In the normal course of business, it's easy to lose track of what a strategic plan is (or should be). The best examples ofgood strategic plansall define clear priorities for an organization and align people and resources to set goals. Although a strategic plan has elements in common with a business plan or even an execution plan, it is very different from both.
If you're still a bit confused about strategic planning, here's how to start a sample step-by-step strategic plan. Meet Upward Airlines, our fictional company about to start its strategic planning process.
Upward Airlines strategic plan example
Let's imagine that Upward Airlines has a strategic plan for 2017-2022 that is coming to an end. Now it's time to create a new strategy for 2023-2028. The airline's strategic plan must include goals and the overall plan of action on how to achieve those goals. Think of a strategic plan like a flight plan. Just like an airline has a final destination like Hong Kong and predetermined routes to get there, including departure times, direction, connecting airports, etc. Your company has the same plan for its future growth.
But for Upward Air, it takes more than just a flight to get where the company wants to go. The Strategic Plan is a five-year perspective of your operations, fleet, pilots, customers and more.The airline can't just take the old plan and change the dates.—must complete the entire planning process, which includes two phases: 1) an assessment of the company's current situation in preparation for the elaboration of a new strategy, and 2) the implementation of a strategic planning framework that will guide the management and execution of the plan . (Upward Air would also benefitStrategy Softwareto help with execution - more on that below!)
Let's take a closer look at both phases.
Phase 1: First, prepare for a new strategy.
A company's mission and vision largely determine the direction it takes, but there are countless ways to get where you want to be. Upward Airlines must develop a strategic plan that has the best chance of success given the company's current strengths and weaknesses and external factors that may affect its course of action.
Therefore, before diving into the planning process, Upward Airlines will assess the relevant situational aspects using one or more of the analysis frameworks below.
An environmental scan is the process of collecting, analyzing, and interpreting data about an organization's external opportunities and threats. This ranges from political and economic factors to competitive developments. One of the most popular methods of performing an environment scan is thePESTEL-Analyse.
When Upward Airlines subjected this imaginary draft strategic plan to an environmental review, it found several things that influenced its 2023-2028 strategy:
- Several new low-cost airlines emerged, increasing competition for routes to major cities.
- Larger, more established airlines have added perks like free Wi-Fi and additional seat upgrades.
- Airfares have changed dramatically across the industry over the past five years.
- Upward Air has saturated its current geographic footprint since its last plan.
Using data from the environmental scan, Upward Airlines aSTRIVE(strengths, weaknesses, opportunities and threats). This high-level analysishelps organizations recognize where they are leading and where they are falling behindso that they can shape their strategic goals accordingly. Upward Air's SWOT analysis revealed:
- forcesA consistent marketing message about no checked bag fees and a standardized flight experience.
- weaknesses—An aging fleet that was technologically lagging.
- occasions- Allow people to bring their own devices (no planning hassle) and potentially upgrade the fleet with new seats that allow for more people on the same planes.
- threatsCompetitors copied the low-cost marketing message but added last-minute hidden costs and confused the market.
SWOT and PESTEL are the most common ways to assess the internal and external landscape, but there are other approaches you can use to better understand your business and find the right way forward. These include:
- ÖBlue Ocean Strategy
- ÖPrecious, Rare, Inimitable and Organized Structure (VRIO)
- Das McKinsey 7S-Framework
Your Opinion: Preferred methods of preparing a new strategy
We asked the business community for feedback on which frameworks they prefer for strategic planning analysis, and here's what they said:
“By examining your organization's strengths, weaknesses, opportunities and threats(STRIVE)They scan the inner and outer field of view. You can create feedback from other frameworks like PESTLE, but focus on the elements that will have the greatest impact on your business and its goals today and in the future."
– Catrina Clulow vonCut through the marketing
“I think the best strategic planning framework is thisSWOT-Analyse.It takes into account both internal and external factors, both of which are critical to making strategic decisions. It also forces you to think about the positives and negatives of a situation, which can help you develop a more complete and comprehensive strategy."
"STRIVEhelps companies to identify their strengths and weaknesses. For this reason, it is popular with companies as it helps them reduce costs and create unique demand for products/services."
"Ö7S Structureanalyzes the effectiveness of an organization based on seven key factors: strategy, structure, systems, shared values, style, team and skills. Looking at these factors can give you a good idea of where your business is today and what needs to be done to get to the next level."
– Erik Pham dehealth channel
"ÖMcKinsey 7S-FrameworkIt is based on the idea that for an organization to be successful, seven internal organizational components must be in balance. These factors are divided into "hard components" that are easy to identify and influence, and "soft elements" that are more complex to define and influence. The template layout is designed to help organizations identify which components they need to change to achieve/maintain alignment or achieve a higher level of performance.
In my opinion, the Model 7S is the best choice for companies that want to compare their current state with their future state; change your organizational structure or align with a chosen strategy; or modeling the impact of future organizational changes. Our experience at Restoration1 has shown that the 7S framework is useful in understanding the organizational implications and resource requirements needed to execute a strategic plan. but it's not very effective when it comes to helping organizations implement and communicate their plans."
– Steve Elliott themrecovery1
"ÖBlue Ocean Strategyaims to create “undisputed market space” or a new market. It does this by creating unique products or services that meet the needs of a specific target market. You want to be the only player in town when it comes to your product or service."
—Loran Marmes vonMedicare Solutions Team
"For our high-level goals, aAnalyse PESTIt is critical because we want to ensure we are proactive and aware when it comes to our long-term goals across the business. We have little leeway to control the socio-political context, so we use PEST analysis to stay connected to the broader discourse and ensure we are fast and responsive to the changing contexts of technology and business landscapes."
—James Lloyd-Townshend, CEO and President ofFrank recruitment group
“A company must be able to answer questions about the value, rarity and imitability of its product(BOIL).This will help steer future events as a company and use circumstances to your advantage for productivity, growth and profitability."
– Steve Hruby, DC desuperhuman
Using the results of the environment scan, the SWOT, or another methodology, the final part of the preparation phase is to identify the key changes your organization needs to make, which can then be represented in a diagram.sliding shift.
A shift slide defines a spectrum of where a company is positioned for a strategic area and how it can "shift" along that spectrum to get where it really needs to be. (If you need to step back and reassess your goals before putting them on a spectrum, you'll find them hereExamples of strategic planning goals and targets.) Sometimes changes come with big changes, such as B. upgrading a fleet of aircraft, and sometimes it's just a change in brand positioning.
Continuing with our strategic plan example, Upward Airlines decided it needed a shift in customer perceptions to evolve the way passengers see their brand. Your spectrum would shift from a "no-frills airline" to "freedom in the air". A shift in marketing was also required, positioning Upward Airlines as a “one time cost” rather than just “low cost” and focusing on standardizing customer expectations.
Phase 2: Implement a strategic planning framework to guide plan management and execution.
Once you've identified a way forward, you need a framework to help you make it happen. (This is a must, as executing the strategy is a lot harder than it sounds.) As with the first phase, there are multiple frameworks for organizations to choose from. There is no "right" one - just what best fits your organization's approach or perhaps reflects a change you want to make to improve strategy execution.
Also remember that you can combine strategic planning frameworks. Some organizations use elements from two or more frameworks to create a customized approach. Excellent! Every organization manages differently; Your planning model should reflect your approach.
Below is a summary of some commonly used strategic management frameworks.
Of balanced indicators
A balanced scorecard (BSC) forces you to take a balanced view of strategy because it includes four different perspectives: financial, customer, internal processes, and learning and growth. It also helps achieve high-level goals (objectives) through its framework, which uses measures (key metrics) and initiatives (projects) to align business actions with goals. The Balanced Scorecard has remained a popular choice since its inception in the early 1990s.You can read more about it here.
Below is Upward Airlines Balanced Scorecard as it would appearClearPointGenericNameStrategy software with three categories and the associated goals, measures and initiatives.
In conjunction with the Balanced Scorecard framework, a strategy map is a visual representation of the four perspectives. Creating one is beneficial because it forces you to think about what you want to achieve and how to get there. It also serves as an excellent way to communicate your strategy to employees.
Upward Airlines' strategy map highlighted some of the key takeaways:
- Definition of new financial targets with a differentiated model based on very low ticket prices
- Enable low prices with a cost-effective, high-utilization experience on your standard fleet
- Improve operational efficiencies by accelerating ground turnover and focusing on direct routes
- Invest in employees through higher wages and flexible collective agreements
Objectives and Key Results (OKRs)
ÖOKR-StrukturIt's an easy way to set, track, and measure goals on a repeatable basis (usually quarterly). Everyone knows their direction and destination, and works to get there at a fast, steady pace. In short, goals are what you want to achieve; Key results define how you will carry them out. The main results are aggressive, but always measurable, limited in time and numbers.
The Hoshin approach to planning aligns strategic goals with projects and tasks to ensure efforts are coordinated. This strategic management model focuses less on actions and more on goals and initiatives.
This McKinsey framework requires growth goals to be categorized into three different “time horizons”:
- Core Business – focuses on activities directly generating revenue
- Emerging Opportunities – focuses on expanding existing activities into new areas
- Blue Sky - focused on taking your business in new directions
The idea is that in order to grow, companies must spread their resources across the three horizons, a scenario that allows them to maintain their core business and continuously strive to innovate.
This is not an exhaustive list of strategic management structures;You can read more about it here.It's also important to realize that you can change structures as your business grows.
Your Opinion: Preferred strategy management frameworks
Here are some thoughts from the business community on these frameworks and their benefits:
"ÖOf balanced indicatorsIt is the best strategic planning framework as it takes a more holistic approach rather than just focusing on one aspect of the business. I can focus on my customers, finances, internal processes and company culture, helping myself to track the company's progress and achieve goals."
– Simon Bacher ofAlchemy Solutions
"I am in favorstrategic mappingbecause it provides a great visual representation of how effective your business is at delivering value. I'm a former baseball player, so I really understand how strategy mapping fits into our dashboards."
—Viktor Hall vonwise barber
"Strategy Mappingenables employees to see how their work impacts the company's strategic goals. This helps employees quickly adapt to the company's system."
"There's Brandon Walsh."Occasionally
"Strategy MappingIt is the best framework for strategic planning as it helps to visualize the relationship between an organization's strategic goals and the specific tactics or initiatives used to achieve them. This provides executives and senior managers with a clear roadmap to guide when allocating resources and making decisions. Additionally, strategy mapping can be used to track progress over time, allowing organizations to correct course as needed.”
—Becca Klein deBeccaKlein.co
"Astrategic mapIt is the only framework that gracefully represents the entire web of cause-and-effect relationships between strategy elements. It also provides the template for measuring and for educating and aligning the entire organization on strategy."
—Amie Devero auxIn addition to Best Strategy and Coaching
“The best strategic planning framework isMcKinsey Strategic Horizons, because it helps you focus on expanding your business and finding new sources of income. Many companies are looking to increase their current profit margins, which is fantastic in the short term but poses serious threats to their businesses due to changes in the market, consumer demand or rivalry.”
– Nick Bolshaw deInyouths LED-Spiegel
"ÖMcKinsey Strategic HorizonsThe framework is great for creating future revenue streams and sustaining growth in your organization. In many organizations, the focus is on increasing profit margins. While it's great in the short term, without diversity, your business is at significant risk. In some cases, this is due to market changes, customer demand or competitive activity.
“It is the best strategic framework because such a framework can be applied to the vast majority of organizations and industries. Particularly popular with startups and fast-growing organizations, it helps maintain a balance between cash flow and growth.”
"I believeObjectives and main resultsIt's the best strategic framework because, at its core, it keeps things simple: it focuses on where a business wants to go and the key things that it takes to get there.”
– Tim Connon vonSupreme Quote
“With many strategic planning frameworks, it's easy to get lost in the 'how' and forget the 'why'.RS okthe best structure to start your campaign, because it's hard to get bogged down in the details when your goals and desired outcomes are clearly defined for you."
—Matt Caiola, CEO da5WPR
“Many well-known organizations are consideringRS okCan be an invaluable strategic planning framework because it turns ideas into measurable actions and encourages teams to perform at their best. The core idea of OKRs is to create goals that are well above the norm, making it the best and most ideal approach to consistently meet or even exceed business goals.”
–Adam Garcia vonThe stupid stock
Ensure your plan is successful with the help of strategic reporting software.
No example of strategic planning is complete without mentioning itStrategy Reporting Software.
In the strategy implementation phase, most plans fail. Why? Because your plan alone does not include critical elements that will coordinate and sustain your activities over the long term, such as: B. Monitoring and reporting on progress. Maintaining focus and alignment over a three to five year period is an ongoing task that requires dedicated leadership and a systematic approach.
This is where strategy management frameworks set—eStrategy reporting software likeClearPointGenericName-between.
ClearPoint helps organizations evolve by enabling them to adapt as internal or external conditions change, work as a unified team, and identify and respond to performance issues. It also helps combat strategy fatigue by putting your goals front and center for employees at all levels.
Would you like to find out more?Here's a great summary of how ClearPoint increases your chances of success.