In our last article we discussed the importance of having a strategic plan for your business. Today, we’ll be delving deeper into that topic; not just addressing the why’s of strategic planning, but also the how’s. What follows is a brief overview of three different strategic planning models (we selected these three as the most widely used and successful templates). Each model is a unique way of approaching the strategic planning process. So, we hope that after reading this article you will feel more prepared to choose the model and approach that works best for you and your business.
Why Does My Business Need a Strategic Planning Model?
A strategic planning model is essentially a template around which to build your strategic plan. We view models as a helpful jumping off point. It can be quite daunting to begin the strategic planning process with no structure in mind.
But if you have a model that lays out each step of the process, it is likely that you will end up with a more efficiently constructed and effective plan.
Three Common Strategic Planning Models
A few reasons this model may work well for your company could be if you:
- are a relatively new business
- are accustomed to strategic planning and simply need to update your existing plan
- don’t have a lot of time to allocate for strategic planning
- don’t have major operational issues to address
This is both the most common and the simplest template for carrying out a strategic plan.
Does your team have specific issues to address with your strategic plan? Or is there another reason to conduct a more in-depth analysis of your business? If these are the case, you may want to consult our other model suggestions.
How it works
Structuring a standard strategic plan is relatively straightforward. It starts out with a discussion and analysis of what your goals as a business are within the strategic plan’s timeline (usually 2-5 years). Once your team identifies the goals, it is important to consider how well these goals uphold your mission and vision statements. This would also be the time to make any amendments to your mission or vision statements if need be. However, basic strategic plan models generally do not alter mission or vision statements significantly, if at all.
Establishing goals and reviewing your business’ mission and vision is the ‘visioning’ part of the strategic planning process. Next, the basic model moves right into the ‘meat’ of the strategic plan. The bulk of this model focuses on how you’re going to achieve the goals you set forth. This is essentially an action plan: clear strategies with specific steps outlining the who, what, where, when, and why of each step.
Lastly, the standard model should always end with how your business plans on monitoring your strategic plan progress. The monitoring section will lay out when you decide how to conduct progress checks and who will conduct them.
The Issue-Based Strategic Planning Model is a ‘step up’, as it were, from the Basic Model in terms of depth and fluidity.
Like the basic model, it can be completed in a relatively short time-frame. As such it’s a good option for businesses lacking copious time and/or capital for strategic planning.
But what sets it apart from the standard model is that – first and foremost – it examines the issues facing your business. Plus, it looks at how exactly you will go about addressing each issue, always keeping your mission statement in mind. In this respect, it’s a more dynamic and intuitive strategic planning model.
Could this model very well be the right one for your company? Yes, if the reason your business is conducting a strategic plan is due to outstanding internal or external issues you are facing.
How it works
The issue based model starts with a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis. Typically, it’s a good idea to involve a wide range of stakeholders in this SWOT analysis, as they will often have differing perspectives on these issues.
After conducting an internal and external SWOT analysis, identify several main issues (between 5-7 is generally a good amount) your strategic plan will address. This is also the point at which you should bring everything back to your mission. Is it possible to address these issues while still staying true to your mission? If not, it might be time to adjust your mission statement.
When conducting an issue based strategic planning process, the team will spend much time on figuring out how to address the key issues you have established. Keeping the business’ core values in mind, each issue identified should have a clear and detailed action plan regarding how your business will overcome it. We highly recommend including an annual budget and operating plan in this model. This can be invaluable to ensuring that the action plan you have outlined is realistic and tangible.
It is also important to establish clear monitoring procedures with issue-based planning. Since the plan focuses on addressing issues, it is wise to check in on the progress frequently, in order to ensure the plan is being carried out. Deciding in advance exactly how and when progress will be monitored is usually quite effective.
Issue based plans work best in the short-term and are efficient in that a company could easily repeat them. As the business environment rapidly evolves and changes, so do the issues facing our businesses. Therefore, 6-12 months is usually a good time frame to establish for this model.
Balanced Scorecard Model
Does it seem like your business is overly focused on financials, or are other important aspects of the business environment also being lost in the fray? Then you may want to consider the balanced scorecard approach to strategic planning.
The balanced scorecard technique was created in the 1990s by Drs. Robert Kaplan and David Norton, and it has achieved wide-ranging popularity and success since then.
How it works
This model examines four distinct performance metrics in order to holistically analyze the best ways to achieve your long-term strategic goals.
The four metrics, or perspectives, that balanced scorecard planning takes into consideration are:
- Financial perspective
- Customer and stakeholder perspective
- Learning and growth perspective
- Internal operations perspective
The goal with a balanced scorecard approach to strategic planning is that your business should be made up of a balance of each of the four categories above; one perspective should not take extreme precedence over any other.
Thus, the idea is that when you take into account each of these four metrics, you will be able to more clearly establish the steps and measures necessary to ultimately achieve your business’ long-term goals and realize your vision statement. Whereas if your business focuses on only one or two metrics when strategic planning, it will either be impossible or much harder to have long-term business health, sustainability, and success.
The balanced scorecard method works well for established, medium to large scale businesses looking to conduct an in-depth, more long-term analysis of both their present and future business health.
Need Help with the Right Strategic Planning Model for Your Company?
These three strategic planning models are tried-and-true, successful ways to plan for the future of your business. If none of these seem quite right for you, though, we’d love to talk. There are many more models and strategies to consider, and we’re here to help you find the right fit for your business.
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