Strategic planning is a process every business needs to master, yet many fail to do. It is not that they do not want to plan for the future. They just do not know how to initiate the process and then follow through until a high quality strategic plan is developed. The best way to approach strategic planning is to think in terms of asking the right questions and giving honest answers.
What are the right questions? The first question is: What does "strategic" mean? Making everyday decisions that keep the business running is not the same as making strategic decisions. For example, consider this question: How can we improve customer service? This is a question that drives decisions about software, staffing, social media utilization, shipping, and so on. However, stopping at analyzing the status quo is not strategic planning. Every business wants to offer excellent customer service or improve delivery times, and they want to do it right now and not five years down the road.
Strategic planning is a process for setting future goals or determining where the business needs to be heading to improve competitiveness in a volatile marketplace. Managers should be asking: Where are we now and where to we want to go from here over the next five years. A business would not ask: How can we improve customer service today? It would ask: What future customer problems can we solve through innovation, changes to business activities, and/or partnering with strategic partners?
What is the Ideal Business?
Strategic planning does include a review of current business activities but with a new perspective. Instead of simply reviewing current activities to find areas ripe for improvement, business leaders ask: What outcomes do we want to see in five years and what must be changed and accomplished to achieve those outcomes? A strategic planning process framework begins with identifying boundaries of decision making, analyzing the status quo, identifying and assessing strategic options, selecting the strategic goals, and deploying the strategy.
Once a strategy for reaching outcomes is defined, the business plan incorporates the strategic plan. Following are some of the critical questions that business leaders must ask in order to be strategic in their planning.
• What type of innovation does the business want to develop and offer the marketplace? (Apple is working on a smartphone camera that is as good as a digital camera, but they do not expect the technology to catch up for more than two years. That is strategic thinking.)
• What market will be targeted in the future, i.e. going deeper into the current target market or adding new markets?
• What are the risks, and how can they be minimized?
• What skills will the workforce need for the business to achieve outcomes, and how will the talent pipeline be filled?
• What is the profit goal for the next five years?
Fitting the Pieces Together
The strategic planners asks questions about industry trends, potential competition, existing competencies, and resources. How will the business ensure all the pieces are in place to reach outcomes?
Some people define strategic planning in terms of the who-what-when-where-and-how model. It may seem old-fashioned, but defining each component ensures the enterprise has considered the many factors that influence outcomes. Assemble a team of planners, ask the right questions, and the business is sure to be steered in the right direction to achieve sustainability. The strategic plan is a brand new roadmap for reaching goals.