Strategic planning refers to the process of identifying and documenting a business's mission and values. With a well-defined framework that outlines a brand's priorities, executives can develop long-term and short-term objectives, make informed decisions, and appropriately allocate resources.
This can effectively drive managers and staff to be productive and motivated in reaching business goals.
6 Key Elements of Strategic Planning
A strong and comprehensive strategic plan puts organizations in a position where success is achievable. In order to create a strategy that is proactive and efficient, businesses should consider the 6 key elements.
1. Identify a Vision
Organizations will generally begin their strategic planning by identifying their vision and developing a vision statement, which is a description that details what the brand wants to achieve in the future.
With a clear vision, executive teams will be able to direct their focus in the right direction and formulate courses of action that will help them accomplish their goals.
It is also helpful to define the business's themes, which are categories that outline a strategic plan's structure and tone. For example, a government agency's theme may be public safety, quality of life, and transportation. On the other hand, a restaurant's theme could be innovation and customer relationships.
2. Develop Goals
Creating goals will help businesses define what success looks like, as well as provide visibility into whether they are on the right track to achieving their vision. Additionally, developing objectives will enable executives to see if their strategic plans are working as intended.
Organizations will typically set short-term goals, as well as long-term goals to maintain focus. For instance, a retailer's long-term objective may be to double revenue in 3 years while their short-term goal is to improve the quality of customer service.
Executives should ensure that all staff is aware of and understands the company's aspirations. This will ensure that everyone is on the same page and working towards a shared goal.
3. Establish Key Performance Indicators (KPIs)
Key performance indicators are metrics that indicate a business or an individual's progress. Executives can establish KPIs by assessing the various measurable values their goal or operation has.
A clothing store, for example, would measure the quality of customer service by looking at online reviews, sales, and the time it takes a staff member to satisfy an order.
With, KPIs, executives can easily manage their goals and see the impact of their strategic plans. It will also help managers make data-driven decisions on how the strategy can be adjusted or how operational flow can be improved.
4. Create a Strategy
Developing clear and effective strategies are vital to a brand's long-term success. Strategies are specific plans for each business objective and are typically set for 3-5 years. Management should only share their plans to staff within their organization to gain a competitive edge.
When creating a strategy, executives must consider what their organization needs and conduct market research to better understand their industry and consumer base. This will enable teams to have innovative and unique thinking, as well as ensure actionable plans are being made.
A successful strategy should also address various obstacles or pitfalls that may occur in the future, and establish preventative measures that must be taken to mitigate them. This will prevent initiatives from encountering and stalling due to roadblocks.
5. Map Down Actions
The strategic plan must define actionable initiatives, projects, and tasks that the organization will execute to meet its objectives. These actions should align well with a business's vision, mission, and goals. This includes allocating resources, creating programs, hiring employees, and conducting staff training.
This is an important element of strategic planning because it demonstrates how achievable an organization's goals are.
6. Monitor Daily Operations
To better understand whether the strategy is working, organizations must monitor and assess the daily activities in their office, warehouse, or brick and mortar location. This can help executives identify and remediate small issues, such as understocking of inventory or inconsistent supplier delivery.
By monitoring daily operations, managers will also be able to make sure that employees are productive and that business plans are efficiently put into motion.
Establishing and monitoring KPIs would help assess day-to-day activities. For example, if a restaurant's objective is to increase revenue, they can track the number of sales made each day, what customers are ordering, and how quickly the food reaches dining guest's tables.
Management should also engage with their employees and collect feedback. Not only can this enable executives to be aware of operational improvements that need to be made, but it can also make employees feel valued. In turn, satisfied employees will be motivated and determined to help businesses meet their goals.
By effectively developing strategic plans, organizations will create a sense of direction and cultivate a strong foundation to be successful.