What are the 4 elements of strategic planning?

Working with both individuals and companies to accelerate innovation, I get a lot of questions about strategy. Strategy sets the objectives of a firm and establishes the boundaries for any new product development (NPD) effort. It provides direction for innovation programs and ensures that investments are consistent with the long-term goals of the organization

Table of Contents Show

Reading Recommendation
1. Solicit Broad Input
2. Gain Leadership Team Alignment
3. Develop a Plan-on-a-Page
4. Use a Good Facilitator

While strategy is easy to define, it’s hard to enact. For instance, Dictionary.com defines strategy as “the science or art of planning.” Organizations plan their business activities in four areas. By aligning projects with these four strategic arenas, quality execution follows naturally.

Product

First, a strategy defines a product. Product development efforts expand both individual products and entire product families. Product development may include addition of new features, new technologies, or service enhancements.

The advantage of a product-focused strategy is the ability to measure success. Strategic business goals include increased revenues, increased sales, and reduced costs. NPD projects ranging from improved product functionality to streamlined marketing and distribution help a firm meet these business objectives.

However, a strategy that concentrates exclusively on product enhancements can miss emerging customer trends and/or industry disruptors. A competitor may learn a new, less expensive technology to produce the same goods. Or fashions and trends may yield a scattering of customers to new product solutions outside of the basic product category. For example, multi-CD players became popular in automobiles a few years ago only to lose to a trend of Bluetooth connections with smartphone allowing customers access to nearly endless collections of their own favorite music.

Problem

The second strategic category for innovation is solving problems. Not just any problem, but a customer’s most vexing problem.

Solving problems is a tougher strategic issue than improving or enhancing product performance. First, the correct problem must be identified and a variety of solutions tests to ensure customer satisfaction. Finding customer problems requires commitment by all levels of the organization.

The easy customer problems to solve are reported to the customer hotline. Next, sales teams and account managers can report customer problems that are directly described to them. Finally, NPD teams conduct observations (“ethnographic research”) to identify unarticulated customer problems.

This latter category of problems – the ones customers have but don’t know how to explain – are fertile for solving.

Many consumers just “live with” products that do part of the job or are just “good enough”. You know you’ve identified a valuable customer problem when you can simplify their use of the product or you can eliminate parts and interconnections.

For instance, consumers used to need a cleaning solution and a special brush for the unpleasant job of cleaning the toilet. People would say they hated cleaning the toilet but wouldn’t be able to specify all of the yucky aspects of the job. Along came a new product solution that combines the brush and cleaning solution, with the added bonus that you flush the brush after use. (Yea! We don’t have to handle any more yucky, dirty stuff!) The entire process is shortened and simplified to improve the customer’s solution to an unarticulated problem.

Mission

A company’s mission statement explains its purpose for existing. Starbucks wants to nurture relationships, one cup of coffee at a time. ADM (a supplier of agricultural products and ingredients) wants to unlock the power of nature and improve the quality of life. The Humane Society wants to confront animal cruelty. As you see, the mission statement frames a firm’s beliefs, actions, and activities over the short-, medium-, and long-term.

New product development projects are often undertaken to deliver the organization’s mission. These types of project focus on the organization’s core capabilities and in generating new technologies. Often the investments are in R&D programs to establish foundational knowledge, onto which specific new product solutions are built later.

For instance, pharmaceutical companies research specific chemical formulations and compounds. A target drug may end up addressing multiple market needs or diseases for which the drug was not initially designed. Viagra® was supposed to be a heart medicine yet found a different – and popular – market application.

People

The last category of innovation strategies invokes people. Here, we are focused on the internal structure and function of the organization. There are two aspects to successful innovation associated with people – one is motivation and the other is process.

Innovation leaders will implement innovation projects but often face limited resources to accomplish project efforts. People are motivated to work harder and identify more creative solutions when they have a vested interest in the NPD project. Moreover, people are also motivated by completing projects. A tool to use for staffing of complex innovation projects is self-assignment. In this way, resource capabilities are aligned with the best use of skills and knowledge.

Second, processes can either support innovation work or drain the energy of the team. Self-organizing teams are one aspect of agile product development. Not everyone should convert to agile NPD processes, but the system does encourage increased communication with target customers, rapid experimentation, and fast failure (learning). Further, limiting multi-tasking frees the technical experts to collaborate on the best solutions for product design and development.

Strategy is often easy to conceptualize as an approach to planning product development work. Yet, enacting strategy in executable innovation programs is more difficult. By defining a strategic goal within the four elements of strategy, innovations are more successful.

First, the product is the outcome of any strategic investment in NPD. Designing competitive features and functions can deliver top-line growth to the firm. Next, the NPD teams can address strategic objectives by truly understanding customer needs and wants. This includes their unarticulated needs which often lead to the most creative and innovative product solutions. Strategy is frequently expressed by the organization’s mission statement. This is the core purpose of the business. Innovation that advances technical processes and core capabilities can lock in market share.

It goes without saying that integration of human resources (people) with the product, problem, and mission is necessary for innovation success. NPD teams thrive under open, self-organizing processes that reward learning over planning.

To learn more about innovation strategies and new product development, check out self-study and other NPDP Workshops. Feel free to contact me at or 281-280-8717. At Simple-PDH.com where we want to help you gain and maintain your professional certifications. You can study, learn, and earn – it’s simple!

Reading Recommendation

One of my favorite new books on innovation strategy is The Power of Little Ideas by David C. Robertson and Kent Lineback. Of course, anyone interested is disruptive innovation should read Clayton Christensen’s The Innovator’s Dilemma and Geoffrey Moore’s Crossing the Chasm (affiliate links). I also have a section on disruptive innovation in NPDP Certification Prep: A 24-Hour Study Guide and additional references at https://globalnpsolutions.com/services/npd-resources/.

Study. Learn. Earn. Simple.

A division of Global NP Solutions, LLC

Imagine looking forward to a week of vacation with your extended family. You certainly wouldn't expect them all to show up at the right place and the right time if you didn't provide them with a destination and a clear plan of how to get there.

As one French writer put it, “A goal without a plan is just a wish.” -Antoine de Saint-Exupéry

It's surprising how many organizations lack a clear strategic action plan. The two main reasons smart leaders fail to do effective strategic planning are 1) they are just too busy or 2) they don't know how to go about it. In fact, one study from Harvard Business Review showed that only 8% of leaders are good at both strategy and execution (2015).

In our experience helping businesses, nonprofits, and churches develop strategic plans, we have found that there are four key elements to an effective strategic plan.

1. Solicit Broad Input

First, it's important to solicit broad input. You want to know how a broad spectrum of your stakeholders feel about the organization – what its strengths, weaknesses, opportunities, and threats are.

2. Gain Leadership Team Alignment

Second, it's important to gain leadership team alignment. It's critical that your key leaders believe these are the right goals and the right way to get there.

3. Develop a Plan-on-a-Page

Third developed on actionable plan on a page. It's important that you have the right metrics, milestones, and owners in place so that you can hold your team accountable to accomplishing the plan. Try to get it on one page. It doesn't help to have a thick, glossy binder with a strategic plan that just sits on the shelf and collects dust.

4. Use a Good Facilitator

And finally, be sure to use a good facilitator. Some teams already have someone that can help them with this, but many find it beneficial to hire an outside facilitator who can help them with the process, challenge their assumptions, identify gaps, etc. In fact, just this week we got a call from an organization that was doing a strategic plan. And even though they had a consultant on their board of directors, they wanted our outside assistance to help them with the process.

As you think about your organization, remember, “Rowing harder doesn't help if the boat is headed in the wrong direction,” Kenichi Ohmae.

So the question is, how do you keep your boat headed in the right direction? Comment below!

Gray Wirth has served more than 25 years as a leader in corporate, non-profit and military environments. He has successfully led organizations ranging from 100 to 3,100 employees. Gray has lived and worked in five different countries and traveled to more than 40 countries on six continents. A servant leader with a proven track record of delivering results, Gray is driven by data and guided by values. He listens and communicates in a way that creates value for his clients. Gray holds an M.B.A. from Harvard University and an M.A.R. from Westminster Theological Seminary.