Key components of a strategic plan
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It’s no secret that many businesses fail within their first 10 years. Poor planning is often cited as a top reason for that failure. To improve your chances of thriving as a business, you need a well-designed plan that includes the elements of a strategic plan that have proven to be successful for other businesses.
Your strategic plan should be the result of extensive research of the current market, industry trends, and competitor analysis. It can help you establish your company vision and mission and determine where your organization needs to go and what you need to do to get there.
Why is strategic planning important?
If you build it, they will come.
That’s a nice line from a movie, but it rarely leads to real life success in the business world. Having an idea and opening a shop doesn’t mean that crowds will line up outside your door clamoring to buy your product.
A well-designed strategic plan communicates a clear idea of what you want to do with your business. This clarity will have a positive impact across your organization including helping your employees understand how to perform their jobs and, even more importantly, why their jobs matter to the success of the business as a whole.
Strategic planning is essential to understanding where your business fits in a particular market, and how your product or service adds value to that market. It helps you stay focused on your target audience and determine what needs your products can satisfy.
Understanding the strategic planning process
The strategic planning process is simply the method your company uses to determine how you will achieve your goals and grow your business. The process helps you to determine which strategic goals you should focus on to move your business forward.
How you go about working through the process will depend on the size of your business, how much time you have, and your personal preferences. No matter how you approach strategic planning, your process should include the following steps:
- Determine your strategic position—Perform a SWOT (Strengths, Weaknesses, Opportunities, and Threats) or a PEST (Political, Economic, Sociological, and Technological) analysis to get a better idea of where your company currently is so you can figure out where it needs to go.
- Prioritize your objectives—Determine which objectives you should pursue that align with your vision and mission and that will help you reach your goals.
- Develop a plan—Identify what you need to do to achieve your goals. Include a timeline and clearly communicate roles and responsibilities.
- Execute and manage the plan—Executing on a plan is what transforms ideas into meaningful action. Implement your plan and monitor your progress.
- Review and revise—Strategic planning isn’t a one-time thing. If you want to stay ahead, you always want to be looking for ways to improve and streamline processes. Review your plan so you can reevaluate priorities and make course corrections as necessary to stay on track.
Key elements of strategic planning
Your strategic plan is a living document that you will need to review and update from time to time. Whether you are creating a plan for the first time or revising an existing one, there are a number of elements that you include in your plan.
Here are some of the basic elements of a strategic plan to get you started:
Create a vision statement
This is an aspirational description of what you want to do with your organization. It’s probably the goal that inspired the creation of your business in the first place.
The vision is meant to give your business direction by describing the long-term goal that the company wants to achieve. In other words, it’s what you want your business to be recognized for or associated with in the future.
Your vision statement should be short and simple. You don’t need to use a lot of business jargon or big words to state where you would like your company to go. For example, look at Google’s vision statement: “To provide access to the world’s information in one click.”
This vision statement is concise, easy to read, and simple to understand. And there is no denying that the company has been successful.
Write your mission statement
The mission statement describes why the business exists. The mission statement is used to back up your vision and explains the company’s purpose in simple terms. It can define the company culture, its values and ethics, and agenda.
A mission statement should be easy to understand so that employees can stay focused on what they need to do to reach stated goals. For example, Google’s mission statement uses simple language to back up it’s vision: “Organize the world’s information and make it universally accessible and useful.”
This mission statement clearly indicates that providing access to information is not enough. The information needs to be organized so it is more useful to users and it needs to be accessible to the entire world.
Your mission statement helps your employees understand their roles and why they are assigned specific tasks. Without a mission statement, your employees are left to interpret the “why” of the company’s vision, which could lead to conflicting strategies and ideas for future development.
A business objective is the specific result that your company is aiming to achieve. While a goal describes a broad outcome, a business objective is a measurable step that needs to be taken to reach that goal.
For example, one of your goals might be to keep employees productive. Your objectives to reach that goal might include employee training, equipment maintenance, and purchasing new equipment to ensure that you have the resources needed to get the job done.
Objectives are typically set for long-term goals that may take several years to achieve.
Your strategies define your long-term plan or plans that you will follow so you can achieve your prioritized objectives. Your strategies might also describe the projects, programs, and specific steps your company and employees will take to execute your objectives.
It’s possible that you will need a separate strategy for each objective, depending on scope and complexity. Strategies are specific and usually only shared within an organization. After all, you don’t want to give away your game plan to the competition.
Here are some other key components of a strategic plan that you might want to include:
- Measurements: Define how you will track your company’s output and progress.
- Funding streams: Include a financial analysis that looks at past performance and projected performance. This will give you and investors an overview of your company's current and potential financial health.
- Core values: A set of principles that define how a company interacts with employees, customers, and stakeholders.
If you need a good tool that will help you work through your strategic planning process, Lucidspark is ideal for virtual collaboration and visual planning. Lucidspark is a virtual whiteboard that lets you bring together the people who will help you develop your strategic plan. It doesn’t matter where they are in the world, Lucidspark brings everybody together to engage in dynamic brainstorming sessions and scope out how you will bring your ideas to life. Once you’ve voted on ideas and decided which ones have the most potential, use Lucidchart to map out the process flows and roadmaps that will get your projects across the finish line.
Now it’s your turn! Conduct your own strategic planning session using Lucidspark.Here’s how
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