Basics of Strategic Planning

In April, I summarized an annual spring cleaning process that I recommend to clients in a post entitled “6 Steps for Small Firm Spring Cleaning”. The final step that was recommended for small firms was the development of a strategic plan. In the April post I stated that “Strategic plans do not have to take an inordinate amount of time to develop and they do not have to become unwieldy documents that nobody uses.” I then promised that my next post would include some basic tips for developing a strategic plan and below is my attempt to do so.

The first thing to note is that the topic of strategic planning and the area of study known as strategic management are both mature concepts and there are many books and articles addressing these topics. Despite this, there are differing opinions on the best approach to strategic planning and there is no “right way” to develop a strategic plan. My personal preference is for a simple process that develops a brief and useable roadmap for future activities.

There are many ways to develop this roadmap and each organization will want to develop the approach that makes the most sense in their specific context. What I will attempt to do below is set out one possible simple approach to strategic planning and identify one structured exercise for each step. Note that there are many other approaches and exercises that are available to guide the development of a strategic plan.

Before I begin to lay out some foundational steps to developing a plan I believe that it is useful to define the term strategy. Although definitions abound, my favorite definition of a strategy is “a plan for the future built around patterns from the past”. This definition is an important stepping off point as it highlights the concept that, in order to develop a good strategic plan, you must consider the organizations past experiences and current situation. This brings us to the first step in the simplified strategic planning process:

Step 1. Internal Analysis

Conducting an internal analysis entails reflecting on your organizations past and current reality. Some relevant areas of inquiry include the organization’s mission, vision, values, strengths, weaknesses and priorities. Although a consideration of these factors could include a simple discussion among those key stakedholders in your organization, there are many exercises that have been developed to assist with the brainstorming process. One commonly used exercise is known as a SWOT. A SWOT analysis provides a basic structure to consider your organizations strengths, weaknesses, opportunities and threats. Further details regarding the SWOT analysis can be found here:

Step 2. External Analysis

Once you have developed a sense of the internal environment of an organization, it is time to consider external factors that may impact upon your plan. Conducting an external analysis entails a reflection on the organization’s external environment. Again this analysis could be accomplished through a free form discussion or through the use of a brainstorming process. One common process is known as a PEST analysis that provides a platform to consider the political, economic, social and technological forces that may impact your organization. Details regarding a PEST analysis can be found here:

Step 3. Strategy Formulation

Once you have a clear sense of the internal and external environment in which your organization operates it is time to begin considering your specific goals and strategies by which you will achieve them. In order to commence this process you must first consider the time frame of your plan. For most small organizations and/or organizations that are embarking on their first strategic planning exercise I recommend a relatively short time frame such as two years. Once your time frame has been identified the next step is as simple as brainstorming what you would like to accomplish in over the time frame. It is a good practice not to censor your ideas during the first brainstorm session as the result should be a long list of goals. From this long list you then spend some time identifying your top priorities. You can decide to pursue as many priorities as you think is feasible however I recommend that no more than five priorities be identified. The next and perhaps most overlooked step to strategy formulation is the process of breaking your goals down into smaller concrete actions that will be taken to reach the goal. One common method of accomplishing this task is to apply the SMART criteria to every action. This means that every action is specific, measurable, assignable, realistic and time related. More information on this tool can be found at the following link:

Step 4. Strategy Execution

Step 4 of the simplified strategic planning process is the most straightforward. During this phase the actions that you have developed during step 3 are carried out by those to whom they have been assigned.

Step 5. Evaluation

The final step in the process is one overlooked in many organizations and that is a regular evaluation of your progress through the strategic plan. The evaluation schedule can be set in whatever way makes sense for your organization and can be as simple as keeping the strategic plan as a regular item that is addressed at monthly meetings. A more structured approach could include setting a quarterly meeting specifically to evaluate your progress through the plan and could employ a formal process such as the Six Thinking Hats. This method assigns a specific role to each member of your team and in my experience elicits more valuable and honest feedback as opposed to an unstructured evaluation conversation. More information on this method can be found at the following link:

At the end of the day strategic planning is a valuable tool to ensure that your organization does not operate without purpose or direction or more commonly lurch from one crisis to another. It is about setting out a clear roadmap for the near future and taking concrete steps to achieve your organizations goals. There is no one recipe for strategic planning and what works for one organization may not work for another. What is set out above is just one simplified approach that I hope will be of use to those who wish to engage in the process but may not have the resources to hire a consultant to assist them with this important task.

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