Business Strategy Made Simple
Not to oversimplify how to create a strategic plan, but in essence, strategic planning consists of three parts:
- The Current State (Where we are now?)
- The Future State (Where are we going?) and
- The Action State (How will we get there?)
Each part has certain elements to it and this guide will lay out each part of the strategic planning process, so that you can put your own strategic plan together.
Part 1. The Current State (Where we are now?)
The purpose of Part 1 of your strategic plan is to detail what is happening internally and externally within your company. This will allow you to understand the baseline from where you are launching your strategy.
- Background Statement: This section provides information about your company such as history, products or services that you produce or customers you serve.
- Organizational Structure: This information is important because it helps in evaluating how your business is structured and operates.
- Values: These are the core principles that an organization stands for and believe in. They guide the culture of the organisation. What are the core values that guide your organization in its business activities?
- Mission Statement: The mission statement describes the purpose your organizations existence and describes what it does and is overall intention. Often people mix up mission and vision statement. A vision is the future goal and the mission statement supports that.
- SWOT Analysis: A SWOT analysis examines the strengths and weakness of the organisation within the context of external opportunities and threats and provides a solid foundation and context for developing strategy (Link to SWOT Tool).
- Problem Statement: On completion of the current state, outline the key issues that have arisen from your analysis.
Part 2. The Future State (Where we going?)
The focus of this section is to create your ‘Vision for the Future of your Organisation’. The key questions that you must answer are ‘What will my organisation look like in the future? and “Where do we want to go?”. Your vision should not be easily reachable. If it is, it is likely to produce only mediocre results for your company. Think and Dream big.
Vision Statement: Your vision statement is the aspirational view of where you want your organisation to go and how it will look in 5-10 years from now. It is the framework for all your strategic planning (Part 3: How do I get there) and detailing what your company hopes to achieve?
Competitive Advantage: A competitive advantage is the benefits that you deliver to your target market that’s better than your competitors. To really arrive at an understanding of your company’s competitive advantage, you must really understand who your target market is? what are their needs? And how your product or service delivers real benefits to them in comparison to your competitors.
Part 3. Action State (How will we get there?)
The focus of this section is to detail how you will achieve the ‘Vision for your Organisation’. It is the planned actions that you are going to take to arrive at your destination, that you have detailed in Part 2. Be aware, this section is the most time consuming because you must determine your actions above other possibilities. Here are the elements of this part:
Strategic objectives: These are long-term and overarching objectives that will achieve your vision. They must be realistic, measurable and time bound.
Short-term objectives: Long term objectives and short-term objectives compliment and support one another. In essence, short term objectives detail how you are going you achieve your strategic objectives. They state your goal, the action, responsibility and how it will be measured. into specific performance targets.
Action Plan: This is where you detail the specific actions that your organisation is going to take to achieve short-term objectives. They state the goal that is being achieved, the action, responsibility and how it will be measured.
Evaluation: Evaluation methods must be clearly articulated. It is important to detail what key performance indicators (KPIs) are going to be used to track the performance of actions on an ongoing basis.
Resource Implementation: While a significant portion of strategizing is thinking and planning, there then comes an execution or implementation phase. It is critical that you identify (i) what resources (e.g. time, money, people etc) are required for successful implementation? and (ii) who is responsible for managing implementation?