The first step in strategic planning is generally:

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Action Grid

*To access the worksheets under “Tools & Techniques” please refer to our Strategic Planning Kit for Dummies.

Step 1: Use Your SWOT to Set Priorities

If your team wants to take the next step in the SWOT analysis, apply the TOWS Strategic Alternatives Matrix to help you think about the options that you could pursue. To do this, match external opportunities and threats with your internal strengths and weaknesses, as illustrated in the matrix below:

TOWS Strategic Alternatives Matrix

*To access the worksheets under “Tools & Techniques” please refer to our Strategic Planning Kit for Dummies.

Evaluate the options you’ve generated, and identify the ones that give the greatest benefit, and that best achieve the mission and vision of your organization. Add these to the other strategic options that you’re considering.

Step 2: Define Long-Term Strategic Objectives

Long-Term Strategic Objectives are long-term, broad, continuous statements that holistically address all areas of your organization. What must we focus on to achieve our vision?  What are the “big rocks”?

Questions to ask:

• What are our shareholders or stakeholders expectations for our financial performance or social outcomes?
• To reach our outcomes, what value must we provide to our customers? What is our value proposition?
• To provide value, what process must we excel at to deliver our products and services?
• To drive our processes, what skills, capabilities and organizational structure must we have?

Outcome: Framework for your plan – no more than 6

Step 3: Setting Organization-Wide Goals and Measures

Once you have formulated your strategic objectives, you should translate them into goals and measures that can be clearly communicated to your planning team (team leaders and/or team members). You want to set goals that convert the strategic objectives into specific performance targets. Effective goals clearly state what, when, how, and who, and they are specifically measurable. They should address what you need to do in the short-term (think 1-3 years) to achieve your strategic objectives. Organization-wide goals are annual statements that are specific, measurable, attainable, responsible and time bound.  These are outcome statements expressing a result expected in the organization.

What is most important right now to reach our long-term objectives?

Outcome: Clear outcomes for the current year.

Step 4: Select KPIs

Key Performance Indicators (KPI) are the key measures that will have the most impact in moving your organization forward. We recommend you guide your organization with measures that matter.

How will we measure our success?

Outcome: 5-7 measures that help you keep the pulse on your performance. When selecting your Key Performance Indicators, begin by asking “What are the key performance measures we need to track in order to monitor if we are achieving our goals?” These KPIs include the key goals that you want to measure that will have the most impact in moving your organization forward.

Step 5: Cascade Your Strategies to Operations

Cascading action items and to-dos for each short-term goal is where the rubber meets the road – literally. Moving from big ideas to action happens when strategy is translated from the organizational level to the individual. Here we widen the circle of the people who are involved in the planning as functional area managers and individual contributors develop their short-term goals and actions to support the organizational direction. But before you take that action, determine if you are going to develop a set of plans that cascade directly from the strategic plan, or instead if you have existing operational, business or account plans that should be synced up with organizational goals. A pitfall is to develop multiple sets of goals and actions for directors and staff to manage. Fundamentally, at this point you have moved from planning the strategy to planning the operations; from strategic planning to annual planning. That said, the only way strategy gets executed is to align resources and actions from the bottom to the top to drive your vision.

Questions to Ask

• How are we going to get there at a functional level?
• Who must do what by when to accomplish and drive the organizational goals?
• What strategic questions still remain and need to be solved?

Outcome:

Department/functional goals, actions, measures and targets for the next 12-24 months

Step 6: Cascading Goals to Departments and Team Members

Now in your Departments / Teams, you need to create goals to support the organization-wide goals. These goals should still be SMART and are generally (short-term) something to be done in the next 12-18 months. Finally, you should develop an action plan for each goal. Keep the acronym SMART in mind again when setting action items, and make sure they include start and end dates and have someone assigned their responsibility. Since these action items support your previously established goals, it may be helpful to consider action items your immediate plans on the way to achieving your (short-term) goals. In other words, identify all the actions that need to occur in the next 90 days and continue this same process every 90 days until the goal is achieved.

Examples of Cascading Goals:

*To access the worksheets under “Tools & Techniques” please refer to our Strategic Planning Kit for Dummies.

1. Strategic planning is often a dreaded task for small businesses, but it doesn't have to be. By following some very specific and easy-to-implement steps, organizations of any size can develop strategic plans that are focused and provide direction to employees. Effective plans will carefully evaluate the business environment, be aligned with the organization's mission, enumerate a company's strengths and weaknesses, and include measurable objectives to gauge success.

Situation Analysis

1. The situation analysis is the first step in strategic planning. It involves the gathering of information, both internally and externally, to provide insights into issues related to a business's employees, customers, competitors and industry. A thorough situation analysis will ensure that decisions made during the strategic planning process are based on facts and data, and not just the opinions and whims of those involved in the planning process.

SWOT Analysis

1. The information gathered during the situation analysis is used as an important input to the SWOT analysis, which is a consideration of the strengths, weaknesses, opportunities and threats that impact the organization. The SWOT analysis is basically a brainstorming session in which the planning team will create a list for each of these items and then prioritize that list to identify the top items in each category. These will then become the focus for the development of goals, objectives, strategies and tactics.

Developing Goals and Objectives

1. Goals indicate the broad direction in which the company wishes to head while objectives provide further clarification of the goals so that everybody involved in implementing the plan knows exactly what success looks like. For instance, a goal might be "to expand into the youth market," and a related objective might be "to increase market share in the 18 to 25 year age group by 25 percent by the end of the year."

Developing Strategies and Tactics

1. Goals and objectives indicate where a company wants to go; strategies and tactics are designed to show how it will get there. Strategies are broad statements that relate back to the SWOT analysis and indicate how the company will either leverage its strengths and opportunities or overcome its weaknesses and threats. For instance: "Focus on a 100 percent product guarantee in all communication materials to address growing competition." Tactics are specific action steps that the company will take. For instance: "Tweet about product guarantee," or "Include product guarantee prominently on all packing slips."

Execution

1. While the development of the plan is important, it is the actual implementation of the plan that generates results. Executing the plan requires that specific assignments be made and that people are held accountable for achieving desired results. Communication is critical throughout this process to ensure both that employees know what is expected of them and that they receive feedback on the results of their efforts.