Over the past 20+ years, Growthink has developed strategic plans for thousands of companies big and small. Many of them have gone on to achieve incredible success. Below please find our thinking on the strategic planning process and how to create a great strategic plan for your business.
Strategic Planning Overview
Organizations undertake strategic planning to define their business priorities and align their resources in pursuit of those priorities. Strategic planning is a crucial tool that can refocus a business’ energies to where they will be best spent.
In spite of the great importance and scope of a strategic plan, many times it is ignored or quickly completed each year with no strategic focus. Or it is created, but results are not measured against it. The end result is a strategic plan that is neither strategic nor even a plan.
Successful companies, on the other hand, have and continue to make use of strategic planning to consistently stay on top of their game. You can too. Below we offer a comprehensive strategic plan template that can easily be used to initiate and establish effective strategic planning in your organization. The template discusses the 13 elements you must include in your strategic plan as follows:
- Executive Summary
- Elevator Pitch
- Mission Statement
- SWOT Analysis
- Key Performance Indicators (KPIs)
- Target Market Analysis
- Industry Analysis
- Competitor Analysis
- Marketing Plan
- Human Resources Plan
- Operations Plan
- Financial Projections
Ensure your strategic plan begins with a summary that succinctly captures the gist of the plan and its key takeaways. Needless to say, you will be able to construct a summary only after the other elements of your strategic plan have been completed.
Including a summary is important because it allows you to quickly and effectively present your strategic plan to key stakeholders. It is crucial that you are able to disseminate the strategic plan throughout your organization as its success hinges on everybody’s buy in and support.
An elevator pitch refers to a brief but memorable description about what your business does. At its core every strategic plan is reviewing, and if need be, re-defining a business’ core purpose. So, at the end of a strategy planning meeting, a catchy elevator pitch should be created that should reflect the key findings of the new strategic plan. This will ensure that all your employees are on the same page when it comes to the main impetus of your business. They will be able to articulate the same at investor meetings, networking events or even in a casual chat at a get together. Presenting a clear and consistent vision of the business is instrumental in getting the right people interested and opening up new opportunities.
Since an elevator pitch is a short yet striking description of the business it also helps motivate employees causing them to work hard and take pride in their organization. Such fostering of a positive culture will attract impassioned people to your organization as well. For example, Microsoft in its founding days worked with the following pitch:
Such inspirational statements are the direct result of strategic planning efforts and have wide- ranging benefits for a business.
A business mission statement describes the most vital objectives of an organization. It acts as a guide post for all organizational deliberations and decisions along with being a visionary declaration to potential investors, collaborators, partners and customers. Consider the multinational tech giant Philips and their mission statement which goes as follows:
Your strategic plan should include a similarly inspirational mission statement so that business efforts are geared towards that one end goal.
SWOT analysis stands for evaluating a business’ inner strengths and weaknesses along with its external opportunities and threats. This is a holistic way to try and understand the inner workings and outer environmental factors that drive an organization. It is essential to a good strategic plan. A well-researched and thorough SWOT analysis will ensure that your strategic plan is capable of harnessing your business’ strengths to exploit different market opportunities while subverting threats along the way. Furthermore, it will also take care of any blind spots you might have had regarding your organization’s weaknesses and market risks.
To create a plan that is truly strategic you need to spend a good amount of time conducting a SWOT analysis and thinking deeply about each of its individual elements.
Successful companies set ambitious yet achievable goals for themselves and strategic planning helps businesses do precisely that. First, you need to discuss and come up with long term goals for your company, like what you would like your organization to have achieved in the next five years. Then focus on the immediate future like what milestones you would want to achieve in the very next year. Setting both long- and short-term goals are essential to a company’s success.
Depending on your objectives you can even narrow your goals down to quarterly, monthly or even weekly goals. Clearly laying out a business’ goals ensures that people expend their energies towards things that actually matter.
While creating goals keep the following things in mind:
Do Not Go Very Broad
Avoid goals that are sweeping. For example, business objectives like ‘being successful’ or ‘being profitable’ are too broad to be useful. This can instead be re-framed as “increasing sales by 20% in the next quarter” for instance. Strategize for goals that are easy to understand and act upon. This will also make it easy to evaluate performances later on and find out how well or poorly the business did. Effective goals are goals that can be measured. Strive for these.
While setting goals it is easy to get carried away. Setting overly ambitious or practically unattainable goals will cause a significant drop in organizational morale as people get frustrated or even burnt out in pursuing such goals. Instead, set goals that are ambitious but within grasp.
Set Time-Bound Goals
Your strategic plan must include goals with realistic deadlines. Time specific goals allow employees to plan their work more effectively, making it more likely that the goals will be met.
Key Performance Indicators (KPIs)
KPIs allow you to track your progress in your quest towards achieving your end goals. Examples of common KPIs include measures like profit margins, total sales, and client retention rates among others. Strategic planning requires certain KPIs to be set beforehand so that performance of different business units can be recorded and evaluated later.
Figure out what the business needs from every stakeholder in order to improve performance and create separate KPIs accordingly. For example, KPIs for the marketing department will be different from those set for the human resource department and so on.
Target Market Analysis
Here, you must identify who your target customers are and document their needs. Your strategic plan must be directed completely towards them. Core business endeavors like product development and marketing can only be successful when you keep your target market’s demographics and needs in focus.
Your strategic plan is worthless if it tries to win over every customer segment in the market. It will most probably end up attracting none. Instead, a strategic plan must pinpoint the target customers whose conversion and retention will provide the business with the highest return on its expenditures.
Your industry analysis provides an overview of your market as well as defines the market opportunities highlighted in the SWOT analysis earlier.
You should discuss the market size and key trends. Discuss if the market is declining or growing. You must also identify your current position and desired future position in the marketplace.
Competitor analysis is another crucial strategic tool which helps you analyze your competitors to better understand their workings and position in the market in which you operate. It is essential to keep a close eye on competition so you can learn from their strengths and exploit their weaknesses.
Competitor analysis coupled with a broad industry analysis also forces you to think about other organizations that might turn into your competitors if industry trends change or markets mutate.
Most importantly, in this section figure out the best positioning of your business in the competitive mix. Importantly, figure out your current competitive strengths that you can exploit, or competitive strengths you need to gain in the coming period and how you will go about achieving them.
Although a marketing plan is a full- fledged plan in its own right, here you can summarize and add the keys to your plan. This way any stakeholder reading the strategic plan will also be informed of how the organization intends to attract its target customer base, retain its existing customers and convert new customers. So, include a brief summation of all the findings and objectives of your marketing plans.
Human Resources Plan
In this section of your strategic plan you must analyze your human capital to see if you have the right people in the right places to execute the end goals established earlier. You will need capable people at the helm of different departments to make the most of your opportunities and strengths.
If you feel you need to hire more people or people with certain specific competencies then this is the place where you and your team should deliberate and document your human resource requirements. For instance, if your strategic plan includes diversifying into a new market then it would be pertinent to start creating detailed job descriptions and interviewing people to execute on this initiative. This way you will not impede your diversification plans due to a hiring crunch or having the wrong people trying to execute critical tasks.
Your operations plan describes the nitty gritty of exactly how your organization will go about realizing its goals.
Here you must narrow down the overarching strategic aim of the business into smaller tactical goals to be executed by specific departments and/or teams. In this section, you will detail each of these goals along with action plans for achieving them. We suggest using Gantt charts to map out the way your departments will attain key goals over time.
Finally, we come to the last part of a strategic plan: the financial projections. In this section you attach some hard numbers to the projects you have decided to undertake in the course of developing your strategic plan.
Creating financial forecasts allows you to estimate the potential results of different strategies and analyze which might have the best impact on your business. Even when they are based on estimates, financial projections are able to reflect business realities pretty accurately provided your assumptions are realistic.
Importantly, use your financial projections as KPIs to judge your performance as you execute on your strategic plan.
Strategic Plan Development – Conclusion
Be sure to include each of the elements outlined above in your strategic plan. Then, at the end of each month review your actual performance against your goals and projections in your plan. If you are on target, continue as planned. If not, consider adjusting your strategy or your plan. The key is to constantly adjust your performance and plan so that you continuously achieve milestones and achieve, over the long-term, the success you desire.