What Is Strategic Planning
A strategic plan describes how your company executes a chosen strategy. It spells out where an organization is going over the next year or more, and how it's going to get there. Typically, a strategic plan is organization-wide or focused on a major function, such as a division, or a department. A strategic plan focuses the energy, resources, and time of everyone in the organization in the same direction. If you are going to implement a strategic plan be sure to take into account the following:
- Make sure that your strategic plan focuses on helping your organization build a competitive advantage.
- Use your strategic plan to focus on the right opportunities.
- Use your strategic plan to help prioritize the company’s financial needs.
Assessing the Current Situation
In developing a strategic plan a company must answer the questions where are we right now and what are we up against both internally and externally. In drafting your strategic plan remember that the plan is not complete without examining the following:
- Are there any pressing problems and if so what is the scope of those problems?
- Has the company recently missed goals, been unprofitable, or experienced little to no growth?
- What are the contributors to the organization’s current successes or failures?
- What assumptions are you operating under that could affect the outcome of your business?
- Finally what potential risk could you be facing over the coming years?
Because I am hard wired as a strategic thinker, it drives me crazy when business strategy is poorly done as in the case of companies like Kodak or more recently Netflix. In 2009 the Lego Group was facing a 5 percent global toy decline. Its strategic plan focused on cutting cost, creating better partnerships and licensing deals (Star Wars, Indiana Jones, and Toy Story), creating a more exciting line of toys, courting more young women and promoting Legos as a fun, systematic and creative way to play. Lego’s strategic plan paid off, allowing them to identify problems and establish goals and objectives for turning things around. In doing so they were able to realize a 23% sales increase during a global toy decline. What’s your strategy?