Strategic planning is the process of defining your business direction and how you will achieve it. It helps you align your team, prioritize your efforts, and measure your progress. A strategic plan is a document that summarizes your vision, mission, goals, and action plan for the next three to five years.
But how do you create a strategic plan that is clear, realistic, and relevant? How do you avoid getting overwhelmed by the complexity and uncertainty of the future?
In this blog post, I will share with you a simple and effective method to create a strategic plan for your business, based on an article by Catherine Cote in Harvard Business School Online. The method consists of five steps:
1. Analyze your current situation
The first step is to assess where you are now and what are the strengths, weaknesses, opportunities, and threats (SWOT) of your business. You can use a SWOT analysis to identify the internal and external factors that affect your performance and potential.
For example, you can ask yourself:
- What are the things that you do well and that give you an advantage over your competitors?
- What are the things that you need to improve or that limit your growth or profitability?
- What are the trends or changes in the market or industry that create new possibilities or challenges for your business?
- What are the risks or obstacles that could hinder or harm your business?
You can use a matrix like this one to summarize your SWOT analysis:
The SWOT analysis will help you understand your current situation and identify the gaps or issues that you need to address.
2. Define your vision and mission
The second step is to define what you want to achieve in the long term and why it matters. This is where you articulate your vision and mission statements.
Your vision statement is a concise and inspiring description of your desired future state. It answers the question: Where do you want to go?
Your mission statement is a clear and compelling explanation of your purpose and value proposition. It answers the question: Why do you exist?
For example, here are the vision and mission statements of Atlassian, a software company that provides tools for teamwork:
- Vision: To unleash the potential of every team
- Mission: To help teams collaborate, build software, and serve their customers better
You can use a template like this one to write your vision and mission statements:
| Statement | Template | Example |
|---|---|---|
| Vision | To (verb) (target audience) (outcome) | To unleash the potential of every team |
| Mission | To (verb) (value proposition) by (differentiator) | To help teams collaborate, build software, and serve their customers better by providing innovative and user-friendly tools |
Your vision and mission statements will help you communicate your direction and motivation to your team and stakeholders.
3. Set your strategic goals
The third step is to set your strategic goals that will help you achieve your vision and mission. These are the specific and measurable objectives that you want to accomplish in the next three to five years.
You can use the SMART criteria to make sure your strategic goals are Specific, Measurable, Achievable, Relevant, and Time-bound.
For example, here are some possible strategic goals for Atlassian:
- Increase annual revenue by 25% by 2026
- Expand customer base by 50% by 2026
- Launch three new products by 2026
- Improve employee engagement by 20% by 2026
- Reduce environmental impact by 30% by 2026
You can use a table like this one to summarize your strategic goals:
| Goal | Specific | Measurable | Achievable | Relevant | Time-bound |
|---|---|---|---|---|---|
| Increase annual revenue by 25% by 2026 | Yes | Yes | Yes | Yes | Yes |
| Expand customer base by 50% by 2026 | Yes | Yes | Yes | Yes | Yes |
| Launch three new products by 2026 | Yes | Yes | Yes | Yes | Yes |
| Improve employee engagement by 20% by 2026 | Yes | Yes | Yes | Yes | Yes |
| Reduce environmental impact by 30% by 2026 | Yes | Yes | Yes | Yes | Yes |
Your strategic goals will help you focus your efforts and resources on the most important outcomes for your business.
4. Create your action plan
The fourth step is to create your action plan that will help you achieve your strategic goals. This is where you break down your strategic goals into smaller and shorter-term objectives, assign responsibilities and resources, and monitor progress and performance.
You can use a framework like OKR (Objectives and Key Results) to create your action plan. OKR is a goal-setting methodology that helps you align your team around common objectives and measure the results.
An OKR consists of two parts:
- An Objective: A qualitative statement of what you want to achieve
- Key Results: A set of quantitative indicators of how you will measure the achievement of the objective
For example, here is an OKR for one of Atlassian’s strategic goals:
- Objective: Launch three new products by 2026
- Key Results:
- Conduct market research and customer feedback for each product idea by Q1 2024
- Develop and test prototypes for each product by Q2 2025
- Launch and market each product by Q4 2026
You can use a template like this one to write your OKRs:
| Objective | Key Results |
|---|---|
| Launch three new products by 2026 | – Conduct market research and customer feedback for each product idea by Q1 2024 <br> – Develop and test prototypes for each product by Q2 2025 <br> – Launch and market each product by Q4 2026 |
Your action plan will help you execute your strategy and track your progress and performance.
5. Review and revise your strategic plan
The fifth step is to review and revise your strategic plan regularly to make sure it is still relevant and effective. You should check your strategic plan at least once a year, or more often if there are significant changes in your business environment or performance.
You can use a framework like PDCA (Plan-Do-Check-Act) to review and revise your strategic plan. PDCA is a continuous improvement cycle that helps you evaluate your results and make adjustments as needed.
PDCA consists of four steps:
- Plan: Define your objectives, goals, and action plan
- Do: Implement your action plan
- Check: Monitor and measure your results
- Act: Analyze and improve your process
For example, here is how you can apply PDCA to one of Atlassian’s strategic goals:
- Plan: Launch three new products by 2026
- Do: Conduct market research, develop prototypes, launch products
- Check: Track revenue, customer feedback, market share
- Act: Identify gaps, issues, or opportunities, and make changes accordingly
You can use a diagram like this one to visualize your PDCA cycle.
Source: Atlassian
Your review and revision process will help you keep your strategic plan up to date and aligned with your vision and mission.
