Table of Contents
Do any of the following situations describe your organization?
If you chose any of the above situations, the strategic planning process described in this Factsheet may be for you!
Strategy has been defined as "that which has to do with determining the basic objectives of an organization and allocating resources to their accomplishment." A strategy determines the direction in which an organization needs to move to fulfil its mission. A strategic plan acts as a road map for carrying out the strategy and achieving long-term results.
Strategic planning is different from long-range planning. Long-range planning builds on current goals and practices and proposes modifications for the future. Strategic planning, however, considers changes or anticipated changes in the environment that suggest more radical moves away from current practices.
A farmer, when planning a cropping enterprise in the long-term, may forecast the eventual replacement of a combine with a newer model that has increased efficiency and capacity. However, when developing a strategic plan, long-term market trends, alternative opportunities, new technology and other factors are analyzed. This analysis might determine the emphasis on cash crops versus other farm enterprises, decisions on the future expansion of land, labour or capital, and other strategic decisions.
Similarly an organization such as a community recreation council, makes long-range planning decisions (e.g., rental prices or fees, or staffing) based on current conditions. However, strategic planning may result in facility expansion or major changes to programs as a result of social or demographic trends.
When strategic planning, your organization should emphasize team planning. By involving those affected by the plan, you build an organization-wide understanding and commitment to the strategic plan (participants acquire an "ownership" of it).
Strategic planning requires a significant investment of time and energy. Organizations will also have to overcome barriers raised by comments such as: "a lack of time", "things are changing too fast", "we're doing OK now", etc. A visible commitment from top leadership is required for effective strategic planning.
The strategic planning process is shown by the model accompanying this Factsheet. Note that the arrows indicate a continuous need for feedback, evaluation and comparing with previous steps. New information or further analysis of issues may suggest a modification of objectives or even of the basic mission of an organization. (Flow Chart)
The steps of the strategic planning process will be described in the following sections:
Stage 1: Mission Statement
The mission statement establishes what the organization plans to do, for whom, and for what benefit it will exist. The mission statement identifies organizational purposes and the reason for its existence. It addresses the "what" questions, i.e., what is our role? what business are we in?, etc. It is a short (one to two sentence) statement.
Is It Necessary?
The mission statement - the organization's "preferred future" - ensures consistency and clarity of purpose throughout the organization. It provides a point of reference for all major planning decisions. When it is communicated as a basis for key decisions, commitment is gained from within the organization and support from those outside is generated.
What Should It Tell You?
Some of the following questions should be answered:
Simply, What? For whom? and Why?
For example: The Anywhere Recreation Council provides recreational programs to the citizens of Anywhere Township so that they may enjoy a healthy and socially-fulfilled lifestyle.
Stage 2: Strategic Analysis
The strategic analysis is an in-depth look at all factors likely to have the greatest impact on the future of the organization. During this analysis, critical issues facing the organization should be identified.
This analysis forms the basis for decisions affecting the organization's future. Thus, it is essential that sufficient accurate information be available on which to base judgments. All assumptions should be identified and checked.
Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis
Strengths and Weaknesses of the Organization (Internal)
In this part of the analysis, factors which are internal to, or within the control of, the organization should be identified. Their impact on the ability of the group to fulfil its mission should be discussed. These may include: membership numbers, skills or resources, structure, shared values, finances, staff/directors, and style of leadership within the organization or systems such as communications channels.
Opportunities and Threats Facing the Organization (External)
All organizations are affected by outside influences over which they may have little control. These factors have varying degrees of impact, both positive and negative, on the organization. Factors to be addressed here will relate to the mission. They may include activities of competing organizations, government policies, society/community influences or trends, markets, the economy, lifestyles, the environment, demographic trends, technological advances or alternatives.
To conclude the SWOT analysis, identify the issues most critical to the future of the organization. Their significance can be measured by the size of the gap between the current status or performance of the organization and what is needed to favourably respond to internal and external factors in the future.
These issues may affect growth or financial stability or form barriers to the accomplishment of the organization's mission.
A short report for each critical issue should be compiled. It may contain the issue, supporting information, underlying causes and conclusions with respect to impact on the organization:
Example: Recreation Council - Strategic Analysis Summary
Stage 3: Strategy Formulation
In this phase, the focus should be on where the organization should be going rather than how it should get there. A three to five year planning horizon is recommended. The critical issues facing the organization in accomplishing its mission should be the basis for this stage. Make sure that decisions "fit" with the directions defined by the mission statement.
There are three steps in this stage:
Identification of Key Strategic Areas
This step produces a listing of key strategic areas or thrusts that must be emphasized to address the critical issues. They should be stated in no more than a few words.
Example: Recreation Council - Key Strategic Areas
Other examples of key strategic areas in organizations may include: improving image, broadening educational focus, training of members/ leaders/staff, profitability, public profile, etc.
Each key strategic area will require extra effort from the organization in the future. They are important in addressing one or several critical issues identified during the strategic analysis. Ideally, there should be no more than seven to ten key strategic areas formulated in this stage.
Establishing Priority of Key Strategic Areas
Some strategic areas will be more crucial to the organization's success or survival than others. The next step is to prioritize the strategic areas. Criteria for ranking should be based on which area has the greatest effect on the organization's ability to fulfil its mission.
It is a good practice, prior to ranking, to state clearly and agree on what each strategic area encompasses. The highest ranking key strategic area will be the "driving force" of the strategy and the one requiring the most time and resources allocated to it.
Develop Strategy Statement for Top Ranked Areas
The key strategic areas are the basis for future actions of the organization. Thus, they must be carefully documented for communication to the membership.
Strategy statements for each area (two to three paragraphs) should answer the following questions: What shall be our future key strategic areas? How do they differ from our current areas of concentration? Do they represent changes? Are they compatible with our mission and the conclusions from our strategic analysis?
Example: Recreation Council - Statement
1. Member recruitment is necessary for our Council to regain the support of our community and to provide the human resources to help us raise funds for new projects. We have not gone into the community to recruit in the past. If we are to serve our community, we must be seen as representative of it.
Stage 4: Long Term Objectives
Within the most important strategic areas, identify what must happen to move the organization closer to accomplishing its mission and strategy. These objectives should be broad and visionary.
Write the objectives using the following format: "To have (or become) ... (the results) ... by ... (year)".
Example: Recreation Council
To have 1000 members by 1992.
Test the objectives to determine if:
Stage 5: Implementation
A comparison with the current strategy should be undertaken at this stage. An examination of the structure and operations of the organization must be carried out to ensure a fit with the newly stated strategy or objectives. Areas to be scrutinized, and possibly changed, include:
The time frame for implementation should reflect the scope of the required change. In addition, some sort of ongoing criteria and techniques for evaluation should be established.
Stage 6: Operation Plan
Finally, short-term objectives (e.g., one year) are set based on the long-term objective. These will include activities and programs. The written analysis employed for these objectives should be similar to those used when developing long-term objectives.
The result should be a map of activities or programs, responsibilities of people, resource allocations, and a time frame for the next planning period.
In subsequent years, if checks for fit indicate that no changes to the strategy or long-term objectives are required, this stage will be the only required planning activity.
Example: Operational Plan
Strategic planning is a thought process as well as a plan. Part of developing sound strategies is learning to think strategically, learning how to ask questions and to think broadly and creatively.
While this Factsheet has focused on organizations, the same process can be applied to business or personal strategic planning.
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