If you are new to Strategic Planning and want to familiarize yourself on what a strategic plan is and how to go about preparing one, then this article will be useful.
Strategic plans are prepared at different levels using different approaches, but the ones mentioned below are 5 important elements of a good strategic plan. The framework of Hoshin Kanri Policy Deployment aptly covers these 5 elements.
Traditionally strategic plans are considered to be complex and bulky reports that runs to pages. But that isn’t necessary true. However, it is true that there is lot of work that goes into creating an organization’s strategic plan. But a good strategic plan can just be a one-document containing the following elements :
Business goals are the organizational level goals that are closely tied to the organization’s vision and mission. It reflects the aspirations of the organization and their commitment to their customers, shareholders and employees. Usually the organizational goals are restricted to not more than 5 and preferably just 3. Each of these goals are quantifiable measures with agreed targets for next 3 years. Not all goals are equally important, so it would be a good idea to arrange them in the order of importance.
If your organization feels that all the goals are equally important, then there is no need to prioritize them.
As mentioned earlier, it is important to quantify all goals. So there is a clear difference between vision and goals. ‘To be market leader in next 3 years’ isn’t a goal. For some goals, there may be more than one measure of success. It’s a good idea to include all of them, but they can be carefully screened before inclusion.
Organizational Strategy is the most misused management term. Goals and strategies are interchangeability used and they are thoroughly confused. As Michel Porter puts it, strategies represent the ‘How’ part of achieving the goal, not the ‘What’. Strategies are arrived based on internal and external environments. Number of strategies to be no more than 7 but preferably just 5. I’m not covering the details of the how organizational strategies are arrived here, but you will find information regarding this in other articles. Most times, a given strategy can be helpful in achieving more than one goal.
Like goals, strategies have to be prioritized as well. Some organizations consider inorganic growth as a strategy and include it as the last strategy. But it isn’t mandatory to include acquisition as a strategy by default.
Goals without individual ownership will never be accomplished. Hence each of the goals at the organizational level are owned by individual leaders. Just to reiterate, I used the word ‘Owned’ not ‘Assigned’. Hence the individual leaders of the organization engage in a discussion and agree to own goals rather than being assigned by the Chief Executive. In achieving some of these goals, there will be inter-dependencies. That’s where joint accountability comes into play.
Strategic Initiatives are strategic thrust areas where the leadership believes the organization has to do something different in order to achieve 1 or more goals. Few synonyms for Strategic Projects are Strategic Initiatives, Critical Strategic Projects, etc. There is no restriction on the number of strategic projects, but should be limited based how much an organization can manage concurrently. Most organizations falter here. Similar to goals and strategies, strategic projects are also prioritized. In order to ensure a strategic project is successful, there needs to be a robust project plan, cross-functional teams and rigor.
Once created, a strategic plan is a live document and needs to be reviewed and updated every month.
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