How Often Should Strategic Planning Be Done? An organization or individual that will go far in life must not only have a vision but must have strategic plans so that the vision can come to reality. The big question now is; how often should strategic planning be done? Should it be daily, weekly, monthly or yearly? You will be getting the answers in this article. Read along!
How Often Should Strategic Planning Be Done?
Strategic planning is simply the art of developing specific business strategies to achieve set goals. It involves setting up a sequence in which set goals can be achieved so that an organization can reach its vision.
For organizations desiring future success, higher profit, value and impact, strategic and rigorous planning is needed. How often strategic planning should be done varies from one organization to another. This is because every organization has its own system of operation and also different factors (both internal and external forces) affecting them at varying degrees.
For instance, fast-paced industries like technology, tourism may need to review their strategies every month. Meanwhile, in slow-faced industries, like sports, mining, government may do their planning every one to three years.
So, there is no particular time frame for strategic planning, it varies from one organization to another. So whether you chose to do your planning on a weekly, monthly or yearly basis, the most important issue is proper understanding of the purpose and process in strategic planning.
Steps Involved in Strategic Planning
There is need for a plan
There is a saying; “if you fail to plan, then you are planning to fail”. If you desire a forward and upward movement for your organization, you must make plans.
Have set goals
This step is highly important because you cannot do adequate planning if you don’t have a direction. Your goals must be S.M.A.R.T.
S stands for Specific
M stands for Measurable
A stands for Achievable
R stands for Relevant
T stands for Time-Bound
You need to develop some premises
Even though the future is unpredictable, you will still need to carve out some assumptions or premises if you want extraordinary results in your business. A common type of premises is called forecast, which is simply the act of making some predictions about the future.
Example of premises include:
What kind of result am I expecting?
What technological advancement would I be needing to achieve the goals?
Find out various ways of achieving your set goals
It is important that you research different ways of achieving your set goals. After you must have found out those ways, then you weigh the strength of each solution against its weakness and then select the best option.
Develop an action plan
In developing an action plan to achieve set goals, you need to be very strategic. Never choose a plan that will be too costly to execute or one that will pose some threats to you or business. You also must be very practical in your approach.
Develop a secondary plan
You will sometimes need some secondary plans in order to implement your main plan. So as you make your major plans, you should have some secondary plans alongside.
For example, if you as a bakery owner wants to generate more profit (your aim), your major plan could be, to expand the size of the bakery so as to accommodate more ovens. Your secondary plans would be to get more flour (raw materials) and also hire more hands.
Implementation of the plan
It is not enough to write down plans, you must implement them. In implementation of your strategic plan, skill set and expertise are always needed. Also you will need to make sure your team members understand their responsibility and also be encouraged to work together so as to achieve the set goals.
Why You Need Strategic Planning?
Even though strategic planning can really be a tasking and arduous process, there are so many benefits attached to it. Some of these benefits include:
Higher and better chances of success
An organization or individual that employs strategic planning as one of its tools will have better results than those that do not.
Lesser chance of being distracted
Strategic planning enhances better focus and helps eliminates different forms of distraction.
Strategic planning fosters productivity. More is achieved when an organization or individual is involved in strategic planning.
It allows for innovation
In strategic planning, different models, ideas that will foster productivity are employed. Thus, strategic planning makes room for innovations and creativity.
Fosters team work
In Strategic planning, everyone gets the opportunity to participate through idea generation, suggestions, etc. In short, everyone is carried along in the process, which is a good one for higher productivity.
Better Performance of Employee
When there is adequate and structured planning, employees of that organization performs better.
There is opportunity for Feedback
Feedback is actually important in the organization process. With strategic planning, staffs have the opportunity to inform the management on the operational processes that are functional and also those processes that have issues.
Organizations can get to measure their growth
With strategic planning, organizations can get to see how well they are doing and areas of improvement.
Strategic Planning tools
Strategic planning tools are those techniques used by organizations to determine their current performance and also make future projections and plans. Some of the tools include:
- SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis
- OKR (Objectives and Key Results)
- PEST (political, economic and socio-cultural, and technological) analysis
- Balanced Score card
SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis
The SWOT analysis is a very important tool in strategic planning. It helps an organization identify her performance level and areas that there can be improvement. SWOT is an acronym for:
Strengths has to do with what the organization excels at and what distinguishes it from its competition. For example, a strong customer base, a strong brand, outstanding technology, etc.
Weakness is that which hinders an organization from functioning at its optimal level. These are areas the business needs to improve so as to remain competitive. Examples of weakness include high level of debt, lack of capital, weak brand, etc.
Opportunities are favorable external factors that could make an organization stand out from its competitors.
Threats are those factors that could pose some danger to the organization. Examples include increasing cost of raw materials, low sales, high competition, etc.
What happens within the company (internal factors) provide information on what the strengths and weaknesses of the company are. Examples include financial resources, human resources, etc. What happens outside the company (external factors) provide information on the opportunities and threats.
SWOT analysis can be used for annual strategic planning and also in daily decision making. It can be used in the boardroom where the major stakeholders in the organization meet together for strategic planning on moving forward. However, SWOT analysis is not 100% sufficient in itself, rather it should be used with other tools for effective and strategic planning.
Businesses could match up their strength with available opportunities so that can have better result and output. SWOT can be used by start-ups, entrepreneurs, etc.
OKR (Objectives and Key Results)
This tool is used by some famous and well-established organizations like Microsoft, Google, Intel, Twitter, Walmart, Target and a host of others. The tool works by establishing a well-defined goal alongside some key results. The key results are quantifiable checkpoints that builds up towards the desired goal.
The good thing about OKR is that it is very adjustable. This tool is very good for established and profitable businesses who need to make some progressive adjustments without having to discard their successful formula.
PEST (Political, Economic and Socio-cultural, and Technological) analysis
This tool helps to analyze the political, economic, socio-cultural and technological changes in the business environment. This helps a business owner understand better the different forces of change the business is exposed to and also how to maximize the opportunities around. PEST tool helps a business owner:
- Identify business opportunities around
- Know the direction of change within the business environment
- Analyze risks
This tool can be used by any kind of business including healthcare, automotive, education, technology, etc. Balanced score card is used by organizations to:
- Communicate what they intend to achieve
- Prioritize products and services
- Quantify and monitor progress towards strategic targets.
- Align daily activities of its staff with strategy
Pros and Cons of Strategic Planning
- Strategic planning helps organizations identify and manage risks.
- Strategic planning encourages creative thinking.
- It helps to clarify the aims and objectives of an organization.
- It fosters collaborations among managers and other staffs in the organization.
- It helps organizations to allocate resources appropriately.
- Some external factors like economic, environmental can sometimes adversely affect strategic planning and cause it to fail.
- Strategic planning can be complex and ambiguous sometimes.
The pros of strategic planning far outweigh its constraints. Whether you are a business owner, a manager in an organization or a student, strategic planning is essential to all. With strategic planning, goals will be achieved, resources will be maximized and team work will be greatly enhanced.