, goal achievement, and employee satisfaction.

Additional Resources

Thank you for reading CFI’s guide to Strategic Planning. To keep learning and advancing your career, the additional CFI resources below will be useful:

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• Systems Thinking
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• 7 strategic planning models, plus 8 fra ...

7 strategic planning models, plus 8 frameworks to help you get started

Strategic planning is vital in defining where your business is going in the next three to five years. With the right strategic planning models and frameworks, you can uncover opportunities, identify risks, and create a strategic plan to fuel your organization’s success. We list the most popular models and frameworks and explain how you can combine them to create a strategic plan that fits your business.

A strategic plan is a great tool to help you hit your business goals . But sometimes, this tool needs to be updated to reflect new business priorities or changing market conditions. If you decide to use a model that already exists, you can benefit from a roadmap that’s already created. The model you choose can improve your knowledge of what works best in your organization, uncover unknown strengths and weaknesses, or help you find out how you can outpace your competitors.

In this article, we cover the most common strategic planning models and frameworks and explain when to use which one. Plus, get tips on how to apply them and which models and frameworks work well together. 

Strategic planning models vs. frameworks

First off: This is not a one-or-nothing scenario. You can use as many or as few strategic planning models and frameworks as you like. 

When your organization undergoes a strategic planning phase, you should first pick a model or two that you want to apply. This will provide you with a basic outline of the steps to take during the strategic planning process.

During that process, think of strategic planning frameworks as the tools in your toolbox. Many models suggest starting with a SWOT analysis or defining your vision and mission statements first. Depending on your goals, though, you may want to apply several different frameworks throughout the strategic planning process.

For example, if you’re applying a scenario-based strategic plan, you could start with a SWOT and PEST(LE) analysis to get a better overview of your current standing. If one of the weaknesses you identify has to do with your manufacturing process, you could apply the theory of constraints to improve bottlenecks and mitigate risks. 

Now that you know the difference between the two, learn more about the seven strategic planning models, as well as the eight most commonly used frameworks that go along with them.

1. Basic model

The basic strategic planning model is ideal for establishing your company’s vision, mission, business objectives, and values. This model helps you outline the specific steps you need to take to reach your goals, monitor progress to keep everyone on target, and address issues as they arise.

If it’s your first strategic planning session, the basic model is the way to go. Later on, you can embellish it with other models to adjust or rewrite your business strategy as needed. Let’s take a look at what kinds of businesses can benefit from this strategic planning model and how to apply it.

Small businesses or organizations

Companies with little to no strategic planning experience

Organizations with few resources 

Write your mission statement. Gather your planning team and have a brainstorming session. The more ideas you can collect early in this step, the more fun and rewarding the analysis phase will feel.

Identify your organization’s goals . Setting clear business goals will increase your team’s performance and positively impact their motivation.

Outline strategies that will help you reach your goals. Ask yourself what steps you have to take in order to reach these goals and break them down into long-term, mid-term, and short-term goals .

Create action plans to implement each of the strategies above. Action plans will keep teams motivated and your organization on target.

Monitor and revise the plan as you go . As with any strategic plan, it’s important to closely monitor if your company is implementing it successfully and how you can adjust it for a better outcome.

2. Issue-based model

Also called goal-based planning model, this is essentially an extension of the basic strategic planning model. It’s a bit more dynamic and very popular for companies that want to create a more comprehensive plan.

Organizations with basic strategic planning experience

Businesses that are looking for a more comprehensive plan

Conduct a SWOT analysis . Assess your organization’s strengths, weaknesses, opportunities, and threats with a SWOT analysis to get a better overview of what your strategic plan should focus on. We’ll give into how to conduct a SWOT analysis when we get into the strategic planning frameworks below.

Identify and prioritize major issues and/or goals. Based on your SWOT analysis, identify and prioritize what your strategic plan should focus on this time around.

Develop your main strategies that address these issues and/or goals. Aim to develop one overarching strategy that addresses your highest-priority goal and/or issue to keep this process as simple as possible.

Update or create a mission and vision statement . Make sure that your business’s statements align with your new or updated strategy. If you haven’t already, this is also a chance for you to define your organization’s values.

Create action plans. These will help you address your organization’s goals, resource needs, roles, and responsibilities. 

Develop a yearly operational plan document. This model works best if your business repeats the strategic plan implementation process on an annual basis, so use a yearly operational plan to capture your goals, progress, and opportunities for next time.

Allocate resources for your year-one operational plan. Whether you need funding or dedicated team members to implement your first strategic plan, now is the time to allocate all the resources you’ll need.

Monitor and revise the strategic plan. Record your lessons learned in the operational plan so you can revisit and improve it for the next strategic planning phase.

The issue-based plan can repeat on an annual basis (or less often once you resolve the issues). It’s important to update the plan every time it’s in action to ensure it’s still doing the best it can for your organization.

You don’t have to repeat the full process every year—rather, focus on what’s a priority during this run.

3. Alignment model

This model is also called strategic alignment model (SAM) and is one of the most popular strategic planning models. It helps you align your business and IT strategies with your organization’s strategic goals. 

You’ll have to consider four equally important, yet different perspectives when applying the alignment strategic planning model:

Strategy execution: The business strategy driving the model

Technology potential: The IT strategy supporting the business strategy

Competitive potential: Emerging IT capabilities that can create new products and services

Service level: Team members dedicated to creating the best IT system in the organization

Ideally, your strategy will check off all the criteria above—however, it’s more likely you’ll have to find a compromise. 

Here’s how to create a strategic plan using the alignment model and what kinds of companies can benefit from it.

Organizations that need to fine-tune their strategies

Businesses that want to uncover issues that prevent them from aligning with their mission

Companies that want to reassess objectives or correct problem areas that prevent them from growing

Outline your organization’s mission, programs, resources, and where support is needed. Before you can improve your statements and approaches, you need to define what exactly they are.

Identify what internal processes are working and which ones aren’t. Pinpoint which processes are causing problems, creating bottlenecks , or could otherwise use improving. Then prioritize which internal processes will have the biggest positive impact on your business.

Identify solutions. Work with the respective teams when you’re creating a new strategy to benefit from their experience and perspective on the current situation.

Update your strategic plan with the solutions. Update your strategic plan and monitor if implementing it is setting your business up for improvement or growth. If not, you may have to return to the drawing board and update your strategic plan with new solutions.

4. Scenario model

The scenario model works great if you combine it with other models like the basic or issue-based model. This model is particularly helpful if you need to consider external factors as well. These can be government regulations, technical, or demographic changes that may impact your business.

Organizations trying to identify strategic issues and goals caused by external factors

Identify external factors that influence your organization. For example, you should consider demographic, regulation, or environmental factors.

Review the worst case scenario the above factors could have on your organization. If you know what the worst case scenario for your business looks like, it’ll be much easier to prepare for it. Besides, it’ll take some of the pressure and surprise out of the mix, should a scenario similar to the one you create actually occur.

Identify and discuss two additional hypothetical organizational scenarios. On top of your worst case scenario, you’ll also want to define the best case and average case scenarios. Keep in mind that the worst case scenario from the previous step can often provoke strong motivation to change your organization for the better. However, discussing the other two will allow you to focus on the positive—the opportunities your business may have ahead.

Identify and suggest potential strategies or solutions. Everyone on the team should now brainstorm different ways your business could potentially respond to each of the three scenarios. Discuss the proposed strategies as a team afterward.

Uncover common considerations or strategies for your organization. There’s a good chance that your teammates come up with similar solutions. Decide which ones you like best as a team or create a new one together.

Identify the most likely scenario and the most reasonable strategy. Finally, examine which of the three scenarios is most likely to occur in the next three to five years and how your business should respond to potential changes.

5. Self-organizing model

Also called the organic planning model, the self-organizing model is a bit different from the linear approaches of the other models. You’ll have to be very patient with this method. 

This strategic planning model is all about focusing on the learning and growing process rather than achieving a specific goal. Since the organic model concentrates on continuous improvement , the process is never really over.

Large organizations that can afford to take their time

Businesses that prefer a more naturalistic, organic planning approach that revolves around common values, communication, and shared reflection

Companies that have a clear understanding of their vision

Define and communicate your organization’s cultural values . Your team can only think clearly and with solutions in mind when they have a clear understanding of your organization's values.

Communicate the planning group’s vision for the organization. Define and communicate the vision with everyone involved in the strategic planning process. This will align everyone’s ideas with your company’s vision.

Discuss what processes will help realize the organization’s vision on a regular basis. Meet every quarter to discuss strategies or tactics that will move your organization closer to realizing your vision.

6. Real-time model

This fluid model can help organizations that deal with rapid changes to their work environment. There are three levels of success in the real-time model: 

Organizational: At the organizational level, you’re forming strategies in response to opportunities or trends.

Programmatic: At the programmatic level, you have to decide how to respond to specific outcomes or environmental changes.

Operational: On the operational level, you will study internal systems, policies, and people to develop a strategy for your company.

Figuring out your competitive advantage can be difficult, but this is absolutely crucial to ensure success. Whether it’s a unique asset or strength your organization has or an outstanding execution of services or programs—it’s important that you can set yourself apart from others in the industry to succeed.

Companies that need to react quickly to changing environments

Businesses that are seeking new tools to help them align with their organizational strategy

Define your mission and vision statement. If you ever feel stuck formulating your company’s mission or vision statement, take a look at those of others. Maybe Asana’s vision statement sparks some inspiration.

Research, understand, and learn from competitor strategy and market trends. Pick a handful of competitors in your industry and find out how they’ve created success for themselves. How did they handle setbacks or challenges? What kinds of challenges did they even encounter? Are these common scenarios in the market? Learn from your competitors by finding out as much as you can about them.

Study external environments. At this point, you can combine the real-time model with the scenario model to find solutions to threats and opportunities outside of your control.

Conduct a SWOT analysis of your internal processes, systems, and resources. Besides the external factors your team has to consider, it’s also important to look at your company’s internal environment and how well you’re prepared for different scenarios.

Develop a strategy. Discuss the results of your SWOT analysis to develop a business strategy that builds toward organizational, programmatic, and operational success.

Rinse and repeat. Monitor how well the new strategy is working for your organization and repeat the planning process as needed to ensure you’re on top or, perhaps, ahead of the game. 

7. Inspirational model

This last strategic planning model is perfect to inspire and energize your team as they work toward your organization’s goals. It’s also a great way to introduce or reconnect your employees to your business strategy after a merger or acquisition.

Businesses with a dynamic and inspired start-up culture

Organizations looking for inspiration to reinvigorate the creative process

Companies looking for quick solutions and strategy shifts

Gather your team to discuss an inspirational vision for your organization. The more people you can gather for this process, the more input you will receive.

Brainstorm big, hairy audacious goals and ideas. Encouraging your team not to hold back with ideas that may seem ridiculous will do two things: for one, it will mitigate the fear of contributing bad ideas. But more importantly, it may lead to a genius idea or suggestion that your team wouldn’t have thought of if they felt like they had to think inside of the box.

Assess your organization’s resources. Find out if your company has the resources to implement your new ideas. If they don’t, you’ll have to either adjust your strategy or allocate more resources.

Develop a strategy balancing your resources and brainstorming ideas. Far-fetched ideas can grow into amazing opportunities but they can also bear great risk. Make sure to balance ideas with your strategic direction. 

Now, let’s dive into the most commonly used strategic frameworks.

8. SWOT analysis framework

One of the most popular strategic planning frameworks is the SWOT analysis . A SWOT analysis is a great first step in identifying areas of opportunity and risk—which can help you create a strategic plan that accounts for growth and prepares for threats.

SWOT stands for strengths, weaknesses, opportunities, and threats. Here’s an example:

9. OKRs framework

A big part of strategic planning is setting goals for your company. That’s where OKRs come into play. 

OKRs stand for objective and key results—this goal-setting framework helps your organization set and achieve goals. It provides a somewhat holistic approach that you can use to connect your team’s work to your organization’s big-picture goals.  When team members understand how their individual work contributes to the organization’s success, they tend to be more motivated and produce better results

10. Balanced scorecard (BSC) framework

The balanced scorecard is a popular strategic framework for businesses that want to take a more holistic approach rather than just focus on their financial performance. It was designed by David Norton and Robert Kaplan in the 1990s, it’s used by companies around the globe to: 

Communicate goals

Align their team’s daily work with their company’s strategy

Prioritize products, services, and projects

Monitor their progress toward their strategic goals

Your balanced scorecard will outline four main business perspectives:

Customers or clients , meaning their value, satisfaction, and/or retention

Financial , meaning your effectiveness in using resources and your financial performance

Internal process , meaning your business’s quality and efficiency

Organizational capacity , meaning your organizational culture, infrastructure and technology, and human resources

With the help of a strategy map, you can visualize and communicate how your company is creating value. A strategy map is a simple graphic that shows cause-and-effect connections between strategic objectives. 

The balanced scorecard framework is an amazing tool to use from outlining your mission, vision, and values all the way to implementing your strategic plan .

You can use an integration like Lucidchart to create strategy maps for your business in Asana.

11. Porter’s Five Forces framework

If you’re using the real-time strategic planning model, Porter’s Five Forces are a great framework to apply. You can use it to find out what your product’s or service’s competitive advantage is before entering the market.

Developed by Michael E. Porter , the framework outlines five forces you have to be aware of and monitor:

Threat of new industry entrants: Any new entry into the market results in increased pressure on prices and costs. 

Competition in the industry: The more competitors that exist, the more difficult it will be for you to create value in the market with your product or service.

Bargaining power of suppliers: Suppliers can wield more power if there are less alternatives for buyers or it’s expensive, time consuming, or difficult to switch to a different supplier.

Bargaining power of buyers: Buyers can wield more power if the same product or service is available elsewhere with little to no difference in quality.

Threat of substitutes: If another company already covers the market’s needs, you’ll have to create a better product or service or make it available for a lower price at the same quality in order to compete.

Remember, industry structures aren’t static. The more dynamic your strategic plan is, the better you’ll be able to compete in a market.

12. VRIO framework

The VRIO framework is another strategic planning tool designed to help you evaluate your competitive advantage. VRIO stands for value, rarity, imitability, and organization.

It’s a resource-based theory developed by Jay Barney. With this framework, you can study your firmed resources and find out whether or not your company can transform them into sustained competitive advantages. 

Firmed resources can be tangible (e.g., cash, tools, inventory, etc.) or intangible (e.g., copyrights, trademarks, organizational culture, etc.). Whether these resources will actually help your business once you enter the market depends on four qualities:

Valuable : Will this resource either increase your revenue or decrease your costs and thereby create value for your business?

Rare : Are the resources you’re using rare or can others use your resources as well and therefore easily provide the same product or service?

Inimitable : Are your resources either inimitable or non-substitutable? In other words, how unique and complex are your resources?

Organizational: Are you organized enough to use your resources in a way that captures their value, rarity, and inimitability?

It’s important that your resources check all the boxes above so you can ensure that you have sustained competitive advantage over others in the industry.

13. Theory of Constraints (TOC) framework

If the reason you’re currently in a strategic planning process is because you’re trying to mitigate risks or uncover issues that could hurt your business—this framework should be in your toolkit.

The theory of constraints (TOC) is a problem-solving framework that can help you identify limiting factors or bottlenecks preventing your organization from hitting OKRs or KPIs . 

Whether it’s a policy, market, or recourse constraint—you can apply the theory of constraints to solve potential problems, respond to issues, and empower your team to improve their work with the resources they have.

14. PEST/PESTLE analysis framework

The idea of the PEST analysis is similar to that of the SWOT analysis except that you’re focusing on external factors and solutions. It’s a great framework to combine with the scenario-based strategic planning model as it helps you define external factors connected to your business’s success.

PEST stands for political, economic, sociological, and technological factors. Depending on your business model, you may want to expand this framework to include legal and environmental factors as well (PESTLE). These are the most common factors you can include in a PESTLE analysis:

Political: Taxes, trade tariffs, conflicts

Economic: Interest and inflation rate, economic growth patterns, unemployment rate

Social: Demographics, education, media, health

Technological: Communication, information technology, research and development, patents

Legal: Regulatory bodies, environmental regulations, consumer protection

Environmental: Climate, geographical location, environmental offsets

15. Hoshin Kanri framework

Hoshin Kanri is a great tool to communicate and implement strategic goals. It’s a planning system that involves the entire organization in the strategic planning process. The term is Japanese and stands for “compass management” and is also known as policy management. 

This strategic planning framework is a top-down approach that starts with your leadership team defining long-term goals which are then aligned and communicated with every team member in the company. 

You should hold regular meetings to monitor progress and update the timeline to ensure that every teammate’s contributions are aligned with the overarching company goals.

Stick to your strategic goals

Whether you’re a small business just starting out or a nonprofit organization with decades of experience, strategic planning is a crucial step in your journey to success. 

If you’re looking for a tool that can help you and your team define, organize, and implement your strategic goals, Asana is here to help. Our goal-setting software allows you to connect all of your team members in one place, visualize progress, and stay on target.

Related resources

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How Asana streamlines strategic planning with work management

How to create a CRM strategy: 6 steps (with examples)

What is management by objectives (MBO)?

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More Like this

What is the difference between a business plan and a strategic plan.

It is not uncommon that the terms ‘strategic plan’ and ‘business plan’ get confused in the business world. While a strategic plan is a type of business plan, there are several important distinctions between the two types that are worth noting. Before beginning your strategic planning process or strategy implementation, look at the article below to learn the key difference between a business vs strategic plan and how each are important to your organization.

Definition of a business plan vs. a strategic plan

A strategic plan is essential for already established organizations looking for a way to manage and implement their strategic direction and future growth. Strategic planning is future-focused and serves as a roadmap to outline where the organization is going over the next 3-5 years (or more) and the steps it will take to get there.

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A strategic plan serves 6 functions for an organization that is striving to reach the next level of their growth:.

• Defines the purpose of the organization.
• Builds on an organization’s competitive advantages.
• Communicates the strategy to the staff.
• Prioritizes the financial needs of the organization.
• Directs the team to move from plan to action.
• Creates long-term sustainability and growth impact

Alternatively, a business plan is used by new businesses or organizations trying to get off the ground. The fundamentals of a business plan focus on setting the foundation for the business or organization. While it looks towards the future, the focus is set more on the immediate future (>1 year). Some of the functions of a business plan may overlap with a strategic plan. However, the focus and intentions diverge in a few key areas.

A business plan for new businesses, projects, or organizations serves these 5 functions:

• Simplifies or explains the objectives and goals of your organization.
• Coordinates human resource management and determines operational requirements.
• Secures funding for your organization.
• Evaluates potential business prospects.
• Creates a framework for conceptualizing ideas.

In other words, a strategic plan is utilized to direct the momentum and growth of an established company or organization. In contrast, a business plan is meant to set the foundation of a newly (or not quite) developed company by setting up its operational teams, strategizing ways to enter a new market, and obtaining funding.

A strategic plan focuses on long-term growth and the organization’s impact on the market and its customers. Meanwhile, a business plan must focus more on the short-term, day-to-day operational functions. Often, new businesses don’t have the capacity or resources to create a strategic plan, though developing a business plan with strategy elements is never a bad idea.

Business and strategic plans ultimately differ in several key areas–timeframe, target audience, focus, resource allocation, nature, and scalability.

While both a strategic and business plan is forward-facing and focused on future success, a business plan is focused on the more immediate future. A business plan normally looks ahead no further than one year. A business plan is set up to measure success within a 3- to 12-month timeframe and determines what steps a business owner needs to take now to succeed.

A strategic plan generally covers the organizational plan over 3 to 5+ years. It is set with future expansion and development in mind and sets up roadmaps for how the organization will reach its desired future state.

Pro Tip: While a vision statement could benefit a business plan, it is essential to a strategic plan.

Target Audience

A strategic plan is for established companies, businesses, organizations, and owners serious about growing their organizations. A strategic plan communicates the organization’s direction to the staff and stakeholders. The strategic plan is communicated to the essential change makers in the organization who will have a hand in making the progress happen.

A business plan could be for new businesses and entrepreneurs who are start-ups. The target audience for the business plan could also be stakeholders, partners, or investors. However, a business plan generally presents the entrepreneur’s ideas to a bank. It is meant to get the necessary people onboard to obtain the funding needed for the project.

A strategic plan provides focus, direction, and action to move the organization from where they are now to where they want to go. A strategic plan may consist of several months of studies, analyses, and other processes to gauge an organization’s current state. The strategy officers may conduct an internal and external analysis, determine competitive advantages, and create a strategy roadmap. They may take the time to redefine their mission, vision, and values statements.

Alternatively, a business plan provides a structure for ideas to define the business initially. It maps out the more tactical beginning stages of the plan.

Pro Tip: A mission statement is useful for business and strategic plans as it helps further define the enterprise’s value and purpose. If an organization never set its mission statement at the beginning stages of its business plan, it can create one for its strategic plan.

A strategic plan is critical to prioritizing resources (time, money, and people) to grow the revenue and increase the return on investment. The strategic plan may start with reallocating current financial resources already being utilized more strategically.

A business plan will focus on the resources the business still needs to obtain, such as vendors, investors, staff, and funding. A business plan is critical if new companies seek funding from banks or investors. It will add accountability and transparency for the organization and tell the funding channels how they plan to grow their business operations and ROI in the first year of the business.

The scalability of a business plan vs. strategic plan

Another way to grasp the difference is by understanding the difference in ‘scale’ between strategic and business plans. Larger organizations with multiple business units and a wide variety of products frequently start their annual planning process with a corporate-driven strategic plan. It is often followed by departmental and marketing plans that work from the Strategic Plan.

Smaller and start-up companies typically use only a business plan to develop all aspects of operations of the business on paper, obtain funding and then start the business.

Why understanding the differences between a business plan vs a strategic plan matters

It is important to know the key differences between the two terms, despite often being used interchangeably. But here’s a simple final explanation:

A business plan explains how a new business will get off the ground. A strategic plan answers where an established organization is going in the future and how they intend to reach that future state.

A strategic plan also focuses on building a sustainable competitive advantage and is futuristic. A business plan is used to assess the viability of a business opportunity and is more tactical.

10 Comments

I agree with your analysis about small companies, but they should do a strategic plan. Just check out how many of the INC 500 companies have an active strategic planning process and they started small. Its about 78%,

Strategic management is a key role of any organization even if belong to small business. it help in growth and also to steam line your values. im agree with kristin.

I agree with what you said, without strategic planning no organization can survive whether it is big or small. Without a clear strategic plan, it is like walking in the darkness.. Best Regards..

Vision, Mission in Business Plan VS Strategic Plan ?

you made a good analysis on strategic plan and Business plan the difference is quite clear now. But on the other hand, it seems that strategic plan and strategic management are similar which I think not correct. Please can you tell us the difference between these two?. Thanks

Thank you. I get points to work on it

super answer Thanking you

Hi. I went through all the discussions, comments and replies. Thanks! I got a very preliminary idea about functions and necessity of Strategic Planning in Business. But currently I am looking for a brief nice, flowery, juicy definition of “Business Strategic Planning” as a whole, which will give anyone a fun and interesting way to understand. Can anyone help me out please? Awaiting replies…… 🙂

that was easy to understand,

Developing a strategic plan either big or small company or organization mostly can’t achieve its goal. A strategic plan or formulation is the first stage of the strategic management plan, therefore, we should be encouraged to develop a strategic management plan. We can develop the best strategic plan but without a clear plan of implementation and evaluation, it will be difficult to achieve goals.

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What is Strategic Planning? The Key Components, Process & Role Leaders Play in Ensuring a Strategy's Success

by Thuy Sindell, PhD. and Milo Sindell, MS. Published on February 1, 2023

Strategic planning is a process that is essential for companies to ensure successful and sustainable growth.

An intelligent and actionable strategic plan is a vital part of competing within the marketplace. It directs businesses to take meaningful action to help them reach their organization’s goals by mapping out a clear direction, creating measurable goals, and allocating resources to pursue these specific objectives.

What is Strategic Planning?

A strategic plan is an essential process and strategy execution document for any company looking to make the most of its resources and reach long-term organizational goals.

This vital and continually evolving document outlines a clear direction, sets objectives that must be achieved, and provides an actionable roadmap for success; it also helps organizations stand out from competitors by allowing them to differentiate themselves in the marketplace with their unique approach.

A well-crafted strategic plan will help companies stay focused on their mission while making decisions based on core values guiding them toward achieving desired results by ensuring everyone is moving in the same direction.

What are the Key Components of a Strategic Plan?

Several key components make up a well-developed strategic plan. These key components include:

A Mission Statement

An organization’s mission statement states the company’s purpose and the reasons why it exists. Although you might be already clear on the mission, reiterating your mission statement and connection to the plan acts as a foundation for the strategic plan and your strategy.

A Vision Statement

The company vision is the bigger objective that the company aspires to achieve. This may be as broad as making the world a better place through your product or service or ridding bathrooms of mildew. Whatever your vision, it should be connected to your strategic plan

Aligning the company mission and vision statements is the first crucial step to strategic planning.

SWOT Analysis

An overall evaluation of the company’s strengths, weaknesses, opportunities, and threats. Knowing these points will help you leverage your resources, shore up gaps, and realistically plan your path and the potential risks. Your SWOT analysis will help ensure that your strategic plan is based upon reality and play an important part in your strategic management process.

Goals & Objectives

Goals and objectives need specific, measurable, achievable, and time-bound targets the company wants to achieve. Ensure your goals are achievable, measurable, and can be clearly communicated as part of your strategic planning. High-level company objectives should cascade and align with the objectives of various divisions and teams. The Strategic plans of each division and team should map directly to broader company goals and methods.

The specific courses of action that the company will take to achieve its measurable goals and specific strategic issues.

Action Plans

Detailed project plans outlining the specific steps that will be taken to implement the strategies.

Resource Allocation

The allocation of financial, human, and other resources to implement the action plans.

Evaluation and Control

Evaluation and control are based on measures and systems to monitor the company’s progress toward achieving its organization’s goals, objectives, and financial plan and to make adjustments as necessary.

Who is Responsible for Creating a Strategic Plan?

In general, creating a strategic plan is the responsibility of the company’s top management team - the CEO, CFO, other executives, etc.

However, though the top management will do the strategic thinking, it’s essential for key members throughout the entire organization to be involved in the strategic planning process as different departments, employees, and human resources will have valuable insights and perspectives to contribute to the strategy formation. Also, when various constituents are a part of and the planning process a sense of ownership and commitment to the strategic plan’s success is reinforced.

It’s also common for companies to seek input from external stakeholders, customers, suppliers, and industry experts as part of the strategic planning process. As part of your planning process make sure to identify any critical stakeholders outside of your company.

What Makes the Strategic Planning Process Effective?

Below are some key factors that contribute to the overall effectiveness of a successful strategic plan and the strategic planning process. Understanding these points will help make your strategic planning process more effective:

The plan needs to be clear & concise, with specific strategic goals & objectives that are easy for everyone to understand. Senior leadership plays a critical role in ensuring that each objective is clear and how objectives will be achieved is understood.

The strategic plan needs to take the company’s resources & capabilities into account, and the goals need to be realistic & achievable based on the market data.

The plan needs to be flexible enough to allow for adjustments to be made in response to changes in the external environment after deployment.

The plan must be aligned with the company’s mission, vision & values and should support the organization’s overall direction in terms of business plan and annual budgets.

Easily Communicated

The plan needs to be communicated effectively to all stakeholders & investors, including employees & customers.

The plan needs clear & actionable steps and a timeline for implementation. It must be followed consistently to ensure progress toward business goals like increasing sales and maximizing profit.

The plan needs to measure & evaluate progress, collect feedback, and be reviewed and updated regularly to ensure continuous progress toward company goals and that the plan remains relevant and practical and targets logical key performance indicators.

An effective strategic plan identifies potential factors that might derail the plan and, at a minimum, provides high-level alternatives should the plan become derailed.

When Do Strategic Plans Fail?

Listed below are a few potential reasons why strategic planning might fail. Understanding why strategic plans fail will help create more effective strategic planning outcomes:

Lacks Clarity

Plans need to be clear and specific. If not, it may be difficult to understand and challenging to implement. When a strategic plan is ambitious it is tough for people to feel connected and motivated to take action.

Lack of Realistic Options and Objectives

Plans need to be realistic. If the plan cannot really be achieved, it’ll be difficult to implement and lead to frustration, disappointment, and potential failure.

Lack of Flexibility

The plan needs to be flexible; if it’s not is not flexible and doesn’t allow for adjustments in response to changes in the environment (internal and external) or from evaluation or measurement, it may become irrelevant or ineffective.

Lack of Alignment

The plan needs to be aligned with the company’s mission, vision, and values; if not consistent with the organization’s overall direction, it can quickly become out of sync with its underlying purpose and be ineffective in helping to reach desired goals.

Lack of Understanding

The plan needs to be communicated effectively to all key stakeholders and take feedback from all stakeholders; otherwise, it may be misunderstood or, worse - ignored or seen as not valuable.

Lack Actionable Steps

The strategic plan needs to be implemented swiftly and consistently; if the action steps are not clear or too hard to implement, they may not be implemented effectively.

Lack of Measurable Outcomes

The strategic plan needs to be reviewed and updated regularly, and its performance evaluated after implementation; otherwise, it may become ineffective or outdated, therefore ineffective at achieving desired outcomes.

External Factors

Changes in the external environment can have a huge effect. Changes like shifts in the economy or customer preferences, if not accounted for, can seriously impact the effectiveness of a once brilliant strategic plan.

However, as in life and business, things change, and every business must be able to adapt quickly to changing circumstances. This is why an effective plan includes contingencies.

What is a Company Leader’s Role in Ensuring the Strategic Plan is Implemented Successfully?

Strategic management.

Company leaders are responsible for ensuring that the strategic plan is implemented successfully.

Some specific ways business leaders can ensure the plan is implemented properly are:

Clearly Communicate the Plan

Business leaders need to communicate the strategic plan effectively to all key stakeholders, including employees, customers, and investors. Any questions need to be answered and clarified, so everyone is aligned. The strategic plan should be shared in a way that you (the leader) demonstrate ownership and enthusiasm and can share with your team how each role is vital to achieving the plan’s objectives.

Providing Resources

Leaders need to ensure that resources, such as funding, personnel, and technology, are available to everyone needed in order to implement the plan successfully.

Setting Expectations

Leaders need to set clear expectations for implementing the plan and hold the designated employees accountable for meeting those expectations. Clear and achievable timelines need to be established and committed to by each stakeholder.

Leading by Example

Leaders need to model the behaviors and values outlined in the plan and encourage others to do the same.

Providing Support

Leaders need to provide support and guidance to employees as they work through problems toward achieving the strategic goals and objectives of the plan.

Monitoring Progress

Leaders need to monitor the progress towards achieving the goals and objectives outlined in the plan and make adjustments in the operational plans as they see fit, as needed.

Celebrating Successes

Leaders need to recognize and celebrate wins along the way to help keep morale high and encourage continued progress toward the ultimate goals.

What’s the Role of Each Individual Employee in Implementing & Supporting the Strategic Plans Success?

Employees are the driving force and critical in implementing and supporting the strategic plan’s success. Your employees will be the eyes and ears of how the strategic plan works. This is why it is vital for leaders to create a business environment where there is open communication and all types of information can be shared and reviewed in relation to its impact on the long- term strategy. Leaders must foster an open environment where questions can be asked and bad and good news shared. Leaders can help employees play their part by ensuring employees are supported and are clear on their ability to do the following:

Understand the Plan

Employees need to understand the strategic plan, how it aligns with the company’s mission, the steps to take, and most importantly, the goals.

Aligning Work and Job Goals with the Plan

Leaders, managers, and employees need to align their work with the strategic plan and prioritize tasks that support achieving the plan’s goals & strategic objectives.

Manage Implementation

Employees must consistently follow through on their assigned tasks and responsibilities to implement the plans, steps, and processes.

Provide Feedback

During the initial review of the organization’s current status, employees must provide feedback and suggestions to improve the plan. During its implementation, employees need to provide feedback based on performance and potentially adjust the plan if needed for better performance and goals.

Communicate Laterally and Up

Employees need to communicate with coworkers to ensure everyone is working towards the same goals & objectives and, most importantly, employees need to communicate to their manager on how their contribution is proceeding.

Seek Support and Guidance

Employees need to seek support and guidance from leaders if they need help implementing any steps of the plan or achieving goals.

Do Some Companies Believe that Strategic Planning is a Waste of Time?

Sure. It’s possible some companies may view strategic planning as a waste of time. This could be due to a variety of reasons: resources required upfront, lack of understanding of the benefits of strategic planning, a lack of buy-in from senior management, or a lack of resources to dedicate to the process.

However, for massively successful companies, strategic planning is recognized as an invaluable tool to help organizations achieve their long-term goals and be outstanding in a competitive marketplace.

Strategic planning can also help companies be more agile and adapt to changes in the external environment. For these reasons, it’s generally recommended that companies engage in strategic planning and review results on a regular basis.

What Makes a Great Strategy?

What makes a great competitive strategy? Several characteristics are often considered to be key elements of great strategy execution:

A great strategy is clear & easy to understand, with specific goals & strategic objectives that are well-defined.

A great strategy is a focused strategy. A great strategy is focused on a specific area of the business and doesn’t try to do too many things at once.

A great strategy is aligned with the company’s overall mission, vision for the future, and values, supporting the organization’s overall direction.

Flexibility

A great strategy is flexible and allows for adjustments to be made in response to results and changes in the external environment.

A great strategy is realistic & achievable, taking into account the company’s resources & capabilities and what can actually get done.

Differentiation

The great strategy sets the company apart from its competitors in the marketplace and helps it to differentiate itself from competitors to customers.

A great strategy can be executed effectively, with clear action steps, a timeline for implementation, and who is responsible for each action step.

Evaluation & Feedback

The great strategy includes measures for evaluating progress and collecting feedback, and it needs to be reviewed regularly & potentially updated to ensure it remains relevant & effective.

When is a Great Strategy Not Enough to Ensure Company Success?

While a great strategy can certainly be a key factor in a company’s success, it’s not the only factor needed to be successful. There are a number of other internal and external factors that can impact a company’s success, including:

Even the best strategy will not be a successful strategy if executed poorly.

A company needs resources, period. Resources like funding, personnel, and technology, are essential to implement strategy effectively.

Changes in external factors are equally important as the internal environment. For example, economic shifts or customer preferences can impact a company’s success.

Competition

A company’s success can also be impacted by its competitors’ actions and even competitors’ reactions to strategy implementation.

Market Demand

A company’s success will depend partly on the market demand for its products or services. Demand should absolutely be a part of the strategy formulation.

A company’s success will highly depend on the quality of its products or services and its ability for its products to meet customer needs.

The senior leadership of a company can play a key role in its success, or failure, as they set the vision & direction of the organization.

How Does Company Leadership Play a Critical Part in a Company’s Strategic Success?

Without involved leadership, a strategic plan will more than likely fail. A company’s leadership plays a critical role in strategic success in several ways:

Setting the Direction

A company’s leadership is responsible for setting the organization’s vision and direction and creating a strategic management plan that aligns with that direction.

A company’s Leadership is responsible for ensuring that the necessary resources, such as funding, personnel, and technology, are available to implement the strategic plan.

Communicating the Plan

A company’s leadership communicates the strategic management plan effectively and consistently to all stakeholders, including employees, customers, and investors.

A company’s leadership needs to model the behaviors and values aligned with the plan and encourage others to do the same.

A company’s leadership needs to provide support & guidance to employees as they work towards achieving the goals and objectives of the strategic plan. This will help in employee retention and strategic success.

A company’s leadership needs to monitor progress toward achieving the goals & objectives of the plan and make necessary adjustments as needed.

A company’s leadership needs to recognize and celebrate successes along the way to help keep team morale high and encourage continued progress to achieve goals.

How Can Companies Prepare & Support their Leaders to Implement & Ensure Strategic Planning Success?

There are many ways in which companies can prepare and support their leaders to implement and ensure the success of their strategic planning initiative.

Provide Proper Training

Companies need to provide training & strategy development opportunities to help their leaders acquire the knowledge and skills they need to implement & support the strategic vision effectively.

Encourage Open Communication

Companies need to foster an environment of open, clear communication and encourage leaders to seek input & feedback from their teams within the strategic framework - even when the strategy map is not positive.

Align Leadership with Company Values

Companies must ensure that their leadership’s values align with the company’s values and culture and that their leaders are committed to the mission and vision of the organization.

Encourage Collaboration

Companies need to encourage collaboration & cross-functional teamwork as a part of project management to ensure that all departments work towards the same goals & objectives.

Provide Resources

As part of the strategic planning process, companies need to ensure their leadership has the necessary resources, such as funding, personnel, & technology, to implement the strategic plan effectively for the entire duration.

Establish Clear Expectations

Companies must set clear expectations for how strategic planning should be activated and implemented and hold leadership accountable for meeting expectations as per the strategic plan document.

Monitor Progress

Company leaders need to monitor the progress toward achieving the goals and objectives of the strategic plan and provide their support and guidance as needed. Strategic planning is essential for business success, and the key to achieving successful results lies in the hands of leadership. For leaders to ensure a strategy’s success, they must become strategic planners and the details of the business’s strategic plan must be organized and understood by each person responsible.

Leaders and managers need to communicate the strategic plan through consistent discussions that foster collaborative decision-making. Responsibilities for the planning process and success also extend beyond the leader and onto each individual employee to help realize the steps of an effective strategic plan. Companies must set clear strategic objectives that align with their mission and strategic goals while preparing business leaders to carry out those plans. When done correctly, with careful attention paid to all levels of the organization, successful strategic planning can lead a company in the right direction toward long-term sustainability and future opportunities.

Having a clear strategic plan is one of those obvious items that every company should have in place yet many companies don’t.

Although the effort of investing the time and resources into creating a strategic planning template can be demanding, the value and impact of your investment can return a healthy multiple.

Once your mission and vision statements and strategic plan are in place they become a touchstone to focus your business, align teams, and what makes your way of navigating your market and competition unique.

We hope that this resource provides a road map and helps facilitate the development of your strategic plan if you don’t have one yet. For those that do have strategic plans, we hope this resource helps act as a checklist to fortify the strategy development you’ve already created.

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The Ultimate Guide to Strategic Business Planning

• Are you ready to take the driver's seat and steer your organization towards its future goals?

Strategic business planning is a critical process that propels an organization toward its future goals. It is a roadmap that outlines the direction the organization needs to take, prepares it for potential hurdles, and helps it navigate the competitive business landscape.

In this comprehensive guide, we will delve into what strategic business planning is, its significant benefits, and the detailed process involved, provide some illustrative examples and highlight the crucial elements needed for successful implementation.

Understanding Strategic Business Planning

Strategic business planning is a systematic approach aimed at defining the direction an organization should take, identifying its objectives, and outlining the actions necessary to achieve these objectives. It also includes setting up metrics to measure the success of these actions.

Unlike a business plan that focuses on the first year of operations, a strategic plan is high-level thinking that typically looks at a time frame of 3 to 5 years. It can be created at any point in the organization’s lifespan and should be revisited regularly to reflect the changing business environment.

The Significance of Strategic Business Planning

Strategic planning has a profound impact on an organization’s success. It bolsters long-term success by enhancing the following five key areas:

1. Focus and Direction

A clear vision of the future and a roadmap to get there allows an organization to be proactive rather than reactive. Strategic planning helps anticipate unfavorable scenarios and take precautions to avoid them, enabling the organization to keep pace with market trends and evade common industry challenges.

2. Operational Efficiency

Every organization has a limited amount of resources, both human and financial. A well-defined strategic plan can help determine the most efficient way to allocate these resources by outlining the activities needed to achieve the objectives.

3. Competitive Environment

The business landscape is constantly changing. Organizations must adapt to new government regulations, technological advances, and economic uncertainties. A strategic plan can help companies assess their industry’s attractiveness, identify how trends will affect competition, and determine how to position themselves for success.

4. Employee Morale

A strategic plan is crucial for communicating the organization’s vision to its stakeholders. Sharing realistic goals and the metrics for measuring them motivates employees to perform their best.

5. Stability and Longevity

Without a solid foundation like the one a strategic plan provides, organizations are more likely to struggle. A strategic plan ensures that the organization is prepared for the future, helping it navigate through the tumultuous journey of business growth.

The Strategic Planning Process

The strategic planning process addresses four key considerations: understanding your business, analyzing your strengths, weaknesses, and threats, defining objectives and setting goals, and putting the plan into action.

Let’s delve into each of these steps in detail:

1. Understanding Your Business

The first step is to assess where your business stands currently. This includes reviewing critical business information, such as key customers, financial documents, and more.

2. Analyzing Your Strengths, Weaknesses, and Threats

A SWOT analysis is a fundamental tool for critically evaluating your organization’s strengths, weaknesses, opportunities, and threats. It provides insights into your business’s current position and potential future directions.

3. Defining Objectives and Setting Goals

The next step is to outline specific objectives that will help you achieve your vision. These might include launching a new product, entering new markets, or improving customer service.

4. Putting the Plan into Action

The final step is implementation. This involves breaking down the objectives into specific action steps, assigning responsibility for these tasks, and setting up a timeline for their completion.

Strategic Planning Examples

To provide a clearer understanding, let’s look at some strategic planning examples. Please note that each organization’s strategic plan will be different based on its industry, market sector, and unique circumstances.

• Business Strategic Plans: A strategic plan for a business should focus on the organization’s growth. It should outline clear objectives for launching new products, entering new markets, or improving operational efficiency.
• Nonprofit Strategic Plans: Strategic planning for nonprofits should focus on fulfilling the organization’s mission while also ensuring financial sustainability. It may include objectives such as expanding donor base, improving program delivery, or enhancing community engagement.
• IT Strategic Plans: In the fast-paced IT industry, strategic planning needs to account for rapid technological changes and market trends. Objectives may include upgrading technology infrastructure, developing new software, or enhancing cybersecurity measures.
• Marketing Strategic Plans: A marketing strategic plan should focus on promoting the organization’s products or services and expanding its customer base. Objectives might include launching new marketing campaigns, improving online presence, or enhancing customer engagement strategies.

Elements of Strategic Planning Implementation

A strategic plan is only as good as its implementation. The transition from planning to execution is critical and involves several key elements:

• Stakeholder Involvement: It’s essential that all stakeholders, from top management to employees, are involved in the plan’s implementation.
• Resource Allocation: Ensure you have the appropriate resources (budget, people, technology) in place to execute the plan.
• Communication: Keep all stakeholders informed about the plan and its progress. This includes educating them about why strategic planning was undertaken, how it aligns with the organization’s mission and values, and how their work contributes to the company’s success.
• Responsibility and Accountability: Assign responsibility for tasks to appropriate parties. Set up a scorecard for tracking progress and hold individuals accountable for their assigned tasks.
• Performance Management and Reward System: Link employee performance and rewards to the achievement of strategic goals. This motivates employees to contribute towards the plan’s success.
• Regular Reviews and Updates: Hold quarterly strategic reviews to monitor progress and make necessary adjustments. During annual reviews, revisit all elements of the plan, conduct new assessments, and adjust objectives and KPIs as needed.

Strategic business planning is an indispensable part of any organization’s decision-making process. It provides a comprehensive framework that guides the organization’s response to future challenges and opportunities. By providing a clear vision of the future, outlining a roadmap to get there, and setting measurable objectives, strategic planning propels an organization towards its future goals.

To ensure long-term success, organizations must regularly revisit their strategic plan and make necessary adjustments based on the changing business environment. After all, strategic planning is not a one-time exercise but an ongoing process that keeps an organization on the path to success.

Investing in strategic planning today can set your organization on the path to a successful and prosperous future.

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• Effective Strategic Plans and Business Plans: Understanding the Difference Between

by Waymaker | Jul 25, 2023

Defining Strategic Plans and Business Plans

What is a strategic plan, what is a business plan, key components of strategic plans and business plans, elements of a strategic plan, elements of a business plan, the purpose and goals of the strategic plan and the business plan, the purpose of a strategic plan, the purpose of a business plan, the planning process: strategic plans vs. business plans, developing a strategic plan, developing a business plan, the role of stakeholders in each plan, stakeholder involvement in strategic plans, stakeholder involvement in business plans.

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In the world of business, the terms strategic plans and business plans are often used interchangeably. However, there are significant differences between these two types of plans that are important for entrepreneurs and business leaders to understand.

Before delving into the differences between strategic plans and business plans, it’s important to define each term.

A strategic plan is a long-term plan that outlines an organization’s goals and objectives and the actions needed to achieve them. It typically covers a three to five-year time period and focuses on broad, high-level initiatives that will position the organization for success in the future.

Strategic planning is a crucial process for any organization that wants to succeed in today’s competitive business environment. It allows organizations to identify their strengths, weaknesses, opportunities, and threats, and to develop a plan of action that will help them achieve their long-term goals.

During the strategic planning process, organizations typically conduct a thorough analysis of their internal and external environments. This includes an assessment of their current strengths and weaknesses, as well as an analysis of the market, competition, and other external factors that could impact their success.

Based on this analysis, organizations develop a set of strategic objectives and initiatives that will help them achieve their long-term goals. These initiatives may include expanding into new markets, developing new products or services, or investing in new technologies.

A business plan , on the other hand, is a detailed plan that outlines the steps a company will take to achieve its short-term goals and to operate on a daily basis. It typically covers a one to three-year time period and includes detailed financial projections, marketing plans, and operational strategies.

A business plan is a critical tool for any entrepreneur or small business owner who wants to succeed. It allows them to identify their target market, develop a marketing strategy, and create a roadmap for achieving their financial goals.

When developing a business plan, entrepreneurs typically begin by conducting market research to identify their target market and assess the competition. They then develop a marketing strategy that will help them reach their target market and differentiate themselves from the competition.

In addition to marketing, a business plan also includes detailed financial projections that outline the company’s revenue and expenses over the next one to three years. This allows entrepreneurs to identify potential financial challenges and develop strategies to overcome them.

Finally, a business plan includes operational strategies that outline how the company will operate on a day-to-day basis. This includes everything from hiring and training employees to managing inventory and fulfilling orders.

In conclusion, while both strategic plans and business plans are important tools for organizations and entrepreneurs, they serve different purposes. Strategic plans focus on long-term goals and broad initiatives, while business plans focus on short-term goals and daily operations.

Strategic plans and business plans are essential tools for any organization looking to achieve long-term success. While both plans share some common elements, they differ in their focus and level of detail.

A strategic plan is a comprehensive document that outlines an organization’s long-term goals and objectives. Key components of a strategic plan include:

• Mission Statement:  This statement defines the organization’s purpose and values, and provides a framework for decision-making.
• Vision Statement:  This statement describes the organization’s long-term aspirations and what it hopes to achieve in the future.
• Objectives:  These are specific, measurable goals that the organization aims to achieve within a set timeframe.
• Strategies:  These are the broad approaches that the organization will take to achieve its objectives.
• Tactics:  These are the specific actions that the organization will take to implement its strategies.

By outlining these key components, a strategic plan provides a roadmap for the organization to follow as it works towards its long-term goals.

A business plan is a detailed document that outlines how a company will achieve its short-term and long-term goals. While it shares some elements with a strategic plan, a business plan is more focused on the day-to-day operations of the business. Key components of a business plan include:

• Executive Summary:  This is a brief overview of the entire business plan, highlighting the key points and goals.
• Market Analysis:  This section provides an in-depth look at the industry and market in which the company operates.
• Marketing and Sales Strategies:  These are the specific tactics that the company will use to promote and sell its products or services.
• Operational Plans:  This section outlines the day-to-day operations of the business, including staffing, production, and logistics.
• Financial Projections:  This section provides detailed financial projections, including revenue, expenses, and profit margins.
• Funding Requirements:  This section outlines the company’s funding needs and how it plans to secure financing.

By including these key components, a business plan provides a detailed roadmap for the company to follow as it seeks to achieve its goals and grow its operations.

Overall, both strategic plans and business plans are essential tools for any organization looking to achieve long-term success. By outlining clear goals and strategies, these plans provide a framework for decision-making and help ensure that the organization stays focused on its long-term objectives.

Strategic plans and business plans are both essential tools for any organization. They provide a clear roadmap for achieving goals and ensuring long-term success. While the two plans are similar in some ways, they serve different purposes and have different goals.

A strategic plan is a high-level document that outlines an organization’s long-term goals and objectives. It provides a roadmap for achieving those goals and helps to align the entire organization around a shared vision. The purpose of a strategic plan is to provide a framework for making strategic decisions that will move the organization closer to its desired future state.

Developing a strategic plan requires careful consideration of an organization’s strengths, weaknesses, opportunities, and threats. It involves analyzing market trends, assessing the competition, and identifying potential risks and challenges. The end result is a comprehensive plan that outlines the steps necessary to achieve the organization’s long-term goals.

One of the key benefits of a strategic plan is that it helps to ensure that everyone in the organization is working towards the same goals. By creating a shared vision and providing a clear roadmap for achieving it, a strategic plan can help to align the efforts of all employees, departments, and stakeholders.

A business plan is a detailed document that outlines an organization’s short-term goals and objectives. It provides a roadmap for achieving those goals and helps to define the company’s market niche, outline its marketing and sales strategies, and determine the funding needed to cover startup costs and ongoing expenses.

The purpose of a business plan is to provide a clear and comprehensive plan for achieving the organization’s short-term goals. This includes identifying potential customers, outlining marketing and sales strategies, and determining the resources needed to launch and maintain the business.

Developing a business plan requires careful research and analysis. This includes assessing the market demand for the product or service, analyzing the competition, and identifying potential risks and challenges. The end result is a detailed plan that outlines the steps necessary to launch and grow the business.

One of the key benefits of a business plan is that it helps to ensure that the organization is well-prepared for the challenges of starting and growing a business. By providing a clear roadmap for achieving short-term goals, a business plan can help to minimize risks and increase the chances of success.

Strategic plans and business plans are both essential tools for any organization. While they serve different purposes and have different goals, they both provide a clear roadmap for achieving success. By developing a comprehensive strategic plan and a detailed business plan, organizations can ensure that they are well-prepared for both short-term and long-term success.

Planning is an essential part of any successful business, but the planning process can differ significantly depending on the type of plan being developed. Strategic plans and business plans have different goals, and therefore require different approaches to planning.

Use Waymaker Academy to learn how to build your business plan.

A strategic plan is a long-term plan that outlines an organization’s goals and objectives, and the strategies it will use to achieve them. Developing a strategic plan typically involves a lengthy planning process that includes input from a wide range of stakeholders, such as executives, employees, customers, and shareholders. The planning process may involve conducting research and analysis to identify opportunities and threats in the market, as well as the organization’s strengths and weaknesses.

The strategic plan should be reviewed and updated annually to ensure it remains relevant and aligned with the organization’s goals. This process may involve revisiting the organization’s mission and vision statements, as well as assessing the progress made towards achieving the goals outlined in the plan. 

One of the key benefits of a strategic plan is that it provides a clear direction for the organization, helping to align everyone around a common set of goals and objectives. It also helps to ensure that resources are being allocated in the most effective way possible, and that the organization is able to adapt to changes in the market.

A business plan, on the other hand, is a shorter-term plan that outlines the company’s goals and objectives for the next one to three years. The process of developing a business plan typically involves a smaller team of stakeholders focused on executing the company’s short-term goals.

The business plan may also include input from investors, lenders, and other external stakeholders who have a vested interest in the company’s success. This may involve presenting financial projections, market analysis, and other data to demonstrate the viability of the business.

One of the key benefits of a business plan is that it provides a roadmap for the company’s short-term goals, helping to ensure that everyone is working towards the same objectives. It also helps to identify potential risks and challenges, and provides a framework for measuring progress and making adjustments as needed.

Overall, both strategic plans and business plans are important tools for any organization. By taking the time to develop a clear plan, companies can ensure that they are working towards their goals in the most effective way possible.

Stakeholder involvement plays a key role in both strategic plans and business plans, although the level and type of involvement can vary depending on the plan.

Stakeholder involvement is critical in the development of a strategic plan, as it ensures that all parties have a voice in shaping the organization’s future. This involvement also helps to build consensus around the organization’s goals and the strategies needed to achieve them.

Stakeholder involvement in a business plan may be more limited, as the focus is on executing short-term goals rather than shaping the organization’s long-term future. However, investors and lenders may play a significant role in the development of a business plan, as they provide funding and have a vested interest in the success of the company.

While strategic plans and business plans share some common elements, they serve very different purposes and are designed to achieve different goals. By understanding the differences between these two plans, entrepreneurs and business leaders can better plan for the future, execute their short-term goals, and position their organizations for long-term success.

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The Ultimate Guide to Strategic Decision Making

In today’s fast-paced business environment, making strategic decisions isn’t just about choosing paths—it’s about shaping the future of organizations. This guide is your roadmap for navigating strategic decision making. Whether you’re leading a team or managing a business, here you’ll find practical tools and insights to make informed decisions that drive long-term success. Let’s explore how strategic decision making can empower your organization to thrive in a dynamic world.

What is Strategic Decision Making

Strategic decision making is the process of making significant choices that have a long-lasting impact on an organization’s direction and success. Unlike day-to-day decisions that focus on immediate tasks, strategic decisions involve analyzing information, assessing risks, and considering future opportunities. Leaders and decision-makers often use strategic decision making to chart a course that aligns with the organization’s goals and values. It requires weighing various options carefully, anticipating changes in the business environment, and planning for sustainable growth over time.

Effective strategic decision making involves not only understanding current market trends and competitive dynamics but also anticipating future challenges and opportunities. It requires a blend of analytical thinking and forward-thinking vision to ensure that decisions made today contribute to the organization’s resilience and success in the years to come. By focusing on strategic decision making, organizations can navigate uncertainties with clarity, adapt proactively to changes, and position themselves strategically in their respective industries.

Strategic Decision Making Process

Follow these steps to make informed decisions that support organizational growth and success over time.

1. Understanding the situation

Begin by gathering all the relevant information about your organization’s current status and the environment it operates in. This includes analyzing market trends, evaluating competitors, and identifying challenges and opportunities.

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2. Identifying options

Brainstorm different strategies or decisions based on the information gathered. Consider various alternatives that could address challenges or capitalize on opportunities.

3. Evaluating alternatives

Assess each option based on potential outcomes, risks involved, and how well they align with your organization’s goals and values. Tools like SWOT analysis can help weigh the strengths, weaknesses, opportunities, and threats of each alternative.

4. Making the decision

Choose the best option after careful evaluation. Ensure the decision is aligned with your organization’s mission, vision, and long-term objectives.

5. Implementing the decision

Develop a detailed action plan for executing the chosen strategy. Assign responsibilities, allocate resources, and establish timelines to achieve the desired results.

6. Monitoring and adjusting

Continuously monitor the implementation progress. Track key performance indicators (KPIs), gather feedback, and make necessary adjustments to stay on track and respond effectively to changes in the business environment.

Strategic Decision Making Techniques

These strategic decision making techniques provide structured approaches to the decision making process , helping organizations analyze information, evaluate options, and make informed choices that support their long-term goals.

SWOT analysis

SWOT analysis helps organizations assess internal strengths and weaknesses, as well as external opportunities and threats. It is used at the beginning of the decision-making process to understand the current state of the organization and its competitive position. This insight informs strategic choices by leveraging strengths, addressing weaknesses, seizing opportunities, and mitigating threats.

PESTLE analysis

PESTLE analysis evaluates Political, Economic, Social, Technological, Legal, and Environmental factors that could impact business operations. It is used to scan the external environment and anticipate changes that could affect the organization’s strategy. By considering these factors, decision makers can adjust their strategies to align with emerging trends, regulatory changes, economic shifts, and societal influences.

Decision trees

Decision trees visualize different decision options and their potential outcomes based on probabilistic calculations. They are used to evaluate complex decisions with multiple possible outcomes. Decision makers can map out various scenarios and assess the consequences of each option. This helps in making informed choices by weighing the risks and rewards associated with different decision paths.

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Scenario planning

Scenario planning creates hypothetical future scenarios to prepare for uncertainties. It is used to explore a range of possible futures and their implications for the organization. By developing alternative scenarios, decision makers can identify strategic responses that are flexible and robust in different environments. This proactive approach helps in adapting strategies to unpredictable changes in the market or industry.

Cost-benefit analysis : Cost-benefit analysis compares the costs of decisions with their expected benefits. It quantifies the financial implications of different options to determine which alternative offers the best return on investment. Decision makers use this analysis to prioritize projects, allocate resources effectively, and justify investment decisions to stakeholders.

Risk assessment : Risk assessment identifies potential risks associated with each decision option. It helps in evaluating the likelihood and impact of risks to the organization. By understanding these risks, decision makers can implement risk mitigation strategies to minimize negative outcomes and enhance the success of their decisions. This ensures that strategic choices are made with a clear understanding of potential challenges and how to manage them.

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Strategic Decision Making Examples

Here are some strategic decision making examples to help you understand how to implment the steps;

Expanding a business

A small coffee shop owner wants to open a second location to reach more customers and increase profits. They begin by researching various potential areas, considering factors like foot traffic, competition, and rent costs. After comparing the pros and cons of each location, they choose the one that offers the best balance of cost and potential profit. They secure the new location, hire staff, and start marketing the new shop. After some time, they review the performance of the new location to ensure it is attracting enough customers and making a profit.

Launching a new product

A tech company plans to release a new smartphone to meet customer needs and boost revenue. They conduct market research to understand what features customers want in a smartphone, then look at different designs, features, and price points while considering production costs and potential sales. After evaluating all options, they finalize the design, features, and price of the new smartphone. They begin production, create marketing campaigns, and plan the product launch event. After the launch, they monitor sales and gather customer feedback to determine if the new smartphone is performing well in the market.

Entering a new market

A clothing brand aims to expand its sales by entering a new country. They start by researching the new market, including consumer preferences, local competition, and any legal requirements for operating in that country. They then consider different entry strategies such as opening physical stores, partnering with local retailers, or selling online. After evaluating these options, they choose the entry strategy that best fits their brand’s strengths and market conditions. They implement their plan by setting up operations according to the chosen strategy, such as securing retail space, establishing partnerships, or launching a localized website. They then monitor sales, customer feedback, and overall market performance to assess the success of the expansion.

Improving customer service

An online retailer wants to improve its customer service to boost customer satisfaction and loyalty. They start by collecting customer feedback and analyzing common complaints or suggestions. They consider various improvement measures such as staff training, implementing a new customer relationship management (CRM) system, or extending support hours. After evaluating these options, they select the measures that are most feasible and impactful. They put these improvements into action by training staff, integrating the new CRM system, and extending support hours as planned. The retailer then tracks customer satisfaction scores, feedback, and repeat purchase rates to evaluate the success of the changes and ensure they are meeting their goals.

Cost reduction

A manufacturing company needs to reduce costs to remain profitable. They start by analyzing their current expenses to identify the areas where the most money is being spent. They consider different cost-cutting measures such as renegotiating supplier contracts, automating certain processes, or reducing workforce. After evaluating the potential impact of these options, they choose the measures that will save the most money while having the least negative impact on the business. They implement these changes and communicate them to employees and stakeholders. The company then monitors the savings and checks if product quality and customer satisfaction remain high to ensure the cost-cutting measures are effective.

Why is Strategic Decision Making Important

Strategic decision making is crucial because it sets the direction for an organization’s future success. Here’s why it’s important:

• Guides long-term goals : Strategic decisions help organizations plan for the future. They steer the company toward achieving goals like growth and profitability.
• Adapts to change : In a fast-paced world, strategic decisions help organizations stay flexible and respond to new challenges and opportunities.
• Allocates resources wisely : Strategic decision making prioritizes where to invest resources like money, time, and people for maximum impact.
• Enhances competitive advantage : Smart strategic decisions give organizations an edge over competitors by capitalizing on strengths and seizing opportunities.
• Encourages innovation : Strategic decisions foster innovation, encouraging new ideas to improve products, services, and processes.

Strategic Decision Making Pitfalls

Strategic decision making is crucial for any organization’s success, but it can be fraught with pitfalls. Being aware of these common pitfalls can help leaders make better, more informed decisions.

• Lack of clear goals - Without clear goals, it’s difficult to measure success and make informed decisions. Clear goals provide direction and ensure everyone understands the organization’s aims.
• Inadequate information - Decisions made without enough information can lead to poor outcomes. Proper research and data collection are essential for informed decision making.
• Overlooking risks - Ignoring potential risks can lead to unexpected setbacks. Conducting a thorough risk assessment and having contingency plans are vital to mitigate issues.
• Resistance to change - Resistance to change can hinder decision implementation. Effective communication and involving employees in the process can reduce resistance and ensure smoother transitions.
• Poor communication - Poor communication can cause confusion and lack of support. Clear, transparent communication ensures everyone is on the same page and working towards the same goals.
• Lack of follow-through - Even the best decisions can fail if not properly implemented and monitored. A detailed action plan and regular progress reviews are crucial to ensure effective execution and necessary adjustments.

Who Should Be Involved in Strategic Decision Making

Involving the right people in strategic decision making is crucial for its success. Here’s why:

• Leaders and executives : They provide vision and direction based on their experience and understanding of the organization’s goals.
• Managers and department heads : They offer insights into operational details and how decisions will impact day-to-day activities.
• Key stakeholders : These include investors, customers, and suppliers whose perspectives and interests are vital to consider.
• Subject matter experts : They provide specialized knowledge and advice on technical or industry-specific aspects relevant to the decision.
• Cross-functional teams : Including diverse perspectives ensures decisions are well-rounded and consider different angles.

By involving these stakeholders, organizations can make informed decisions that align with their goals, engage those affected, and enhance the decision’s overall effectiveness

In conclusion, strategic decision making is crucial for organizations to succeed in today’s fast-changing business world. By using tools like SWOT analysis and scenario planning, leaders can make confident choices that drive innovation and growth. Remember to stay flexible, focus on long-term goals, and keep learning from each decision. With strategic decision making as your guide, your organization can navigate challenges and seize opportunities to achieve lasting success.

Join over thousands of organizations that use Creately to brainstorm, plan, analyze, and execute their projects successfully.

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Amanda Athuraliya is the communication specialist/content writer at Creately, online diagramming and collaboration tool. She is an avid reader, a budding writer and a passionate researcher who loves to write about all kinds of topics.

How to Write a Successful Business Plan for Your Startup

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Learn step-by-step how to create a winning business plan for your startup. Easy-to-follow guide with practical tips.

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Introduction

Starting a new business is exciting. But you need a strong business plan to succeed. A business plan helps you know your goals. It guides your actions and decisions. It shows others, like investors, that you are serious.

A business plan also helps you understand your market. It helps you plan for challenges. It keeps you focused on your goals. With a good plan, you are more likely to succeed. Without a plan, you might face problems. A good business plan is your roadmap to success!

Why You Need a Business Plan

A business plan is very important. It helps you organize your ideas. You can see what you need to do first. It helps you set clear goals. You know what you want to achieve. You can plan the steps to reach your goals. A business plan shows others you are serious. Investors and banks want to see a plan. They need to know you have thought things through. It also helps you track your progress. You can see if you are on the right path. If not, you can adjust your plan.

A business plan helps you stay focused. It reminds you of your main goals. It helps you make better decisions. Without a plan, you might feel lost. A strong business plan may be the difference between success and failure.

What to Include in Your Business Plan

Your business plan should have several parts. Each part is important. Here is what you need to include:

• This is a brief overview of your business.
• It includes your business name, what you do, and your goals.
• It should be short and easy to read. ‍
• Describe your business in detail.
• Explain what you do and what makes you different.
• Include your business structure (e.g., sole proprietorship, partnership, corporation). ‍
• Research your industry, market size, and trends.
• Identify your target customers.
• Study your competitors and what they are doing. ‍
• Describe your business structure and the people involved.
• Include an organizational chart if needed.
• Explain who is responsible for what. ‍
• Describe what you are selling.
• Explain the benefits of your products or services.
• Include any patents or trademarks if you have them. ‍
• Explain how you will attract and keep customers.
• Describe your pricing strategy.
• Include your sales process and tactics. ‍
• If you require money, specify how much and why.
• Include how you will use the funds.
• Describe your future financial plans, like when you plan to pay back investors. ‍
• Provide forecasts for your business’s future.
• Include income and cash flow statements, as well as balance sheets.
• Use realistic and accurate numbers. ‍
• Add any extra information that helps your plan.
• Include resumes, permits, and lease agreements.

How to Write Each Section

Writing each section of your business plan can be easy if you take it step by step. Here are tips for each section:

• ‍ Executive Summary : Write this last. It is a short overview of your business. Include your business name, what you do, and your goals. Make it brief but clear. People should understand your business quickly. This summary is at the beginning, but it is easier to write after you finish the other sections. ‍ ‍
• Business Description : Describe your business in detail. Explain what you do and why it is important. Highlight what makes your business unique. Include information about your industry. Describe your business structure. Mention if you are a sole proprietorship, partnership, or corporation. Be clear and concise. Focus on what sets your business apart. ‍ ‍
• Market Analysis : Research your industry and market. Look at market size, growth, and trends. Identify your target customers. Describe their needs and preferences. Study your findings. Show that you understand your market and customers. ‍ ‍
• Organization and Management : Describe your business structure. List the people involved in your business. Include an organizational chart if needed. Explain who is responsible for what. Highlight the strengths of your team. Show why your team is the right choice to run the business. Include information about your advisors or board members if you have them. ‍ ‍
• Products or Services : Describe what you are selling. Explain the benefits of your products or services. Highlight how they solve problems for your customers. Include any patents, trademarks, or other intellectual property. Describe your product lifecycle. Explain any research and development activities. Show why your products or services are valuable to customers. ‍ ‍
• Marketing and Sales Strategy : Explain how you will attract and keep customers. Describe your pricing strategy. Explain how you will reach your target audience. Include information about your sales process. Describe your marketing channels and tactics. Be specific about your strategies. Show how you will achieve your sales goals. ‍ ‍
• Funding Request : If you need money, explain how much and why. Describe how you will use the funds. Include your future financial plans. Explain when you plan to pay back investors. Be realistic in your requests. Only ask for what you need. Show how the funds will help your business grow. ‍ ‍
• Financial Projections : Provide forecasts for your business’s future. Include income statements, cash flow statements, and balance sheets. Use realistic and accurate numbers. Show that you have a solid financial plan. Include assumptions that support your projections. Show how your business will be profitable. ‍ ‍
• Appendix : Add extra information that supports your plan. Include resumes, permits, lease agreements, and other documents. Make sure the information is relevant. The appendix should provide additional details without cluttering the main sections of your plan. ‍

Following these steps makes writing your business plan easier. Each section has a clear purpose. When you finish, you will have a comprehensive plan. It will guide your business and show others you are prepared. A well-written plan increases your chances of success.

What Are Some Common Mistakes in a Business Plan?

Writing a business plan can be tricky. Many people make common mistakes. These mistakes might jeopardize your prospects of success. One mistake is not being clear. Your business plan must be easy to read. Avoid using jargon or complex words. Another mistake is not doing enough research. You need to know your market and competitors well. Lack of research makes your plan weak.

Overestimating profits is another mistake. Be realistic with your financial projections. Investors want to see accurate numbers. Don’t ignore potential problems. Addressing challenges shows you are prepared. Not having a clear marketing plan is also a problem. You need to know how to reach your customers. Your sales strategy should be specific and detailed.

Many plans lack a strong executive summary. This section is crucial. It is the first thing people read. Make it compelling and clear. Another mistake is not explaining your team’s strengths. Show why your team is the right choice. Highlight their skills and experience.

Ignoring the competition is a big mistake. You need to understand what your competitors are doing. Show how you are different and better. Not asking for enough funding is also a problem. Make it clear how much money you need and why. Explain how you will use the funds.

Another common mistake is not updating your plan. Your business plan is not a one-time document. Update it regularly as your business grows. Keep it up to date it with fresh information and changes.

Finally, not seeking feedback is a mistake. Get opinions from others. They can see things you might miss. Feedback helps you improve your plan. Avoid these common mistakes to make a strong business plan. A clear and detailed plan increases your chances of success.

The Importance of a Good Marketing Strategy

A good marketing strategy is key when you write a business plan. It helps you reach your customers and grow your business. You should understand who your consumers are and what they are looking for. A clear marketing plan shows how you will attract and keep customers.

Cost-effective marketing strategies are important for startups. They help you save money while reaching your target audience. Include online marketing, social media, and email campaigns in your plan. Show how you will measure your success. A strong marketing strategy makes your business plan more convincing. It shows investors you have a clear path to growth.

Frequently Asked Questions

Many people have questions about how to write a business plan. Here are some common ones:

Q: How long should a business plan be?

A: Your plan should be long enough to cover all important details. Usually, it is 15-20 pages.

Q: Do I need a business plan if I’m not looking for investors?

A: Yes, a business plan is still important. It helps you stay organized and focused. It helps you make decisions and measure your progress.

Q: How often do I need to update my business plan?

A: You should update your plan regularly. Review it every six months or when there are big changes in your business. Keep it current with new goals and information.

Q: What financial information should I include?

A: Include income and cash flow statements, as well as balance sheets. Provide realistic financial projections. Show your funding needs and how you will use the funds.

Q: How do I make my business plan stand out?

A: Be clear and concise. Use simple language. Highlight what makes your business unique. Include data and research to support your claims.

Q: Do I need a professional to write my business plan?

A: You can write your plan yourself. However, getting feedback from professionals can help. They can provide valuable insights and spot mistakes.

Q: What should I include in the executive summary?

A: Include your business name, what you do, and your goals. Make it short and compelling. It should give a quick overview of your business.

Q: How detailed should my market analysis be?

A: Your market analysis should be thorough. Include information about your industry, market size, and trends. Identify your target customers and competitors.

Q: Can I use templates to write my business plan?

A: Yes, templates can help. They provide a structure and ensure you cover all important sections. Personalize the template to meet your business needs.

Q: How do I handle confidential information in my plan?

A: Mark sensitive information as confidential. Share your plan only with trusted people. Use nondisclosure agreements if necessary.

These answers can help you write a strong business plan. A good plan guides your business and shows others you are prepared.

Final Thoughts

Creating a business plan for your startup is very important. It is your roadmap to success. You need to be clear and realistic. Your business plan shows your goals and how to reach them. It also shows others, like investors, that you are serious. Research is key . Know your market, customers, and competitors well. This helps you make smart decisions. Your marketing strategy needs to be strong and cost-effective. This helps you reach and keep customers without spending too much. Be honest in your financial projections. Show realistic numbers and clear funding needs.

Each section of your plan has a purpose. The executive summary gives a quick overview. The business description explains what you do. Market analysis shows you understand your industry. Organization and management highlight your team’s strengths. Products or services show what you sell. Marketing and sales strategies explain how you will grow. Funding requests and financial projections show your financial needs and plans. The appendix supports your plan with extra details.

Avoid common mistakes. Be clear and concise. Keep your plan updated. Seek feedback to improve it. Your business plan is a living document. It should change as your business grows. Writing a good business plan takes time and effort, but it is worth it. It guides your business and increases your chances of success.

A well-written plan can make the difference between success and failure. Be prepared, stay focused, and use your business plan as a tool to achieve your goals.

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Understanding POS Systems

Types of pos systems, factors influencing pos system costs, average cost of pos systems, how to choose the right pos system for your business, price of the most popular pos systems, how much does a pos transaction cost, is there a pos system for small businesses without monthly fees, what are the hidden costs associated with pos systems, how can i manage the cost of my pos system if i have a seasonal business, the bottom line.

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How Much Does a POS System Cost a Business Owner?

The total cost can include software, hardware, payment processing fees, and other fees

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A point of sale (POS) system comprises the hardware and software that processes retail transactions. For business owners, a POS system is a crucial piece of technology that not only facilitates sales, but also streamlines the collection of important business data. 

If you are considering introducing a POS system to your business, it’s important to understand the costs associated with both the initial implementation and maintaining the system over time. Costs tend to vary by business size, application, and industry, so in evaluating different POS systems, business owners should consider both their operational needs and their budget constraints. For example, a small to medium retail business could pay about $39 to $89 a month for software, up to $1,500 for hardware and installation, and roughly 2.7% per transaction in payment processing fees.

Key Takeaways

• The total cost of a POS system includes expenses associated with hardware and software, as well as payment processing and additional fees.
• Costs can vary significantly based on business size, industry, and the specific features required from a POS system.
• Evaluating long-term costs and benefits, such as scalability and integration with other systems, is crucial in order to select the system that offers the best value.

In a retail business, a POS system facilitates customer payment transactions. It can encompass both hardware and software, including things like a cash register, barcode scanner, card payment terminal, receipt printer, or web-based checkout. 

Aside from streamlining the payment process, a POS system can provide valuable data to business owners, tracking things like inventory, sales , employee sales performance, and tax calculations. It also provides more flexibility and payment options, enabling businesses to sell online as well as at locations like fairs, trade shows, and farmers’ markets.

Different types of POS systems have been developed as new technology emerges. Traditional POS systems might be as basic as a cash register and drawer, but also might include add-ons like a card reading terminal, barcode scanner, receipt printer, computer or tablet screen, and software system. 

POS systems are often differentiated by the way they store data. For example, a POS system whose data is stored in a fixed server location is referred to as an on-premise POS system, whereas technological innovations have added cloud-based software to POS systems to store, manage, and integrate business data across different locations and systems. A hybrid POS system connects to a local server within a fixed location but can also take advantage of cloud-based data storage. 

Many POS systems have also developed wireless hardware and tablet or mobile phone integrations so that payments no longer have to be taken from a fixed location. For example, restaurant customers might find it more convenient to pay the bill at their table as opposed to having to line up to pay at the end of their meal.

Recently, companies and industry groups have been anticipating how AI might factor into aspects of POS software, such as the ability to forecast sales or inventory or make operational decisions based on past ordering data.

POS systems are made up of software and hardware, and the cost of running one may also include one-off or recurring fees. Here are some factors to consider in understanding how much a POS system will cost overall.

Hardware Costs

Depending on the provider and intended purpose, there can be a range of hardware associated with a POS system, including:

• Card readers
• Card payment terminals
• Payment registers
• Cash drawers
• Receipt, kitchen, label, and barcode printers
• Barcode scanners
• Display screens, tablets, and mobile devices
• Chargers and cables 
• Mounts and docks
• Weighing scales

The cost of POS hardware will depend on the number of units and accessories purchased, as well as the type of software it can run. For example, some systems are WiFi-enabled and equipped with an “offline mode” in the event of a power or internet outage. Other systems are designed to withstand the demands of environments like a kitchen, with “spill-proof”–rated restaurant-grade materials.

Software Costs

POS software is typically offered in monthly subscription packages with features that differ according to the use case of the retailer. For example, Shopify and Square offer a range of packages at a fixed monthly rate, plus transaction fees for card payments. Typically, the plan increases in cost as more complexity or customization is required, such as having multiple locations or needing a certain number of user accounts. Some companies also charge setup fees or offer add-ons at additional cost.

Many POS companies offer other software that works in tandem with the POS system, for purposes like appointment booking, restaurant ordering, or inventory management, or their software is designed to integrate with other industry software. Some POS systems are also compatible with apps that unlock additional retailer capabilities, offering things like discounts, loyalty programs, marketing communications, ticket sales, and staff management.

Payment Processing Fees

Most POS providers charge a payment processing fee per transaction at a fixed percentage rate, and sometimes an additional fixed fee will apply. For example, Square charges from 2.6% + 10¢ per transaction.

Additional Costs

Additional costs associated with a POS system might include installation or setup fees, data conversion fees, team training, and tech or customer support. However, these costs are sometimes factored into the monthly subscription fee.

Other Variable Factors

Usually, adding complexity or customization to a POS system will incur further costs. For example, setting up a POS system across multiple locations, having a larger number of user accounts, adding software applications, or scaling the system to increase its speed and capacity can all increase the price of a POS system.

The cost of a POS system will vary depending on the needs of the business and generally increases with the complexity of the system, number of user accounts required, and number of retail locations.

By Business Size

A small to medium retail business should expect to factor in around $39 to $89 per month for software, up to $500 for hardware, up to $1000 for installation, and around 2.7% per transaction in payment processing fees.

Software costs for a larger, more complex business can be in the range of anywhere from $399 per month or higher, although payment processing rates tend to be more competitive (starting around 2.4% per transaction) due to the higher volume of transactions associated with a larger business. Installation fees and hardware costs can also be much higher due to the complexity of the system being installed.

By Industry

POS systems can be designed for a variety of retail applications, but they can also vary greatly by industry due to the features required by particular types of retailers. For example, making a payment at a hotel can be quite different from the payment process at a grocery store.

Certain sectors may face higher expenses due to the level of specificity required to design for their niche application. An all-purpose POS system such as Square is designed to appeal to a wide range of small businesses and has no monthly fee, whereas systems such as ITRetail that are designed for grocery stores can cost up to $149 per month.

Choosing the right POS system is a matter of assessing business needs against costs, features, and other requirements. Here’s what to consider in selecting a POS system for your business.

Assess Your Business Needs

Consider the number of locations where you need to have a POS system as well as the number of users who will need to have an account on the system. You’ll also have to determine the amount of hardware you’ll need, such as card payment terminals, scanners, registers, and printers. Access to a fast and stable internet connection is another consideration in deciding between an on-premise vs. a cloud or a hybrid system.

Compare Providers and Get Quotes

In comparing POS system providers, it’s important to consider cost, features, and scalability. You’ll want to minimize cost while ensuring that your POS system has all the capabilities your business requires, both in the short term and as your business grows or changes over time. Most POS system providers offer quotes or demos that are tailored to the specific needs of your business, so it’s a good idea to take advantage of this to ensure you have an accurate understanding of projected costs.

Plan for the Long Term

When picking a POS system, try to anticipate both long-term costs and benefits, such as the reliability of a POS system and the level of customer support offered by the provider. Payment processing fees are something that can add up very quickly, so if your business processes a high annual sales value, it can be a strategic move to choose a POS system provider that offers a better rate over a certain threshold.

Some POS systems, such as Toast and Square, offer mobile hardware or hardware that is compatible with mobile devices.

Here is a breakdown of the costs associated with some popular POS systems.

Shopify offers multichannel selling (both online and in-person) with a variety of software plans aimed at different sized retailers; these range from $5 per month to $399 per month. Hardware costs vary depending on the units and accessories required, but a card reader starts at $49, a mobile POS device at $299, and a countertop kit at $459.

There are no setup fees with Shopify and their payment processing fees range from 2.4% + 10¢ to 2.9% + 30¢ per transaction.

Square provides ecommerce and in-person POS systems for retail, food and beverage, professional services, and beauty companies, as well as scalable solutions for large businesses.

Their hardware starts at $10 for a mobile card reader, with no installation fees or monthly software costs. The only recurring cost is for payment processing, starting at 2.6% + 10¢ per transaction.

Toast is a POS system for restaurants that offers payment solutions for in-person and online customers. Software and hardware start at $0 per month, and installation costs vary depending on the specific equipment required.

Payment processing fees for Toast are set at a custom rate that is “specific to the characteristics of your restaurant.”

TouchBistro

A cloud-based POS system, TouchBistro is specifically aimed at helping different types of restaurants sell online and in-person. Their POS software plan starts at $69 per month and hardware costs are available upon requesting a quote. They do not specify whether they charge installation fees, only that “hardware and additional fees may apply.”

TouchBistro’s payment processing services are available as an add-on, referred to as TouchBistro Payments; pricing is available upon requesting a quote.

Lightspeed offers online and in-person POS solutions for retail, restaurants, and golf businesses. Their restaurant plan starts at $69, while their retail plan starts at $89.

Hardware costs depend on the exact equipment purchased, but a credit card reader starts at $79, a countertop terminal at $199, and a mobile terminal at $299.

Lightspeed doesn't specify whether installation fees are included, and they charge 2.6% + 10¢ per transaction for payment processing fees.

Pricing for Lightspeed Golf is available upon requesting a quote, but the business promises “fixed rates” for payment processing, “flexible payment options,” and “no long-term contract.”

Payment transaction fees vary depending on the POS system provider, but POS transaction rates can range from 2.4% to 3.5% for credit card transactions.

Square is a POS system provider that does not charge monthly fees. They charge for hardware, starting from $10, as well as card payment processing fees (from 2.6% + 10¢ per transaction).

The cost of a POS system can vary greatly depending on the amount of hardware required and the amount of transactions processed. In addition to monthly software fees, POS system providers may charge for installation, data conversion, training, or customer support.

Owners of seasonal businesses may find it helpful to choose a POS system provider that has no or low monthly fees or offers a month-to-month subscription plan with no cancellation fees.

When selecting a POS system, it’s important to carefully consider the needs of the business when it comes to processing payments. The cost of implementing and running a POS system can quickly escalate depending on the amount of hardware needed to furnish a retail location and the number of transactions processed. Business owners might look to industry-specific POS systems for solutions that are tailored to their application, such as omnichannel sales, specialized retailers like grocery or liquor, or low-volume in-person selling. 

U.S. Small Business Administration. " What Is a POS and Why Does Your Business Need One? "

National Retail Federation. " How Artificial Intelligence Will Change Retail ."

Square. " Hardware Accessories ."

Toast. " Point of Sale Software ."

Square. " Pricing ."

Shopify. " POS System Pricing ."

Shopify. " Shopify App Store ."

Square. " Square Payments Fee Calculator ."

SmartPOS Software. " On Premise POS Software ."

Square. " Pricing for Square POS System ."

Toast. " Payment Processing Fees ."

Toast. " POS Pricing ."

Shopify. " How Much Does a POS System Cost? (Price Guide) ."

ITRetail. " Pricing ."

Shopify. " Pricing ."

Shopify. " POS Hardware for Business ."

IT Retail. " IT Retail Point of Sale ."

POS Nation. " Point of Sale (POS) Systems ."

POS Nation. " Hardware ."

Square. " POS Systems ."

Square. " Square Reader for Magstripe ."

Square Support. " Learn About Square Fees ."

TouchBistro. " Hardware Requirements ."

TouchBistro. " POS Pricing. "

TouchBistro. " Restaurant Credit Card Processing Made Easy With TouchBistro Payments ."

Lightspeed. " POS System Price for Retail ."

Lightspeed. " Restaurant POS Systems Pricing ."

Lightspeed. " Products ."

Lightspeed. " Credit Card Readers ."

Lightspeed. " Lightspeed Golf Pricing ."

Square. " Point of Sale Features ."

TouchBistro. " Get to Know TouchBistro’s Restaurant POS System ."

Lightspeed. " Home ."

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More From Forbes

The ai maturity model and its impact on marketing.

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Alex Kudos has over 20 years experience in marketing and currently serves as CMO at Social Discovery Group.

Artificial intelligence (AI) is more than just a tech trend—it’s a transformative force that has altered the landscape of modern marketing. The integration of AI into marketing has flipped the industry upside down, and companies need to adapt to maintain their positions.

Incorporating AI into a marketing strategy can best be executed by following the steps of the AI Maturity Model , a framework that is used to assess and evaluate the level of maturity of an area within an organization. This model can help organizations enhance their AI capabilities systematically, understand the steps required to improve their processes and establish a road map for achieving their goals. To evaluate our stage with AI, Social Discovery Group followed this model, which transformed our company and helped us incorporate AI into everyday operations.

Understanding The Five Levels Of AI Maturity

1. Awareness: Companies have minimal knowledge about AI and are not using it but are curious about its potential impact.

2. Active Phase: Companies start using AI in specific areas like data science and analytics.

3. Operational Phase: Companies optimize processes and employ AI tools more broadly.

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4. Systematic Phase: Companies build new business models and tools to improve efficiency and innovation.

5. Transformational Phase: AI becomes part of the business’s DNA, exemplified by companies like Amazon and Google.

Social Discovery Group currently sits in level four but is on the verge of reaching level five, where it is being implemented across our company. We have built our own tools to improve efficiency and are continuously being innovative to make our business grow and help ensure our users have exceptional experiences.

It may be daunting to understand where a brand or business falls in its AI maturity, but once it is determined, here are the stages of the model to begin to implement.

Transitioning Through The Stages

Phase 1: analyze.

Evaluate current AI capabilities by conducting a comprehensive audit of marketing processes to identify gaps and opportunities. This sets the foundation for AI integration.

Phase 2: Plan

This phase is about developing a strategic approach to AI integration. Companies can start by identifying AI applications within their marketing operations. These might include chatbots for customer service, AI-driven content creation or machine learning algorithms for targeted advertising.

The planning phase involves prioritizing these AI initiatives based on their potential impact and feasibility. This ensures that resources are allocated efficiently and efforts are focused on high-impact projects. A well-defined road map is created, aligning AI initiatives with broader business objectives. This structured approach is essential for ensuring that AI integration is both strategic and scalable.

Phase 3: Experiment

With a clear plan in place, the next step is to experiment. This is where AI tools and technologies are deployed across various marketing functions. The focus here is on leveraging the AI strategy to drive efficiency, enhance productivity and improve business performance. During the experimentation phase, companies might pilot AI-driven campaigns, test automated content generation or deploy AI-powered customer segmentation models. This phase is ongoing, with continuous testing and refinement to ensure that AI initiatives deliver the desired outcomes.

Phase 4: Evaluate

Measure and optimize AI initiatives' performance by monitoring KPIs and using data to assess effectiveness. Refine strategies based on insights to ensure AI solutions evolve with changing business needs and market conditions.

Phase 5: Innovate

Foster a culture of innovation and experimentation. In this phase, organizations might invest in cutting-edge AI research, explore novel AI applications or partner with AI startups to stay at the forefront of technological advancements. By embracing a forward-thinking mindset, companies can identify untapped business potential and pioneering solutions that set them apart from competitors. Innovation is key to sustaining growth and staying ahead in the rapidly evolving AI landscape.

By following the AI Maturity Model, companies can systematically integrate AI into their marketing strategies and harness its full potential. This structured approach helps ensure that AI initiatives are strategic, impactful and continuously evolving, enabling organizations to stay competitive and achieve sustained success in the age of AI-driven marketing.

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Average 401(k) balance by age

Average 401(k) balance by income level, average 401(k) balance between men and women, average 401(k) balance by industry.

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Average 401(k) Balance by Age in 2024: Benchmarking Your Retirement Savings

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• The average 401(k) balance is $112,572, according to Vanguard's 2023 analysis of over 5 million plans.
• But most people don't have that much saved for retirement.
• The median 401(k) balance is significantly lower at $27,376, more reflective of how most Americans save for retirement.

A 401(k) account is an employee-sponsored retirement vehicle that allows you to contribute pre-tax income toward your retirement. As one of the best retirement plans for US employees, a 401(k) lets you reduce the amount of income you're taxed on and lets your funds grow tax-free.

Every year, Vanguard analyzes account data from millions of retirement accounts in a report titled " How America Saves. "

Knowing the average 401(k) balance by age group and income level can help you determine how much you need to retire . Here's the average 401(k) account balance based on age in 2024. 

Understanding the average 401(k) balance in 2024

According to Vanguard's annual data report, the average 401(k) account balance in 2024 was $134,128, an increase from 2023's average balance of $112,572. 

Across these accounts, the typical account balances vary widely by the method used to calculate it — while the average 401(k) savings balance is well over $100,000, the median account balance is much less at $35,286, according to Vanguard's latest data.

The Vanguard data is broken down by demographics, showing a wide range of average account balances across various age ranges, income levels, industries, and genders. Here's a breakdown of those balances.

Retirement savings grow with compound interest , which means account balances increase with time. Like other types of retirement accounts, money saved in a 401(k) grows like a snowball, with interest earning interest on itself. The older you are, the more time you've had to build up your savings.

With compounding interest, the earlier money is put into an account, the more opportunity it has to grow and the greater the possible returns. In retirement accounts like 401(k)s, building retirement savings early means a greater opportunity for growth. 

According to Vanguard, here's the average amount people have saved for retirement by age group. 

Check out Personal Finance Insider's retirement calculator to see how much of your annual income you can afford to put away. 

Ages 20-29: Laying the foundation

Most 20-year-olds are just starting to contribute a small amount of money toward a 401(k) or equivalent retirement plan. Between lower salaries, rent payments, student loans, and other living expenses, younger individuals typically can't contribute much toward retirement. But that's okay as folks in their 20s have time on their side.

Contributing a little here and there is better than nothing at all. 

Ages 30-39: Building momentum

People in their 30s often have increased financial freedom to put more money toward retirement. Contributions should be increasing annually. However, you may be distributing funds between different savings and investment accounts if you're planning for other big life events like having kids or buying a home.

This a good time to make calculated risks, as you still have time to recover from larger losses. 

Ages 40-49: Mid-career financial growth

Folks in their 40s should be contributing a much larger portion of their income toward retirement. Aim to maximize your contributions and take full advantage of employer benefits like 401(k) matches. Start shifting your investment portfolio to a more conservative risk tolerance so that a larger percentage of your money is invested in low-risk bonds and other fixed-income securities. 

Ages 50-59: Preparing for the transition

As you near retirement age in your 50s, take advantage of catch-up contributions, maximize your 401(k) savings,  and avoid high-risk investments. Finalize your retirement goals and continue storing as much as possible in a retirement account. 

You might also consider adjusting your retirement timeline. Pushing back your retirement date allows you to put more of your employment income aside for retirement and may increase the amount you receive in Social Security benefits.

Ages 60 and up: Finalizing the retirement strategy

Adjust your investment portfolio as needed, and make sure you understand the tax implications of withdrawing funds. Depending on your retirement account type (traditional or Roth), you may have to pay taxes on your withdrawals. Moreover, your portfolio should be adequately adjusted for stability and should provide a steady source of reliable income. 

Vanguard's data shows that 401(k) balances are greatly influenced by annual income. Across all age groups, the amount people save for retirement increases with their earnings. However, households with a higher annual income had lower average and median 401(k) balances than in previous years. 

Here's the annual income compared against the average 401(k) balance and median 401(k) balance:

On average, men save more for retirement than women. 

Across all age levels, Vanguard's data indicates that women have a median 401(k) account balance of just over $11,099 less than men's.

A 2023 report from the Bureau of Labor Statistics shows that the average woman makes around 86 cents for every man's dollar, which affects how much women can put away for retirement.

While a large disparity in savings exists, women often need greater retirement savings than men to retire comfortably. Women tend to live longer and, therefore, need more long-term care than men, which could require greater spending in retirement.

Balances also vary widely among industries. One possible explanation is that employer match benefits, in which an employer matches an employee's contributions to their savings up to a given percentage, may be more common in some industries than others. Earnings could also affect how workers in a specific industry save.

Here's how the average balances break down by industry.

People who work in agriculture, mining, and construction contribute significantly to retirement, with the average industry worker's account balance well over $180,000. However, teachers, healthcare workers, and people who work in wholesale and retail tend to lag behind, with average account balances under $97,000.

Enhancing your 401(k): Strategies for success

1. start early, contribute often.

Time is a crucial part of financial planning for retirement. Contributing money toward retirement savings allows compound interest to work magic and combat inflation. Even modest contributions can grow into significant savings over time when deposited regularly. 

Ideally, you'll be able to contribute more as your salary increases and your financial situation improves. However, ensure not to over-contribute and lose access to money you'll need shortly. Setting aside cash in an emergency fund is a great way to avoid a 401(k) early withdrawal before your 59 1/2.

2. Take advantage of employer-match benefits

A common benefit with 401(k)s is an employer match benefit, and it's essentially free money. Employers can match a dollar-for-dollar or partial match of an employee's retirement saving contributions. If you can swing it, contribute enough to unlock your employer's full contribution amount and hit your retirement saving benchmarks. 

Under the Secure 2.0 Act, employers can now offer a student loan match to their employees' retirement savings plans when they make qualifying student loan payments. 

3. Diversify investments

Diversifying your investment is key to managing risk and volatility in your portfolio. Investment diversification in a 401(k) may also boost growth by getting exposure across multiple market sectors and different kinds of assets.

You can easily diversify your investment portfolio by investing in different stocks, bonds, ETFs, mutual funds, and alternative investment options like real-estate and commodities. 

4. Mind the fees

High management fees can erode your savings over time. Pay attention to the fee schedules and manage 401(k) fees in your plan by investing in low-cost funds like ETFs. If you have an old employer's 401(k) plan, consider rolling over the assets into a new IRA because IRAs vs 401(k)s offer lower fees and more investment opportunities. 

5. Regular rebalancing

As the market fluctuates, so will the composition of your investment portfolio. Your age and proximity to retirement also influence how your portfolio should be allocated. Regular rebalancing is key to keeping your investments on track and maximizing your 401(k) contributions to reach your goals and stay aligned with your risk tolerance. 

Average 401(k) balance FAQs

How much you should save in your 401(k) varies by age. You should aim to save 1x your annual salary by 30, 3x by age 40, 6x by age 50, and 8x by age 60. The best way to reach these age markers is by starting early, consistently contributing, and adjusting based on income, lifestyle, and retirement goals to ensure financial security. 

The average 401(k) balance varies by age. Generally, individuals under age 25 have around $7,000 in retirement savings, and individuals between 25 and 34 have around $37,000 in retirement savings. People aged 55 and 64 have around $244,000. 

Your 401(k) is your future

A 401(k), 403(b), or other retirement plan is more than a savings account. Retirement savings plans are a wealth-building tool to ensure a comfortable, secure, and stress-free retirement. By understanding how age, income, and gender impact your retirement savings, you can make better-informed decisions that align with your demographic and investment goals. 

But you'll need a well-thought-out financial plan before you can reap the rewards of your retirement savings. Consult a financial expert like a fiduciary or CFP for professional management and guidance. 

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An Escalating War in the Middle East

Tensions are on a knife edge after israel carried out a strike on the hezbollah leader allegedly behind an attack in the golan heights..

Hosted by Sabrina Tavernise

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Over the past few days, the simmering feud between Israel and the Lebanese militia Hezbollah, has reached a critical moment.

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On today’s episode

Ben Hubbard , the Istanbul bureau chief for The New York Times.

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Israel says it killed a Hezbollah commander , Fuad Shukr, in an airstrike near Beirut.

The Israeli military blamed Mr. Shukr for an assault on Saturday that killed 12 children and teenagers in the Israeli-controlled Golan Heights.

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