Strategic Planning – Concept, process and models

We explain what strategic planning is and what this process consists of. Why it is important and strategic planning models.

Strategic planning
Strategic planning seeks the best use of resources to meet a goal.

What is strategic planning?

By strategic planning or strategic planning we usually refer to a systematic, that is, methodical, process of implementation of plans to obtain objectives and desired results. It is a type of tactical planning that considers the best ways to achieve the goals that we have set ourselves, both within an organization (company, institution, etc.) and in personal life.

Strategic planning is a commonly used organizational tool, especially in the military field (military strategy) or in the business field (business strategy or financial strategy). Likewise, it also applies to a varied set of areas of life, in which it is necessary to lay the foundations for the achievement of a goal, anticipating possible inconveniences and proceeding according to the most suitable route given the resources available.

The purpose of all this is to find a good strategy, that is, a good path or a good set of procedures to reach the goal. This translates into:

  • Define and then achieve the proposed objective.
  • Take advantage of competitive advantages to stand out from the rest.
  • Design an appropriate methodology for the available resources, the environment in which it is located and the dynamics it faces.
  • Achieve a dynamic, flexible and adaptable method to unforeseen events, which allows solving the problems that arise.
  • Propose a plan that is measurable and correctable in terms of effectiveness.

Good planning establishes the bases for the other administrative processes, such as organization, direction and control.

Strategic planning process

Strategic planning
Once the goals have been established, an analysis of the available resources should be carried out.

Planning It is considered the first stage of every productive cycle and this always starts from the definition of the strategic objectives. This is the name given to the core, central objectives on which the organization is based, that is, the primary goals without which the entire effort is meaningless and which, in turn, allow the achievement of other subsequent goals.

Once the goals are set, an analysis of the available resources should be carried out (material, human, technological, etc.) and environment variables (challenges, difficulties, competition, etc.). The consideration of these elements is essential for any strategic planning process since strategies for which there are no resources can be undertaken, nor should it be wasted or ignored the potentialities present in the organization, even at its starting point.

Once the strategic analysis is completed, a basic plan or a minimum strategy should be designed, which may become more complex as required by the needs of the organization. To do this, the main plan must be segmented into low-level operations, that is, short-term goals, easy to envision and conceive over time, the articulation of which generates the long-term plan. This process of translation into concrete actions is known as strategic execution.

Finally, the process must be controlled and subjected to diagnostic dynamics and strategic evaluation, to know how close your results are to what was initially projected and where the failures, difficulties or challenges are and how they can be solved to obtain greater efficiency and optimal results.

In summary, the strategic planning process consists of:

  • Define or review the values, mission and vision of the organization.
  • Conduct an environmental analysis.
  • (Re) define long-term strategic goals.
  • Develop a strategic action plan to fulfill them.
  • Develop procedures and short-term actions that lead towards the goal.
  • Evaluate the result and re-apply the method.

Importance of strategic planning

Strategic planning
Strategic planning makes decisions by evaluating possible risks.

On many occasions in life, the difference between success and failure will depend on the strategy implemented. And in that sense, strategic planning becomes a very important organizational tool.

While no plan is foolproof, the best plans are those that start from an in-depth assessment of the resources available, the challenges you will face, and other factors that go into making decisions. It is not about foreseeing the future but about making forecasts: assess risk and walk safe so that the journey to the goal is as productive and efficient as possible. What is the use of investing efforts in a path that does not lead to the desired goal? What is the use of investing resources in foreseeing the impossible, leaving other real risks unattended?

Strategic planning is imposed, thus, in the financial and business world as the heart of decision-making, as well as the diagnosis and resolution of problems. That is why many organizations rely on third parties (outsourcing) to carry out this type of intervention and receive help to redirect their efforts to obtain more and better results.

Strategic planning models

Strategic planning - strategic map
The strategy map is useful to communicate the strategic plan of the organization.

There are various conceptual models to think about or define strategic planning, each one endowed with ways of representation and more or less didactic procedures. The best known of these models are:

  • Balanced scorecard. Based on four areas of interest, understood as independent but interconnected cards, it allows defining the operation of an organization. These four areas are: the financial perspective, the customer perspective, the process perspective, and the learning and knowledge (control) perspective. Each card sets out the rigorous strategic objectives and issues to pay particular attention to. Thus, you have a global view of the organization’s strategy.
  • Strategic map. Designed as a hierarchical organization chart, useful for communicating the organization’s strategic plan, contemplating the same four areas of understanding as the previous example: finance, customer, internal processes and control. From each one emerge the lines of connection that determine in a kind of genealogical tree what comes first and what comes next, and what depends on whom in terms of resources or processes.
  • SWOT analysis. Very commonly used in various areas, its name comes from the acronym for the four elements that it seeks to evaluate in any organization: strengths, weaknesses, opportunities and threats. The first two relate to the internal and the last two to the external, which draws a fairly didactic grid of the strategic situation of the organization and allows for future design.
  • PEST analysis. Its name comes from the words: political, economic, sociocultural and technological. These are the four strategic areas that this model proposes to understand any organization. This analysis is ideal for industrial environments and usually represents these four factors using concatenated circles (since they depend on each other in many things).