What is Strategic Planning?

Everyone who writes on the subject offers a slightly different definition of strategic planning. My own favorite definition is based on the words of a remarkable man...a man who, I'm sure, has never seen the words "strategic" and "planning" put together. Abraham Lincoln said, "If we could first know where we are, then whither we are tending, we could then decide what to do and how to do it."

Consider what Lincoln said, place it in question format and modernize it just a bit. You'll arrive at the definition: Strategic Planning is the managerial process which, examining the organization as a whole, addresses three key questions:

1. Where are we today?
2. Where do we wish to arrive, and when?
3. How do we get from here to there?

Glance at the block diagram of the planning process. You'll note the three key questions correspond to the process steps, "Situation Analysis," Objective Setting" and "Strategizing."

But let's not get ahead of ourselves. Let's review each block in the diagram one at a time. Note the first block is "Decision to Plan." This makes sense. We can't begin the process until we've decided to do so. And we won't decide to do so until we've recognized the benefits of planning.

Next is a dedication of resources to the process. For nothing in the world is free. And that includes strategic planning. You'll have to pay for planning. Its costs can be measured in terms of people, place, time and money.

Having decided that strategic planning is beneficial, and that its benefits outweigh the costs of planning, you can then begin the process itself. You'll then enter the first process step.

Situation Analysis

You can begin the situation analysis...tackling the first key question "Where are we today?" Situation analysis involves a look at your organization both internally, in terms of its strengths and weaknesses, and externally, in terms of its opportunities and threats.

Following the situation analysis, your planning team next develops its Mission Statement, a concise declaration of "what business we are in," and "who our customer is." That Mission Statement then sets the stage for the objectives and strategies to follow.

The next process step addressing a key question is Objective Setting. Objective Setting involves establishing a "handful" of quantified objectives in addressing the question "Where do we wish to arrive, and when?"

Strategies

Your planning team will address the third question, "How do we get from here to there?", during a process step called Strategizing. You'll develop two kinds of strategies: Defensive Strategies and Strategies Built on Strength. You'll develop defensive strategies to solve internal weaknesses which make your organization vulnerable to external threats. And you'll develop strategies built on strength to take advantage of external opportunities.

After you have concluded with Situation Analysis, Objective Setting and Strategizing, the three key steps in the process, you'll then have something you can call a strategic plan. You can give it a title, bind it in a pretty book, and communicate it to "the troops". Then the real work begins. Because 85 to 90% of your time, work, effort (and probably your tears) will be involved in the implementation of your plan.

Monitoring Results

But implementing, by itself, isn't enough. You've also got to monitor that implementation. You measure results. You ask, "How is it going?" You can think of this "short term feedback" as a weekly or a monthly up-dating do discover if you're implementing your plan according to your initial intention.

A longer feedback loop within the planning process goes back from measurement of results to situation analysis, where you'll re-enter the process at the beginning of the planning cycle, generally one year later. You can think of this as a "reset" for the strategic planning process.