Survival, growth, profitability – these are some long-term goals that almost every organization has. But do you know how organizations achieve these objectives? They do this through the development of strategies.
A strategy is a plan or a method designed to aid organizations in the achievement of their objectives. A strategy is a course of action tailored to achieve smaller goals, which in turn leads to the accomplishment of a company’s main objectives.
The strategic planning process involves reviewing and planning of the business in order to make better decisions for the future of an organization.
The strategic planning process includes determining the mission and vision of the company and an overall analysis of the current and competitive position. This entire planning process demands a well-thought-out plan on how to allocate time, financial resources and even human capital efficiently.
By following the strategic planning process, companies can highly improve upon operations of their business and work towards its success. The key is to effectively follow the process. Here are a few steps involved in the strategic planning process.
1) Write the Company Vision Statement
The first step of the strategic planning process includes ironing out the company vision. A vision statement is a sentence that frames a mental image of the organization in the reader’s mind. It forms a basic picture of what the company hopes to achieve or become. It is a key step of the process as it’s crucial to comprehend the direction in which an organization is heading before a strategy is devised. A vision statement also provides the leadership (managers) and employees a shared goal to work towards.
A vision statement is devised through a three-step process.
- Exemplify both short-term and long-term aims and objectives of the company.
- Map out the process of how you can achieve those aims and objectives.
- Tailor your message according to your audience. Make sure they clearly understand the vision of the company.
2) Write a Mission Statement
Many people tend to confuse a mission and vision statement. Well, let’s make one thing clear – while they are interconnected, they’re both different from one another. A mission statement outlines the soul of the existence of an organization. It also incorporates the steps a company takes to accomplish its vision. Mission statements typically tend to be longer than vision statements. There are a few basic aspects that every mission statement must cover. It should include the following.
- Information about the customers and how they’ll benefit.
- Offerings of the company (products and services).
- Geographical markets the business is operating in.
- Basic Technology of the firm.
- Survival and growth of the firm.
- Basic values, beliefs and philosophies of the company.
- Strengths and competencies of the company.
- Concern for public image.
- Concern for employees.
3) Perform a Gap Analysis
A gap analysis identifies the fluctuation between the present condition and the aims of the organization. It basically helps analyze what the organization hopes to achieve and what it has currently achieved. This process involves a lot of research within and outside an organization. Gaps can be identified in the following factors.
- Market Share
- Financial Position
- Internal Operations
- Public Relations
- Customer Satisfaction
4) Write SMART Goals
The gap analysis will help you identify any shortfalls in your organization. The next step towards overcoming these shortfalls and reaching the position that you want to be at requires goal-setting. The best way to go about setting goals is by remembering that the goals need to be SMART – Specific, Measurable, Attainable, Realistic and Timely.
It’s important that you consider all these factors when defining your goal. For instance, if you want to increase sales, your goal will be ‘to increase sales by 10% within the next 6 months.’
5) Formulating a Strategy
This is where all the aforementioned steps come into play. Goals are important and provide direction, but they’re almost useless if they’re not implemented. Goals need to be broken down based on departments. A strategy is formulated after reviewing all the information gathered through the analysis. The company will have to figure out the resources required to bridge the gap identified in the gap analysis.
Also, the areas of the business lagging behind and the resources they require to cope up need to be outlined. The problems faced by the company should be prioritized according to the success of the business. It is important that you develop alternative approaches to target each step of the plan.
6) Implement Your Strategy
This step is extremely crucial in order to establish a successful business. After devising the strategy, it is important that it is executed effectively. This is the action stage of the entire strategic management process. In case the overall strategy isn’t very effective due to the present structure of the company, then the structure of the company will have to be revised. At this stage, all employees should be clearly made aware of all their responsibilities and duties to ensure that they fit with the overall objective.
The company will also require additional funding for the execution of the strategy. So, once the human capital and financial resources are ready, the strategy should be executed.
7) Monitor Progress
Strategy evaluation is really important. This step includes performance measures. Once strategies are implemented, they need to be assessed and evaluated to see if they’re working. Internal and external problems need to be reviewed consistently and corrective actions need to be taken when required. The strategy evaluation can only be successful once parameters and standards have been established.
Measure your current progress against the initial plan that you had. In case the strategy isn’t effective, you will have to restart the strategic process. Recollect and reevaluate the data if you are devising a new strategy.
Author Bio:-
Pangea Strategic Intelligence’s on demand energy consulting platform facilitates engagements with market-embedded Experts so Clients make better business decisions, faster.
