strategic planning helps managers and employees show to the organization’s goals

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:

• Broad Factors Analysis
• Scalability
• Systems Thinking
• See all management & strategy resources
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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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What is strategic planning? A 5-step guide

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. In this article, we'll guide you through the strategic planning process, including why it's important, the benefits and best practices, and five steps to get you from beginning to end.

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. The strategic planning process informs your organization’s decisions, growth, and goals.

Strategic planning helps you clearly define your company’s long-term objectives—and maps how your short-term goals and work will help you achieve them. This, in turn, gives you a clear sense of where your organization is going and allows you to ensure your teams are working on projects that make the most impact. Think of it this way—if your goals and objectives are your destination on a map, your strategic plan is your navigation system.

In this article, we walk you through the 5-step strategic planning process and show you how to get started developing your own strategic plan.

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What is strategic planning?

Strategic planning is a business process that helps you define and share the direction your company will take in the next three to five years. During the strategic planning process, stakeholders review and define the organization’s mission and goals, conduct competitive assessments, and identify company goals and objectives. The product of the planning cycle is a strategic plan, which is shared throughout the company.

What is a strategic plan?

A strategic plan is the end result of the strategic planning process. At its most basic, it’s a tool used to define your organization’s goals and what actions you’ll take to achieve them.

Typically, your strategic plan should include: 

Your company’s mission statement

Your organizational goals, including your long-term goals and short-term, yearly objectives

Any plan of action, tactics, or approaches you plan to take to meet those goals

What are the benefits of strategic planning?

Strategic planning can help with goal setting and decision-making by allowing you to map out how your company will move toward your organization’s vision and mission statements in the next three to five years. Let’s circle back to our map metaphor. If you think of your company trajectory as a line on a map, a strategic plan can help you better quantify how you’ll get from point A (where you are now) to point B (where you want to be in a few years).

When you create and share a clear strategic plan with your team, you can:

Build a strong organizational culture by clearly defining and aligning on your organization’s mission, vision, and goals.

Align everyone around a shared purpose and ensure all departments and teams are working toward a common objective.

Proactively set objectives to help you get where you want to go and achieve desired outcomes.

Promote a long-term vision for your company rather than focusing primarily on short-term gains.

Ensure resources are allocated around the most high-impact priorities.

Define long-term goals and set shorter-term goals to support them.

Assess your current situation and identify any opportunities—or threats—allowing your organization to mitigate potential risks.

Create a proactive business culture that enables your organization to respond more swiftly to emerging market changes and opportunities.

What are the 5 steps in strategic planning?

The strategic planning process involves a structured methodology that guides the organization from vision to implementation. The strategic planning process starts with assembling a small, dedicated team of key strategic planners—typically five to 10 members—who will form the strategic planning, or management, committee. This team is responsible for gathering crucial information, guiding the development of the plan, and overseeing strategy execution.

Once you’ve established your management committee, you can get to work on the planning process. 

Step 1: Assess your current business strategy and business environment

Before you can define where you’re going, you first need to define where you are. Understanding the external environment, including market trends and competitive landscape, is crucial in the initial assessment phase of strategic planning.

To do this, your management committee should collect a variety of information from additional stakeholders, like employees and customers. In particular, plan to gather:

Relevant industry and market data to inform any market opportunities, as well as any potential upcoming threats in the near future.

Customer insights to understand what your customers want from your company—like product improvements or additional services.

Employee feedback that needs to be addressed—whether about the product, business practices, or the day-to-day company culture.

Consider different types of strategic planning tools and analytical techniques to gather this information, such as:

A balanced scorecard to help you evaluate four major elements of a business: learning and growth, business processes, customer satisfaction, and financial performance.

A SWOT analysis to help you assess both current and future potential for the business (you’ll return to this analysis periodically during the strategic planning process). 

To fill out each letter in the SWOT acronym, your management committee will answer a series of questions:

What does your organization currently do well?

What separates you from your competitors?

What are your most valuable internal resources?

What tangible assets do you have?

What is your biggest strength? 

Weaknesses:

What does your organization do poorly?

What do you currently lack (whether that’s a product, resource, or process)?

What do your competitors do better than you?

What, if any, limitations are holding your organization back?

What processes or products need improvement? 

Opportunities:

What opportunities does your organization have?

How can you leverage your unique company strengths?

Are there any trends that you can take advantage of?

How can you capitalize on marketing or press opportunities?

Is there an emerging need for your product or service? 

What emerging competitors should you keep an eye on?

Are there any weaknesses that expose your organization to risk?

Have you or could you experience negative press that could reduce market share?

Is there a chance of changing customer attitudes towards your company? 

Step 2: Identify your company’s goals and objectives

To begin strategy development, take into account your current position, which is where you are now. Then, draw inspiration from your vision, mission, and current position to identify and define your goals—these are your final destination. 

To develop your strategy, you’re essentially pulling out your compass and asking, “Where are we going next?” “What’s the ideal future state of this company?” This can help you figure out which path you need to take to get there.

During this phase of the planning process, take inspiration from important company documents, such as:

Your mission statement, to understand how you can continue moving towards your organization’s core purpose.

Your vision statement, to clarify how your strategic plan fits into your long-term vision.

Your company values, to guide you towards what matters most towards your company.

Your competitive advantages, to understand what unique benefit you offer to the market.

Your long-term goals, to track where you want to be in five or 10 years.

Your financial forecast and projection, to understand where you expect your financials to be in the next three years, what your expected cash flow is, and what new opportunities you will likely be able to invest in.

Step 3: Develop your strategic plan and determine performance metrics

Now that you understand where you are and where you want to go, it’s time to put pen to paper. Take your current business position and strategy into account, as well as your organization’s goals and objectives, and build out a strategic plan for the next three to five years. Keep in mind that even though you’re creating a long-term plan, parts of your plan should be created or revisited as the quarters and years go on.

As you build your strategic plan, you should define:

Company priorities for the next three to five years, based on your SWOT analysis and strategy.

Yearly objectives for the first year. You don’t need to define your objectives for every year of the strategic plan. As the years go on, create new yearly objectives that connect back to your overall strategic goals . 

Related key results and KPIs. Some of these should be set by the management committee, and some should be set by specific teams that are closer to the work. Make sure your key results and KPIs are measurable and actionable. These KPIs will help you track progress and ensure you’re moving in the right direction.

Budget for the next year or few years. This should be based on your financial forecast as well as your direction. Do you need to spend aggressively to develop your product? Build your team? Make a dent with marketing? Clarify your most important initiatives and how you’ll budget for those.

A high-level project roadmap . A project roadmap is a tool in project management that helps you visualize the timeline of a complex initiative, but you can also create a very high-level project roadmap for your strategic plan. Outline what you expect to be working on in certain quarters or years to make the plan more actionable and understandable.

Step 4: Implement and share your plan

Now it’s time to put your plan into action. Strategy implementation involves clear communication across your entire organization to make sure everyone knows their responsibilities and how to measure the plan’s success. 

Make sure your team (especially senior leadership) has access to the strategic plan, so they can understand how their work contributes to company priorities and the overall strategy map. We recommend sharing your plan in the same tool you use to manage and track work, so you can more easily connect high-level objectives to daily work. If you don’t already, consider using a work management platform .  

A few tips to make sure your plan will be executed without a hitch: 

Communicate clearly to your entire organization throughout the implementation process, to ensure all team members understand the strategic plan and how to implement it effectively. 

Define what “success” looks like by mapping your strategic plan to key performance indicators.

Ensure that the actions outlined in the strategic plan are integrated into the daily operations of the organization, so that every team member's daily activities are aligned with the broader strategic objectives.

Utilize tools and software—like a work management platform—that can aid in implementing and tracking the progress of your plan.

Regularly monitor and share the progress of the strategic plan with the entire organization, to keep everyone informed and reinforce the importance of the plan.

Establish regular check-ins to monitor the progress of your strategic plan and make adjustments as needed. 

Step 5: Revise and restructure as needed

Once you’ve created and implemented your new strategic framework, the final step of the planning process is to monitor and manage your plan.

Remember, your strategic plan isn’t set in stone. You’ll need to revisit and update the plan if your company changes directions or makes new investments. As new market opportunities and threats come up, you’ll likely want to tweak your strategic plan. Make sure to review your plan regularly—meaning quarterly and annually—to ensure it’s still aligned with your organization’s vision and goals.

Keep in mind that your plan won’t last forever, even if you do update it frequently. A successful strategic plan evolves with your company’s long-term goals. When you’ve achieved most of your strategic goals, or if your strategy has evolved significantly since you first made your plan, it might be time to create a new one.

Build a smarter strategic plan with a work management platform

To turn your company strategy into a plan—and ultimately, impact—make sure you’re proactively connecting company objectives to daily work. When you can clarify this connection, you’re giving your team members the context they need to get their best work done. 

A work management platform plays a pivotal role in this process. It acts as a central hub for your strategic plan, ensuring that every task and project is directly tied to your broader company goals. This alignment is crucial for visibility and coordination, allowing team members to see how their individual efforts contribute to the company’s success. 

By leveraging such a platform, you not only streamline workflow and enhance team productivity but also align every action with your strategic objectives—allowing teams to drive greater impact and helping your company move toward goals more effectively. 

Strategic planning FAQs

Still have questions about strategic planning? We have answers.

Why do I need a strategic plan?

A strategic plan is one of many tools you can use to plan and hit your goals. It helps map out strategic objectives and growth metrics that will help your company be successful.

When should I create a strategic plan?

You should aim to create a strategic plan every three to five years, depending on your organization’s growth speed.

Since the point of a strategic plan is to map out your long-term goals and how you’ll get there, you should create a strategic plan when you’ve met most or all of them. You should also create a strategic plan any time you’re going to make a large pivot in your organization’s mission or enter new markets. 

What is a strategic planning template?

A strategic planning template is a tool organizations can use to map out their strategic plan and track progress. Typically, a strategic planning template houses all the components needed to build out a strategic plan, including your company’s vision and mission statements, information from any competitive analyses or SWOT assessments, and relevant KPIs.

What’s the difference between a strategic plan vs. business plan?

A business plan can help you document your strategy as you’re getting started so every team member is on the same page about your core business priorities and goals. This tool can help you document and share your strategy with key investors or stakeholders as you get your business up and running.

You should create a business plan when you’re: 

Just starting your business

Significantly restructuring your business

If your business is already established, you should create a strategic plan instead of a business plan. Even if you’re working at a relatively young company, your strategic plan can build on your business plan to help you move in the right direction. During the strategic planning process, you’ll draw from a lot of the fundamental business elements you built early on to establish your strategy for the next three to five years.

What’s the difference between a strategic plan vs. mission and vision statements?

Your strategic plan, mission statement, and vision statements are all closely connected. In fact, during the strategic planning process, you will take inspiration from your mission and vision statements in order to build out your strategic plan.

Simply put: 

A mission statement summarizes your company’s purpose.

A vision statement broadly explains how you’ll reach your company’s purpose.

A strategic plan pulls in inspiration from your mission and vision statements and outlines what actions you’re going to take to move in the right direction. 

For example, if your company produces pet safety equipment, here’s how your mission statement, vision statement, and strategic plan might shake out:

Mission statement: “To ensure the safety of the world’s animals.” 

Vision statement: “To create pet safety and tracking products that are effortless to use.” 

Your strategic plan would outline the steps you’re going to take in the next few years to bring your company closer to your mission and vision. For example, you develop a new pet tracking smart collar or improve the microchipping experience for pet owners. 

What’s the difference between a strategic plan vs. company objectives?

Company objectives are broad goals. You should set these on a yearly or quarterly basis (if your organization moves quickly). These objectives give your team a clear sense of what you intend to accomplish for a set period of time. 

Your strategic plan is more forward-thinking than your company goals, and it should cover more than one year of work. Think of it this way: your company objectives will move the needle towards your overall strategy—but your strategic plan should be bigger than company objectives because it spans multiple years.

What’s the difference between a strategic plan vs. a business case?

A business case is a document to help you pitch a significant investment or initiative for your company. When you create a business case, you’re outlining why this investment is a good idea, and how this large-scale project will positively impact the business. 

You might end up building business cases for things on your strategic plan’s roadmap—but your strategic plan should be bigger than that. This tool should encompass multiple years of your roadmap, across your entire company—not just one initiative.

What’s the difference between a strategic plan vs. a project plan?

A strategic plan is a company-wide, multi-year plan of what you want to accomplish in the next three to five years and how you plan to accomplish that. A project plan, on the other hand, outlines how you’re going to accomplish a specific project. This project could be one of many initiatives that contribute to a specific company objective which, in turn, is one of many objectives that contribute to your strategic plan. 

What’s the difference between strategic management vs. strategic planning?

A strategic plan is a tool to define where your organization wants to go and what actions you need to take to achieve those goals. Strategic planning is the process of creating a plan in order to hit your strategic objectives.

Strategic management includes the strategic planning process, but also goes beyond it. In addition to planning how you will achieve your big-picture goals, strategic management also helps you organize your resources and figure out the best action plans for success. 

Related resources

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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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.

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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.

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The Importance of Strategic Goals And How to Set Them

Strategic goals are like the foundation of a successful business. They act as a guide, helping a company reach its big-picture vision for the future. Unlike short-term goals, which focus on immediate wins, strategic goals aim to push a company forward in a significant and measurable way. These are the big milestones that, when achieved, can change a business and make it stand out in the market.

In this article, we’ll guide you on determining the appropriate times to establish strategic goals compared to other types of goals, and we’ll also explain the process of setting them.

What are Strategic Goals?

Strategic goals are the significant, long-term objectives that an organization sets to guide its overall direction and success. Unlike short-term goals that focus on immediate tasks, strategic goals are designed to have a lasting impact and propel the organization toward its broader vision. These goals typically span several years and are aligned with the company’s core mission and values. The main characteristics of strategic goals are:

Long-Term Impact : Strategic goals are all about the future, reaching beyond just this year and often spanning multiple years.

Alignment with Vision : These goals are closely connected to a company’s main mission and values, making sure that every effort contributes to the big picture.

Measurability : To know if you’re making progress, strategic goals need to be measurable, using clear metrics to track success.

When strategic goals match up with the long-term vision, leaders can make sure that everyone in the company is working together toward a big, game-changing objective. This is where tools like Creately come in handy, offering features like real-time collaboration and visual project management to keep everyone on track and moving in the right direction.

How Strategic Goals Are Different from Other Business Processes:

Strategic Goals VS Strategic Planning Strategic goals serve as the ultimate destinations for an organization, representing the long-term objectives that propel it forward. They are the ambitious milestones that, when achieved, transform a business fundamentally and secure its position in the market. On the other hand, strategic planning acts as the roadmap leading to these endpoints. It involves the thoughtful process of outlining steps, allocating resources, and devising strategies to reach the predetermined strategic goals.

Strategic Goals vs. Strategic Management While strategic goals represent the desired outcomes, strategic management involves the ongoing process of planning, implementing, and evaluating these strategies to ensure they align with organizational objectives.

Strategic Goals vs. Strategic Objectives Strategic objectives are the specific, measurable steps taken to achieve strategic goals. They break down the broader goals into actionable tasks, providing a clear path for implementation.

Strategic Goals vs. OKRs (Objectives and Key Results) OKRs are a goal-setting framework that encompasses both objectives (similar to strategic goals) and key results, which are specific, measurable indicators of progress toward those objectives.

Strategic Goals vs. KPIs (Key Performance Indicators) While strategic goals are the overarching objectives, KPIs are specific metrics used to measure performance and track progress toward achieving those goals.

Strategic Goals vs. Business Goals Strategic goals are a subset of business goals, focusing on the long-term vision and transformation, whereas business goals can encompass a broader range of objectives, including short-term targets.

The Importance of Strategic Goals

The benifits of strategic goals.

Strategic goals play a critical role in organizational success. Here are some key benefits:

Provides Clarity and Direction : Strategic goals define the purpose and direction for the organization. They serve as a compass, guiding decision-making and resource allocation. By setting clear goals, companies can focus their efforts and ensure that actions are purposeful and directed towards specific outcomes.

Drives Alignment : Strategic goals unite individuals and teams towards a common objective. They foster collaboration and synergy, as everyone is working towards the same goals. Communication and cooperation are enhanced, unlocking the full potential of the organization.

Facilitates Decision-Making : Strategic goals provide a framework for decision-making. They serve as a reference point for evaluating opportunities, initiatives, and investments. When faced with various options, organizations can assess how well each choice aligns with their goals, ensuring that decisions are consistent and supportive of the overall company strategy.

Helps Prioritize Resources : In a world of limited resources, strategic goals help organizations prioritize where to allocate time, energy, and financial resources. By focusing on the most critical goals, companies maximize their impact and efficiency, ensuring that resources are utilized effectively.

Promotes Accountability and Measurement : Strategic goals provide a basis for accountability and measurement. They enable organizations to track progress, evaluate performance, and adjust their course as needed. By setting clear and measurable goals, companies can assess their success and identify areas for improvement.

Strategic Goals Are an Iterative Process

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Strategic planning is not a one-time event but a continuous, evolving process. Acknowledging the iterative nature of this approach is essential for organizations seeking sustained success in a dynamic business landscape.

Continuous Reassessment : Regularly revisiting and reassessing strategies is a cornerstone of the iterative process. Organizations must stay vigilant, evaluating whether the chosen strategies align with current objectives and market conditions.

Adapting to Evolving Objectives :Evolving objectives demand a proactive response. Strategic planning involves adapting to shifts in organizational goals, industry trends, and external factors. This adaptability ensures that the strategies remain relevant and effective.

Real-time Adjustments : An iterative approach allows for real-time adjustments. This agility enables organizations to respond swiftly to unforeseen challenges or capitalize on unexpected opportunities, fostering resilience in the face of uncertainties.

Learning from Experience : Each iteration provides valuable insights. Organizations should leverage lessons learned from previous planning cycles, using them to refine and enhance future strategies. This continuous learning process contributes to the overall effectiveness of strategic planning.

Developing Clear and Measurable Strategic Goals

Setting clear and measurable strategic goals is crucial for their effective execution and evaluation. To develop such goals, organizations can follow a framework: Identify Key Focus Areas: Determine the critical areas that require attention and improvement. These can be related to revenue growth, customer satisfaction, market expansion, or operational efficiency, among others. Gather Stakeholder Input: Involve key stakeholders, such as employees, customers, partners, and investors, in the goal-setting process. Their perspectives and insights can provide valuable input and help ensure that the goals are relevant and realistic.

Define Key Objectives: Break down each focus area into specific objectives that support the central vision. These objectives should be challenging yet achievable, aligning with the organization’s strategic priorities. Create Measurable Metrics: Establish metrics or key performance indicators (KPIs) that will be used to track progress and evaluate success. These metrics should be quantifiable, time-bound, and aligned with the objectives.

Assign Accountability and Resources: Determine who will be responsible for driving each strategic goal and ensure they have the necessary resources and support to achieve them. Clear ownership enhances accountability and increases the likelihood of successful execution.

Communicate and Cascade: Communicate the strategic goals and their corresponding objectives to the entire organization. Ensure that everyone understands the purpose, rationale, and expected outcomes. Cascade the goals to different teams and individuals, establishing clear alignment with day-to-day activities.

Regularly Review and Adapt: Continuously monitor progress towards the goals and review the effectiveness of the strategies. If necessary, adapt and adjust the goals or tactics to stay on track and respond to changing circumstances.

100 Examples of Strategic Goals

Successful companies have demonstrated the power of strategic goal-setting. Here are 20 examples of strategic goals from various industries:

Financial Strategic Goals

Profit Maximization: Increase net profit margins by 10% over the next fiscal year.

Cost Reduction: Implement cost-cutting measures to reduce operational expenses by 15%.

Market Expansion: Expand into new markets, targeting a 20% increase in revenue and market share.

Debt Management: Reduce overall debt levels by 8% to improve financial health.

Working Capital Efficiency: Improve the working capital turnover ratio by 12% to optimize cash flow.

Investment Diversification: Allocate 15% of the portfolio to new investment opportunities to mitigate risks and enhance long-term returns.

Financial Sustainability: Achieve a debt-to-equity ratio of 0.8 to ensure long-term financial stability.

Cash Flow Improvement: Increase positive cash flow by 18% and reduce external financing dependency by 10%.

Credit Risk Management: Achieve a 5% reduction in bad debt through strengthened credit risk assessment.

Dividend Growth: Increase dividends to shareholders by 8% over the next three years.

Financial Compliance: Maintain a 95% compliance rate with financial regulations and reporting standards.

Tax Planning: Implement tax strategies to achieve a 10% reduction in tax liabilities.

Profitable Product Mix: Adjust product or service offerings to achieve a 15% increase in overall profitability.

Financial Forecasting Accuracy: Improve financial forecasting accuracy to within +/- 5% of actual results.

Investor Relations: Increase investor satisfaction ratings by 15% through improved communication.

Insurance Risk Management: Achieve a 10% reduction in financial risks through effective insurance coverage.

Mergers and Acquisitions: Realize cost synergies of 12% within two years of strategic mergers or acquisitions.

Return on Investment (ROI): Achieve an overall ROI increase of 7% on investments and capital expenditures.

Working Capital Optimization: Improve working capital turnover ratio by 10% through efficient management of inventory, accounts receivable, and accounts payable.

Credit Rating Improvement: Achieve an increase of one notch in the organization’s credit rating.

Financial Education Programs: Increase financial literacy among employees by 20% through education initiatives.

Sustainable Finance Initiatives: Allocate 5% of financial resources to projects aligned with ESG principles.

Cash Reserve Management: Maintain a cash reserve equivalent to three months' operating expenses.

Expense Control: Achieve a 10% reduction in overall expenses through stringent controls.

Capital Adequacy: Maintain a capital adequacy ratio of 12% to support operations and growth initiatives.

Customer Facing Strategic Goals

Customer Satisfaction: Achieve a customer satisfaction score (CSAT) of 90% or higher through surveys and feedback.

Net Promoter Score (NPS): Increase NPS by 15 points over the next year to measure customer loyalty and advocacy.

Customer Retention Rate: Maintain a customer retention rate of 85% to ensure long-term customer relationships.

Response Time: Reduce average response time to customer inquiries by 20%, enhancing service efficiency.

First Contact Resolution (FCR): Achieve an FCR rate of 90% to address customer issues in a single interaction.

Customer Lifetime Value (CLV): Increase CLV by 10% through personalized offers and enhanced customer experiences.

Cross-Selling Success: Achieve a 15% increase in cross-selling success, measured by the percentage of customers purchasing additional products/services.

Average Order Value (AOV): Increase AOV by 12% through strategic upselling and bundling.

Customer Feedback Utilization: Act on 90% of customer feedback received, demonstrating responsiveness to customer concerns.

Customer Onboarding Efficiency: Reduce the time taken for customer onboarding by 20% to improve the initial customer experience.

Channel Diversification: Increase online channel sales by 25%, capturing a broader customer base.

Customer Education Engagement: Increase customer engagement with educational resources by 15%.

Product Adoption Rate: Achieve a 20% increase in the adoption rate of new products or features among existing customers.

Customer Referral Program Success: Increase the number of new customers acquired through referrals by 30%.

Customer Self-Service Utilization: Encourage self-service usage, aiming for a 15% increase in customer utilization of online resources.

Personalization Effectiveness: Increase conversion rates through personalized marketing efforts by 10%.

Mobile App Engagement: Achieve a 25% increase in monthly active users on the mobile app.

Social Media Interaction: Improve social media engagement metrics by 20%, including likes, comments, and shares.

Resolution Time for Complaints: Reduce the average resolution time for customer complaints by 15%.

Customer Community Growth: Increase the number of active participants in the customer community by 30%.

Customer Loyalty Program Participation: Increase participation in the loyalty program by 20%.

Feedback Implementation Time: Shorten the time between receiving feedback and implementing changes to products or services to within two weeks.

Customer Journey Mapping: Achieve a 95% completion rate in mapping the customer journey to enhance understanding and responsiveness.

Social Proof Metrics: Increase positive online reviews by 25% to enhance brand reputation.

Customer Upskilling: Achieve a 15% increase in customer knowledge and proficiency in using products/services through training initiatives.

Growth Strategic Goals

Revenue Growth: Achieve a 20% increase in overall revenue by the end of the fiscal year.

Market Expansion: Enter and establish a presence in three new markets within the next 12 months.

Customer Acquisition: Increase the customer base by 15% through targeted marketing campaigns.

Product Portfolio Expansion: Introduce and successfully launch three new products within the next quarter.

Market Share Increase: Capture an additional 5% market share within the industry by the end of the year.

Strategic Partnership Development: Form alliances with two key industry players to enhance market reach and capabilities.

Geographic Expansion: Open two new regional offices to tap into emerging markets.

Digital Presence Enhancement: Increase online sales by 25% through an enhanced digital marketing strategy.

Customer Retention Improvement: Implement initiatives to improve customer retention, aiming for a 10% increase.

Sales Team Performance: Enhance the sales team’s productivity, resulting in a 15% increase in sales per representative.

New Customer Segmentation: Target a 20% growth in sales from a newly identified customer segment.

Strategic Alliances: Establish partnerships with two complementary businesses to drive mutual growth.

E-commerce Sales Boost: Achieve a 30% increase in online sales through website optimization and marketing efforts.

International Expansion: Launch operations in two new international markets within the next fiscal year.

Productivity Improvement: Increase operational efficiency, leading to a 10% reduction in production costs.

Innovation Metrics: Introduce and successfully implement three innovative processes to streamline operations.

Employee Skill Development: Implement training programs to enhance employee skills, contributing to a 15% increase in productivity.

Diversification Success: Achieve a 25% revenue contribution from new product lines within the next 18 months.

Brand Awareness: Increase brand recognition by 20% through targeted marketing and advertising campaigns.

Customer Lifetime Value (CLV): Enhance CLV by 12% through personalized customer engagement strategies.

Cost of Customer Acquisition (CAC) Reduction: Achieve a 15% reduction in the cost of acquiring new customers.

Quality Improvement: Increase customer satisfaction by 15%, as measured by post-purchase surveys.

Operational Capacity Expansion: Expand operational capacity to meet growing demand, targeting a 20% increase.

Employee Engagement: Improve employee satisfaction, aiming for a 10% increase in employee engagement scores.

Profit Margin Enhancement: Increase profit margins by 5% through cost optimization and revenue growth strategies.

Internal Strategic Goals

Employee Productivity Improvement: Increase individual employee productivity by 15% through targeted training and support programs.

Operational Efficiency: Achieve a 20% reduction in operational costs by streamlining processes and improving resource utilization.

Employee Satisfaction: Boost employee satisfaction scores by 10% through surveys and feedback mechanisms.

Skill Development Programs: Implement training initiatives resulting in a 15% improvement in employees' relevant skills.

Leadership Development: Identify and groom internal talent, aiming for a 20% increase in the promotion of employees to leadership positions.

Employee Retention Rate: Maintain a minimum employee retention rate of 90% to ensure continuity and reduce recruitment costs.

Workplace Diversity and Inclusion: Increase diversity by 15% in all levels of the organization through targeted recruitment efforts.

Employee Wellness Program Success: Improve overall employee well-being, measured by a 20% reduction in absenteeism.

Knowledge Management: Implement a knowledge-sharing platform, aiming for a 25% increase in the sharing of critical information.

Cross-Functional Collaboration: Enhance collaboration between departments, targeting a 15% increase in cross-functional projects.

Internal Communication Effectiveness: Improve internal communication, aiming for a 20% increase in response rates to internal communications.

Change Management Success: Achieve a 90% or higher success rate in implementing organizational changes, as measured by employee feedback.

Employee Recognition Program Impact: Increase employee morale by 15% through the successful implementation of an employee recognition program.

Employee Training Completion Rates: Achieve a 95% completion rate for mandatory employee training programs.

Team Building Effectiveness: Enhance team cohesion, as measured by a 20% increase in team satisfaction scores.

Innovation Culture: Foster an innovation-friendly culture, aiming for a 10% increase in employee-generated innovative ideas.

Workplace Flexibility Implementation: Successfully implement workplace flexibility policies, resulting in a 15% improvement in work-life balance satisfaction.

Performance Appraisal Accuracy: Improve the accuracy of performance appraisals, aiming for a 90% or higher alignment with employee achievements.

Cost of Employee Recruitment: Achieve a 15% reduction in the cost of recruiting new employees.

Technology Adoption: Increase the adoption rate of new technologies, targeting a 20% improvement in efficiency.

Succession Planning: Develop and implement a comprehensive succession plan, aiming for a 90% or higher success rate in filling key roles internally.

Employee Diversity Training: Implement diversity training programs, aiming for a 20% improvement in employees' understanding and appreciation of diversity.

Employee Workload Management: Achieve a 10% reduction in employee workload stress, as measured by employee surveys.

Employee Skill Utilization: Increase the utilization of employee skills, targeting a 15% improvement in aligning skills with job responsibilities.

Team Performance Metrics: Improve team performance, as measured by a 15% increase in key performance indicators (KPIs) relevant to team goals.

Strategic goals are essential for organizational success. They provide clarity, drive alignment, facilitate decision-making, help prioritize resources and promote accountability and measurement. By tying these goals to the overall company strategy, communicating effectively, involving stakeholders, and using visual templates and ideation sessions, organizations can set clear and measurable objectives that propel them toward their desired future state. The key to successful execution lies in breaking goals into actionable steps, assigning responsibility, providing support, measuring progress, and fostering a culture of regular review and adaptability. With a well-defined and executed strategic goal framework, organizations can unlock their full potential and create a path toward sustainable success.

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

More Related Articles

Chiraag George is a communication specialist here at Creately. He is a marketing junkie that is fascinated by how brands occupy consumer mind space. A lover of all things tech, he writes a lot about the intersection of technology, branding and culture at large.

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!

Strategic planning is essential for any organization aiming to achieve its long-term goals and sustain growth. ClearPoint Strategy offers a powerful platform that streamlines the strategic planning process, making it easier for your organization to develop, implement, and monitor your strategic initiatives.

See ClearPoint Strategy in action! Click here to watch a quick DEMO on the software

“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.

Claim your FREE eBook on 8 effective strategic planning templates here

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.

Download your FREE 40-page eBook to lead effective Strategy Review Meetings

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!

Book your FREE 1-on-1 DEMO with ClearPoint Strategy

Ted Jackson

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

Table of Contents

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What is strategic planning & why is it important?

Planning is an important part of most people’s days. Even if you’re the most driven person alive, it’s easy to get sidetracked if you don’t have an action plan. 

Maybe you need to train for a marathon and sort the mail, but you binge-watch a new TV show instead. The next day, you’re behind on your training and an important bill goes unread – stalling your health goals and financial plans. And once you’re behind, it’s harder to get ahead. 

The same scenario applies to business. Without strategic planning, it’s very difficult to meet long-term goals. 

The strategic planning process helps you break your organization’s vision for the future into strategic objectives. You’ll prioritize which strategic goals to focus on, when they should happen, and how you’ll achieve them. This strategic framework drives your operational planning (how you’ll execute this strategic framework). 

If you want to know how to apply strategic planning in your business, you’re in the right place. This roadmap will cover the benefits of strategic planning, the strategic planning process, the steps involved, and, most importantly, how to make the long-term goals of your strategic framework a reality.

What are the benefits of strategic planning for your organization?

When should you create a strategic plan, top 6 elements of a strategic plan, how do you adapt strategic planning for your organization’s needs, what is the strategic planning process, how do you chart your strategic path to success.

Successful strategic planning results in a structured business in which your team is united in implementing the strategy execution of your desired outcomes. Here’s how the process helps an organization:

Creates cost-effective day-to-day operations

Your strategic framework will ensure that your day-to-day operations bring you closer to your long-term goals. Clarity regarding the strategic goals you want to achieve can help you identify what will (and won’t) help you achieve them.

Strategic planning also helps you better allocate your resources, thanks to a thorough understanding of your organization’s strengths and weaknesses. The process involves analyzing your business processes to find inefficiencies, so you can find ways to streamline workflows and save time, labor, and money.

Gives you a competitive advantage

Strategic planning gives your organization a competitive advantage since it involves thoroughly analyzing your internal strengths and weaknesses. It also considers new opportunities and external threats, helping you identify unique capabilities and areas where the organization can outperform competitors. Moreover, you can anticipate market trends and adapt to changing circumstances more easily. 

Helps you track progress and communicate success

Identifying and tracking key performance indicators (KPIs) shows exactly how far you’ve progressed in achieving your organization’s goals. These metrics let you measure your organization’s performance against the specific objectives and goals set in your strategic plan.

Tracking your progress using KPIs can also help you communicate where your company is achieving success and how well. Stakeholders want to know these things, and marketing them can make your company a magnet for high-achieving talent.

Keeps bias out of your organization

Strategic planning fosters a systematic and objective decision-making process based on data and evidence – not personal opinions. This prevents cognitive biases from hindering your organization’s growth. Strategic planning encourages a balanced and inclusive decision-making approach by focusing on long-term goals and considering the broader impact of decisions on a diverse set of stakeholders. 

No matter what stage of growth your organization is in, successful strategic planning targets your development toward your desired outcomes. 

Strategic planning typically captures your vision for your organization’s next three to five years. However, businesses experiencing rapid growth (like small businesses and startups) might need a new strategic plan more frequently, like every two years. 

Strategic planning is a continual process. After all, if you don’t adapt to a changing world, you’ll be left behind.  Stay on top of changing markets and organizational needs by constantly reevaluating your business strategy, especially when making large organizational changes. You’ll also want to reevaluate your strategic plan once you’ve achieved the initial goals and desired outcomes from your original plan document.

There are six key elements of a good strategic plan:

• Mission statement: Your mission statement is the north star of your strategic planning. It’s a concise, declarative statement that defines your organization’s core purpose and primary objectives. It explains the motivations, or the why, behind your plan, which motivates team members and stakeholders to work toward your organization’s goals. For example, a tech company’s mission statement could read: “Our mission is to empower people through innovative technologies, creating a more connected and sustainable world.”
• Vision statement: A vision statement outlines how you’ll achieve your organization’s driving motivation. It can also help employees solve problems based on organizational guidelines since your vision statement reflects your organization’s strategic plan in broad terms. To continue from the above example, a vision statement example might read: “Our vision is to be a global leader in driving transformative technological advancements that shape the future and enrich lives.”
• Organizational goals : Organizational goals are specific and measurable objectives an organization sets to achieve its mission and fulfill its long-term vision. These are realistic, attainable goals (e.g., performance expectations, KPI objectives, and specific deadlines). For example, short-term goals might include yearly or quarterly objectives for individuals, departments, or the entire organization (e.g., employee performance, turnover rate, or sales goals). Meanwhile, long-term goals might stretch these goals beyond one year.
• SWOT analysis : A SWOT analysis aims to create situational awareness about your organization’s position within your industry. The acronym stands for strengths, weaknesses, opportunities, and threats. This strategic management tool is a comprehensive assessment that helps you make informed business decisions.
• Action plan : Your action plan is the part of your strategic planning process that lays out exactly how you will achieve your goals and priorities. It captures your strategic initiatives and, specifically, how you will execute them.
• Key performance indicators ( KPIs ): Key performance indicators are measurable metrics that help you evaluate your progress toward your desired outcomes. KPIs include profit margins, sales data, customer satisfaction, and employee retention. These hard data help you track progress within your set time frame.

While these key elements sound similar to a business plan, some crucial differences exist.

A strategic plan outlines your organization’s overall direction, including its vision, mission, long-term goals, and strategies to achieve them. On the other hand, a business plan focuses on specific operational aspects, such as products or services, target markets, and competition, communicating goal-setting and priorities to team members, investors, and key stakeholders. Companies primarily use business plans for management and clarity, especially during the startup phase or when restructuring.

A new organization could create a business plan and use it as a building block of the strategic planning process once it’s more established.

All businesses can reap the benefits of strategic planning at some point in their development. However, the strategic planning process will apply differently depending on your business type. 

Below, we’ll go into how to make a strategic plan work depending on the organization type.

The strategic plan’s end result is a roadmap for your organization’s future development. For this reason, startups can especially benefit from the strategic planning process, as they have a large growth potential. Setting long-term goals, metrics, and strategic initiatives keeps startups focused on their desired outcomes and prevents them from being overwhelmed by an undefined future. 

But because startups have so much potential, they’ll likely need to adjust their strategic objectives as they make pivots. Many startups have a small team, so they may need to revisit their strategic plan more often than the standard three to five years as they redefine the needs of their organization. 

Nonprofit organizations

A well-crafted strategic plan offers unique benefits to nonprofits, benefitting those using the nonprofit’s services and the business itself. For one, it enhances donor and stakeholder engagement by showcasing transparency, accountability, and a clear roadmap for achieving impact and fostering trust, confidence, and increased support for the organization’s mission. Secondly, a strategic plan can improve a nonprofit’s resource allocation and efficiency, helping prioritize the initiatives and projects that align with its mission to create maximum impact with limited resources.

Finally, a strategic plan helps nonprofits measure their impact and adapt to changing circumstances. Nonprofits can set measurable objectives and KPIs to track progress and assess initiatives’ effectiveness. This makes it easier to respond to emerging needs and challenges, remain committed to long-term goals, and ensure sustained relevance and success in mission-driven endeavors.

Project management

Strategic planning is also useful when embarking on a complex, lengthy project that could take months – or even years – to achieve. When setting long-term goals during the strategic planning process, you’ll likely have some ambitious projects to achieve as a part of your overall business strategy. 

A strategic project plan outlines the initiative or project timeline and gives an overview of its desired outcomes. This is especially helpful for long-term project management, where it can be easy to lose sight of your objectives amidst all the moving parts and multiple deadlines. 

Also, a clear plan document for your project can help delegate responsibilities as your team changes (for instance, when team members retire or take leaves of absence and when new teammates are hired).

Now that you have an overview of the elements that go into strategic planning, let’s get into the step-by-step methodology needed to make it happen. 

• Analysis of current position: First, gain an understanding of your organization’s current position and how it fits into the broader industry. This is when you’ll complete a SWOT analysis, conduct research, survey your clients, and gather employee feedback. 
• Strategy formulation: Now that you know where your organization stands, determine the direction you’d like to head and strategize how to get there. First, define your mission statement, vision statement, and organizational goals. Then, prioritize your strategic initiatives .

While a select leadership group (e.g., a handful of executives) usually completes the strategic planning process, incorporating stakeholder feedback in your decision-making is essential to ensure you’re on the right track.

Strategy development involves creating documentation that communicates your goals. One example is a strategy map , a flowchart of your strategic objectives, and an explanation of how one leads into the next. You can also create a roadmap to provide an overview of your plan’s execution timeline.

You should have a clear action plan with KPIs to measure your desired outcomes before moving into strategy execution. Remember, you can’t move forward without knowing where you’re going and how you’re getting there. 

• Strategy execution : You’ve done the dreaming; now it’s time for the doing. Use your action plan, KPIs, and metrics to guide your strategy execution. Additionally, maintain clear communication with team members so everyone understands their individual roles in achieving the desired outcomes and how you’ll measure their performance. 
• Evaluation: Track your progress to ensure successful strategic planning and to confirm you’re meeting your KPIs and metrics for success. Use strategic management tools like a balanced scorecard , which helps visualize the impact of your initiatives across the sectors of development, business processes, finance, and customers.

Also, evaluate whether your results align with your organization’s mission. Revise your strategic plan as needed to meet your organization’s changing needs and any updated timeframes. 

Keep detailed notes of the challenges, setbacks, and successes you experience during your strategic plan’s time frame. This will improve your execution when it’s time to start the strategic planning process again. 

Understanding the mechanics of strategic planning, how it links day-to-day operations to immediate and future objectives— is an important step in achieving your organization’s desired results. Not only will it enable you to manage your resources more effectively, but it will also ensure that your aspirations aren’t left to chance.

However, knowledge is only half the journey. Applying these strategic concepts in a way that aligns with your organization’s unique mission, vision and goals can be a challenge in itself. And that’s where IMD comes in and provide the knowledge and tools needed to help your business create a foundation for secure, long-term success. 

Your path to strategic mastery begins here »

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Strategic planning aligns the organization with a common understanding of what they want to achieve and how they will get there with daily operations. It’s taking a company’s vision and breaking it into mid-term and long-term goals. In contrast to strategic planning, business planning focuses on short-term goals. But a strategic plan sets priorities to […]

Ever stood at the crossroads of business decisions, the winds of uncertainty howling around you? Illuminate your path with the beacon of SWOT analysis. This revered compass, trusted by entrepreneurs and seasoned executives alike, unveils the landscape of opportunities and hurdles that lie ahead, waiting to be conquered.  A SWOT analysis is a powerful tool […]

Planning is an important part of most people’s days. Even if you’re the most driven person alive, it’s easy to get sidetracked if you don’t have an action plan.  Maybe you need to train for a marathon and sort the mail, but you binge-watch a new TV show instead. The next day, you’re behind on […]

When it comes to investing in the most valuable services, the customer is always right. After all, if customers spend their hard-earned income on a product or service, they want the best bang for their buck. Like customer needs, those of stakeholders are equally important. Of course, you can’t forget to prioritize your company’s interests, […]

The Power of Strategic Planning: A Key to Success

In a world where innovation drives success, strategic planning emerges as a powerful tool for organizations seeking to stay ahead of the curve. With the ability to align goals, identify opportunities, and foster creativity, strategic planning empowers organizations to adapt and thrive in the face of ever-changing market dynamics.

By combining analytical insight with effective communication and coordination, organizations can unleash their full potential and achieve sustainable success.

This article explores the transformative power of strategic planning and its key role in driving organizational competitiveness and innovation.

Table of Contents

Key Takeaways

• Strategy is about positioning an organization relative to its competitors.
• Strategic plans focus on competitiveness and respond to change and future opportunities.
• The process of strategic planning involves gathering information, analyzing market trends, and generating ideas.
• Successful implementation of strategic plans requires effective communication, coordination, and flexibility.

Understanding the Importance of Strategic Planning

Understanding the importance of strategic planning is crucial for organizations to stay focused and aligned, make informed decisions, identify opportunities, foster innovation, and enhance performance. Strategic planning plays a vital role in organizational growth by providing a clear roadmap for success.

It enables organizations to identify their strengths, weaknesses, opportunities, and threats through a comprehensive SWOT analysis. By understanding these factors, organizations can effectively manage risks and minimize potential pitfalls.

Strategic planning also helps organizations seize opportunities by proactively identifying market trends and customer needs. It fosters innovation and creativity by encouraging new ideas and approaches.

Furthermore, strategic planning enhances performance and sustainability by providing a framework for setting specific goals, developing strategies, and monitoring progress.

Overall, strategic planning is an essential tool for organizations seeking to achieve long-term success and overcome challenges in a rapidly changing business landscape.

Unleashing the Potential of Strategic Planning

Unleashing the potential of strategic planning requires organizations to effectively implement and adapt their strategies based on feedback and market changes. To truly maximize the potential of strategic execution, organizations must embrace the following:

Embrace innovation: Strategic planning opens the doors to new ideas and creative solutions, allowing organizations to stay ahead of the competition and meet the ever-changing needs of customers.

Foster collaboration: By bringing together diverse perspectives and expertise, strategic planning encourages collaboration and teamwork, leading to the development of more robust and effective strategies.

Embrace agility: The ability to quickly adapt and adjust strategies based on feedback and market changes is vital for success. Organizations that can navigate uncertainty and embrace flexibility are more likely to thrive in today’s dynamic business environment.

Key Elements of an Effective Strategic Plan

Embracing collaboration and agility are essential factors in developing an effective strategic plan. In today’s rapidly changing business landscape, communication plays a vital role in strategic planning.

Effective communication ensures that all stakeholders are aligned and working towards a common goal. It facilitates the exchange of ideas, promotes transparency, and fosters innovation. By encouraging open and frequent communication, organizations can adapt to market changes and seize new opportunities.

Additionally, flexibility is crucial in strategic planning. A rigid plan may become obsolete in the face of unforeseen circumstances. Organizations must be willing to adjust their strategies and tactics based on feedback and market dynamics. Flexibility allows for agile decision-making and enables organizations to stay ahead of the curve.

Building a Strong Foundation for Success Through Strategic Planning

Effective communication and adaptability are crucial elements in building a strong foundation for success through strategic planning. By effectively communicating the goals and objectives of the strategic plan, organizations can ensure that all stakeholders are aligned and working towards a common vision. This fosters a sense of unity and collaboration, creating a resilient organization that can weather any challenges that come its way.

Additionally, adaptability is necessary for long-term growth. It allows organizations to adjust their strategies and tactics in response to feedback and market changes, ensuring that they stay relevant and competitive in an ever-evolving landscape.

Building resilience and focusing on long-term growth through strategic planning empowers organizations to not just survive, but thrive in today’s dynamic and innovative business environment.

The Role of Strategic Planning in Organizational Competitiveness

Adaptability and flexibility play a crucial role in helping organizations maintain their competitiveness through strategic planning.

In today’s rapidly changing business landscape, organizations need to constantly analyze the market and adapt their strategies accordingly. Strategic planning allows organizations to assess market trends, identify their target audience, and understand customer needs.

It provides a framework for organizations to allocate resources effectively and efficiently. By conducting thorough market analysis, organizations can identify key opportunities and develop strategies to capitalize on them. Furthermore, effective resource allocation strategies ensure that organizations are utilizing their resources in the most optimal way, maximizing their competitive advantage.

In order to stay ahead of the competition, organizations must embrace innovation and constantly adapt their strategies based on market feedback. Strategic planning is the key to maintaining organizational competitiveness in today’s dynamic business environment.

Harnessing the Power of Strategic Thinking and Decision-making

Organizations can leverage strategic thinking and sound decision-making to gain a competitive edge in the dynamic business landscape. By unleashing their potential and navigating change effectively, they can drive innovation and stay ahead of the curve.

Here are three emotional responses that strategic thinking and decision-making can evoke in an audience:

Confidence: Strategic planning instills confidence in organizations, as it provides a clear direction and roadmap for success. It empowers them to make informed decisions and take calculated risks.

Resilience: Strategic thinking enables organizations to adapt and thrive in a rapidly changing environment. It equips them with the agility and flexibility needed to navigate unforeseen challenges and seize emerging opportunities.

Excitement: Strategic decision-making encourages organizations to explore new possibilities and push boundaries. It ignites a sense of excitement and curiosity, fostering a culture of innovation and continuous improvement.

Navigating Change and Embracing Opportunities With Strategic Planning

During times of change, organizations can leverage strategic planning to navigate shifting landscapes and seize new opportunities.

Embracing change is essential for organizations seeking innovation and growth. Strategic planning provides a structured approach to identify and respond to emerging trends and market shifts. It enables organizations to adapt their strategies and tactics to align with the changing environment, ensuring they stay ahead of the competition.

By analyzing market dynamics and customer needs, organizations can identify untapped opportunities and develop strategies to seize them. Strategic planning also fosters a culture of innovation and creativity, encouraging organizations to think outside the box and explore new possibilities.

With a well-executed strategic plan, organizations can successfully navigate change, embrace opportunities, and achieve long-term success in today’s dynamic business landscape.

Enhancing Performance and Sustainability Through Strategic Planning

Strategic planning is not just about navigating change and embracing opportunities; it is also crucial for enhancing performance and ensuring long-term sustainability. By maximizing efficiency through strategic planning, organizations can optimize their resources and achieve greater productivity. This allows them to stay ahead of their competitors and adapt to market changes effectively.

Strategic planning also plays a vital role in promoting long-term sustainability. By setting specific goals and objectives, organizations can focus their efforts on initiatives that align with their values and mission. Additionally, strategic planning fosters innovation and creativity, enabling organizations to develop new strategies and solutions that address emerging challenges.

Strategies for Effective Implementation of Strategic Plans

To ensure effective implementation of strategic plans, it is essential for leaders to communicate and coordinate effectively, allocate resources efficiently, and establish a monitoring and evaluation system.

Strategic plan implementation requires strong leadership that can effectively communicate the vision and goals of the plan to all stakeholders. By fostering open lines of communication, leaders can ensure that everyone is on the same page and working towards the same objectives.

Additionally, effective coordination is crucial in allocating resources efficiently. Leaders must ensure that resources are allocated to the right areas at the right time to maximize their impact.

Finally, establishing a monitoring and evaluation system allows leaders to track progress, identify areas for improvement, and make necessary adjustments to the plan.

Overcoming Challenges and Roadblocks in Strategic Planning

In the realm of strategic planning, challenges and roadblocks are inevitable. However, overcoming these obstacles is crucial for the success of any organization.

Strategic planning requires careful consideration and adaptability to navigate through the complexities of the business landscape.

Here are some common challenges that organizations may face during the strategic planning process:

Limited resources: Organizations often face constraints in terms of finances, manpower, and technology. This can hinder the implementation of strategic plans and require innovative solutions to overcome.

Resistance to change: People naturally resist change, and implementing new strategies may face resistance from employees and stakeholders. Effective communication and change management strategies are essential to address this challenge.

Uncertainty and unpredictability: The business environment is constantly evolving, making it difficult to predict future trends and outcomes. Strategic planning must be flexible and agile to adapt to unexpected changes.

Overcoming these challenges requires a proactive and strategic mindset. By embracing innovation and leveraging opportunities, organizations can successfully navigate through the obstacles and achieve their strategic goals.

The Impact of Strategic Planning on Organizational Innovation

Organizational innovation is greatly influenced by the implementation of a well-designed strategic plan. Strategic planning plays a crucial role in shaping the culture of an organization and creating an environment that fosters innovation.

By aligning the goals and objectives of the organization with its strategic plan, employees are motivated and empowered to think creatively and contribute to the overall innovation process. Strategic planning also has a significant impact on employee engagement.

When employees feel that their ideas and contributions are valued and are aligned with the organization’s strategic direction, they become more engaged and committed to their work. This leads to increased productivity, collaboration, and a sense of ownership in the innovation process.

Therefore, organizations that prioritize strategic planning not only cultivate a culture of innovation but also enhance employee engagement, resulting in greater success and competitive advantage in the ever-changing business landscape.

Measuring Success: Performance Indicators in Strategic Planning

Performance indicators are essential tools used in strategic planning to measure the success and effectiveness of an organization’s strategies and tactics. These indicators provide valuable insights into the progress and outcomes of strategic initiatives, allowing organizations to track their performance and make informed decisions.

By evaluating the effectiveness of their strategies, organizations can identify areas of improvement and take corrective actions to ensure their success. Performance indicators also help in measuring the effectiveness of different tactics employed, enabling organizations to optimize their resources and achieve desired outcomes.

Tracking progress through performance indicators fosters a sense of accomplishment and motivation among the team members, driving them towards innovation and continuous improvement. It provides a clear and objective way to measure success and effectiveness, encouraging organizations to strive for excellence in their strategic planning efforts.

Aligning Organizational Goals and Objectives With Strategic Planning

After measuring success through performance indicators, the next crucial step in strategic planning is aligning organizational goals and objectives. This entails ensuring that the entire organization is working towards a common vision and mission.

To achieve this alignment, organizations need to focus on two key aspects: aligning organizational culture and integrating stakeholder engagement.

Aligning organizational culture involves creating a shared set of values, beliefs, and behaviors that guide decision-making and actions within the organization. This includes fostering a culture of collaboration, innovation, and adaptability to support the implementation of strategic plans.

Integrating stakeholder engagement involves actively involving key stakeholders, such as employees, customers, suppliers, and the community, in the strategic planning process. By incorporating their perspectives and feedback, organizations can better understand their needs and expectations, leading to more effective strategies and outcomes.

Adapting and Evolving: The Dynamic Nature of Strategic Planning

Adapting and evolving is essential in the dynamic nature of strategic planning. Organizations must continuously assess market trends and adjust their strategies accordingly. In today’s fast-paced business environment, flexibility plays a crucial role in strategic planning. By being flexible, organizations can leverage market changes to their advantage and stay ahead of the competition.

Here are three emotional responses that highlight the importance of flexibility in strategic planning:

Opportunity: Flexibility allows organizations to seize new opportunities and explore innovative ideas, creating a sense of excitement and possibility.

Resilience: With the ability to adapt, organizations can navigate challenges and setbacks, instilling a sense of resilience and determination.

Competitive Edge: By leveraging market changes, organizations can gain a competitive edge, evoking a sense of confidence and success.

Embracing flexibility empowers organizations to proactively respond to change, drive innovation, and achieve long-term success in strategic planning.

Empowering Organizations Through Strategic Planning

Flexibility in strategic planning empowers organizations to proactively respond to change, drive innovation, and achieve their desired outcomes.

By embracing a flexible approach, organizations can unleash their potential and harness the power of strategic planning to stay ahead in a rapidly evolving business landscape.

Strategic planning provides a framework for organizations to identify opportunities, analyze risks, and develop strategies that align with their goals. It enables them to adapt to market changes, anticipate customer needs, and seize new opportunities.

Through strategic planning, organizations can foster a culture of innovation, encouraging creativity and out-of-the-box thinking. This not only enhances their performance but also ensures their long-term sustainability.

Frequently Asked Questions

How does strategic planning improve decision-making in an organization.

Strategic planning improves decision-making in an organization by providing a clear direction and framework for evaluating options. It enables organizations to assess risks, identify opportunities, and make informed choices that align with their long-term goals and objectives.

What Are Some Common Challenges and Roadblocks Encountered in the Strategic Planning Process?

Common challenges and obstacles in the strategic planning process include resistance to change, lack of alignment and communication, inadequate resources, and external market volatility. Overcoming these hurdles requires adaptability, collaboration, and a proactive approach to problem-solving.

How Does Strategic Planning Contribute to Organizational Innovation?

Strategic planning contributes to organizational innovation by fostering a culture of creativity and providing a clear direction for growth. It helps identify new opportunities, enhances competitive advantage, and improves decision-making for sustainable organizational success.

What Are Some Strategies for Effectively Implementing Strategic Plans?

Effective execution of strategic plans requires clear communication, resource allocation, and a monitoring system. Actionable steps include assigning responsibilities, adapting to feedback, and adjusting strategies based on market changes.

How Does Strategic Planning Enhance Organizational Performance and Sustainability?

Strategic planning enhances organizational performance and sustainability by providing a clear direction for growth. It helps organizations gain a competitive advantage through innovation and creativity, improving decision-making and aligning resources effectively.

Strategic Planning Process: Why Is Strategic Planning Important for Organizations in 2024?

What to read next:

Playing chess without a strong opening is a guaranteed way to disadvantage yourself. Just like in chess, organizations without an adequate strategic planning process are unlikely to thrive and adapt long-term. 

The strategic planning process is essential for aligning your organization on key priorities, goals, and initiatives, making it crucial for organizational success.   

This article will empower you to craft and perfect your strategic planning process by exploring the following:  

• What is strategic planning
• Why strategic planning is important for your business  
• The seven steps of the strategic planning process   

Strategic planning frameworks

• Best practices supporting the strategic planning process  

By the end of this article, you’ll have the knowledge needed to perfect the key elements of strategic planning. Ready? Let’s begin.  

What is strategic planning?

Strategic planning charts your business's course toward success. Using your organization’s vision, mission statement , and values — with internal and external information — each step of the strategic planning process helps you craft long-term objectives and attain your goals with strategic management.  

The key elements of strategic planning includes a SWOT analysis, goal setting , stakeholder involvement, plus developing actionable strategies, approaches, and tactics aligned with primary objectives.  

In short, the strategic planning process bridges the gap between your organization’s current and desired state, providing a clear and actionable framework that answers:   Where are you now?   Where do you want to be?   How will you get there?

7 key elements of strategic planning 

The following strategic planning components work together to create cohesive strategic plans for your business goals. Let’s take a close look at each of these:  

• Vision : What your organization wants to achieve in the future, the long-term goal  
• Mission : The driving force behind why your company exists, who it serves, and how it creates value  
• Values : Fundamental beliefs guiding your company’s decision-making process  
• Goals : Measurable objectives in alignment with your business mission, vision, and values  
• Strategy : A long-term strategy map for achieving your objectives based on both internal and external factors  
• Approach : How you execute strategy and achieve objectives using actions and initiatives   
• Tactics : Granular short-term actions, programs, and activities  

Why is the strategic planning process important?

Just as a chess player needs a gameplan to reach checkmate, a company needs a solid strategic plan to achieve its goals.   

Without a strategic plan, your business will waste precious time, energy, and resources on endeavors that won’t get your company closer to where it needs to be.   

Your ideal plan should cover all key strategic planning areas, while allowing you to stay present by measuring success and course-correcting or redefining the strategic direction when necessary. Ultimately, enabling your company to stay future-proof through the creation of an always-on strategy that reflects your company's mission and vision.   

An always-on strategy involves continuous environmental scanning even after the strategic plan has been devised, ensuring readiness to adapt in response to quick, drastic changes in the environment.

Let’s dive deeper into the steps of the strategic planning process.  

What are the 7 stages of the strategic planning process?

You understand the overall value of implementing a strategic planning process — now let’s put it in practice. Here's our 7-step approach to strategic planning that ensures everyone is on the same page:  

• Clarify your vision, mission, and values  
• Conduct an environmental scan  
• Define strategic priorities  
• Develop goals and metrics  
• Derive a strategic plan  
• Write and communicate your strategic plan  
• Implement, monitor, and revise   

1. Clarify your vision, mission, and values 

The first step of the strategic planning process is understanding your organization’s core elements: vision, mission, and values. Clarifying these will align your strategic plan with your company’s definition of success. Once established, these are the foundation for the rest of the strategic planning process.   

Questions to ask:

• What do we aspire to achieve in the long term?
• What is our purpose or ultimate goal?
• What do we do to fulfill our vision?
• What key activities or services do we provide?
• What are our organization's ethics?
• What qualities or behaviors do we expect from employees?

Read more: What is Mission vs. Vision  

2. Conduct an environmental scan

Once everyone on the same page about vision, mission, and values, it's time to scan your internal and external environment. This involves a long-term SWOT analysis, evaluating your organization’s strengths, weaknesses, opportunities, and threats.  

Internal factors 

Internal strengths and weaknesses help you understand where your organization excels and what it could improve. Strengths and weaknesses awareness helps make more informed decisions with your capabilities and resource allocation in mind.  

External factors

Externally, opportunities and threats in the market help you understand the power of your industry’s customers, suppliers, and competitors. Additionally, consider how broader forces like technology, culture, politics, and regulation may impact your organization.   

• What are our organization's key strengths or competitive advantages?
• What areas or functions within our organization need improvement?
• What emerging trends or opportunities can we leverage?
• How do changes in technology, regulations, or consumer behavior impact us?

3. Define strategic priorities

Prioritization puts the “strategic” in strategic planning process. Your organization’s mission, vision, values, and environmental scan serve as a lens to identify top priorities. Limiting priorities ensures your organization intentionally allocates resources.  

These categories can help you rank your strategic priorities:  

• Critical : Urgent tasks whose failure to complete will have severe consequences — financial losses, reputation damage, or legal consequences  
• Important : Significant tasks which support organizational achievements and require timely completion  
• Desirable : Valuable tasks not essential in the short-term, but can contribute to long-term success and growth  
• How do these priorities align with our mission, vision, and values?
• Which tasks need to be completed quickly to ensure effective progress towards our desired outcomes?
• What resources and capabilities do we need to pursue these priorities effectively?

4. Develop goals and metrics

Next, you establish goals and metrics to reflect your strategic priorities. Purpose-driven, long-term, actionable strategic planning goals should flow down through the organization, with lower-level goals contributing to higher-level ones.  

One approach that can help you set and measure your aligned goals is objectives and key results (OKRs). OKRs consist of objectives, qualitative statements of what you want to achieve, and key results, 3-5 supporting metrics that track progress toward your objective.  

OKRs ensure alignment at every level of the organization, with tracking and accountability built into the framework to keep everyone engaged. With ambitious, intentional goals, OKRs can help you drive the strategic plan forward.  

• What metrics can we use to track progress toward each objective?
• How can we ensure that lower-level goals and metrics support and contribute to higher-level ones?
• How will we track and measure progress towards key results?
• How will we ensure accountability?

Get an in-depth look at OKRs with our Ultimate OKR Playbook

5. Derive a strategic plan

The next step of the strategic planning process gets down to the nitty-gritty “how” — developing a clear, practical strategic plan for bridging the gap between now and the future.   

To do this, you’ll need to brainstorm short- and long-term approaches to achieving the goals you’ve set, answering a couple of key questions along the way. You must evaluate ideas based on factors like:  

• Feasibility : How realistic and achievable is it?  
• Impact : How conducive is it to goal attainment?  
• Cost : Can we fund this approach, and is it worth the investment?  
• Alignment : Does it support our mission, vision, and values?  

From your approaches, you can devise a detailed action plan, which covers things like:  

• Timelines : When will we take each step, and what are the deadlines?  
• Milestones : What key achievements will ensure consistent progress?  
• Resource requirements : What’s needed to achieve each step?  
• Responsibilities : Who's accountable in each step?  
• Risks and challenges : What can affect our ability to execute our plan? How will we address these?  

With a detailed action plan like this, you can move from abstract goals to concrete steps, bringing you closer to achieving your strategic objectives.  

6. Write and communicate your strategic plan

Writing and communicating your strategic plan involves everyone, ensuring each team is on the same page. Here’s a clear, concise structure you can use to cover the most important strategic planning components:  

• Executive summary : Highlights and priorities in your strategic overview   
• Introduction : Background on your strategic plan  
• Connection : How your strategic plan aligns with your organization’s mission, vision, and values  
• Environmental scan : An overview of your SWOT analysis findings  
• Strategic priorities and goals : Informed short and long-term organizational goals  
• Strategic approach : An overview of your tactical plan   
• Resource needs : How you'll deploy technology, funding, and employees  
• Risk and challenges : How you’ll mitigate the unknowns if and when they arise  
• Implementation plan : A step-by-step resource deployment plan for achieving your strategy  
• Monitoring and evaluation : How you’ll keep your plan heading in the right direction  
• Conclusion : A summary of the strategic plan and everything it entails  
• What information or context do stakeholders need to understand the strategic plan?
• How can we emphasize the connection between the strategic plan and the overall purpose and direction of the organization?
• What initiatives or strategies will we implement to drive progress?
• How will we mitigate or address risks?
• What are the specific steps and actions we need to take to implement the strategic plan?
• Any additional information or next steps we need to communicate?

7. Implement, monitor, and revise performance 

Finally, it’s time to implement your strategic plan, making sure it's up to date, creating a persistent, always-on strategy that doesn't lag behind. As you get the ball rolling, keep a close eye on your timelines, milestones, and performance targets, and whether these align with your internal and external environment.   

Internally, indicators like completions, issues, and delays provide visibility into your process. If any bottlenecks, inefficiencies, or misalignment arises, take corrective action promptly — adjust the plan, reallocate resources, or provide additional training to employees.  

Externally, you should monitor changes such as customer preferences, competitive pressures, economic shifts , and regulatory changes. These impact the success of your strategic action plan and may require tweaks along the way.   

Remember, implementing a strategic plan isn’t a one-time task — continual evaluation is essential for an always-on strategy. It involves extending beyond planning stages and contextualizing the strategy in real-time, allowing for swift adaptations to changing circumstances to ensure your plan remains relevant.

• Are there any bottlenecks, inefficiencies, or misalignments we need to address?
• Are we monitoring and analyzing external factors?
• Are we prepared to make necessary tweaks or adaptations along the way?
• Are we agile enough to promptly correct deviations from our strategic plan while maintaining an "always-on" strategy for continual adjustments?

You can use several frameworks to guide you through the strategic planning process. Some of the most influential ones include:

• Balanced scorecard (BSC) : Takes an overarching approach to strategic planning, covering financial, customer, internal processes, and learning and growth, aligning short-term operational tasks with long-term strategic goals.
• SWOT analysis : Highlights your business's internal strengths and weaknesses alongside external opportunities and threats to enable informed decisions about your strategic direction.
• OKRs : Structures goals as a set of measurable objectives and key results. They cascade down from top-level organizational objectives to lower-level team goals, ensuring alignment across the entire organization. Get an in-depth look at OKRs here . 
• Scenario planning : Involves envisioning and planning for various possible future scenarios, allowing you to prepare for a range of potential outcomes. It's particularly useful in volatile environments rife with uncertainties.
• Porter's five forces : Evaluates the competitive forces within your industry — rivalry among existing competitors, bargaining power of buyers and suppliers, threat of new entrants, and threat of substitutes — to shape strategies that position the organization for success.

Common problems with strategic planning and how to overcome them

While strategic planning provides a roadmap for business success, it's not immune to challenges. Recognizing and addressing these is crucial for effective strategy implementation. Let's explore common issues encountered in strategic planning and strategies to overcome them.

Want a quick recap? Watch our summary below

Static nature

Traditional strategic planning models often follow a linear, annual, and inflexible process that doesn't accommodate quick changes in the business landscape. Strategies formulated this way may quickly become outdated in today's fast-paced environment.

To overcome the rigidity of traditional strategic planning, your organization should integrate continuous environmental scanning processes. This includes monitoring market changes, competitor actions, and technological advancements, ensuring real-time insights inform strategic decision-making. Additionally, adopting agile methodologies allows for iterative planning, breaking down strategies into smaller, manageable components reviewed and adjusted regularly, ensuring adaptability in today's fast-paced landscape.

Disconnect between strategic plan and execution

There's often a significant gap between the strategic objectives and their actual implementation, leading to misalignment, confusion, and inefficiency within the organization.

To bridge the gap, ensure accountability, alignment, and feedback-driven processes across the business. Linking team roles and responsibilities to lower-level objectives can fosters alignment and accountability, whereas aligning these with overarching strategic objectives ensure coherence in execution. To ensure goals are optimized on an ongoing basis, implement a feedback mechanism that continuously evaluates progress against goals, enabling regular adjustments based on market feedback and internal insights.

Lack of real-time insights

Traditional planning models rely on historical data and periodic reviews, which might not capture real-time changes or emerging trends accurately. This can result in misaligned strategies unsuitable for the current business landscape.

Leverage advanced analytics tools and AI-driven technologies. Invest in technologies that offer real-time tracking and reporting of key performance indicators, with dashboards and monitoring systems that provide up-to-date insights. These allow you to gather, process, and interpret real-time data for proactive decision-making that aligns with the current business landscape. 

Failure to close the feedback loop

The absence of a feedback loop between strategy formulation, execution, and evaluation can impact learning and improvement. Companies might therefore struggle to refine their strategies based on real-time performance insights.

Establish a structured feedback loop encompassing strategy formulation, execution, and evaluation stages. Encourage employees to actively contribute insights on strategy execution, fostering a culture of continuous improvement and adaptation.

Best practices during the strategic planning process

Navigating strategic planning goes beyond overcoming challenges. A successful strategic plan requires you to embrace a set of guiding best practices, helping you navigate the development and implementation of your strategic planning process.   

1. Keep the planning process flexible

With ever-changing business environments, a one-and-done approach to strategic planning is insufficient. Your strategic plan needs to be adaptable to ensure its relevancy and its ability to weather the effects of changing circumstances.  

2. Pull together a diverse group of stakeholders

By including voices from across the organization, you can account for varying thoughts, perspectives, and experiences at each step of the strategic planning process, ensuring cross-functional alignment .  

3. Document the process

Continuous documentation of the strategic management process is crucial in capturing and communicating the key elements of strategic planning. This keeps everyone on the same page and your strategic plan up-to-date and relevant.  

4. Make data-driven decisions

Root your decisions in evidence and facts rather than assumptions or opinions. This cultivates accurate insights, improves prioritization, and reduces biased (flawed) decisions.  

5. Align your company culture with the strategic plan 

Your strategic plan can only be successful if everyone is on board with it — company culture supports what you’re trying to achieve. Behaviors, rules, and attitudes optimize the execution of your strategic plan.  

6. Leverage AI 

Using AI in strategic planning supports the development of an always-on strategy — amplifying strategic agility, conducting comprehensive environmental scans, and expediting planning phases. It can streamline operations, facilitate data-driven decision-making, and provide transparent insights into progress to drive accountability, engagement, and alignment with the strategic plan.

The strategic planning process in a nutshell

Careful strategy mapping is crucial for any organization looking to achieve its long-term goals while staying true to its mission, vision, and values. The seven steps in the strategic planning process outlined in this article provide a solid framework your organization can follow — from clarifying your organization’s purpose and developing a strategic plan, to implementing, monitoring, and revising performance. These steps will help your company meet goal measurements and create an always-on strategy that's rooted in the present. 

It’s important to remember that strategic planning is not a one-time event. To stay effective and relevant, you must continuously monitor and adapt your strategy in response to changing circumstances. This ongoing process of improvement keeps your organization competitive and demonstrates your commitment to achieving your goals.  

Quantive empowers modern organizations to turn their ambitions into reality through strategic agility. It's where strategy, teams, and data come together to drive effective decision-making, streamline execution, and maximize performance.  

As your company navigates today’s competitive landscape, you need an Always-On Strategy to continuously bridge the gap between current and desired business outcomes. Quantive brings together the technology, expertise, and passion to transform your strategy from a static plan to a feedback-driven engine for growth.  

Whether you’re a visionary start-up, a mid-market business looking to conquer, or a large enterprise facing disruption, Quantive keeps you ahead — every step of the way. For more information, visit www.quantive.com . 

Additional resources

How top companies are closing the strategy execution gap, strategy execution in 4 steps: keys to successful strategy, 7 best practices for strategy execution, why your business needs strategy execution software, subscribe for our newsletter.

How to improve strategic planning

In conference rooms everywhere, corporate planners are in the midst of the annual strategic-planning process. For the better part of a year, they collect financial and operational data, make forecasts, and prepare lengthy presentations with the CEO and other senior managers about the future direction of the business. But at the end of this expensive and time-consuming process, many participants say they are frustrated by its lack of impact on either their own actions or the strategic direction of the company.

This sense of disappointment was captured in a recent McKinsey Quarterly survey of nearly 800 executives: just 45 percent of the respondents said they were satisfied with the strategic-planning process. 1 1. “ Improving strategic planning: A McKinsey Survey ,” The McKinsey Quarterly , Web exclusive, September 2006. The survey, conducted in late July and early August 2006, received 796 responses from a panel of executives from around the world. All panelists have mostly financial or strategic responsibilities and work in a wide range of industries for organizations with revenues of at least $500 million. Moreover, only 23 percent indicated that major strategic decisions were made within its confines. Given these results, managers might well be tempted to jettison the planning process altogether.

But for those working in the overwhelming majority of corporations, the annual planning process plays an essential role. In addition to formulating at least some elements of a company’s strategy, the process results in a budget, which establishes the resource allocation map for the coming 12 to 18 months; sets financial and operating targets, often used to determine compensation metrics and to provide guidance for financial markets; and aligns the management team on its strategic priorities. The operative question for chief executives is how to make the planning process more effective—not whether it is the sole mechanism used to design strategy. CEOs know that strategy is often formulated through ad hoc meetings or brand reviews, or as a result of decisions about mergers and acquisitions.

Our research shows that formal strategic-planning processes play an important role in improving overall satisfaction with strategy development. That role can be seen in the responses of the 79 percent of managers who claimed that the formal planning process played a significant role in developing strategies and were satisfied with the approach of their companies, compared with only 21 percent of the respondents who felt that the process did not play a significant role. Looked at another way, 51 percent of the respondents whose companies had no formal process were dissatisfied with their approach to the development of strategy, against only 20 percent of those at companies with a formal process.

So what can managers do to improve the process? There are many ways to conduct strategic planning, but determining the ideal method goes beyond the scope of this article. Instead we offer, from our research, five emergent ideas that executives can employ immediately to make existing processes run better. The changes we discuss here (such as a focus on important strategic issues or a connection to core-management processes) are the elements most linked with the satisfaction of employees and their perceptions of the significance of the process. These steps cannot guarantee that the right strategic decisions will be made or that strategy will be better executed, but by enhancing the planning process—and thus increasing satisfaction with the development of strategy—they will improve the odds for success.

Start with the issues

Ask CEOs what they think strategic planning should involve and they will talk about anticipating big challenges and spotting important trends. At many companies, however, this noble purpose has taken a backseat to rigid, data-driven processes dominated by the production of budgets and financial forecasts. If the calendar-based process is to play a more valuable role in a company’s overall strategy efforts, it must complement budgeting with a focus on strategic issues. In our experience, the first liberating change managers can make to improve the quality of the planning process is to begin it by deliberately and thoughtfully identifying and discussing the strategic issues that will have the greatest impact on future business performance.

Granted, an approach based on issues will not necessarily yield better strategic results. The music business, for instance, has discussed the threat posed by digital-file sharing for years without finding an effective way of dealing with the problem. But as a first step, identifying the key issues will ensure that management does not waste time and energy on less important topics.

We found a variety of practical ways in which companies can impose a fresh strategic perspective. For instance, the CEO of one large health care company asks the leaders of each business unit to imagine how a set of specific economic, social, and business trends will affect their businesses, as well as ways to capture the opportunities—or counter the threats—that these trends pose. Only after such an analysis and discussion do the leaders settle into the more typical planning exercises of financial forecasting and identifying strategic initiatives.

One consumer goods organization takes a more directed approach. The CEO, supported by the corporate-strategy function, compiles a list of three to six priorities for the coming year. Distributed to the managers responsible for functions, geographies, and brands, the list then becomes the basis for an offsite strategy-alignment meeting, where managers debate the implications of the priorities for their particular organizations. The corporate-strategy function summarizes the results, adds appropriate corporate targets, and shares them with the organization in the form of a strategy memo, which serves as the basis for more detailed strategic planning at the division and business-unit levels.

A packaged-goods company offers an even more tailored example. Every December the corporate senior-management team produces a list of ten strategic questions tailored to each of the three business units. The leaders of these businesses have six months to explore and debate the questions internally and to come up with answers. In June each unit convenes with the senior-management team in a one-day meeting to discuss proposed actions and reach decisions.

Some companies prefer to use a bottom-up rather than top-down process. We recently worked with a sales company to design a strategic-planning process that begins with in-depth interviews (involving all of the senior managers and selected corporate and business executives) to generate a list of the most important strategic issues facing the company. The senior-management team prioritizes the list and assigns managers to explore each issue and report back in four to six weeks. Such an approach can be especially valuable in companies where internal consensus building is an imperative.

Bring together the right people

An issues-based approach won’t do much good unless the most relevant people are involved in the debate. We found that survey respondents who were satisfied with the strategic-planning process rated it highly on dimensions such as including the most knowledgeable and influential participants, stimulating and challenging the participants’ thinking, and having honest, open discussions about difficult issues. In contrast, 27 percent of the dissatisfied respondents reported that their company’s strategic planning had not a single one of these virtues. Such results suggest that too many companies focus on the data-gathering and packaging elements of strategic planning and neglect the crucial interactive components.

Strategic conversations will have little impact if they involve only strategic planners from both the business unit and the corporate levels. One of our core beliefs is that those who carry out strategy should also develop it. The key strategy conversation should take place among corporate decision makers, business unit leaders, and people with expertise essential to the discussion. In addition to leading the corporate review, the CEO, aided by members of the executive team, should as a rule lead the strategy review for business units as well. The head of a business unit, supported by four to six people, should direct the discussion from its side of the table (see sidebar, "Things to ask in any business unit review").

Things to ask in any business unit review

Are major trends and changes in your business unit’s environment affecting your strategic plan? Specifically, what potential developments in customer demand, technology, or the regulatory environment could have enough impact on the industry to change the entire plan?

How and why is this plan different from last year’s?

What were your forecasts for market growth, sales, and profitability last year, two years ago, and three years ago? How right or wrong were they? What did the business unit learn from those experiences?

What would it take to double your business unit’s growth rate and profits? Where will growth come from: expansion or gains in market share?

If your business unit plans to take market share from competitors, how will it do so, and how will they respond? Are you counting on a strategic advantage or superior execution?

What are your business unit’s distinctive competitive strengths, and how does the plan build on them?

How different is the strategy from those of competitors, and why? Is that a good or a bad thing?

Beyond the immediate planning cycle, what are the key issues, risks, and opportunities that we should discuss today?

What would a private-equity owner do with this business?

How will the business unit monitor the execution of this strategy?

One pharmaceutical company invites business unit leaders to take part in the strategy reviews of their peers in other units. This approach can help build a better understanding of the entire company and, especially, of the issues that span business units. The risk is that such interactions might constrain the honesty and vigor of the dialogue and put executives at the focus of the discussion on the defensive.

Corporate senior-management teams can dedicate only a few hours or at most a few days to a business unit under review. So team members should spend this time in challenging yet collaborative discussions with business unit leaders rather than trying to absorb many facts during the review itself. To provide some context for the discussion, best-practice companies disseminate important operational and financial information to the corporate review team well in advance of such sessions. This reading material should also tee up the most important issues facing the business and outline the proposed strategy, ensuring that the review team is prepared with well-thought-out questions. In our experience, the right 10 pages provide ample fuel to fire a vigorous discussion, but more than 25 pages will likely douse the level of energy or engagement in the room.

Adapt planning cycles to the needs of each business

Managers are justifiably concerned about the resources and time required to implement an issues-based strategic-planning approach. One easy—yet rarely adopted—solution is to free business units from the need to conduct this rigorous process every single year. In all but the most volatile, high-velocity industries, it is hard to imagine that a major strategic redirection will be necessary every planning cycle. In fact, forcing businesses to undertake this exercise annually is distracting and may even be detrimental. Managers need to focus on executing the last plan’s major initiatives, many of which can take 18 to 36 months to implement fully.

Some companies alternate the business units that undergo the complete strategic-planning process (as opposed to abbreviated annual updates of the existing plan). One media company, for example, requires individual business units to undertake strategic planning only every two or three years. This cadence enables the corporate senior-management team and its strategy group to devote more energy to the business units that are “at bat.” More important, it frees the corporate-strategy group to work directly with the senior team on critical issues that affect the entire company—issues such as developing an integrated digitization strategy and addressing unforeseen changes in the fast-moving digital-media landscape.

Other companies use trigger mechanisms to decide which business units will undergo a full strategic-planning exercise in a given year. One industrial company assigns each business unit a color-coded grade—green, yellow, or red—based on the unit’s success in executing the existing strategic plan. “Code red,” for example, would slate a business unit for a strategy review. Although many of the metrics that determine the grade are financial, some may be operational to provide a more complete assessment of the unit’s performance.

Freeing business units from participating in the strategic-planning process every year raises a caveat, however. When important changes in the external environment occur, senior managers must be able to engage with business units that are not under review and make major strategic decisions on an ad hoc basis. For instance, a major merger in any industry would prompt competitors in it to revisit their strategies. Indeed, one advantage of a tailored planning cycle is that it builds slack into the strategic-review system, enabling management to address unforeseen but pressing strategic issues as they arise.

Implement a strategic-performance-management system

In the end, many companies fail to execute the chosen strategy. More than a quarter of our survey respondents said that their companies had plans but no execution path. Forty-five percent reported that planning processes failed to track the execution of strategic initiatives. All this suggests that putting in place a system to measure and monitor their progress can greatly enhance the impact of the planning process.

Most companies believe that their existing control systems and performance-management processes (including budgets and operating reviews) are the sole way to monitor progress on strategy. As a result, managers attempt to translate the decisions made during the planning process into budget targets or other financial goals. Although this practice is sensible and necessary, it is not enough. We estimate that a significant portion of the strategic decisions we recommend to companies can’t be tracked solely through financial targets. A company undertaking a major strategic initiative to enhance its innovation and product-development capabilities, for example, should measure a variety of input metrics, such as the quality of available talent and the number of ideas and projects at each stage in development, in addition to pure output metrics such as revenues from new-product sales. One information technology company, for instance, carefully tracks the number and skill levels of people posted to important strategic projects.

Strategic-performance-management systems, which should assign accountability for initiatives and make their progress more transparent, can take many forms. One industrial corporation tracks major strategic initiatives that will have the greatest impact, across a portfolio of a dozen businesses, on its financial and strategic goals. Transparency is achieved through regular reviews and the use of financial as well as nonfinancial metrics. The corporate-strategy team assumes responsibility for reviews (chaired by the CEO and involving the relevant business-unit leaders) that use an array of milestones and metrics to assess the top ten initiatives. One to expand operations in China and India, for example, would entail regular reviews of interim metrics such as the quality and number of local employees recruited and the pace at which alliances are formed with channel partners or suppliers. Each business unit, in turn, is accountable for adopting the same performance-management approach for its own, lower-tier top-ten list of initiatives.

When designed well, strategic-performance-management systems can give an early warning of problems with strategic initiatives, whereas financial targets alone at best provide lagging indicators. An effective system enables management to step in and correct, redirect, or even abandon an initiative that is failing to perform as expected. The strategy of a pharmaceutical company that embarked on a major expansion of its sales force to drive revenue growth, for example, presupposed that rapid growth in the number of sales representatives would lead to a corresponding increase in revenues. The company also recognized, however, that expansion was in turn contingent on several factors, including the ability to recruit and train the right people. It therefore put in place a regular review of the key strategic metrics against its actual performance to alert managers to any emerging problems.

Integrate human-resources systems into the strategic plan

Simply monitoring the execution of strategic initiatives is not sufficient: their successful implementation also depends on how managers are evaluated and compensated. Yet only 36 percent of the executives we surveyed said that their companies’ strategic-planning processes were integrated with HR processes. One way to create a more valuable strategic-planning process would be to tie the evaluation and compensation of managers to the progress of new initiatives.

Although the development of strategy is ostensibly a long-term endeavor, companies traditionally emphasize short-term, purely financial targets—such as annual revenue growth or improved margins—as the sole metrics to gauge the performance of managers and employees. This approach is gradually changing. Deferred-compensation models for boards, CEOs, and some senior managers are now widely used. What’s more, several companies have added longer-term performance targets to complement the short-term ones. A major pharmaceutical company, for example, recently revamped its managerial-compensation structure to include a basket of short-term financial and operating targets as well as longer-term, innovation-based growth targets.

Although these changes help persuade managers to adopt both short- and long-term approaches to the development of strategy, they don’t address the need to link evaluation and compensation to specific strategic initiatives. One way of doing so is to craft a mix of performance targets that more appropriately reflect a company’s strategy. For example, one North American services business that launched strategic initiatives to improve its customer retention and increase sales also adjusted the evaluation and compensation targets for its managers. Rather than measuring senior managers only by revenue and margin targets, as it had done before, it tied 20 percent of their compensation to achieving its retention and cross-selling goals. By introducing metrics for these specific initiatives and linking their success closely to bonus packages, the company motivated managers to make the strategy succeed.

An advantage of this approach is that it motivates managers to flag any problems early in the implementation of a strategic initiative (which determines the size of bonuses) so that the company can solve them. Otherwise, managers all too often sweep the debris of a failing strategy under the operating rug until the spring-cleaning ritual of next year’s annual planning process.

Some business leaders have found ways to give strategic planning a more valuable role in the formulation as well as the execution of strategy. Companies that emulate their methods might find satisfaction instead of frustration at the end of the annual process.

Renée Dye is a consultant in McKinsey’s Atlanta office, and Olivier Sibony is a director in the Paris office.

This article was first published in the Autumn 2007 issue of McKinsey on Finance . Visit McKinsey’s corporate finance site to view the full issue.

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3 Steps to Identify the Right Strategic Goals for Your Company

• Graham Kenny

Identify who your key stakeholders are — and what you want from them.

In setting strategic objectives, companies usually end up with a list of worthy but vague aspirations. The secret to getting a list of clearly defined and measurable objectives is to anchor them in what you, as a company’s leaders, want to get from your stakeholders. This leads you to defining desired behavioral outcomes, even fairly obvious ones like buying more. The debate can then move to thinking about how to trigger that behavior, and progress toward these outcomes can be described in measures that are in dollars, like revenue; quantities, like units sold; or percentages, like market share. Thinking in this way sounds prosaic, even obvious, but it is an effective way of getting a management team to think clearly about what they need to do.

Ann is the CEO of my country’s largest independent, not-for-profit aged-care provider, offering residential aged care, retirement living, and at-home support. It was established well over a hundred years ago and is set in many of its ways. One of these is how strategic objective-setting is conducted. But Ann’s not happy with the process. I asked her, “Why not?”

• Graham Kenny is the CEO of Strategic Factors and author of Strategy Discovery . He is a recognized expert in strategy and performance measurement who helps managers, executives, and boards create successful organizations in the private, public, and not-for-profit sectors. He has been a professor of management in universities in the U.S. and Canada.

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How to set strategic goals (with 73 examples you can steal)

Georgina Guthrie

March 23, 2022

As a project manager, setting strategic goals for your team is an absolute must. By establishing objectives, you can ensure everyone (including yourself) is productive and moving in the right direction. It also means you can track progress and make real-time adjustments — which is incredibly difficult to do without clear metrics . In fact, without measurable goals, it’s near impossible to determine whether initiatives are working or not.

But what should these goals be?

What are strategic goals?

A strategic goal is a broad, long-term objective that a company strives to achieve. It can be something as general as becoming the top player in your industry or as specific as increasing market share by 20%.

There are different types of strategic goals (which we’ll explore in a little more detail later on), and each goal will involve metrics — the  criteria you’ll use to measure progress.

Why are performance metrics important?

Metrics are important because they provide concrete evidence of whether a goal is being achieved. Without metrics, it can be difficult to determine whether things are working and how well. Metrics also help to identify areas of improvement and allow for targeted action.

Here are some common strategic goals metrics:

• Revenue growth :  this metric measures how much revenue the company generates over some time. You can break it down by product, market, or other factors.
• Gross margin : this measures how much profit the company earns on each dollar of revenue. Gross margins are useful for tracking product profitability or comparing performance against competitors.
• Customer churn : churn refers to how many customers leave the company over a given period. It can identify areas of improvement and indicate which aspects of a service or product are driving away customers.
• Employee turnover : the opposite of retention, turnover measures how many employees leave the company over a given period. A high turnover rate often indicates that the company needs to improve its employee retention strategy or benefits package.
• Social media followers : this metric measures how many people follow your company on various social media platforms. Follower numbers help you determine the strength of the company’s brand awareness or engagement levels.
• Website visits : this metric shows how many people visit your company website over time. You can use this data to track the company’s online visibility or marketing efforts.
• Product launch success : this metric measures the success of a product release. You can use factors such as sales, customer feedback, and market share to understand product launch success clearly.

Strategic goals vs. strategic management: what’s the difference?

While both strategic goals and strategic management are important, they’re not the same thing.

• Strategic goals are the objectives a company aims to achieve.
• Strategic management is the process of setting and accomplishing those goals.

Think of strategic goals as the long-term outcome you envision — the things you want to achieve in three to five years. To achieve your goals, you need a well-defined process for developing and monitoring them. That’s where strategic management comes in.

Strategic goals vs. OKRs: what’s the difference?

OKRs (Objectives and Key Results) are a popular framework for setting strategic goals. But there are some key differences between OKRs and strategic goals.

Firstly, OKRs are typically shorter-term compared to strategic goals. Secondly, OKRs are more specific and quantitative, while strategic goals are broader and qualitative. Thirdly, OKRs are often used in performance-driven organizations, while strategic goals can be used in any organization.

Strategic goals vs. KPIs: what’s the difference?

KPIs (Key Performance Indicators) are a popular framework for measuring performance. Here’s where they differ from strategic goals.

KPIs are usually more narrow in scope than strategic goals. And while KPIs are highly specific and quantitative, strategic goals are more broad and qualitative. Also, KPIs are best suited for measuring operational performance , while strategic goals are better for measuring business performance overall.

Strategic goals vs. business goals:

There are some key similarities between strategic goals and business goals. Both are important for driving organizational success and must be measurable and achievable to offer the most value. But here’s where they differ:

• Strategic goals focus on long-term growth or performance, while business goals are more immediate targets you must hit to achieve bigger objectives.
• Business goals tend to be specific and quantitative, while strategic goals have a broader and more aspirational focus.
• Strategic goals encourage you to take a comprehensive approach to achieve organizational success. Business goals are more modular and focus on improving performance in individual business units or departments.

Which framework is right for your company?

There is no one-size-fits-all answer to this question. The right goal-setting framework depends on your company’s size, culture, and industry. If unsure which model is right, speak with a business advisor or consultant for guidance. They can help you understand which operational factors impact your organization and choose a framework to drive progress.

How to set strategic goals

Now that we’ve covered some differences between strategic goals and other popular frameworks, let’s take a closer look at how to set effective strategic goals.

1. Start with the big picture

Start by thinking about the overall vision and mission of your company. What are you trying to achieve? Where do you want to be in three to five years? Once you have a general idea of where you want to go, you can start thinking about specific goals to help you get there.

2. Make them SMART

All goals should be SMART : that’s Specific, Measurable, Achievable, Relevant, and Time-bound. Your goals must be specific enough to be quantified and measured, achievable (not too easy or too difficult), and relevant to the company’s overall vision and mission. They should also have a specific timeframe for completion.

3. Communicate your goals to all employees

Make sure to communicate your goals to all employees, not just management. Employees need to understand what the company’s trying to accomplish and their role in achieving those objectives.

4. Hold everyone accountable

Holding employees accountable for meeting their goals is important to success. Use a system of rewards and penalties to motivate employees to stay on track.

5. Evaluate progress, and make changes as needed

Regularly evaluating progress is essential for managing the pace and success of your goals. If necessary, make changes based on what you learn from one milestone to the next.

Now, let’s get to some real-world examples.

73 strategic goal examples

We’ve split this list by goal type to make it easier to follow. Please note: the examples do not reflect Nulab’s goals; they’re here for educational purposes.

Strategic goals for finance

1) Increase revenue by 20% in the next three years 2) Reduce costs by 15% in the next 12 months 3) Invest in new technology that will improve our overall efficiency 4) Increase our market share by 5% in the next two years 5) Create a new product that will generate $1 million in revenue in the next 12 months 6) Diversify our revenue streams into two new markets 7) Become financially sustainable by 2023 8) Grow shareholder value by 20% in the next two years 9) Reduce marketing costs by 10% over the next year

Strategic goals for marketing

10) Increase website traffic by 25% in the next three months 11) Generate 1,000 leads through our website in the next six months 12) Double our social media following in the next six months 13) Increase customer satisfaction by five points in the next year 14) Increase brand awareness by 25% in the next year 15) Launch a new marketing campaign that generates a 10% ROI 16) Reach 10,000 people through our email list in the next six months 17) Secure two major partnerships in the next 12 months 18) Attend three industry tradeshows in the next year

Strategic goals for R&D

19) Develop a new product that will be in the market in 12 months 20) Patent our new technology by the end of the year 21) Increase our R&D budget by 15% in the next year 22) Hire two new senior scientists in the next six months 23) Double our current market share in the next three years 24) Develop a product that is fives times more efficient than our current products 25) Reduce the time to market for new products by 50% in the next year 26) Increase our customer base by 20% in the next year 27) Collaborate with two other companies in the next year

Strategic goals for employee productivity

28) Increase average billable hours per employee by 20% in the next three months 29) Streamline our billing process so that it takes employees less time to bill clients 30) Reduce customer support inquiries by 20% in the next month 31) Improve team productivity by 10% in the next three months 32) Implement a new CRM system that will make it easier for employees to find customer information 33) Create a training program for new employees that will shorten the learning curve 34) Hire two new customer service representatives in the next month 35) Allow employees to work from home one day a week 36) Give employees a 5% raise in the next three months

Strategic goals for innovation

37) Develop a new product that will be in the market in 12 months 38) Patent our new technology by the end of the year 39) Increase our R&D budget by 15% in the next year 40) Hire two new senior product designers in the next six months 41) Double our current market share in the next three years 42) Develop a product that is five times more efficient than our current products 43) Reduce the time to market for new products by 50% in the next year 44) Increase our customer base by 20% in the next year 45) Collaborate with two other companies in the next year

Customer-focused strategic goals

46) Increase customer satisfaction by five points in the next year 47) Decrease website bounce rate by 25% in the next three months 48) Generate 1,000 customer product reviews in the next six months 49) Secure a rating of 75% five-star reviews on Tripadvisor by the end of the quarter 50) Reduce refund time by one week by the end of next quarter 51) Host two focus groups in December to get feedback about the new product 52) Reduce customer call time wait by an average of three minutes in the next two months 53) Secure two major influencer partnerships in the next 12 months 54) Increase newsletter subscriptions by 20% by the end of 2022

Strategic goals for internal improvement

55) Increase average billable hours per employee by 20% in the next three months 56) Develop and implement new company core values by December 2023 57) Reduce staff turnover by 25% in the next six months 58) Increase employee satisfaction by 10% in the next six months 59) Implement a new training program for new employees 60) Give employees a raise of 5% in the next three months 61) Hire two new customer service representatives in the next month 62) Allow employees to work from home one day a week 63) Reduce the time it takes to process invoices by 50% in the next month 64) Implement new software that will improve team communication

Strategic goals to promote growth

65) Secure a new office space that is twice the size of our current one 66) Implement a new sales strategy that generates a 20% increase in sales in the next six months 67) Increase our customer base by 20% in the next year 68) Double our market share in the next three years 69) Collaborate with two other companies in the next year 70) Launch a new marketing campaign that generates a 10% ROI 71) Reach 10,000 people through our email list in the next six months 72) Secure two major partnerships in the next 12 months 73) Invest in a new advertising campaign

Final thoughts

Developing effective strategic goals is essential for any business, regardless of size or industry. By setting measurable, achievable objectives, you can ensure your company is moving fully ahead in the right direction and achieving its long-term goals.

As your organization or team grows and changes, choose tools that make collaborating and tracking your goal metrics as convenient as possible. By doing so, you’ll be able to work together as a team toward the success you and your business deserve.

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7 Key Strategic Planning Skills for Business Success

Deft strategic planning confers a sizable competitive advantage by sharpening enterprise focus, revealing blindspots early, and seamlessly aligning organization-wide efforts towards shared goals. Thus, honing strategic plan thinking capabilities becomes pivotal for leaders charting ambitious growth trajectories.

This blog covers why strategic planning matters, which underlying competencies it demands, and how professionals can systematically strengthen strategic acumen, steering their firms to unprecedented heights.

Why Does Strategic Planning Matter?

Strategic planning is a critical process that helps organizations define ambitious yet achievable long-term goals and lay out step-by-step roadmaps to reach them. It provides immense value in several key ways:

• Channels Energy Towards Key Goals Strategic planning brings a sharp focus on the handful of make-or-break goals that matter most for an organization’s success. This prevents resources and efforts from getting diffused across less impactful peripheral initiatives that merely seem urgent. Strategic planning sets apart the vital few from the trivial many.
• Anticipates Emerging Risks and Opportunities By mandating that strategy designers envision potential scenarios - both positive and negative - strategic planning builds organizational agility and resilience. It prompts proactive identification of looming threats that may require contingency planning. Similarly, it reveals openings for first-mover advantage through breakthrough initiatives in adjacent spaces.
• Ensures Organization-wide Alignment By transparently communicating enterprise-wide priorities identified through systematic strategic planning, organizations resolve departmental misalignments where siloed units may otherwise work at cross purposes. It brings coherence to collective efforts.
• Enables Course Corrections The regular reviews and progress tracking processes inherent in strategic planning cycles allow organizations to rapidly detect early signals when realities deviate materially from projections. This allows timely course corrections through informed pivots, saving precious time and resources. Meticulous strategic planning ensures budgetary, talent, and operational capabilities get efficiently channeled towards differentiated goals and minimize waste. Pitfalls like over-investing in non-core activities or duplicative competing efforts are averted through judicious allocation.
• Attracts Top Talent By boldly articulating an ambitious vision for the future, organizations inspire both current and prospective talent. Employees feel pride in contributing to outsized goals and team bonds while overcoming shared challenges. An aura of pioneering spirit retention and recruitment. In summary, separating hype from reality, strategic planning confers durable competitive strength to firms intentionally building this organizational capability. It is no panacea but ignored at one’s own peril. With disciplined adherence to its tenets and principles, business strategy unlocks immense latent potential for teams aligned around inspirational goals empowering their future.

What Competencies Shape Strategic Planning Excellence?

While different models exist, several fundamental capabilities remain vital for any successful strategic planning approach. Mastering these multidimensional strategic planning skills separates mediocre incrementalists from transformational strategic thinkers driving enduring growth.

Diagnostic Acumen

Strategic leaders boast the perceptiveness to read weak signals within steady trends and see early warnings of impending changes ahead of peers. Key aspects include:

• Subtle Pattern Spotting - Identify nuanced inflections in contextual factors from subtle cues. This allows for an accurate assessment of situational dynamics.
• Transition Sensing - Spot transitions from one maturity stage to another in the market lifecycle curve by analyzing business growth patterns.
• Opportunities/Threats Detection - Uncover latent niche opportunities or existential threats in the longer term from seemingly random data points today.

Systems Thinking

Top strategic thinkers conceptually connect disparate dots, creatively configuring them into ambitious yet viable future systems displaying seasoned judgment.

• Future Conceptualization - Design structured goal scenarios expanding capabilities balancing realism with idealism avoiding incrementalism.
• Inspirational Visioning - Portray desired future states vividly, appealing at emotional levels to rally collective spirit.
• Contingency Planning - Codify crisis response protocols for extreme scenarios, from wild card events to liquidity crunches.

Change Leadership

Beyond technical analysis, strategic leaders leverage political and cultural change management savvy to drive transformation.

• Stakeholder Alignment - Overcome resistance by appealing to the interests/values of influencers and securing requisite buy-in.
• Motivational Communication - Share reality while restoring hope, conveying authentic confidence in the collective capacity to prevail against challenges.
• Sustained Commitment - Remain resilient in adherence to strategic direction without wavering or diffusion during uncertainty typical of transitions.

Flawless Alignment

Ensuring strategic priorities in shared goals cascade down enterprises simplified into specific accountabilities prevents disjointed efforts.

• Goals Breakdown - Granularly decompose top-level goals into departmental, team, and individual OKRs enterprise-wide.
• Conflict Resolution - Foster harmony across functions by jointly resolving differences that hinder cross-departmental collaboration.
• Interdependence Identification - Intentionally structure workflows by identifying touchpoints demanding enterprise-wide synchronization.

Results Orientation

Instilling zeal for surpassing existing standards avoids complacency, while progress bars continually elevate as organizations evolve capabilities over time.

• Stretch Metrics - Institutionalize a chronic sense of constructive discontent with the status quo fueled by hunger for ambitious stretch goals.
• Ruthless Prioritization - Maintain unwavering focus on outcomes without distraction by peripheral matters or pet initiatives.
• Virtuous Progression - Raise performance bars as competencies strengthen in perpetuity while celebrating small wins, shaping a culture of excellence.

Together, these diverse but symbiotic capabilities make for strategic planning proficiency at scale, distinguishing outperforming entities. While ingrained early in childhood, components can be systematically nurtured later through dedicated grooming.

7 Ways Professionals Can Level Up Strategic Planning Skills

For both individuals and organizations seeking strategic planning elevation, the following are 7 actionable tactics:

1. Adopt Helicopter Perspectives

Rather than getting mired in granular everyday details, consciously zoom out to spot emerging sector patterns promising first-mover advantages or reductionist tactics missing the big picture.

• Carve out contemplation time pondering existential questions facing business.
• Debate strategy priorities with thought leaders beyond usual peer circles.
• Map core assumptions driving decisions and stress test them.

2. Learn Proven Frameworks

While no formulaic solutions exist in strategy, time-tested models provide guardrails for avoiding previous pitfalls.

• Master renowned foundations like Porter’s 5 Forces , SWOT , PESTEL, etc.
• Audit past successful and failed initiatives, discerning differentiating factors.
• Enroll in formal strategy programs offered by leading faculties.

3. Sharpen Analytical Capabilities

Help cohorts sift signals from noise by honing fact-based evaluation proficiency.

• Take courses elevating statistical analysis, financial modeling, and data science skills.
• Take up puzzles and participate in case competitions, building cognitive muscles.
• Take up advisory roles guiding strategy for early-stage ventures.

4. Design Scenarios Exhaustively

Stress test growth plans by charting scenarios spanning best, worst, and most likely cases given identifiable conditions.

• Use techniques like simulation modeling to form probabilistic assumptions.
• Red team proposed ideas of having contrarians poke holes, unearthing hidden flaws.
• Benchmark against analog contexts where similar plays unfolded successfully or flopped.

5. Secure Alignment Nimble Execution

Foster coherence across layers via transparent communications while empowering teams executing plans through distributed authority.

• Cascade goals into specific accountabilities across the hierarchy, preventing diffusion.
• Equip frontline colleagues closest to market realities with autonomy, taking decisive actions.
• Encourage surfacing deviations from projections quickly without fear of repercussions.

6. Plan For Pivots

In dynamic times, planning must evolve from rigid roadmaps to flexible playbooks deftly adapting momentum.

• Build contingency responses for high-impact scenarios rather than dismiss them as improbable.
• Accept key assumptions will be invalidated and represent temporary best knowledge.
• Maintain war chests, allowing capitalization should breakthrough opportunities arise.

7. Instill Accountability

Celebrate milestones met by linking progress to formal incentives and informal recognitions, enhancing morale.

• Quantify contributions via OKR goal fulfillment over relativistic model rewards.
• Share stories of teams overcoming setbacks through grit rather than glory for successes alone.
• Discuss missteps openly as learnings without ascribing blame.

Combined, such steps ingrain strategic planning excellence at individual and organizational levels, promising prudent vision setting and flawless execution.

The capacity to formulate robust strategies and align collective efforts toward ambitious targets represents an invaluable capability conferring market leadership. By studying concepts, shaping strategy, honing supporting skill sets, and applying learnings through guided practice, professionals unlock coveted strategic planning mastery, elevating their leadership impact and accelerating their ascent up organizational ladders.

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More From Forbes

Seven steps to engage your employees in strategic planning.

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I remember when I first started my leadership development business 30 years ago, strategic planning was considered a top-down effort. I worked with leaders to help them create strategic plans that included the organization's vision, mission, values, goals and key initiatives. Department managers were then asked to engage their employees to get these projects done. This would often be met with resistance and excuses (lack of time was among the most popular).

As I dug deeper into the root of this issue, employees eventually admitted they didn’t want to be assigned another “chore,” especially without a voice in the matter. I shared this feedback with top management, but many of them felt the strategic planning process was management’s responsibility, and execution was up to the employees.

This kind of top-down management created a dynamic on the team of “leadership” versus “worker bees,” which left employees less than inspired. And — though there were countless initiatives to create more engagement, collaboration and innovation — what employees really wanted was to be heard, respected and appreciated for the contribution they could make to the overall strategy of the company. This feedback is just as important to a company’s culture as the strategy itself.

When I saw "culture" defined in Merriam-Webster's dictionary as “the act of developing the intellectual and moral faculties," an “aha” moment came to me: What if developing intellectual and moral faculties meant creating and deploying the strategic plan differently?

This led me to think about how to hear, respect and appreciate employees in the strategic planning process by integrating the plan into everyday decision making. I also knew these decisions couldn’t just be understood in their heads. I believe employees need to make sense in their guts and be inspired in their hearts as well. When the gut, heart and head are all on the same page, what happens is "gut intelligence," a term I developed that describes the wisdom to know what to do when these three elements are in sync.

I've written a book on how gut intelligence works, and to create a culture with increased gut intelligence, I often coach my clients on the following seven-step collaborative strategic planning process:

1. Create vision and values.

It's important to have a vision and values for your organization, as this tells everyone why your company exists and who you are. To start your vision and value quest, develop three vision statements, and determine 10-15 values you want your company to portray. Then, send a survey to educate employees on the “why” behind those selections. Have employees rate the vision statements and values, and ask them to give comments.

Once you've heard your employees' feedback, select your vision and values. Review their input, and choose one vision statement and between five and eight values.

2. Create the mission and goals.

Your mission statement acts as a compass for your goals. Have managers share with employees the chosen vision statement and values from step No. 1. Then, send three mission statements and five goals to support it. Have employees rate the mission statements and goals, and ask for additional comments. After everyone responds, select your mission and between three and five goals, based on your team's feedback.

3. Create initiatives.

At this step, it's time to send out which mission and goals were chosen, along with up to five initiatives for accomplishing each goal. Employees can then rate the initiatives and express if they believe anything should change. Make your final initiative selection when your team is finished reviewing their suggestions.

I've found it's best to give your initiatives an inspirational, memorable name, such as "Dare to be aware," rather than something bland like, "Reduce mistakes."

4. Create teams.

Once you've established which initiatives will help your company reach its goals, send your initiatives to employees so they can choose a few to work on. Then, review their requests, and assign teams. Try your best to even out the load among employees, as sometimes overzealous employees will sign up for too many initiatives, and their job descriptions could suffer.

5. Determine action plans.

Ensure each manager in your organization is assigned initiatives to lead, and instruct them to send out milestones for each. Ask employees what they think, and encourage them to sign up for action steps and suggest deadlines.

Then, review and finalize the action plan, assignments and deadlines. Be sure to look at all the initiatives to consider if deadlines are realistic and no one department or person is overloaded (Gantt charts are great for this).

6. Check in on employees' progress.

Check action plan progress weekly. Where progress is not made, coach your team, and encourage them along the way. For example, ask, "How can you get back on track?" instead of, "Why didn't you get this done?" The former gets them thinking about what they can do, while the latter begs for an excuse. Where progress is made, recognize it. When your team meets its deadlines, be sure to point this out.

7. Provide quarterly updates — and celebrate.

Hold quarterly meetings with all employees to update and celebrate the progress of the teams and individuals who met their goals. It is important to do quarterly updates and celebrate to keep your plan front and center. By benchmarking progress and celebrating milestones, you send a message to everyone about how important it is to achieve the deadlines and results.

While most of my clients were already doing steps four through seven, by also engaging and educating employees in steps one through three, they've found that not only did their employees feel more heard, respected and appreciated, but their companies also gained greater alignment and achievement to their goals. This occurred because the collaborative strategic planning process developed a culture with intellectual and moral faculties to support the vision, mission, values and goals. The ultimate benefit was employees increased their gut intelligence, a skill needed for more effective daily decision making and goal achievement.

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The 5 reasons employees benefit from engaging with strategy

Focusing on strategy execution benefits employees

Strategies are not abstract ideas that only a select few are concerned with; they’re concrete plans of action that people implement in their daily activities. 

Focusing on strategy execution means engaging your people in the strategic processes. Those processes involve your strategic plan’s development, assessment, and implementation capabilities. 

Conceptual and dictated strategies belong to the past. Grounded and co-created strategies are the way forward. And in co-creation, context rules over content.

Here are some specific ways that engaging your employees in the strategic processes benefits execution:

Why employees benefit from engaging with strategy execution

1. because they understand the big picture.

And their place in it.

At the end of the day, people execute strategies . It’s the actions on the front line that move the needle, not the elaborate details of backstage planning. Problems arise when people on the front line can’t see the impact of their work. They move their organization towards its strategic goals but don’t know it.

This creates a gap between people's actual work impact and their perception of it. They might get a glimpse of their impact on a team level, but it’s limited. As a result, they don’t understand how their work fits into the bigger picture or why they do what they do.

In other words, they lack context.

This gap has a twofold effect.

• The effort and decisions are all over the place. There isn’t a guiding destination that allows people to collect and direct those efforts towards it. The lack of context compels people to make decisions based on temporary circumstances.
• It robs them of the satisfactory feeling of participating in a large cause. On the contrary, when people understand how their work contributes to their company’s vision, they take pride in their work and feel fulfilled.

Fulfillment isn’t an emotion that stems from celebrating victories.

A person could feel fulfilled at the end of their working day despite making a mistake or missing a target. That’s because fulfillment stems from a feeling of belonging and working towards a vision that is bigger than any single victory. That’s why it’s so important to share the context of the company’s strategy. It highlights the bigger picture.

And when people understand the big picture, they engage with it more.

2. Because they work smarter instead of harder

Engaged employees don’t work on default mode.

They are more conscious about the things they work on. They allocate more time to finding out the most important tasks and prioritize them over the rest. They work on working. The most important kind of work.

This is due to the increased alignment the strategic context provides. Alignment that is generated by an intense focus on strategy execution and goes beyond setting goals and objectives. It integrates strategy with business as usual. That means people’s daily activities are aligned with the team’s goals and projects, which are, in turn, aligned with the strategic objectives.

Meanwhile, the plan’s objectives, timelines, and goals are updated based on people’s feedback. Any unrealistic, overambitious, and overoptimistic aspects are adapted to fit the company’s reality.

This creates a positive loop.

Where people align their actions with the plan’s goals, their involvement in the strategy grounds it to reality. The thing is that the loop breaks if there is too much friction on certain processes. Specifically, if the strategic context (not content) is not clear or the grounding process takes too much time, then the loop expands too much, rendering it ineffective.

That’s why it’s so important to migrate from static tools like spreadsheets and slides into dynamic platforms like Cascade .

Their impact is visible to everyone

This is an added benefit of having more transparent strategic processes that invite more people (than just the executives) in the strategy discussions and expose the plan to every stakeholder.

The need for increased transparency forces managers to adopt tools and install processes that highlight every team member’s contribution to progress through team projects and individual responsibilities.

As a result, no work goes unnoticed by the superiors, who realize the value each individual brings to the team.

3. Because they do fewer administrative tasks & more actual work

One of the most appreciated benefits that strategy execution software like Cascade provides to executives and managers is a clear overview of the plan’s structure and the current progress towards the strategic objectives and goals.

This has a direct impact on people’s everyday work.

It reduces the need for out-of-the-blue progress updates. For example, managers don’t need to send emails asking, “Where are we concerning X?” since they can get into the platform and, with a few clicks, get the answer themselves.

This also reduces reporting friction.

No more spreadsheets with countless versions and time spent looking for the right one. Instead, all information is collected into one centralized location with integrated abilities to track and report progress. As a result, managers get a clear and concise view of the current trajectory, and people spend less time composing long reports and emails and more time doing things that move the needle.

4. Because they gain clarity in their performance expectations

A focus on strategic execution forces an alignment process that brings structure into performance management.

How does it work?

By introducing top-down transparency . Two things are accomplished simultaneously in a platform like Cascade, where all aspects of the plan are exposed available on-demand to every team member.

Firstly, the workload of each team member becomes apparent, and managers have a clearer view of how many projects each person is responsible for. That forces a conversation around prioritization . Each project’s impact is determined and then they are ranked based on their importance. 

So people have a better sense of where to focus their efforts and resources. It also facilitates finding duplicate work between different teams and saving the resources that would otherwise be wasted (like hiring new people to cover needs the company doesn’t have).

Secondly, the discussions around impact and importance allow team members to raise their concerns, address potential blocks and get clearer instructions. As a result, employees better understand expectations and what success looks like . Not only do they invite structure into their work, but they also get more specific, tailored and clear instructions.

This also impacts reviewing meetings since candid discussions help balance the execution's subjective part with the metrics' objective aspects. This means that meetings don’t address only KPIs' progress but move on to discuss judgment calls and decision-making. 

5. Because they get more authority (& less micromanagement)

Inviting people to engage with the strategic processes sets the foundation for effective strategy execution. Because it creates a strong sense of ownership and accountability . 

Humans feel responsible for anything they have spent time and energy to create. It makes them feel invested, so they strive to bring it to completion.

It’s the same for strategy. When people feel like they have contributed to the development of the strategic plan and co-created it, they are intrinsically motivated to bring it to life and integrate it into their daily activities.

That creates a fertile ground for employee empowerment because managers know that everyone is on the same strategic page and that decisions are aligned with the company’s objectives and aspirations.

Thus, managers trust their people to make the right decisions and grant them the authority to do so.

It’s a win-win scenario because managers delegate more decisions, reduce micromanaging and take back valuable time that they can spend on more important tasks. 

At the same time, people acquire the freedom to make the right decisions since they have the strategic context to inform them and the flexibility to apply the customer knowledge they possess.

Employees feel empowered and customers are better served.

However, there is one crucial requirement.

Culture needs one particular trait for these benefits to take place

Specifically, top-down trust and, ideally, all-directional (vertical and lateral) trust. In a culture with a strict distinction between the private and public spheres, initiatives aiming to increase bottom-up transparency without similar or more radical top-down moves have the reverse effect.

They are perceived as more measures to control and micromanage.

That’s why it’s so important to have a balance of metrics to measure trust and performance. For example, besides regular performance metrics, include peer reviews that evaluate people on their people skills, like cooperation, trust, communication, etc.

Then, make decisions based on that, as well.

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Your toolkit for strategy success.

Crucial Link Between Performance Management & Strategic Planning

Have you ever asked your team members if they know what the key company goals are for this year? If yes, are they aligned with these goals in their day-to-day work? 

When your employees are unaware of the organization’s goals, a gap exists between performance management and strategic planning .

This gap can be why your employees feel disengaged, do not collaborate well with other team members, and are ready to quit.

You can fix this issue within your company by prioritizing the performance management-strategic planning alignment with the help of proven management frameworks.

This blog will explore how performance management and strategic planning are interconnected and how leveraging this connection can enhance team and business performance.

Understand performance management

Effective performance management is the continuous process of setting clear expectations, tracking progress, providing feedback, and recognizing achievements to drive employee and team performance.

Beyond annual performance reviews, it embraces a more holistic approach to support growth and development.

For instance, as a team leader, you want to ensure your team is aligned, motivated, and productive.

You implement continuous performance management practices that involve creating a structured framework that enables open communication, facilitates growth, and aligns individual goals with organizational objectives.

Performance management is a dynamic process that requires continuous effort and commitment.

It is not a one-size-fits-all approach. Tailor it to suit your team’s unique needs and aspirations, and be open to adapting your strategies as your organization evolves.

Performance management factors that employees value

Clarity and transparency.

Provide your employees with a clear direction and measurable targets.

Enable them to see how their performance relates to the company’s objectives.

You can implement a simple, transparent goal-setting and execution framework like OKRs to set performance goals. 

For example, despite setting a vague goal like “Increase sales,” you can set a SMART objective like “Achieve a 15% increase in monthly sales by implementing a targeted marketing campaign.”

Regular feedback

Regularly communicate with your employees, provide constructive feedback to acknowledge their strengths, and identify areas for improvement.

By enabling an environment where feedback flows freely, you create a culture of continuous improvement.

For instance, schedule a feedback session to discuss what went well and areas for growth after project completion, allowing your employees to learn and develop.

Fairness and equity

Treat your employees fairly, ensuring that goals, expectations, and rewards are distributed based on merit and performance, not other factors like race and gender. 

Demonstrating fairness instills trust, boosts morale, and creates an inclusive work environment.

Development and growth

Invest in the professional development of your team. Provide opportunities for learning, training, and skill enhancement.

By facilitating a learning culture, you empower your employees to develop their abilities, continually enhancing individual and team performance.

For instance, offering them access to online training resources.

Ensure employees are engaged and motivated by aligning their work with their passions and strengths.

They should have a say in how their performance is evaluated and that their feedback is being considered.

Recognize and acknowledge their efforts to boost morale and create a sense of ownership.

Celebrate milestones, achievements, and exceptional performance to reinforce positive behavior and encourage continuous success.

For instance, acknowledging the individual and team achievements in the regular meetings.

Understand strategic planning

Strategic planning is defining your organization’s mission, vision, and long-term goals and developing a roadmap to achieve them.

It involves aligning resources, making informed decisions, and charting a plan that positions the organization for success.

Think of it as a compass that guides your team’s actions, ensuring they are purposeful and aligned with the ultimate business goals.

Every organization is unique, and strategic planning should be tailored to suit your company’s needs and circumstances.

Involve your team in the planning process, and remember that it is not a one-time event but an ongoing journey of growth and adaptability.

Essential steps in effective strategic planning:

Establish the organization’s mission and vision.

Clarify the purpose and direction of your organization. What is your organization’s mission? What do you want to achieve in the long term?

Involve your team in the process to ensure a shared understanding and commitment to the organization’s core values and purpose.

Do a SWOT analysis

Conduct a comprehensive analysis of your organization’s strengths, weaknesses, opportunities, and threats (SWOT).

This provides valuable insights into internal capabilities and external factors that may impact your organization’s success.

For instance, your business may have a strong technology infrastructure (strength) but lack a diverse customer base (weakness).

Set SMART goals

Set specific, measurable, achievable, relevant, and time-bound (SMART) goals that align with your organization’s mission and vision.

SMART goals offer a clear focus and allow you to track progress effectively. 

For instance, a SMART goal could be “Increase market share by 15% within the next year by expanding into two new geographic regions.”

Develop a strategic plan

Design a strategic plan that outlines the actions, initiatives, and resources required to achieve your goals.

Break down your goals into actionable steps and assign responsibilities to individuals and teams.

Define milestones that will help you monitor progress. One effective framework you consider to measure success is the OKR framework.

Consider the resources and budget needed to support the strategic plan’s execution.

For instance, the plan may involve investing in research and development to launch new product offerings.

Communicate the strategic plan to employees

Effectively communicate the strategic direction of the organization and ensure everyone understands it.

Transparently share the strategic plan with your employees, explaining how their roles and contributions align with the overall objectives.

Encourage two-way open communication and foster a culture of collaboration.

Align the organization’s activities with the strategic plan

Cascade the strategic plan to individual teams and employees, ensuring that day-to-day activities and projects align with the broader objectives.

You may know that OKRs are a very effective way of doing this. They are cascading and bottom-up goals aligning everyone with the organizational objectives and initiatives.

Develop a sense of ownership and accountability by involving employees in goal-setting.

Provide the necessary resources and support to help them achieve their objectives.

For example, if one of the objectives is to enhance customer satisfaction, ensure that customer-facing teams have the necessary training and tools to deliver exceptional service.

Measure progress and make adjustments as needed

Continuously track and measure progress toward your goals. Monitor the metrics based on the framework you use to assess performance and identify improvement areas.

Be agile and resilient, adapting your strategies to navigate changing market conditions or emerging opportunities. 

For instance, if a marketing campaign is not delivering, analyze the data and make necessary adjustments to optimize its effectiveness.

Celebrate successes

Acknowledge and celebrate milestones along the way.

Recognize the efforts of your employees, facilitating a positive and motivated work environment.

This boosts morale and reinforces the importance of strategic planning and its impact on organizational performance.

Relation between performance management and strategic planning

You cannot run a successful organization without effective performance management and strategic planning. 

Both are part of the process in which you strive to achieve key business goals as a team.

Learn about the performance management and strategic planning factors that influence each other and are indispensable in an organization:

Performance management helps you achieve key strategic goals and plans

Performance management is a bridge between day-to-day operations and long-term strategic objectives.

When companies effectively manage and evaluate employee performance, organizations can ensure that individual and team efforts are aligned with the overall strategic goals.

To better understand this, imagine a scenario where your company sets a strategic goal to become a customer-centric organization.

Through effective performance management practices, such as regular feedback and performance evaluations, your managers can identify individuals who consistently show excellent customer service skills.

Recognizing and rewarding these employees motivates them to perform better and ensures alignment with the strategic goal.

Performance management aligns employees with the strategic plan

A robust performance management system lets you align employee objectives with the broader strategic plan.

Your clear communication of the strategic direction and cascading objectives throughout the organization facilitates alignment and a shared sense of purpose.

By linking individual and team goals to the strategic plan, employees understand how their efforts contribute to the organization’s success.

This helps create a sense of ownership and accountability among your team, driving performance toward strategic objectives.

Consider a software development company that aims to expand into new markets.

By incorporating this strategic objective into performance management, team leaders can set specific goals for their teams, such as developing new product features or targeting specific customer segments.

This alignment ensures that individual and team efforts directly contribute to the organization’s strategic growth.

Performance management helps identify improvement areas in the strategic plan

Regular performance evaluations and feedback give you valuable insights into improvement areas in the strategic plan.

When you closely monitor employee performance, you can identify gaps or challenges that may impact the successful execution of the strategic plan.

For example, you identified common employee feedback during a performance review: ineffective communication between different teams.

This made you revisit the strategic plan and incorporate initiatives focused on improving cross-team collaboration, such as implementing the OKR framework.

Performance management can highlight areas where the strategic plan needs adjustments.

Data from performance management aid in better decision-making for strategic planning

Performance management can help you generate valuable data that informs decision-making in the strategic planning process. 

Data on employee performance, competencies, and skill gaps can help you make informed decisions about resource allocation, talent development, and succession planning.

For instance, your sales team consistently falls short of its targets, and by analyzing conversion rates and customer feedback, you can identify specific improvement areas.

With the data-driven approach, you can make better strategic planning decisions, enabling you to allocate resources, implement training programs, or revise sales strategies to align with the organization’s overall goals.

Performance management helps develop employee strategic planning skills

Performance management encourages an ongoing learning and development culture. 

When you set clear performance expectations, provide regular feedback, and offer growth opportunities, employees develop strategic thinking and planning skills.

This benefits individuals and enhances the organization’s collective ability to contribute to strategic planning.

For instance, performance management includes regular coaching and mentoring sessions when focusing on employee development.

These sessions allow employees to discuss their career aspirations and align their goals with the organization’s strategic direction.

You support individual growth and organizational success by nurturing employees’ strategic thinking skills.

Strategic planning helps create more effective performance management

There is no doubt strategic planning provides the context and framework for performance management initiatives.

It becomes more focused and impactful when you align performance management with strategic objectives.

The strategic plan guides the identification of metrics and milestones that align with the organization’s long-term goals.

This alignment ensures that performance management efforts directly contribute to the organization’s strategic success.

For example, your customer service team aligned to reduce customer churn can use performance metrics related to customer satisfaction and retention rates.

This alignment with the goal ensures that performance management efforts are focused on driving outcomes that support the strategic plan.

Strategic planning boosts accountability, hence performance

When you clearly define objectives, roles, and responsibilities in your strategic planning, you establish a foundation for accountability at all levels. 

This drives performance and ensures that individual and team efforts are focused on achieving the desired strategic outcomes.

For example, you set a strategic goal of improving project delivery timelines.

By defining relevant milestones and holding regular performance check-ins, you can track progress and ensure accountability throughout the organization.

This sense of accountability motivates employees to consistently meet deadlines and deliver high-quality work, ultimately driving overall performance.

Strategic planning ensures performance management aligns with the organizational culture

You can plan to align performance management practices with the organization’s values and culture.

You can incorporate performance management principles that reflect the organization’s core beliefs. 

For example, your organization is known for its collaborative and innovative culture, as you value employee autonomy and creativity.

You create a performance management framework designed to support and nurture this culture by – emphasizing the importance of individual contributions, providing regular opportunities for idea-sharing, and recognizing employees who demonstrate innovative thinking aligned with the strategic goals.

Effectively link performance management and strategic planning

You can make teamwork much smoother and simpler by establishing a common language and framework throughout your organization.

For example, by practicing the OKR management framework, you can align employees with each other and the key business goals. 

This also makes their work simpler as everyone knows transparently how their work impacts the achievement of the key business goals.

Learn about more specific ways to align performance management with strategic planning:

Involve employees in the strategic planning process

When you involve employees in strategic planning, they are more likely to be committed to the plan and understand how their work contributes to the organization’s overall success.

Seek their input, collect their insights, and encourage their active participation.

For example, you can organize cross-functional workshops where employees from different departments share their ideas and perspectives on the strategic goals for the upcoming year.

This collaborative approach ensures that the strategic plan incorporates input from various stakeholders, resulting in a more comprehensive and inclusive strategy.

Usually, collaborative strategic planning meetings can be time-taking and ineffective as they follow no simple framework.

OKRs simplify your strategic planning and execution. Talk with our OKR experts to learn how you can efficiently plan better and align your team with the plan. We are happy to help.

Ensure that strategic goals are measurable and aligned with performance management goals

Ensure your strategic goals are SMART because tracking progress and identifying areas lacking performance becomes easier.

Align these goals with your performance management framework to create a clear connection between individual and team objectives and the broader strategic vision.

For example, one of the strategic goals is to increase customer satisfaction.

To align performance management with this goal, you can set relevant metrics related to customer feedback and incorporate them into regular performance evaluations.

This allows employees to see the direct impact of their efforts on the strategic goal and motivates them to excel.

Provide regular feedback to employees on their performance

Encourage employees to share regular constructive feedback to drive performance and align it with the strategic plan.

Conduct ongoing conversations with your team members to discuss their progress, provide guidance, and address performance gaps.

Timely feedback helps your employees understand how their work contributes to the strategic goals and empowers them to make necessary adjustments to achieve desired outcomes.

For example, managers could conduct monthly one-on-one meetings with their team to provide feedback on performance and discuss goal progress.

Focus your conversations on recognizing achievements, identifying improvement areas, and offering support and guidance. 

Offer opportunities for learning and development

Invest in your employees’ growth by offering opportunities for learning and development with training programs, workshops, mentorship, or coaching sessions.

Your employees become better equipped to achieve their goals by enhancing their skills and knowledge.

Align performance management with the organization’s culture

By aligning the performance management system with your culture, you create a harmonious environment where employees feel motivated and engaged in pursuing the organization’s objectives.

For example, you have a software development company known for its innovation and continuous improvement culture.

You conduct regular “innovation check-ins.” which allow your employees to share their innovative ideas and discuss their progress.

This alignment with the company culture reinforces the importance of innovation in achieving strategic goals and fosters a sense of ownership among employees.

Regularly review and update the strategic plan and performance management system

You must regularly review and update your strategy and performance management methods to ensure alignment with the ever-evolving business landscape.

You can respond to market changes and seize new opportunities by staying agile and resilient.

For example, you update the strategic plan to prioritize e-commerce initiatives as you notice a market shift towards online shopping.

Simultaneously, you adjust performance metrics to measure online sales performance and provide training to enhance your employees’ digital skills.

This proactiveness enabled you to align organizational efforts with the changing market dynamics and achieve business goals.

Make sure that performance management is a continuous process

Effective performance management is an ongoing and continuous process.

Regular check-ins, feedback, and goals progress reviews help employees stay on track and ensure their efforts are aligned with strategic objectives.

For example, managers in your company conduct quarterly performance check-ins with their teams.

These check-ins allow you to assess progress, discuss challenges, and offer support.

Employees receive regular guidance, recognition, and course corrections, which improve their performance and contribute to achieving strategic goals.

Use performance management data to make decisions

You must leverage the data generated from performance management to make informed decisions.

Performance metrics and employee feedback provide valuable insights that guide strategic planning and resource allocation. 

With this data, you can identify strengths, improvement areas and make data-driven decisions to drive performance and achieve business goals.

For example, you used performance management data to identify skill gaps within your sales team.

You analyzed individual performance metrics and feedback sessions to find that product knowledge was an area that needed improvement.

Therefore, you organized targeted training programs to enhance product knowledge and sales skills.

Did you know you can manage employee performance and goals smoothly on the same platform?

We at JOP help companies improve their teams’ performance through our OKR management platform and personalized OKR-based change management consultation.

Gaurav Sabharwal

Gaurav is the CEO of JOP (Joy of Performing), an OKR and high-performance enabling platform. With almost two decades of experience in building businesses, he knows what it takes to enable high performance within a team and engage them in the business. He supports organizations globally by becoming their growth partner and helping them build high-performing teams by tackling issues like lack of focus, unclear goals, unaligned teams, lack of funding, no continuous improvement framework, etc. He is a Certified OKR Coach and loves to share helpful resources and address common organizational challenges to help drive team performance. Read More

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