Strategic Planning: A What is and How to Guide

strategic planning session

Mastery of your strategic planning can transform your business action-plan from reactive to proactive. Businesses are prone to reactive thinking. As opportunities and challenges arise, organizations react to what’s right in front of them. And while every company needs to be responsive to current reality, strategic vision often suffers as a result.

This dynamic is understandable. When your team is immersed in immediate priorities, it’s easy to neglect overarching goals. But what’s the process for becoming proactive, rather than reactive?

Table of Contents

A guide to the strategic planning process.

For many of the world’s most powerful organizations, the answer lies in strategic planning, a deliberate approach to analyzing the present and charting a path forward. In contrast to reactive management, this method empowers companies to assert their own values and goals.

This guide unpacks the core concepts of strategic planning, including its potential benefits and possible risks. You’ll learn if and when strategic planning makes sense for your business and how to effectively engage your team in the process.

From there, we’ll present four specific phases of strategic planning, from preparation to execution to constructive evaluation. This four-step process makes it easier to plan strategically with your team and helps you avoid common pitfalls that might hinder your efforts.

To understand and implement strategic planning for your organization, start by familiarizing yourself with its core concepts and characteristics.

Strategic planning: key definitions and concepts.

In the language of modern business, the terms “strategic” and “planning” are used so widely that their meanings can become unclear.

So, when we discuss the strategic planning process, what are we talking about exactly? How does it differ from other forms of planning that businesses and individuals engage in every day? Who should be involved and how?

To answer these questions and avoid potential confusion, the following section describes strategic planning in more detail.

What is strategic planning?

The strategic planning process defines your business’s direction, outlining a path from your present toward a preferred future. A strategic plan captures an organization’s mission and core principles, envisioning the fulfillment of these ideals. Strategic planning is both conceptual and practical, presenting the big-picture goals and specific ways to achieve them.

While strategic plans can be shaped to suit each organization’s needs, they typically include the following elements:

In essence, a strategic plan provides a coherent set of targets with which to align your organization’s efforts. In moments of difficulty or indecision, it can be a guiding light.

Why is strategic planning effective for a business?

Without a strategic plan, an organization cannot proceed collectively toward a shared set of goals. This limitation can impede morale, productivity, and innovation, among other key aspects of organizational success.

In the absence of strategic clarity, teams may focus on individual indicators, such as revenue, profit, or market share. But none of these metrics are inherently motivating on their own, and colleagues may clash over how to prioritize them.

Strategic planning provides a common vision, enabling team members to separate themselves from their daily duties and consider larger questions. When workers get bogged down in the minutia of their roles, the risk of burnout increases.

Strategic discussions help each person contextualize their work within a larger purpose, helping make mundane tasks more meaningful.

In addition, strategic planning entails a thorough assessment of strengths and weaknesses. Rather than continuing ineffective tactics out of habit, teams that engage in strategic planning can pivot toward what actually works.

But perhaps the most important benefit of strategic planning is your organization’s chance to determine its destiny. By candidly assessing its present and collectively embracing a different vision, a company can chart its own course. The alternative is a strategy determined by default — your organization will be shaped by external forces, not its own aims and principles.

What are the advantages of strategic planning for business?

If the benefits above sound appealing, you’ll be glad to know that strategic planning can work in any industry, for companies large and small. The advantages of a strategic plan can be equally evident at a Fortune 500 company and a recently founded startup.

That being said, strategic planning requires certain conditions and levels of commitment to succeed. Moreover, certain misconceptions can cloud the process from the beginning, and counterproductive team dynamics can undermine its results. Here’s how to set your team up for success.

How to start strategic planning.

To successfully engage in strategic planning, you’ll need to create the following dynamics within your team:

Potential risks in the strategic planning process.

If the conditions above can help strategic planning succeed, the following misconceptions or liabilities can hinder its positive impacts. Before beginning strategic planning, consider how to mitigate or prevent these challenges.

Who does strategic planning involve?

The strategic planning process benefits from inclusivity. When varied perspectives are represented, new insights and possibilities emerge. However, in larger organizations, it may not be feasible or practical for all team members to participate in strategic planning discussions.

In cases where a set of company leaders will compose a strategic plan, gather the unvarnished opinions from your broader team by other means, such as surveys or interviews. In a later section, we’ll discuss the importance of this data in more detail.

Additionally, you may wish to look beyond your full-time team to inform your strategy. The experiences of clients, customers, and collaborators can shed new light on an organization’s strengths and weaknesses.

As you consider all potential sources of input, make sure your core strategic planning team includes leaders from across your organizational structure. These stakeholders could include:

Clearly, there’s no universal playbook. The form and degree of involvement from all these different parties will vary from company to company, depending on your structure and needs.

When should strategic planning be done?

Strategic planning is not a close-ended exercise. A strategic plan is meant to evolve continually, and strategic thinking can be valuable in a company’s daily activities. Moreover, the stages of implementation and evaluation can keep your team constantly engaged in forward-thinking dialogue.

However, because creating a strategic plan requires significant organizational commitment, most teams find it helpful to conduct formal strategic planning at specific intervals. Consistently scheduling strategic planning also helps resist the urge to put it off.

Annual planning.

For many companies, conducting strategic planning at a set time every year is a natural scheduling cadence. The annual planning approach lends itself to reassessing the last year before moving forward into the next one.

It’s important to preserve the distinct emphasis and elements of strategic planning, separating it from other annual reviews. If your team conducts financial reviews or performance evaluations annually, for example, your strategic planning should be separated from these undertakings.

Quarterly planning.

Considering the rapid pace of modern businesses, many companies find it helpful to conduct strategic planning on a quarterly basis, rather than just once a year. A more frequent planning cadence can help ensure continuous alignment with identified goals and surface new areas of opportunity.

Another option is to use quarterly planning meetings to evaluate the status of the initiatives described in your strategic plan. In this approach, a strategic plan is developed once a year and assessed or updated in each subsequent quarter.

The strategic planning process: 4 essential stages.

Now that we’ve covered general aspects of strategic planning, we can discuss its specific stages more thoroughly. The strategic planning process is best understood in terms of four specific phases, each with important constituent elements.

The sections below provide detailed guidance on generating, implementing, and evaluating a strategic plan.

1. How should I prepare for strategic planning?

In the strategic planning process, plotting future successes requires an accurate understanding of your present. You can’t plan a journey without knowing where you’re starting from.

Preparation is crucial and can set the tone for all your subsequent discussions. To analyze your organization’s present, you’ll need data. As much of it as possible, including statistical, anecdotal, and historical information.

Experts call these kinds of data “inputs”— information sources that shed light on some dimension of the strategic planning process. To figure out which inputs might help you prepare for strategy planning, look inside your organization as well as beyond it.

Use internal inputs.

Internal inputs are data sources that describe some aspect of your organization’s performance. Generally, these measures are generated by your team during the course of their typical duties or in a special effort to prepare for strategic planning.

Internal inputs might be qualitative or quantitative, although some combination of these types will probably provide a richer picture. If you suspect that you lack insight into key aspects of your team, consider taking the time to generate new metrics. Internal inputs might include:

Consider external inputs.

External inputs refer to data pertaining to factors outside of your organization, such as the competitive landscape or broader economic trends. They describe the circumstances in which your organization is striving to succeed, contextualizing your efforts in important ways. External inputs might include:

Organizing your inputs – SWOT and PESTLE methods.

Once you’ve gathered internal and external inputs to inform your strategic planning, it’s helpful to assess them through structured frameworks, which can identify overarching themes within a bunch of diverse data points, separating the signal from the noise.

The SWOT and PESTLE methods are two approaches that teams regularly use in preparing for strategic planning. These techniques allow organizations to evaluate where they stand and clarify areas of emphasis for their subsequent strategic plans.

SWOT method.

SWOT is an acronym for strengths, weaknesses, opportunities, and threats, the four elements of this method of analysis. As a team, you’ll be asked to identify inclusions for each category. For purposes of discussion and visual clarity, these can be arrayed in a table format.

The SWOT method can be applied to your organization as a whole or to specific aspects of your work. And while it can be a helpful tool for organizing your data, it may also help you draw important conclusions.

For example, you may identify four or five separate problem areas, as evidenced by your internal inputs. However, when you consider these together, which organizational weaknesses do they indicate? Asking these kinds of questions can lead to important higher-level analysis.

PESTLE method.

PESTLE is also an acronym, focused mainly on external factors that shape the context in which your organization does business. To conduct a PESTLE analysis, examine the following elements with your team:

PESTLE is an excellent means to pull back and consider how your organization can adapt to broader forces. Additionally, it bridges an important gap between assessing where you stand and anticipating future changes. By identifying current trends, PESTLE positions your team to begin strategic planning in earnest.

2. How do I create a strategic plan?

With the right data at your disposal and valuable insights about where you stand, your team is ready to craft its strategic plan. While the format of strategic plans can differ somewhat, most include a few key elements: a vision, mission, goals, and contingency plans for what may lie ahead.

Create a mission statement.

A strategic plan should capture the very heart of a business, articulating its distinct character. Accordingly, a mission statement is a crucial inclusion in any strategic plan.

Simply put, a mission statement describes what your organization does and how it differs from competitors. A strong mission statement can also convey a business’s reason for being and the distinct value it provides. While there are several ways to express an organization’s mission, it’s best not to overcomplicate the concept.

Most mission statements are concise, efficiently characterizing a company in a paragraph or less. This clarity is helpful both internally and externally. Team members can align their efforts with this mission, and the public can quickly comprehend what you’re all about.

Questions to ask when creating a strategic plan.

In developing a mission statement, consider the following questions with your team:

Create a vision statement.

A vision statement describes your organization’s preferred future — a state of affairs you seek to achieve in time. A vision statement may reflect a continuation of current strategies or a reimagined sense of what your company can be.

Your vision statement should be bold but firmly rooted in the realm of reality. It should be possible, if not immediately so. In creating a vision statement, you’re presenting specific aspirations and pointing the way forward. This vision must be attainable, rather than an abstract fantasy no one takes seriously.

Create a vision statement: What to ask yourself.

In creating a vision statement, consider the following questions with your team:

What’s the difference between a mission statement and a vision statement?

As you create or refine your mission and vision statements, it’s important to make a clear distinction between them. Confusing the two will detract from the value they provide.

One common mistake is confusing a specific vision of the company for a mission statement. These concepts are closely linked but not interchangeable. For example, “To become one of the highest-selling car dealerships in Los Angeles County” is not a mission, but a vision of what a car dealership can be.

On the other hand, “To deliver a trustworthy car-buying experience by providing affordable, high-quality automobiles and unparalleled service” is an actual mission statement, capturing the business’s purpose. Crucially, by honoring its mission, this theoretical dealership could achieve its vision of sales success.

Set strategic goals.

With your mission statement and vision statements in hand, you’ll have a clear view of your company’s character and preferred future. So how do you get from your present circumstances (revealed by the SWOT analysis) to the vision you’ve created—while honoring your mission?

The key is creating strategic, well-formed goals. By translating your vision into specific metrics and milestones, you can create a practical path to change. Goal-setting is arguably the most important component of strategic planning, as it transforms abstract aspirations into specific actions your team can take.

Cascading goals.

In order to hit ambitious targets, your entire organization needs to be pulling in the same direction, with each individual contributing to a broader vision through their specific roles. Cascading goals is one way to help align your team’s efforts.

This term refers to translating a company’s overarching goals into smaller component objectives for specific departments and even smaller objectives for specific teams, with yet smaller objectives assigned to individuals.

In this approach, each contributor delivers some piece of a larger plan, “cascading” from top-level goals.

This is the meat and potatoes of strategic planning — identifying the cascading goals to help a company achieve its vision. When done successfully, cascading goals ensure alignment between an organization’s actions and its ambitions.

Ways to set strategic planning goals.

In developing business goals for your organization, for specific teams, or for individual workers, you may find it helpful to use one or more specific techniques. Here are some popular approaches to goal setting.

Project for the future.

You’re not setting goals in a vacuum. As you develop plans for your team, acknowledge the full array of possibilities that the future might hold. If your PESTLE analysis turned up potential barriers, or your SWOT analysis generated possible threats, account for these contingencies in your strategic planning.

You can’t anticipate every possible outcome. But there are some smart ways to ensure that your strategic plan is strong enough to endure potential setbacks.

Scenario planning.

Scenario planning is the process of identifying multiple possible outcomes and developing appropriate response plans to each one. This approach is especially helpful in cases where external factors present considerable uncertainty.

As part of your strategic planning, consider how you would continue to pursue your vision if various events unfolded. Develop your plan with the flexibility necessary to adapt if undesirable outcomes come to pass.

Using a tool like Workfront Scenario Planner can help you plan effectively and respond to market shifts with speed.

“What if” questions to ask when strategic planning.

Similar to scenario planning for external circumstances, don’t be afraid to imagine possible challenges or opportunities within your team. Ask “what if” questions about how you might encounter difficulty in translating your strategy to reality.

What if your marketing and product teams have misaligned timelines? What if an important team member takes a new job elsewhere? By asking these questions in advance, you can anticipate and avert many setbacks.

Strategic planning and budgeting.

It should come as no surprise that an effective strategy requires real investment. You can’t expect your team to embrace new initiatives if you don’t give them the necessary resources and support to execute their new duties. And if they’re so strapped for time that they can barely keep up, don’t expect them to do much innovating.

Back your strategic plan up with a real budget, whether it’s used for hiring new team members or investing in new tools. When it comes to strategic commitment, money talks.

3. Strategic planning and execution.

Strategic planning isn’t an academic exercise. You do it to generate real results. Once you’re comfortable with your strategic plan, it’s time to put it into action.

Execution is never perfect. Even the most talented teams encounter roadblocks when implementing strategic plans. In fact, if your organization can enact your strategic plan flawlessly, you probably weren’t ambitious enough.

So, take a different view of execution: In the daily Scrum of getting work done, how do you keep strategic goals in view?

When it comes to executing a strategic plan successfully, here are some key ideas to keep in mind:

Tracking strategic planning goals.

You can’t set cascading goals and simply hope they’ll be accomplished within specified time frames. For purposes of collaboration and accountability, you need to track progress toward identified goals as well as times when your team falls short. Without this insight, you’ll be flying blind.

A huge component of goal-tracking is utilizing appropriate platforms to monitor and coordinate the activities of your team. With the right tools, your entire workforce can seamlessly report what they’ve accomplished to their colleagues and managers. For those in leadership roles, identifying successes and roadblocks becomes far simpler, as well.

As the world’s leader in enterprise work management, Workfront builds strategic planning software like Workfront Goals for precisely this purpose. We help companies track their efforts in real time, offering both big-picture insights and granular detail. If you need the perfect platform for tracking your team’s goals, we have a customizable solution ready to suit your organization’s needs.

Communication and alignment.

As you execute your strategic plan, ongoing communication will be critical. Don’t let strategic thinking stop once your plan is complete. Actively discuss how the implementation is unfolding with stakeholders.

Communication issues can arise between individuals or whole departments, jeopardizing the teamwork necessary to achieve an ambitious vision. To avoid miscues, create recurring opportunities to check in on strategic priorities, such as a regular meeting or chat channel.

By building communication opportunities into the work experience, you’ll keep your team members aligned and moving toward shared goals.

Internal vs. external communication in strategic planning.

Often, businesses are thoughtful about communicating their strategies to those outside their teams, such as:

This external communication aims to project a positive image publicly, with the assumption that favorable impressions will yield desirable business outcomes.

Yet, internally communicating your strategy is at least as important as conveying it to outsiders. When discussing your strategic plan with your team members, communicate how their duties and roles relate to your organization’s larger mission and vision. Doing this will not only ensure that everyone is on the same page, it can also be highly motivating.

Common roadblocks to execution success.

If you’re consistently encountering problems in executing your strategic plan, here are some common culprits to consider in terms of when project plans fail. Look over the following issues and consider which would be most likely to occur within your organization.

4. Evaluating the strategic plan execution.

The final stage of the strategic planning process involves evaluating the execution of your strategic plan in retrospect. This kind of post-mortem assessment can be extremely informative and help shape future strategic planning. After all, the results of your last strategic planning make great inputs for your next one.

In fact, evaluation could be considered part of a continuous process, in which the execution triumphs and failures show the way to a better strategy. To make the most of your evaluation process, keep the following ideas in mind.

Review regularly.

As mentioned earlier, many companies revisit their strategic plans on a quarterly basis, checking progress toward identified goals. This cadence is valuable in keeping strategic priorities fresh and making adjustments to achieve important benchmarks.

Whether or not quarterly reviews sound right for your company, regularly revisiting goals is a good idea. When you do, create space for a real discussion about what’s been going well and what hasn’t, rather than just noting where you stand.

If a department is falling short, interview key members to gather insights about their challenges. If a team member is excelling, explore the factors that account for their success.

Importantly, separate these conversations from other performance reviews so that other topics don’t overshadow strategic considerations.

Revisit strategic planning goals and reassess.

When you set concrete goals using the processes outlined above, you can easily assess whether they’ve been met. Review which cascading goals for your team have been completed, which are still in progress, and which seem to be totally stuck. This approach increases accountability and signals the importance of these goals to your entire team.

This doesn’t require an all-or-nothing mindset. Where partial success occurs, celebrate it. And don’t presume that someone who’s offering context is really trying to make excuses. If a team member’s goals were truly impacted by external factors, adjust your plan accordingly.

The point of revisiting these goals is to prompt further constructive discussion and find ways to improve outcomes going forward.

Utilize the right strategic planning tools and techniques.

In order to review your team’s progress toward established goals, you’ll need the right technological tools to track their results. Otherwise, following up on even basic performance metrics can be a time-consuming process.

With flexible and customizable tools that integrate directly with the applications you already use, Workfront is your ideal partner for monitoring progress and performance. Check out our offerings to see just how simple generating these insights can be.

Strategic planning deployment.

As you use this high-level overview of the strategic planning process to guide your organization’s efforts, remember that there’s no one-size-fits-all approach for such an important undertaking. Be sure to tailor each element to the nature of your business and your particular team.

The power of strategic planning lies in its universal applicability and adaptability. No matter your obstacles and opportunities, these principles and practices can help move your company forward.

Want to know more about making your business run more efficiently and planning for success? Check out our guides to:

Frequently asked questions.

What are the steps of strategic planning?

The steps of strategic planning include:

  1. Setting your strategic aims
  2. Sorting your goals in order of priority
  3. Defining tactics
  4. Performing a SWOT analysis
  5. Creating a strategy map
  6. Executing your plan
  7. Monitoring, controlling and revision

The number of steps in each strategic planning process will differ in line with project complexity. You might need three steps or seven, depending on the depth of your planning needs.

While no single step of strategic planning is the most important, the post-execution steps are often overlooked. Monitoring and controlling helps you to revise plans while a project is in progress and plan better next time.

How do you write a five-year strategic plan?

To write a five-year strategic plan, consider your goals and the metrics you’ll measure success by. These should be SMART – specific, measurable, attainable, relevant and time-bound.

You’ll also need to write a mission statement, defining your broad visions. This should feed into all subsequent sections and underpin all decisions.

Strategic planning can be used for business projects or to ground your wider company’s aims for the years ahead. For a wider strategic plan, you might wish to include an industry analysis stage and a standalone marketing plan. For both, consider risks and threats, including in any financial modelling.

What’s the difference between a strategic framework and strategic plan?

A strategic framework is similar to a strategic plan but has a wider reach. There’s less focus on short-term, actionable tasks and more emphasis on factors such as global industry trends, supply chain information, policy changes and marketplace shifts.

It may be more flexible than a strategic plan and a good place to start, as they can act as an umbrella for all departments, projects and plans. At the same time, strategic plans offer the precision for project managers and business leaders to drive results.