What is Strategic Planning?

Strategic planning is an organizational management activity that is used to set priorities, focus
energy and resources, strengthen operations, ensure that employees and other stakeholders are
working toward common goals, establish agreement around intended outcomes/results, and
assess and adjust the organization's direction in response to a changing environment. It is a
disciplined effort that produces fundamental decisions and actions that shape and guide what an
organization is, who it serves, what it does, and why it does it, with a focus on the future.
Effective strategic planning articulates not only where an organization is going and the actions
needed to make progress, but also how it will know if it is successful.

What is a Strategic Plan?

A strategic plan is a document used to communicate with the organization the organizations
goals, the actions needed to achieve those goals and all of the other critical elements developed
during the planning exercise.

What is Strategic Management? What is Strategy

Execution?
Strategic management is the comprehensive collection of ongoing activities and processes that
organizations use to systematically coordinate and align resources and actions with mission,
vision and strategy throughout an organization. Strategic management activities transform
the static plan into a system that provides strategic performance feedback to decision making and
enables the plan to evolve and grow as requirements and other circumstances change. Strategy
Execution is basically synonymous with Strategy Management and amounts to the systematic
implementation of a strategy.

What Are the Steps in Strategic Planning & Management?

There are many different frameworks and methodologies for strategic planning and
management. While there are no absolute rules regarding the right framework, most follow a
similar pattern and have common attributes. Many frameworks cycle through some variation
on some very basic phases: 1) analysis or assessment, where an understanding of the current
internal and external environments is developed, 2) strategy formulation, where high level
strategy is developed and a basic organization level strategic plan is documented 3) strategy
execution, where the high level plan is translated into more operational planning and action
items, and 4) evaluation or sustainment / management phase, where ongoing refinement and
evaluation of performance, culture, communications, data reporting, and other strategic
management issues occurs.

What Are the Attributes of a Good Planning Framework?

The Association for Strategic Planning (ASP), a U.S.-based, non-profit professional association
dedicated to advancing thought and practice in strategy development and deployment, has
developed a Lead-Think-Plan-Act rubric and accompanying Body of Knowledge to capture and
disseminate best practice in the field of strategic planning and management. ASP has also
developed criteria for assessing strategic planning and management frameworks against the
Body of Knowledge.
These criteria are used for three primary purposes:

Ensure that the ASP Body of Knowledge is continuously updated to include frameworks
that meet these criteria.

Maintain a list of qualifying commercial and academic frameworks recommended for

study and training, to prepare participants to sit for the three ASP certification
examinations.
Provide a resource and check list for practitioners as they refine and improve their
organizations systems and for consultants as they improve their product and service
offerings.

The criteria developed by the ASP are:

1. Uses a Systems Approach that starts with the end in mind.
2. Incorporate Change Management and Leadership Development to effectively transform
an organization to high performance.
3. Provide Actionable Performance Information to better inform decision making.
4. Incorporate Assessment-Based Inputs of the external and internal environment, and an
understanding of customers and stakeholder needs and expectations.
5. Include Strategic Initiatives to focus attention on the most important performance
improvement projects.
6. Offer a Supporting Toolkit, including terminology, concepts, steps, tools, and techniques
that are flexible and scalable.
7. Align Strategy and Culture, with a focus on results and the drivers of results.
8. Integrate Existing Organization Systems and Align the Organization Around Strategy.
9. Be Simple to Administer, Clear to Understand and Direct, and Deliver Practical Benefits
Over the Long-Term.
10. Incorporate Learning and Feedback, to Promote Continuous Long-term Improvement.

http://balancedscorecard.org/Resources/StrategicPlanning-Basics
Strategic planning
From Wikipedia, the free encyclopedia
Not to be confused with Strategic thinking.
It has been suggested that Long range planning be merged
into this article. (Discuss) Proposed since June 2012.
It has been suggested that Strategy implementation be
merged into this article. (Discuss) Proposed since March 2015.
Part of a series on Strategy

Strategy

Major dimensions[hide]
Strategy Strategic management

Military strategy Strategic thinking

Strategic planning Game theory

Strategic studies

Thought leaders[hide]
Michael Porter Henry Mintzberg
Bruce Henderson Gary Hamel

Jim Collins Liddell Hart

Carl Von Clausewitz Sun Tzu Chris

Zook Adrian Slywotzky

Concepts[hide]

Business model

Competitive advantage Experience

curve
Value chain Portfolio theory

Core competency Generic strategies

Frameworks & Tools[hide]

SWOT Five Forces

Balanced scorecard Strategy map

PEST analysis Growthshare matrix

v
t
e

Strategic planning is an organization's process of defining its strategy, or direction, and making
decisions on allocating its resources to pursue this strategy. It may also extend to control
mechanisms for guiding the implementation of the strategy. Strategic planning became
prominent in corporations during the 1960s and remains an important aspect of strategic
management. It is executed by strategic planners or strategists, who involve many parties and

research sources in their analysis of the organization and its relationship to the environment in
which it competes.[1]
Strategy has many definitions, but generally involves setting goals, determining actions to
achieve the goals, and mobilizing resources to execute the actions. A strategy describes how the
ends (goals) will be achieved by the means (resources). The senior leadership of an organization
is generally tasked with determining strategy. Strategy can be planned (intended) or can be
observed as a pattern of activity (emergent) as the organization adapts to its environment or
competes.
Strategy includes processes of formulation and implementation; strategic planning helps
coordinate both. However, strategic planning is analytical in nature (i.e., it involves "finding the
dots"); strategy formation itself involves synthesis (i.e., "connecting the dots") via strategic
thinking. As such, strategic planning occurs around the strategy formation activity.[1]

Contents

1 Process
o 1.1 Overview
o 1.2 Inputs
o 1.3 Activities
o 1.4 Outputs
o 1.5 Outcomes
2 Tools and approaches
3 Strategic planning vs. financial planning
4 Criticism
o 4.1 Strategic planning vs. strategic thinking
5 See also
6 References
7 Strategic plan examples
8 Further reading

Process

Strategic management processes and activities

Overview
Strategic planning is a process and thus has inputs, activities, outputs and outcomes. This
process, like all processes, has constraints. It may be formal or informal and is typically iterative,
with feedback loops throughout the process. Some elements of the process may be continuous

and others may be executed as discrete projects with a definitive start and end during a period.
Strategic planning provides inputs for strategic thinking, which guides the actual strategy
formation. The end result is the organization's strategy, including a diagnosis of the environment
and competitive situation, a guiding policy on what the organization intends to accomplish, and
key initiatives or action plans for achieving the guiding policy. [2]
Michael Porter wrote in 1980 that formulation of competitive strategy includes consideration of
four key elements:

1. Company strengths and weaknesses;

2. Personal values of the key implementers (i.e., management
and the board);
3. Industry opportunities and threats; and
4. Broader societal expectations.[3]
The first two elements relate to factors internal to the company (i.e., the internal environment),
while the latter two relate to factors external to the company (i.e., the external environment).[3]
These elements are considered throughout the strategic planning process.

Inputs
Data is gathered from a variety of sources, such as interviews with key executives, review of
publicly available documents on the competition or market, primary research (e.g., visiting or
observing competitor places of business or comparing prices), industry studies, etc. This may be
part of a competitive intelligence program. Inputs are gathered to help support an understanding
of the competitive environment and its opportunities and risks. Other inputs include an
understanding of the values of key stakeholders, such as the board, shareholders, and senior
management. These values may be captured in an organization's vision and mission statements.

Activities
The essence of formulating competitive strategy is relating a company to its environment.
Michael Porter[3]

Strategic planning activities include meetings and other communication among the organization's
leaders and personnel to develop a common understanding regarding the competitive
environment and what the organization's response to that environment (its strategy) should be. A
variety of strategic planning tools (described in the section below) may be completed as part of
strategic planning activities.
The organization's leaders may have a series of questions they want answered in formulating the
strategy and gathering inputs, such as:

What is the organization's business or interest?

What is considered "value" to the customer or constituency?
Which products and services should be included or excluded
from the portfolio of offerings?
What is the geographic scope of the organization?
What differentiates the organization from its competitors in
the eyes of customers and other stakeholders?
Which skills and resources should be developed within the
organization?[1][4]

Outputs
The output of strategic planning includes documentation and communication describing the
organization's strategy and how it should be implemented, sometimes referred to as the strategic
plan. The strategy may include a diagnosis of the competitive situation, a guiding policy for
achieving the organization's goals, and specific action plans to be implemented.[2] A strategic plan
may cover multiple years and be updated periodically.
The organization may use a variety of methods of measuring and monitoring progress towards
the objectives and measures established, such as a balanced scorecard or strategy map.
Companies may also plan their financial statements (i.e., balance sheets, income statements, and
cash flows) for several years when developing their strategic plan, as part of the goal setting
activity. The term operational budget is often used to describe the expected financial
performance of an organization for the upcoming year. Capital budgets very often form the
backbone of a strategic plan, especially as it increasingly relates to Information and
Communications Technology (ICT).

Outcomes
Whilst the planning process produces outputs, as described above, strategy implementation or
execution of the strategic plan produces Outcomes. These outcomes will invariably differ from
the strategic goals. How close they are to the strategic goals and vision will determine the
success or failure of the strategic plan. There will also arise unintended Outcomes, which need to
be attended to and understood for strategy development and execution to be a true learning
process.

Tools and approaches

Play media
Video explaining the strategic plan of the Wikimedia Foundation

Wikimedia Movement Strategic Plan (PDF)

A variety of analytical tools and techniques are used in strategic planning.[1] These were
developed by companies and management consulting firms to help provide a framework for
strategic planning. Such tools include:

PEST analysis, which covers the remote external

environment elements such as political, economic, social
and technological (PESTLE adds legal/regulatory and
ecological/environmental);
Scenario planning, which was originally used in the military
and recently used by large corporations to analyze future
scenarios;
Porter five forces analysis, which addresses industry
attractiveness and rivalry through the bargaining power of
buyers and suppliers and the threat of substitute products
and new market entrants;
SWOT analysis, which addresses internal strengths and
weaknesses relative to the external opportunities and
threats;
Growth-share matrix, which involves portfolio decisions
about which businesses to retain or divest; and
Balanced Scorecards and strategy maps, which creates a
systematic framework for measuring and controlling
strategy.
The Nine Steps to Success(TM)[5] - The Balanced Scorecard
Institute's framework for Strategic Planning and
Management.

Strategic planning vs. financial planning

Simply extending financial statement projections into the future without consideration of the
competitive environment is a form of financial planning or budgeting, not strategic planning. In
business, the term "financial plan" is often used to describe the expected financial performance
of an organization for future periods. The term "budget" is used for a financial plan for the
upcoming year. A "forecast" is typically a combination of actual performance year-to-date plus
expected performance for the remainder of the year, so is generally compared against plan or
budget and prior performance. The financial plans accompanying a strategic plan may include 3
5 years of projected performance.
McKinsey & Company developed a capability maturity model in the 1970s to describe the
sophistication of planning processes, with strategic management ranked the highest. The four
stages include:

1. Financial planning, which is primarily about annual budgets

and a functional focus, with limited regard for the
environment;
2. Forecast-based planning, which includes multi-year financial
plans and more robust capital allocation across business
units;

3. Externally oriented planning, where a thorough situation

analysis and competitive assessment is performed;
4. Strategic management, where widespread strategic thinking
occurs and a well-defined strategic framework is used.
Categories 3 and 4 are strategic planning, while the first two categories are non-strategic or
essentially financial planning. Each stage builds on the previous stages; that is, a stage 4
organization completes activities in all four categories.[6]

Criticism
Strategic planning vs. strategic thinking
Strategic planning has been criticized for attempting to systematize strategic thinking and
strategy formation, which Henry Mintzberg argues are inherently creative activities involving
synthesis or "connecting the dots" which cannot be systematized. Mintzberg argues that strategic
planning can help coordinate planning efforts and measure progress on strategic goals, but that it
occurs "around" the strategy formation process rather than within it. Further, strategic planning
functions remote from the "front lines" or contact with the competitive environment (i.e., in
business, facing the customer where the effect of competition is most clearly evident) may not be
effective at supporting strategy efforts.[1]

What is VMOSA?
Why should your organization use VMOSA?

When should you use VMOSA?

Like everyone else, community organizers often dream about goals they would like to
accomplish, such as an end to drug abuse; every child being wanted, cared for, and nurtured; a
home for everyone; peace in our lifetime. These are just a few of many people's visions for our
community. Unfortunately, like many individual dreams, we think these objectives are too lofty
and unattainable to ever be realized.
But, in fact, realizing these dreams is possible. Look, for example, at our global success in
eradicating small pox, or how far we have come since the 1950s in the United States towards
reaching racial and gender equality. As Henry David Thoreau said over a century ago, "If you
have built castles in the air, your work need not be lost; there is where they should be. Now, put
foundations under them."
Building foundations for your community dreams is what VMOSA, the strategic planning
process that is the focus of this chapter, is all about. It's about groups of people deciding together
what they want to accomplish, and how they are going to get there.

http://ctb.ku.edu/en/table-of-contents/structure/strategicplanning/vmosa/main
What is VMOSA?
One way to make that journey is through strategic planning, the process by which a group
defines its own "VMOSA;" that is, its Vision, Mission, Objectives, Strategies, and Action Plans.

VMOSA is a practical planning process that can be used by any community organization or
initiative. This comprehensive planning tool can help your organization by providing a blueprint
for moving from dreams to actions to positive outcomes for your community.
In this section, we will give a general overview of the process, and touch briefly on each of the
individual parts. In Examples, we'll show you how an initiative to prevent adolescent pregnancy
used the VMOSA process effectively. Then, in Tools, we offer you a possible agenda for a
planning retreat, should your organization decide to use this process. Finally, the remaining
sections in this chapter will walk you through the steps needed to fully develop each portion of
the process.

Why should your organization use VMOSA?

Why should your organization use this planning process? There are many good reasons,
including all of the following:

The VMOSA process grounds your dreams. It makes good

ideas possible by laying out what needs to happen in order
to achieve your vision.
By creating this process in a group effort (taking care to
involve both people affected by the problem and those with
the abilities to change it), it allows your organization to build
consensus around your focus and the necessary steps your
organization should take.
The process gives you an opportunity to develop your vision
and mission together with those in the community who will
be affected by what you do. That means that your work is
much more likely to address the communitys real needs
and desires, rather than what you think they might be. It
also means community ownership of the vision and mission,
putting everyone on the same page and greatly increasing
the chances that any effort will be successful.
VMOSA allows your organization to focus on your short-term
goals while keeping sight of your long-term vision and
mission.

When should you use VMOSA?

So, when should you use this strategic planning process? Of course, it always makes sense for
your organization to have the direction and order it gives you, but there are some times it makes
particularly good sense to use this process. These times include:

When you are starting a new organization.

When your organization is starting a new initiative or large
project, or is going to begin work in a new direction.
When your group is moving into a new phase of an ongoing
effort.
When you are trying to invigorate an older initiative that has
lost its focus or momentum.
When youre applying for new funding or to a new funder.
Its important under these circumstances to clarify your

vision and mission so that any funding you seek supports

what your organization actually stands for. Otherwise, you
can wind up with strings attached to the money that require
you to take a direction not in keeping with your
organizations real purpose or philosophy.
Let's look briefly at each of the individual ingredients important in this process. Then, in the next
few sections we'll look at each of these in a more in-depth manner, and explain how to go about
developing each step of the planning process.

Vision (the dream)

Your vision communicates what your organization believes are the ideal conditions for your
community how things would look if the issue important to you were perfectly addressed. This
utopian dream is generally described by one or more phrases or vision statements, which are
brief proclamations that convey the community's dreams for the future. By developing a vision
statement, your organization makes the beliefs and governing principles of your organization
clear to the greater community (as well as to your own staff, participants, and volunteers).
There are certain characteristics that most vision statements have in common. In general, vision
statements should be:

Understood and shared by members of the community

Broad enough to encompass a variety of local perspectives
Inspiring and uplifting to everyone involved in your effort
Easy to communicate - for example, they should be short
enough to fit on a T-shirt

Here are a few vision statements which meet the above criteria:

Healthy children
Safe streets, safe neighborhoods
Every house a home
Education for all
Peace on earth

Mission (the what and why)

Developing mission statements are the next step in the action planning process. An organization's
mission statement describes what the group is going to do, and why it's going to do that. Mission
statements are similar to vision statements, but they're more concrete, and they are definitely
more "action-oriented" than vision statements. The mission might refer to a problem, such as an
inadequate housing, or a goal, such as providing access to health care for everyone. And, while
they don't go into a lot of detail, they start to hint - very broadly - at how your organization might
go about fixing the problems it has noted. Some general guiding principles about mission
statements are that they are:

Concise. Although not as short a phrase as a vision

statement, a mission statement should still get its point
across in one sentence.
Outcome-oriented. Mission statements explain the
overarching outcomes your organization is working to
achieve.

Inclusive. While mission statements do make statements

about your group's overarching goals, it's very important
that they do so very broadly. Good mission statements are
not limiting in the strategies or sectors of the community
that may become involved in the project.

The following mission statements are examples that meet the above criteria.

"To promote child health and development through a

comprehensive family and community initiative."
"To create a thriving African American community through
development of jobs, education, housing, and cultural pride.
"To develop a safe and healthy neighborhood through
collaborative planning, community action, and policy
advocacy."

While vision and mission statements themselves should be short, it often makes sense for an
organization to include its deeply held beliefs or philosophy, which may in fact define both its
work and the organization itself. One way to do this without sacrificing the directness of the
vision and mission statements is to include guiding principles as an addition to the statements.
These can lay out the beliefs of the organization while keeping its vision and mission statements
short and to the point.

Objectives (how much of what will be accomplished by

when)
Once an organization has developed its mission statement, its next step is to develop the specific
objectives that are focused on achieving that mission. Objectives refer to specific measurable
results for the initiative's broad goals. An organization's objectives generally lay out how much
of what will be accomplished by when. For example, one of several objectives for a community
initiative to promote care and caring for older adults might be: "By 2015 (by when), to increase
by 20% (how much) those elders reporting that they are in daily contact with someone who cares
about them (of what)."
There are three basic types of objectives. They are:

Behavioral objectives. These objectives look at changing the

behaviors of people (what they are doing and saying) and
the products (or results) of their behaviors. For example, a
neighborhood improvement group might develop an
objective around having an increased amount of home
repair taking place (the behavior) or of improved housing
(the result).
Community-level outcome objectives. These are related to
behavioral outcome objectives, but are more focused more
on a community level instead of an individual level. For
example, the same group might suggest increasing the
percentage of decent affordable housing in the community
as a community-level outcome objective.
Process objectives. These are the objectives that refer to the
implementation of activities necessary to achieve other

objectives. For example, the group might adopt a

comprehensive plan for improving neighborhood housing.
It's important to understand that these different types of objectives aren't mutually exclusive.
Most groups will develop objectives in all three categories. Examples of objectives include:

By December 2010, to increase by 30% parent engagement

(i.e., talking, playing, reading) with children under 2 years of
age. (Behavioral objective)
By 2012, to have made a 40% increase in youth graduating
from high school. (Community -level outcome objective)
By the year 2006, increase by 30% the percentage of
families that own their home. (Community-level outcome
objective)
By December of this year, implement the volunteer training
program for all volunteers. (Process objective)

Strategies (the how)

The next step in the process of VMOSA is developing your strategies. Strategies explain how the
initiative will reach its objectives. Generally, organizations will have a wide variety of strategies
that include people from all of the different parts, or sectors, of the community. These strategies
range from the very broad, which encompass people and resources from many different parts of
the community, to the very specific, which aim at carefully defined areas.
Examples of broad strategies include:

A child health program might use social marketing to

promote adult involvement with children
An adolescent pregnancy initiative might decide to increase
access to contraceptives in the community
An urban revitalization project might enhance the artistic life
of the community by encouraging artists to perform in the
area

Five types of specific strategies can help guide most interventions. They are:

Providing information and enhancing skills (e.g., offer skills

training in conflict management)
Enhancing services and support (e.g., start a mentoring
programs for high-risk youth)
Modify access, barriers, and opportunities (such as offering
scholarships to students who would be otherwise unable to
attend college)
Change the consequences of efforts (e.g., provide incentives
for community members to volunteer)
Modify policies (e.g., change business policies to allow
parents and guardians and volunteers to spend more time
with young children)

Action plan (what change will happen; who will do what by

when to make it happen)
Finally, an organization's action plan describes in great detail exactly how strategies will be
implemented to accomplish the objectives developed earlier in this process. The plan refers to: a)
specific (community and systems) changes to be sought, and b) the specific action steps
necessary to bring about changes in all of the relevant sectors, or parts, of the community.

Date
to
Person(s)
be
Resources
Action Step Responsibl
Complete Required
e
d

Draft a
social
marketi
ng plan

Terry
McNeil
(from
marketing

Potential
Barriers
Collabora
or
rs
Resistanc
e

April 2006 $15,000

(remaining
donated)

None
anticipate
d

Members
the busine
action grou

Septembe 5 hours; 2
r 2008
hour
proposal
prep;
3
hours
for
meeting
and
transportati
on

Corporatio
n: may see
this
as
expensive;
must
convince
them
of
benefit of
the
plan
for
the
corporatio
n

Members
the busine
action gro
and
t
school act
group

firm)

Maria
Ask
Suarez
local
(from
corporat business
ions to
action
introduc group)
e flextime for
parents
and
mentors

The key aspects of the intervention or (community and systems) changes to be sought are
outlined in the action plan. For example, in a program whose mission is to increase youth interest
in politics, one of the strategies might be to teach students about the electoral system. Some of
the action steps, then, might be to develop age-appropriate materials for students, to hold mock
elections for candidates in local schools, and to include some teaching time in the curriculum.

Action steps are developed for each component of the intervention or (community and systems)
changes to be sought. These include:

Action step(s): What will happen

Person(s) responsible: Who will do what
Date to be completed: Timing of each action step
Resources required: Resources and support (both what is
needed and what's available )
Barriers or resistance, and a plan to overcome them!
Collaborators: Who else should know about this action

Here are two examples of action steps, graphed out so you can easily follow the flow:

Of course, once you have finished designing the strategic plan or "VMOSA" for your
organization, you are just beginning in this work. Your action plan will need to be tried and
tested and revised, then tried and tested and revised again. You'll need to obtain feedback from
community members, and add and subtract elements of your plan based on that feedback.

In Summary
Everyone has a dream. But the most successful individuals - and community organizations - take
that dream and find a way to make it happen. VMOSA helps groups do just that. This strategic
planning process helps community groups define their dream, set their goals, define ways to
meet those goals, and finally, develop practical ways bring about needed changes.
In this section, you've gained a general understanding of the strategic planning process. If you
believe your organization might benefit from using this process, we invite you to move on to the
next sections of this chapter, which explain in some depth how to design and develop your own
strategic plan.

Strategic planning the basic idea

From the Support Center for Nonprofit Management in San Francisco
(see note at end)
Strategic planning can be used to determine mission, vision, values, goals, objectives, roles and
responsibilities, timelines, etc.
Strategic planning is a management tool, period.
As with any management tool, it is used for one purpose only: to help an organization do a better
job to focus its energy, to ensure that members of the organization are working toward the same
goals, to assess and adjust the organization's direction in response to a changing environment. In
short, strategic planning is a disciplined effort to produce fundamental decisions and actions that

shape and guide what an organization is, what it does, and why it does it, with a focus on the
future. (Adapted from John M. Bryson, Strategic Planning in Public and Nonprofit
Organizations; you can order the book with this link and a small royalty will be paid that
supports this site.)
A word-by-word dissection of this definition provides the key elements that underlie the meaning
and success of a strategic planning process:

The process is strategic because it involves preparing the

best way to respond to the circumstances of the
organization's environment, whether or not its
circumstances are known in advance; nonprofits often must
respond to dynamic and even hostile environments. Being
strategic, then, means being clear about the organization's
objectives, being aware of the organization's resources, and
incorporating both into being consciously responsive to a
dynamic environment.

The process is about planning because it involves

intentionally setting goals (i.e., choosing a desired future)
and developing an approach to achieving those goals.

The process is disciplined in that it calls for a certain order

and pattern to keep it focused and productive. The process
raises a sequence of questions that helps planners examine
experience, test assumptions, gather and incorporate
information about the present, and anticipate the
environment in which the organization will be working in the
future.

Finally, the process is about fundamental decisions and

actions because choices must be made in order to answer
the sequence of questions mentioned above. The plan is
ultimately no more, and no less, than a set of decisions
about what to do, why to do it, and how to do it. Because it
is impossible to do everything that needs to be done in this
world, strategic planning implies that some organizational
decisions and actions are more important than others and
that much of the strategy lies in making the tough decisions
about what is most important to achieving organizational
success.

Strategic planning can be complex, challenging, and even messy, but it is always defined by the
basic ideas outlined above and you can always return to these basics for insight into your own
strategic planning process.

Strategic Planning and Long-Range Planning

Although many use these terms interchangeably, strategic planning and long-range planning
differ in their emphasis on the "assumed" environment. Long-range planning is generally
considered to mean the development of a plan for accomplishing a goal or set of goals over a

period of several years, with the assumption that current knowledge about future conditions is
sufficiently reliable to ensure the plan's reliability over the duration of its implementation. In the
late fifties and early sixties, for example, the US. economy was relatively stable and somewhat
predictable, and, therefore, long-range planning was both fashionable and useful.
On the other hand, strategic planning assumes that an organization must be responsive to a
dynamic, changing environment (not the more stable environment assumed for long-range
planning). Certainly a common assumption has emerged in the nonprofit sector that the
environment is indeed changeable, often in unpredictable ways. Strategic planning, then, stresses
the importance of making decisions that will ensure the organization's ability to successfully
respond to changes in the environment.

Strategic Thinking and Strategic Management

Strategic planning is only useful if it supports strategic thinking and leads to strategic
management the basis for an effective organization. Strategic thinking means asking, "Are we
doing the right thing?" Perhaps, more precisely, it means making that assessment using three key
requirements about strategic thinking: a definite purpose be in mind; an understanding of the
environment, particularly of the forces that affect or impede the fulfillment of that purpose; and
creativity in developing effective responses to those forces.
It follows, then, that strategic management is the application of strategic thinking to the job of
leading an organization. Dr. Jagdish Sheth, a respected authority on marketing and strategic
planning, provides the following framework for understanding strategic management:
continually asking the question, "Are we doing the right thing?" It entails attention to the "big
picture" and the willingness to adapt to changing circumstances, and consists of the following
three elements:

formulation of the organization's future mission in light of

changing external factors such as regulation, competition,
technology, and customers
development of a sustainable strategy to achieve the
mission
creation of an organizational structure which will deploy
resources to successfully carry out its competitive strategy.

Strategic management is adaptive and keeps an organization relevant. In these dynamic times it
is more likely to succeed than the traditional approach of "if it ain't broke, don't fix it."

What Strategic Planning Is Not

Everything said above to describe what strategic planning is can also provide an understanding
of what it is not. For example, it is about fundamental decisions and actions, but it does not
attempt to make future decisions. Strategic planning involves anticipating the future
environment, but the decisions are made in the present. This means that over time, the
organization must stay abreast of changes in order to make the best decisions it can at any given
point it must manage, as well as plan, strategically.
Strategic planning has also been described as a tool but it is not a substitute for the exercise of
judgment by leadership. Ultimately, the leaders of any enterprise need to sit back and ask, and
answer, "What are the most important issues to respond to?" and "How shall we respond?" Just
as the hammer does not create the bookshelf, so the data analysis and decision-making tools of
strategic planning do not make the organization work they can only support the intuition,
reasoning skills, and judgment that people bring to their organization.

Finally, strategic planning, though described as disciplined, does not typically flow smoothly
from one step to the next. It is a creative process, and the fresh insight arrived at today might
very well alter the decision made yesterday. Inevitably the process moves forward and back
several times before arriving at the final set of decisions. Therefore, no one should be surprised if
the process feels less like a comfortable trip on a commuter train, but more like a ride on a roller
coaster. But even roller coaster cars arrive at their destination, as long as they stay on track!

Copyright 1994-95 Support Center, 706 Mission Street, 5th Floor, San Francisco, CA, USA
94103-3113. Distribution and reprinting permitted as long as this copyright notice is included.
All Rights Reserved. (Note: The Support Center changed its name to Compasspoint some time
ago. This article is no longer available in its original location.)

Its hard to accomplish anything without a plan. Whether youre coaching a football team,
cooking Thanksgiving dinner, or running a small business, you need a strategic plan.
A strategic plan looks at all the things your small business could do and narrows it down to the
things it is actually good at doing. A strategic plan also helps business leaders determine where to
spend time, human capital, and money.
But, how should small businesses approach strategic planning? There are hundreds of business
books dedicated to the topic. Weve read most of them. We put the others on our bookshelf just
for show.
Developing a strategic plan might seem like an overwhelming process, but if you break it down,
its easy to tackle. Heres our five-step approach:
1. Determine where you are. This is harder than is looks. Some people see themselves how they
WANT to see themselves, not how they actually appear to others. Many small businesses get
snared in this same trap.
For an accurate picture of where your business is, conduct external and internal audits to get a
clear understanding of the marketplace, the competitive environment, and your organizations
competencies (your realnot perceivedcompetencies).
2. Identify whats important. Focus on where you want to take your organization over time.
This sets the direction of the enterprise over the long term and clearly defines the mission
(markets, customers, products, etc.) and vision (conceptualization of what your organizations
future should or could be).
http://www.forbes.com/sites/aileron/2011/10/25/five-steps-to-a-strategic-plan/
From this analysis, you can determine the priority issuesthose issues so significant to the
overall well-being of the enterprise that they require the full and immediate attention of the entire
management team. The strategic plan should focus on these issues.
3. Define what you must achieve. Define the expected objectives that clearly state what your
organization must achieve to address the priority issues.
4. Determine who is accountable. This is how youre going to get to where you want to go. The
strategies, action plans, and budgets are all steps in the process that effectively communicates

how you will allocate time, human capital, and money to address the priority issues and achieve
the defined objectives.
5. Review. Review. Review. Its not over. Its never over. To ensure the plan performs as
designed, you must hold regularly scheduled formal reviews of the process and refine as
necessary. We suggest at least once a quarter.
A strategic plan is a wonderful thing. It can help you take your small business to places you
never thought possible. If you havent already done so, take the time to lay out a strategic plan
now. It will help keep your small business on track and you focused on the future.

What is Strategic Planning?

Simply put, strategic planning determines where an organization
is going over the next year or more and how it's going to get
there. Typically, the process is organization-wide, or focused on a
major function such as a division, department or other major
function. (The descriptions on this page assume that strategic
planning is focused on the organization.)

How to Get a Feel for Strategic Planning -- There's No

Perfect Way to Do It
Planning typically includes several major activities or steps in the
process. Different people often have different names for these
major activities. They might even conduct them in a different
order. Strategic planning often includes use of several key terms.
Different people might use apply different definitions for these
terms, as well.
Don't be concerned about finding the "perfect way" to conduct strategic planning. You'll soon
notice that each writer seems to have their own particularly interpretation of the activities in
strategic planning. However, as you read the materials linked from the topic Strategic Planning
in this library, you'll begin to notice some information that is common to most writers.
Read the basic description described below on this page. Then review the various materials
linked from the library in the topic Strategic Planning. Once you start strategic planning, you'll
soon find your own particular approach to carrying out the process.

One Way to Look at Strategic Planning

One interpretation of the major activities in strategic planning
activities is that it includes:

1. Strategic Analysis
This activity can include conducting some sort of scan, or review,
of the organization's environment (for example, of the political,
social, economic and technical environment). Planners carefully
consider various driving forces in the environment, for example,
increasing competition, changing demographics, etc. Planners
also look at the various strengths, weaknesses, opportunities and
threats (an acronym for this activity is SWOT) regarding the
organization.
(Some people take this wide look around after they've identified or updated their mission
statement, vision statement, values statement, etc. These statements are briefly described below.
Other people conduct the analysis before reviewing the statements.)
(Note that in the past, organizations usually referred to the phrase "long-range planning". More
recently, planners use the phrase "strategic planning". This new phrase is meant to capture the
strategic (comprehensive, thoughtful, well-placed) nature of this type of planning.)

2. Setting Strategic Direction

Planners carefully come to conclusions about what the
organization must do as a result of the major issues and
opportunities facing the organization. These conclusions include
what overall accomplishments (or strategic goals) the
organization should achieve, and the overall methods (or
strategies) to achieve the accomplishments. Goals should be
designed and worded as much as possible to be specific,
measurable, acceptable to those working to achieve the goals,
realistic, timely, extending the capabilities of those working to
achieve the goals, and rewarding to them, as well. (An acronym
for these criteria is "SMARTER".)
At some point in the strategic planning process (sometimes in the activity of setting the strategic
direction), planners usually identify or update what might be called the strategic "philosophy".
This includes identifying or updating the organization's mission, vision and/or values statements.
Mission statements are brief written descriptions of the purpose of the organization. Mission
statements vary in nature from very brief to quite comprehensive, and including having a specific
purpose statement that is part of the overall mission statement. Many people consider the values
statement and vision statement to be part of the mission statement. New businesses (for-profit or
nonprofit) often work with a state agency to formally register their new business, for example, as
a corporation, association, etc. This registration usually includes declaring a mission statement in
their charter (or constitution, articles of incorporation, etc.).
It seems that vision and values statements are increasingly used. Vision statements are usually a
compelling description of how the organization will or should operate at some point in the future
and of how customers or clients are benefiting from the organization's products and services.
Values statements list the overall priorities in how the organization will operate. Some people
focus the values statement on moral values. Moral values are values that suggest overall
priorities in how people ought to act in the world, for example, integrity, honesty, respect, etc.
Other people include operational values which suggest overall priorities for the organization, for
example, to expand marketshare, increase efficiency, etc. (Some people would claim that these
operational values are really strategic goals. Don't get hung up on wording for now.)

3. Action Planning
Action planning is carefully laying out how the strategic goals will
be accomplished. Action planning often includes specifying
objectives, or specific results, with each strategic goal.
Therefore, reaching a strategic goal typically involves
accomplishing a set of objectives along the way -- in that sense,
an objective is still a goal, but on a smaller scale.
Often, each objective is associated with a tactic, which is one of the methods needed to reach an
objective. Therefore, implementing a strategy typically involves implementing a set of tactics
along the way -- in that sense, a tactic is still a strategy, but on a smaller scale.
Action planning also includes specifying responsibilities and timelines with each objective, or
who needs to do what and by when. It should also include methods to monitor and evaluate the
plan, which includes knowing how the organization will know who has done what and by when.
It's common to develop an annual plan (sometimes called the operational plan or management
plan), which includes the strategic goals, strategies, objectives, responsibilities and timelines that
should be done in the coming year. Often, organizations will develop plans for each major
function, division department, etc., and call these work plans.
Usually, budgets are included in the strategic and annual plan, and with work plans. Budgets
specify the money needed for the resources that are necessary to implement the annual plan.
Budgets also depict how the money will be spent, for example, for human resources, equipment,
materials, etc.
(Note there are several different kinds of budgets. Operating budgets are usually budgets
associated with major activities over the coming year. Project budgets are associated with major
projects, for example, constructing a building, developing a new program or product line, etc.
Cash budgets depict where cash will be spent over some near term, for example, over the next
three months (this is very useful in order to know if you can afford bills that must be paid soon.
Capital budgets are associated with operating some major asset, for example, a building,
automobiles, furniture, computers, etc.

Basic Overview of Variety of Planning Models

Here's a quick overview of a variety of strategic planning. This
overview will help you get a feel for the variety of perspectives on
strategic
planning.
Basic Overview of Various Models
Now that you have some basic sense about what strategic planning is, you can go on to polish
your understanding by returning to the topic Strategic Planning, starting with in the section Basic
Overviews of Strategic Planning Process (basics, special topics and sample plans)

http://managementhelp.org/strategicplanning/basics.htm