The Five Steps of the Strategic Planning Process

Summary: There is an important five steps in the strategic planning process that every business should go through to ensure alignment throughout its operations and make sure the direction the organization is headed is the right one.  This five step process you can go through to make sure you cover all of the key components of the strategic planning process. The five steps are:

1. Define the strategic planning process

2. Conduct a situation analysis

3. Set strategic goals and objectives

4. Develop strategies and action plans

5. Implement the plan and regularly review progress

This is article, I will walk through these five questions and the things you should be thinking about as you answer each one to build out your strategic plan.

Step 1: Define the strategic planning process

This includes establishing a clear process for developing the strategic plan, identifying the key stakeholders and participants, and setting the timeline for completion.

It is important to be completely honest with yourself about where your business is. If you really want to dig deep on where your business is and what your strengths and weaknesses are, which is where the next step will come in. I also recommend considering conducting a Business War Game.

Step 2: Conduct a situation analysis

This step involves assessing the organization's current internal and external environment, including its strengths, weaknesses, opportunities, and threats.

You should expect this step in the process to take some considerable amount of time. You should review vision statements, your mission statement, and long-term goals you might have already developed in the past.  You really need to assess the current state of the organization through a variety of tools.  You should conduct a situational analysis, which is an examination of your organization’s presence in the market, both internally and externally. A popular tool for doing a situational analysis is a SWOT, which covers situational analysis well through four simple, yet thought-provoking boxes.

A SWOT analysis covers the following:

• Strengths: Strong points about your brand, products and services and marketing programs

• Weaknesses: Aspects of your products, brand image and marketing programs that you could improve upon

• Opportunities: Includes ways you can increase success, such as new ways to reach customers or a new market you could enter

• Threats: External elements that could negatively impact your sales or profitability

This is an example of a SWOT analysis.

Step 3: Set strategic goals and objectives

Based on the information gathered in the situation analysis, the organization sets strategic goals and objectives that will guide its future direction and decisions.

Refine down the list of possible paths and assign rough timelines to the ones you really want to go after. Build links to your future vision with shorter time frames. A high-level Gantt Chart can help you understand of you are building enough time between what you could be and where you want to go.

A great tool for examining what paths might be best for your business is SMART. SMART is a goal setting tool that ensures you are defining your goals well to make them most effective. If you goal cannot be crafted under the SMART framework, it probably shouldn’t be a goal.

If you are struggling through this step, or the strategic planning process as a whole, perhaps a framework like EOS Traction might help. I created an entire article on whether or not a system like EOS Traction is good for your business.

Step 4: Develop strategies and action plans

Once the goals and objectives have been established, the organization develops the strategies and action plans needed to achieve them. You do these by defining three areas: Strategies, Tactics, and Implementation Plan.

Defining the Strategies

For this area, you are going to clearly define your strategies that will be in your plan.  For example, one of your strategies might be to “grow sales from new products” or “improve customer retention”. These strategies should be the main focus of your organization moving forward, representing the most important things that are going to move your business forward.

Defining the Tactics

After you have your strategies defined, now you need to develop the various tactics that will achieve those strategies.

Using the “improve customer retention” example above, some of your tactics might be things like:

• Setup a monthly outbound call campaign to call customers to see how they are doing and if there is anything your company can do to help them

• Offer a discount code at time of renewal

• Increase the value proposition of their current product or service at no cost increase

These tactics should all roll up towards achieving the strategy.

Defining the Implementation Plan

Now you need to put those tactics into action, and to do that you need an implementation plan. This plan configures teams and resources to execute on the tactics.

In the example above where the strategy is to “improve customer retention” and the tactic is “setup a monthly outbound call campaign to call customers”, you will need to assign a team of employees to make those calls, develop a call script, develop a way to capture any data you might want to collect from the calls, setup a system to escalate any issues that arise, etc. All of these tactics require implementation to complete.

Once implementation is complete, you are off and running on executing your strategic plan and are onto Step 5.

Step 5: Implement the plan and regularly review progress

This step involves putting the plan into action, including allocating resources, establishing milestones, and monitoring progress. Regularly review and evaluate the progress made towards achieving the goals and objectives, and make any necessary adjustments to the plan.

BONUS: Communicate and engage with stakeholders

Communicate the plan and progress to key stakeholders and engage them in the process to ensure buy-in and support.

One suggestion is to set up a dashboard that keeps real-time metrics for your executive team to see. Watch these metrics closely and conduct assessments where necessary to correct any tactics that are off track, or stop a strategy that is not working.