STRATEGIC PLANNING

 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.

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.

Analysis or assessment, where an understanding of the current internal and external environments is developed.

Strategy formulation, where a high-level strategy is developed and a basic organization-level strategic plan is documented.

Evaluation or sustainment/management phase, where ongoing refinement and evaluation of performance, culture, communications, data reporting, and other strategic management issues occurs.

The purpose of Strategic Planning

The purpose of strategic planning is to set your overall goals for your business and to develop a plan to achieve them. It involves stepping back from your day-to-day operations and asking where your business is headed and what its priorities should be.

Taking the decision actively to grow a business means embracing the risks that come with growth. Spending time on identifying exactly where you want to take your business – and how you will get there – should help you reduce and manage those risks.

As your business becomes larger and more complex, so strategy formulation will need to become more sophisticated, both to sustain growth and to help you muster the leadership and resources you need to keep your business developing.

To do this, you will also need to start collecting and analysing a wider range of information about your business – both about how it operates internally and about how conditions are developing in your current and potential markets.

The Three Key Elements of Strategic Planning

Developing a strategy for business growth requires you to deepen your understanding of the way your business works and its position relative to other businesses in your markets.

TACTICAL PLANNING

Tactical planning takes a company's strategic plan and sets forth specific short-term actions and plans, usually by company department or function. The tactical planning horizon is shorter than the strategic plan horizon. If the strategic plan is for five years, tactical plans might be for a period of one to three years, or even less, depending on what kind of market the business serves and the pace of change.

Tactical planning is such an important part of a company's strategic planning process that management consulting companies are often hired to assist companies in preparing tactical plans. A company usually begins with its objectives and then develops strategies for how to carry out its objectives. Tactical plans are the specific action steps necessary to get results.

Tactical Marketing Plan Example

Assume for a moment your company sells insurance products in a large metropolitan area. The tactical marketing plan for your insurance company must outline, step by step, each marketing component needed to meet the goals and vision of your company's strategic plan.

For example, if you decide one of the best ways to reach your target consumer is TV advertising, then the tactical plan needs to carefully spell out the specifics of the TV campaign. Steps in developing this plan include, but are not restricted to, deciding on an appropriate message; arranging for the production of the commercial; deciding what channels to air the commercial on and when; and following up with potential customers who respond to the campaign.

Strategies Vs.

One of the biggest challenges in tactical planning is knowing the difference between a strategy and a tactic. These are sometimes confused. A strategy is essentially a framework or plan, but it provides no tangible results on its own. Tactics are steps for implementing your strategies and are actionable and have a purpose and a measurable result. If you cannot see or discern the result of the action or task it is likely not a tactic.

OPERATIONAL PLANNING

Operational planning is the process of planning strategic goals and objectives to tactical goals and objectives. It describes milestones, and conditions for success and explains how, or what portion of, a strategic plan will be put into operation during a given operational period, in the case of commercial application, a fiscal year or another given budgetary term. An operational plan is a basis for, and justification of an annual operating budget request. Therefore, a five-year strategic plan would typically require five operational plans funded by five operating budgets.

Operational plans should establish the activities and budgets for each part of the organization for the next 1 – 3 years. They link the strategic plan with the activities the organization will deliver and the resources required to deliver them.

An operational plan draws directly from the agency and programs strategic plans to describe agency and program missions and goals, program objectives, and program activities.

The operations plan is both the first and the last step in preparing an operating budget request. As the first step, the operations plan provides a plan for resource allocation; as the last step, the OP may be modified to reflect policy decisions or financial changes made during the budget development process.

Operational plans should be prepared by the people who will be involved in the implementation. There is often a need for significant cross-departmental dialogue as plans created by one part of the organization inevitably have implications for other parts.