Frameworks of a Solid Strategic Plan
The difference between strategic planning and strategic management can be profound to an organization when understood. Strategic planning usually refers to the development of a plan. Strategic management refers to both strategy development and execution.
Strategic management is a business process. Strategic planning is an event. Although referred to as strategic planning, understand that it also means developing and executing because every executive wants to drive results. And you do that by instilling a business cycle from developing to implementing to adapting and then repeating.
Several different frameworks can help you develop your strategic plan. Think of the frameworks as different lenses through which to view the strategic planning process. You don’t always look through two or three lenses at once. Normally, you use one at a time, and often you may not know that you’re using certain frameworks embedded in your process.
If you’re trying to explain to your planning team how pieces of the puzzle fit together, first you must understand the following components of the strategic plan:
Strategy and culture: Your organization’s culture is made up of people, processes, experiences, ideas, and attitudes. Your strategy is where your organization is headed, what path it takes, and how it gets there. You can’t have strategy without culture or vice versa. Your culture is like your house, and if it’s not in order, the best strategy in the world can’t take your company anywhere.
Internal and external: Similar to the strategy and culture framework, you have an internal and external framework. The strategy is external because you gather information from your customers, competitors, industry, and environment to identify your opportunities and threats. Through employee surveys, board assessments, and financial statements, you identify your company’s strengths and weaknesses, which are internal.
The Balanced Scorecard perspectives: Businesses use the Balanced Scorecard framework to develop goals and objectives in four areas (instead of departments): financial, customers, internal business processes, and people. The financial, internal business processes, and people areas are internal. The customer area is external.
Market focus: Growth comes from focusing on your customers and delivering superior value to them consistently year after year. Built in to your strategic plan is a market-focus framework because of how critical this aspect is to your organizational growth.
Where are we now? Where are we going? How will we get there? Because it’s easy to confuse how all the elements of a plan come together and where they go, this framework is a simple yet clear way of looking at the whole plan.