The 7 Stages of the Strategic Planning Process
Does your organization have a clearly articulated strategic business plan that everyone understands and supports? Who should be involved in the preparation, review and approval of your business strategic plan?
In this second part of a series of blogs about strategic plans, I attempt to outline the steps and owners of the strategic planning process.
Read the first part of our strategic planning series, Why Do you Need a Strategic Plan? here. Let’s break down the strategic planning process for your organization into stages. Fundamentally, you want to engage as many stakeholders as possible in one or more stages of the process while at the same time recognizing that “everyone on the ball” for the whole process will not be efficient.
I suggest that you consider the following stages in developing your business plan:
1. Project Plan
Get agreement on the process to be used and define who will be involved in the research, development, authoring, review, approval and communication phases of the plan. What time horizon will be used, how long will the process take and how often should the process be repeated?
- For most organizations, the strategic business plan will look out three to five years, with five being the most common for NFP corporations and other mature businesses and three being more common for fast-moving technology businesses.
- It is recommended that the strategic plan be revisited annually with either a major iteration or minor tweaks depending on the extent of changes in both the external and internal environments.
- The process should be able to be completed within 2 to 3 months from start to finish.
- Many organizations undertake the strategic planning process during their 2nd fiscal quarter so that the 3rd quarter can be used to start preparation for the next year with the annual budget being finalized and approved during the 4th quarter before the next fiscal year starts.
2. Research Phase
During the research phase, most of the time will be spent looking outward at the overall market and the other players (competitors and potential partners) in the market. It is important to cast a wide net but then focus down on the market segments where you will participate over the planning period.
Although private companies are not required to give details about customers, revenue, margins etc., many will do so in press releases and presentations at industry conference. This phase should define the Total Available Market (TAM) for your products and services and identify market share for at least the top three to five players. This is also the time to identify the SWOT (strengths, weaknesses, opportunities and threats) for the corporation, as well as the other major players in the market.
3. Authoring Phase
The authoring phase will generally be led by one person, but the writing can be divided into sections with different people writing each section. The format will depend on your requirements, but I suggest that you consider a Word document with a target to get the core content covered in 15 to 20 pages with more detailed content included in appendices. In my next blog I will outline what content should be included in the strategic plan.
4. Presentation & Review Phase
Once the plan is fully outlined and agreed by the CEO and senior team, it is a good time to put the highlights of the plan into presentation format. This facilitates a broader review of the plan by the board and key stakeholders and can be used to gain further feedback on the key components of the plan. It also starts the preparation for the broader communication of the plan.
5. Approval Phase
During the approval phase, it is common for the CEO to present the strategic plan to the board, often with the senior management team present. Some CEOs prefer that components of the plan be presented to the board by the senior team. Either at the end of the presentation, or at a subsequent meeting, the board should approve the plan, either as presented or with certain changes agreed. If the board has suggested substantial changes, then it is prudent to bring the revised strategic plan back to the board for final approval.
6. Communication Phase
Once the board has approved the plan, it is important for the CEO to present and solicit feedback from all key stakeholders, senior team, employees, funders, partners etc. The depth of the presentation may vary by stakeholder but the essence should be the same for all.
7. Implementation Phase
The CEO and senior team are now responsible for the implementation of the plan. Major changes in direction should be mapped out into smaller stages with clearly agreed timeline and milestones. It is the board’s responsibility to check periodically to ensure that the organization is staying true to the course set during the strategic planning exercise. If there is too much drift then it is likely that the whole strategic planning process needs to be undertaken again. Of course, major outside forces may require that the plan be re-visited earlier than anticipated.
Who has ownership of the Strategic Plan?
- The CEO should have overall ownership for completion of the strategic plan but may delegate certain phases of the process while still maintaining ownership.
- The Board: While the board will not be directly involved in the implementation of the strategic plan, the board does have responsibility to ensure that the organization is operating consistent with the approved plan.
- The Senior Management Team: Sometimes supported by an external specialist, the senior management team will often be responsible for the research, authoring and packaging phases for the plan.
The strategic planning process can seem a daunting undertaking at the beginning, especially if the organization has not really had a strategic plan in the past. However, the process is critical to harnessing all of the energy of the organization into a single direction with an agreed goal or objective. Without a common plan in place, everyone lacks direction and sense of purpose.
Outsiders question the organization and are less likely to help the team achieve their ultimate objectives. In addition, board members can become difficult to deal with and may start questioning every proposed action, no matter how significant it is. Align your team and stakeholders to achieve the best outcomes for the organization – articulate a clear strategic plan.
In Part 3 of the strategic planning series, I will go over a SWOT analysis and the other elements involved in the Research Phase of the strategic plan.
We love to work with organizations to articulate and communicate their strategic plan and would appreciate your feedback on this article. Learn more about our Strategic Planning services.
About the Author
Claude Haw is the Executive Leader for the Strategy & Governance practice at Business Sherpa Group. He has been directly involved as a senior manager, CEO, founder, funder, mentor, advisor and board member of more that 30 private, public and not-for-profit corporations over the past three decades. Claude loves working with energetic and passionate people to take their business to the next level.