Ask any business leader if they have a strategic planning process in place and they will likely say yes. Unfortunately, studies estimate that 67% of well-formulated strategies fail to deliver their intended results due to poor execution. It is easy to create and communicate a vision, but the strategic planning process makes or breaks the actual execution, achievement or realization of that vision.

The key to developing an effective strategic planning process is to understand what it is and to reevaluate it to ensure it’s the guiding north star for all work.

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The purpose of the strategic planning process is to create a vision to drive change and transformation.
The purpose of the strategic planning process is to create a vision to drive change and transformation.

Introduction to the Strategic Planning Process

While a vision is an overarching, aspirational goal, the strategic plan is the game plan on how to reach it. There are attainable objectives that must be communicated with the organization, so everyone knows the goals, their role, their purpose, and how their contributions are helping the business get closer to achieving the vision.

The purpose of the strategic planning process is to map those activities that will achieve the strategic plan. It typically includes at least four phases that should be repeated regularly:

  1. Assessing where the business is and where it needs to go in relation to the vision.
  2. Developing a strategy of how the business can achieve high-level goals and how success will be measured.
  3. Prioritizing work and delivering outcomes aligned to the strategy at organizational and team levels.
  4. Evaluating key performance metrics to understand whether the established goals and related work achieved their intended results and managing operations and change as needed.

The strategic planning process should encompass executives and employees alike, understanding that it takes the entire organization working together to identify risks and opportunities, establish goals, and execute the work that drives the business forward. While the strategic planning process involves all levels of the enterprise, the strategic plan must come from the top down with the trust that the organization is capable of determining how best to execute the plan.

The more common bottom-up approach is often why so many companies fail to execute on strategy. When departments vie for budget to fund projects that are loosely represented as “strategic” based on misaligned understanding of objectives, too many low-value projects get green-lighted. Those projects consume resources that could be spent on higher-value work that has a greater opportunity to reach the goals that achieve the corporate vision.

The purpose of the strategic planning process is to create a vision to drive change and transformation. The strategic plan itself connects that vision to strategic initiatives, priorities, and goals. If there is a disconnect, then there will be insufficient direction, funding, and resources for successful execution. Organizations that struggle to achieve their goals typically have a disconnected and dysfunctional strategic planning process.

Benefits of a Strategic Planning Process

The strategic planning process doesn’t require a crystal ball to predict the future with certainty. Instead, it is intended to identify and prioritize potential opportunities and increase the odds of success as measured against the defined objectives. It provides a platform to toss around ideas and determine which are worth trying. It balances out-of-the-box thinking and innovation with the realities of capacity and funding.

The planning process doesn’t stop there. It transforms ideas into a corporate vision with goals and then builds a roadmap on how to get there. The strategic plan gives everyone from the C-suite and stakeholders to every employee a line of sight to align their daily work. Having a sense of purpose ranks as a top contributor to job satisfaction. It is critical to establish a vision but even more valuable to translate that vision into an actionable plan everyone can understand and to which they can be held accountable.

Beyond building a cohesive team rowing in the same direction, the strategic planning process provides the opportunity to optimize resources, processes, and technology to ensure teams are focused on the right things at the right time.

By doing so, companies can save costs and mitigate risks by prioritizing outcomes with the most value.

The evaluation phase of the planning process is effective in identifying what worked and what didn’t for continual improvement and better utilization of resources. In this sense, the strategic plan should always be viewed as evolving, resilient, and agile to the changing forces around it.

Reengineering the Strategic Planning Process

Whether your organization lacks a strategic planning process, or you recognize yours has shortcomings, there’s never been a better time to address it. To avoid the common pitfalls of a poorly organized planning process, you must build a new strategic planning process from the top-down. In the most basic sense, you will:

  • Designate a cross-functional strategic planning team to identify what the organization needs to do to stay competitive and, potentially, disrupt and dominate your market
  • Break down these visionary ideas into actionable plans with clear responsibilities and defined funding and work and resource requirements
  • Build a strategic roadmap that aligns every project with strategic goals, identifies strategic priorities, and charts timelines and milestones
Enterprise strategic roadmaps connect strategy with investments, products, and applications.
Enterprise strategic roadmaps connect strategy with investments, products, and applications.

For agile execution of the strategic plan, allow goals to drive ideas. Empower teams to decide how they want to deliver. Adopt an iterative approach to encourage testing new concepts, failing fast, and accelerating delivery of successful innovative alternatives.

When strategic planning is an iterative process, the feedback loop of analysis and change refines your strategy, making it more likely that your organization will realize its vision. Like navigating a ship through uncharted waters, constant small course corrections are more likely to get you where you want to go than steering straight ahead until you run aground.

To reach your destination with reduced risk, execute work incrementally, evaluate progress toward goals frequently, and pivot toward adjusted strategies quickly. Funding incrementally instead of all at once ensures that each iteration receives the financial resources it requires.

Strategic planning is an exercise in uncertainty. The question of how to deliver value can be answered in countless ways.

Embrace the uncertainty by building flexibility into planning and execution. The result will be an adaptable plan with goals that can be reprioritized and strategy tradeoffs that weigh funding, capacity and risk.

The Fundamentals: A 5-Step Strategic Planning Process

With the understanding of the basics, it’s time to dig into more of the details of strategic planning. Use the strategic planning process to create your strategic plan and translate it into an actionable roadmap that your entire organization can manage, track, and execute against.

The following guide is still a 1,000-foot view of the strategic planning process, but it provides a simplified approach with clear action items to help get you started.

1. Determine your current market position.

  • Designate a process owner and cross-functional planning team to get different perspectives
  • Identify strategic issues across the organization and see if there are trends or patterns
  • Do a SWOT analysis (strengths, weaknesses, opportunities, threats) to identify areas for improvement, growth, and success, particularly in the context of competitors and external factors
  • Reach out to customers, vendors and partners to understand their experience, wants, needs, and demands
  • Assess your workforce skills, deficits, gaps, and overlaps to determine if resources are optimized and if new skills are required to execute goals
  • Evaluate technology preparedness for digital transformation and determine whether additional technology is needed to support work requirements

2. Develop your strategic direction.

  • Articulate your mission, vision, and values, and communicate it to all stakeholders
  • Define your current competitive advantage and differentiators and determine if there are additional opportunities
  • Envision cross-functional strategies for achieving your vision
  • Identify strategic, attainable objectives for the short and long term
  • Forecast your financial position as a result of achieving these objectives

3. Create an actionable strategic plan.

  • Define strategic initiatives and priorities across the organization based on SWOT analysis
  • Define SMART goals (specific, measurable, achievable, relevant, time-bound) for the short-, mid-, and long-term
  • Determine key performance indicators (KPIs) for each goal to track progress
  • Assign top-down responsibility to cascade down to cross-functional teams and individuals
  • Allocate required funding to strategic projects

4. Build a strategic roadmap to align execution.

  • Connect strategy to vision, investments, and outcomes
  • Manage initiatives/projects, goals, funding, resources, timelines, milestones, teams, KPIs
  • Monitor progress, evaluate performance, revise/update goals, and create iterations
  • Use cross-functional strategy meetings to identify accomplishments, shortfalls, and next action plans
  • Understand impacts of decisions, model trade-offs, and adjust dynamically
  • Communicate regularly to the organization’s current strategic priorities, progress, and changes, with data-backed justifications for decisions

5. Review and update strategy.

  • Leverage visibility and transparency to assess actual progress towards goals
  • Update plan of action with each iteration of strategic initiatives
  • Optimize funding and resource allocation in sync with agile execution
  • Review quarterly and as strategic direction shifts
  • Repeat the entire process at least once every three years or as external forces come into play

Strategic Planning Process Success

Business leaders have reasons for optimism. The status quo doesn’t have to be the guiding principle.

Instead, companies can embrace true strategic planning to redefine how the organization approaches its vision and executes the strategy. There are multiple, interdependent factors driving success in the strategic planning process. A dynamic plan includes these fundamentals:

  • Strategy that is driven by products, applications, and services
  • Incremental, measurable, and achievable strategic goals
  • Allocation of resources (people, capital, and/or material goods)
  • Trade-offs in resource allocation modeled for various scenarios
  • Strategic funding and initiatives managed to drive performance
  • Strategic roadmaps that connect strategy to outcomes with investments, timelines, milestones, priorities, and progress
  • Iterative projects with defined, measurable objectives
  • Performance and progress shared with dashboards and visualizations
  • Short- and long-term assessment of value delivered
  • Continuous process for reprioritizing projects and reallocating resources
  • Alternatives for achieving objectives based on cost, benefit, risk, and capacity
  • Programs delivered to drive innovation and transformational change

Bringing a strategic vision to life takes unprecedented coordination of work, resources and technology. That means engaging people at all levels of the organization and continually evolving their capabilities to execute and deliver on plan.

Engage Your Organization in Strategic Work

Unfortunately, too many organizations trip over the hurdle of communicating their vision and execution strategy to employees. Harvard Business Review reported that 95 percent of employees either don’t know or don’t understand their company’s strategy. How can organizations articulate their vision and strategy in a way that makes sense to everyone outside of the planning team?

Even when communication is effective, it doesn’t always mean the message is received for the long term. It’s human nature for people to drift back to working on what they know instead of the unfamiliar work that is aligned with strategy.

It’s also common for individuals to resist working on cross-functional teams. Consistent communication and clarification are often required to keep people engaged and on track.

When it comes to relying on other groups to complete projects, 84% of managers trust colleagues in their own business units but only 9% trust colleagues in other units.

Strategic execution unravels when managers prioritize work for their department above commitments to deliver outcomes for strategic cross-organizational programs.

An effective strategic planning process requires that virtual and cross-functional teams are brought together to plan and execute strategy.
An effective strategic planning process requires that virtual and cross-functional teams are brought together to plan and execute strategy.

When teams lose sight of strategic goals and deprioritize these projects, the allocated resources tend to be absorbed by other programs. In fact, it’s not uncommon to reallocate strategic funding to non-strategic work – a practice that undermines strategic execution.

Project teams stay focused and on task if they have confidence in the strategic planning process and are committed to the strategic vision. That means engaging every business unit, department, and team in planning.

In a top-down process, each team buys in on the value statements that clearly define what is expected of them in the short- and long-term. Each iteration provides feedback that refines the team’s understanding of how to achieve its goals.

The strategic roadmap clarifies priorities and resolves conflicts for teams on cross-functional/cross-silo programs. These timelines and milestones establish accountability and set expectations for prioritizing strategic work relative to day-to-day work. An overarching schedule with timelines and milestones for all teams allows everyone to see how their work tracks against the organizational goals.

Collaborative cross-functional teams can make or break a strategic initiative. A shared collaborative workspace allows cross-functional teams to connect and exchange information, ensuring that everyone has what they need to succeed.

Streamline Your Strategic Planning Process

Using presentations, office documents, spreadsheets, and email to manage strategic planning and execution is like using an Etch-a-Sketch to create and manage an enterprise-wide customer loyalty program. You need dynamic, interconnected tools to manage interdependent workstreams across the organization.

Strategic planning software streamlines the process by centralizing connected information and automating core functions such as:

  • Scenario planning
  • Strategic road mapping
  • Program management
  • Finanzplanung
  • Strategic analysis

Visual tools and dashboards accelerate the process of defining objectives, budget, funding, resources, schedules, and actionable plans.

An automated strategic planning process continuously updates data and forecasts based on input from across the organization, helping to realign priorities, reallocate resources and, when change or disruptions strikes, rethink goals and initiatives. Using strategic planning software not only makes this process more efficient and effective but also provides visibility and transparency across the organization.

Scenario planning in the strategic planning process allows organizations to model trade-offs in constantly changing environments.
Scenario planning in the strategic planning process allows organizations to model trade-offs in constantly changing environments.

Making Strategy Real

Even the most inspired vision will come to naught if strategy is not connected to strategic execution. Equally vital is how the strategic plan is communicated throughout the organization to gain sufficient buy-in, funding and resources.

While the strategic plan is approached from the top-down, it is not dictated from above. It envisions the means to an end and empowers the organization to plot the best path.

The most innovative organizations allow the goals to drive ideas. Teams fully engage when empowered from the top down.

For strategic planning to be truly transformative, it takes a sense of urgency to drive organizational change. Clear priorities, achievable goals, rapid iteration, and dynamic re-visioning can accelerate the process in volatile times. A strategic planning process that continuously monitors progress, evaluates outcomes, and forecasts time-to-value allows organizations to pivot in anticipation of changing market conditions.

Creating a strategic planning process is the key to creating a vision that drives organizational transformation. Goals and objectives are both demonstrated and achieved by the strategic plan. Avoiding disconnection between the organizational vision and the strategic plan ensures proper direction, funding, and resources for successful execution.