What is Strategic Planning? The Key Components, Process & Role Leaders Play in Ensuring a Strategy's Success
Strategic planning is a process that is essential for companies to ensure
successful and sustainable growth.
An intelligent and actionable strategic plan is a vital part of competing
within the marketplace. It directs businesses to take meaningful action to
help them reach their organization’s goals by mapping out a clear direction,
creating measurable goals, and allocating resources to pursue these specific
objectives.
What is Strategic Planning?
A strategic plan is an essential process and strategy execution document for
any company looking to make the most of its resources and reach long-term
organizational goals.
This vital and continually evolving document outlines a clear direction, sets
objectives that must be achieved, and provides an actionable roadmap for
success; it also helps organizations stand out from competitors by allowing
them to differentiate themselves in the marketplace with their unique
approach.
A well-crafted strategic plan will help companies stay focused on their
mission while making decisions based on core values guiding them toward
achieving desired results by ensuring everyone is moving in the same
direction.

What are the Key Components of a Strategic Plan?
Several key components make up a well-developed strategic plan. These key
components include:
A Mission Statement
An organization’s mission statement states the company’s purpose and the
reasons why it exists. Although you might be already clear on the mission,
reiterating your mission statement and connection to the plan acts as a
foundation for the strategic plan and your strategy.
A Vision Statement
The company vision is the bigger objective that the company aspires to
achieve. This may be as broad as making the world a better place through your
product or service or ridding bathrooms of mildew. Whatever your vision, it
should be connected to your strategic plan
Aligning the company mission and vision statements is the first crucial step
to strategic planning.
SWOT Analysis
An overall evaluation of the company’s strengths, weaknesses, opportunities,
and threats. Knowing these points will help you leverage your resources, shore
up gaps, and realistically plan your path and the potential risks. Your SWOT
analysis will help ensure that your strategic plan is based upon reality and
play an important part in your strategic management process.
Goals & Objectives
Goals and objectives need specific, measurable, achievable, and time-bound
targets the company wants to achieve. Ensure your goals are achievable,
measurable, and can be clearly communicated as part of your strategic
planning. High-level company objectives should cascade and align with the
objectives of various divisions and teams. The Strategic plans of each
division and team should map directly to broader company goals and methods.
Strategies
The specific courses of action that the company will take to achieve its
measurable goals and specific strategic issues.
Action Plans
Detailed project plans outlining the specific steps that will be taken to
implement the strategies.
Resource Allocation
The allocation of financial, human, and other resources to implement the
action plans.
Evaluation and Control
Evaluation and control are based on measures and systems to monitor the
company’s progress toward achieving its organization’s goals, objectives, and
financial plan and to make adjustments as necessary.

Who is Responsible for Creating a Strategic Plan?
In general, creating a strategic plan is the responsibility of the company’s
top management team - the CEO, CFO, other executives, etc.
However, though the top management will do the strategic thinking, it’s
essential for key members throughout the entire organization to be involved in
the strategic planning process as different departments, employees, and human
resources will have valuable insights and perspectives to contribute to the
strategy formation. Also, when various constituents are a part of and the
planning process a sense of ownership and commitment to the strategic plan’s
success is reinforced.
It’s also common for companies to seek input from external stakeholders,
customers, suppliers, and industry experts as part of the strategic planning
process. As part of your planning process make sure to identify any critical
stakeholders outside of your company.
What Makes the Strategic Planning Process Effective?
Below are some key factors that contribute to the overall effectiveness of a
successful strategic plan and the strategic planning process. Understanding
these points will help make your strategic planning process more effective:
Clear
The plan needs to be clear & concise, with specific strategic goals &
objectives that are easy for everyone to understand. Senior leadership plays a
critical role in ensuring that each objective is clear and how objectives will
be achieved is understood.
Realistic
The strategic plan needs to take the company’s resources & capabilities into
account, and the goals need to be realistic & achievable based on the market
data.
Flexible
The plan needs to be flexible enough to allow for adjustments to be made in
response to changes in the external environment after deployment.
Aligned
The plan must be aligned with the company’s mission, vision & values and
should support the organization’s overall direction in terms of business plan
and annual budgets.
Easily Communicated
The plan needs to be communicated effectively to all stakeholders & investors,
including employees & customers.
Actionable
The plan needs clear & actionable steps and a timeline for implementation. It
must be followed consistently to ensure progress toward business goals like
increasing sales and maximizing profit.
Measurable
The plan needs to measure & evaluate progress, collect feedback, and be
reviewed and updated regularly to ensure continuous progress toward company
goals and that the plan remains relevant and practical and targets logical key
performance indicators.
Adaptable
An effective strategic plan identifies potential factors that might derail the
plan and, at a minimum, provides high-level alternatives should the plan
become derailed.

When Do Strategic Plans Fail?
Listed below are a few potential reasons why strategic planning might fail.
Understanding why strategic plans fail will help create more effective
strategic planning outcomes:
Lacks Clarity
Plans need to be clear and specific. If not, it may be difficult to understand
and challenging to implement. When a strategic plan is ambitious it is tough
for people to feel connected and motivated to take action.
Lack of Realistic Options and Objectives
Plans need to be realistic. If the plan cannot really be achieved, it’ll be
difficult to implement and lead to frustration, disappointment, and potential
failure.
Lack of Flexibility
The plan needs to be flexible; if it’s not is not flexible and doesn’t allow
for adjustments in response to changes in the environment (internal and
external) or from evaluation or measurement, it may become irrelevant or
ineffective.
Lack of Alignment
The plan needs to be aligned with the company’s mission, vision, and values;
if not consistent with the organization’s overall direction, it can quickly
become out of sync with its underlying purpose and be ineffective in helping
to reach desired goals.
Lack of Understanding
The plan needs to be communicated effectively to all key stakeholders and take
feedback from all stakeholders; otherwise, it may be misunderstood or, worse -
ignored or seen as not valuable.
Lack Actionable Steps
The strategic plan needs to be implemented swiftly and consistently; if the
action steps are not clear or too hard to implement, they may not be
implemented effectively.
Lack of Measurable Outcomes
The strategic plan needs to be reviewed and updated regularly, and its
performance evaluated after implementation; otherwise, it may become
ineffective or outdated, therefore ineffective at achieving desired outcomes.
External Factors
Changes in the external environment can have a huge effect. Changes like
shifts in the economy or customer preferences, if not accounted for, can
seriously impact the effectiveness of a once brilliant strategic plan.
However, as in life and business, things change, and every business must be
able to adapt quickly to changing circumstances. This is why an effective plan
includes contingencies.

What is a Company Leader’s Role in Ensuring the Strategic Plan is Implemented Successfully?
Strategic Management
Company leaders are responsible for ensuring that the strategic plan is
implemented successfully.
Some specific ways business leaders can ensure the plan is implemented
properly are:
Clearly Communicate the Plan
Business leaders need to communicate the strategic plan effectively to all key
stakeholders, including employees, customers, and investors. Any questions
need to be answered and clarified, so everyone is aligned. The strategic plan
should be shared in a way that you (the leader) demonstrate ownership and
enthusiasm and can share with your team how each role is vital to achieving
the plan’s objectives.
Providing Resources
Leaders need to ensure that resources, such as funding, personnel, and
technology, are available to everyone needed in order to implement the plan
successfully.
Setting Expectations
Leaders need to set clear expectations for implementing the plan and hold the
designated employees accountable for meeting those expectations. Clear and
achievable timelines need to be established and committed to by each
stakeholder.
Leading by Example
Leaders need to model the behaviors and values outlined in the plan and
encourage others to do the same.
Providing Support
Leaders need to provide support and guidance to employees as they work through
problems toward achieving the strategic goals and objectives of the plan.
Monitoring Progress
Leaders need to monitor the progress towards achieving the goals and
objectives outlined in the plan and make adjustments in the operational plans
as they see fit, as needed.
Celebrating Successes
Leaders need to recognize and celebrate wins along the way to help keep morale
high and encourage continued progress toward the ultimate goals.

What’s the Role of Each Individual Employee in Implementing & Supporting the Strategic Plans Success?
Employees are the driving force and critical in implementing and supporting
the strategic plan’s success. Your employees will be the eyes and ears of how
the strategic plan works. This is why it is vital for leaders to create a
business environment where there is open communication and all types of
information can be shared and reviewed in relation to its impact on the long-
term strategy. Leaders must foster an open environment where questions can be
asked and bad and good news shared. Leaders can help employees play their part
by ensuring employees are supported and are clear on their ability to do the
following:
Understand the Plan
Employees need to understand the strategic plan, how it aligns with the
company’s mission, the steps to take, and most importantly, the goals.
Aligning Work and Job Goals with the Plan
Leaders, managers, and employees need to align their work with the strategic
plan and prioritize tasks that support achieving the plan’s goals & strategic
objectives.
Manage Implementation
Employees must consistently follow through on their assigned tasks and
responsibilities to implement the plans, steps, and processes.
Provide Feedback
During the initial review of the organization’s current status, employees must
provide feedback and suggestions to improve the plan. During its
implementation, employees need to provide feedback based on performance and
potentially adjust the plan if needed for better performance and goals.
Communicate Laterally and Up
Employees need to communicate with coworkers to ensure everyone is working
towards the same goals & objectives and, most importantly, employees need to
communicate to their manager on how their contribution is proceeding.
Seek Support and Guidance
Employees need to seek support and guidance from leaders if they need help
implementing any steps of the plan or achieving goals.

Do Some Companies Believe that Strategic Planning is a Waste of Time?
Sure. It’s possible some companies may view strategic planning as a waste of
time. This could be due to a variety of reasons: resources required upfront,
lack of understanding of the benefits of strategic planning, a lack of buy-in
from senior management, or a lack of resources to dedicate to the process.
However, for massively successful companies, strategic planning is recognized
as an invaluable tool to help organizations achieve their long-term goals and
be outstanding in a competitive marketplace.
Strategic planning can also help companies be more agile and adapt to changes
in the external environment. For these reasons, it’s generally recommended
that companies engage in strategic planning and review results on a regular
basis.
What Makes a Great Strategy?
What makes a great competitive strategy? Several characteristics are often
considered to be key elements of great strategy execution:
Clarity
A great strategy is clear & easy to understand, with specific goals &
strategic objectives that are well-defined.
Focus
A great strategy is a focused strategy. A great strategy is focused on a
specific area of the business and doesn’t try to do too many things at once.
Alignment
A great strategy is aligned with the company’s overall mission, vision for the
future, and values, supporting the organization’s overall direction.
Flexibility
A great strategy is flexible and allows for adjustments to be made in response
to results and changes in the external environment.
Realistic
A great strategy is realistic & achievable, taking into account the company’s
resources & capabilities and what can actually get done.
Differentiation
The great strategy sets the company apart from its competitors in the
marketplace and helps it to differentiate itself from competitors to
customers.
Execution
A great strategy can be executed effectively, with clear action steps, a
timeline for implementation, and who is responsible for each action step.
Evaluation & Feedback
The great strategy includes measures for evaluating progress and collecting
feedback, and it needs to be reviewed regularly & potentially updated to
ensure it remains relevant & effective.
When is a Great Strategy Not Enough to Ensure Company Success?
While a great strategy can certainly be a key factor in a company’s success,
it’s not the only factor needed to be successful. There are a number of other
internal and external factors that can impact a company’s success, including:
Execution
Even the best strategy will not be a successful strategy if executed poorly.
Resources
A company needs resources, period. Resources like funding, personnel, and
technology, are essential to implement strategy effectively.
External Factors
Changes in external factors are equally important as the internal environment.
For example, economic shifts or customer preferences can impact a company’s
success.
Competition
A company’s success can also be impacted by its competitors’ actions and even
competitors’ reactions to strategy implementation.
Market Demand
A company’s success will depend partly on the market demand for its products
or services. Demand should absolutely be a part of the strategy formulation.
Quality
A company’s success will highly depend on the quality of its products or
services and its ability for its products to meet customer needs.
Leadership
The senior leadership of a company can play a key role in its success, or
failure, as they set the vision & direction of the organization.
How Does Company Leadership Play a Critical Part in a Company’s Strategic Success?
Without involved leadership, a strategic plan will more than likely fail. A
company’s leadership plays a critical role in strategic success in several
ways:
Setting the Direction
A company’s leadership is responsible for setting the organization’s vision
and direction and creating a strategic management plan that aligns with that
direction.
Providing Resources
A company’s Leadership is responsible for ensuring that the necessary
resources, such as funding, personnel, and technology, are available to
implement the strategic plan.
Communicating the Plan
A company’s leadership communicates the strategic management plan effectively
and consistently to all stakeholders, including employees, customers, and
investors.
Leading by Example
A company’s leadership needs to model the behaviors and values aligned with
the plan and encourage others to do the same.
Providing Support
A company’s leadership needs to provide support & guidance to employees as
they work towards achieving the goals and objectives of the strategic plan.
This will help in employee retention and strategic success.
Monitoring Progress
A company’s leadership needs to monitor progress toward achieving the goals &
objectives of the plan and make necessary adjustments as needed.
Celebrating Successes
A company’s leadership needs to recognize and celebrate successes along the
way to help keep team morale high and encourage continued progress to achieve
goals.
How Can Companies Prepare & Support their Leaders to Implement & Ensure Strategic Planning Success?
There are many ways in which companies can prepare and support their leaders
to implement and ensure the success of their strategic planning initiative.
Provide Proper Training
Companies need to provide training & strategy development opportunities to
help their leaders acquire the knowledge and skills they need to implement &
support the strategic vision effectively.
Encourage Open Communication
Companies need to foster an environment of open, clear communication and
encourage leaders to seek input & feedback from their teams within the
strategic framework - even when the strategy map is not positive.
Align Leadership with Company Values
Companies must ensure that their leadership’s values align with the company’s
values and culture and that their leaders are committed to the mission and
vision of the organization.
Encourage Collaboration
Companies need to encourage collaboration & cross-functional teamwork as a
part of project management to ensure that all departments work towards the
same goals & objectives.
Provide Resources
As part of the strategic planning process, companies need to ensure their
leadership has the necessary resources, such as funding, personnel, &
technology, to implement the strategic plan effectively for the entire
duration.
Establish Clear Expectations
Companies must set clear expectations for how strategic planning should be
activated and implemented and hold leadership accountable for meeting
expectations as per the strategic plan document.
Monitor Progress
Company leaders need to monitor the progress toward achieving the goals and
objectives of the strategic plan and provide their support and guidance as
needed. Strategic planning is essential for business success, and the key to
achieving successful results lies in the hands of leadership. For leaders to
ensure a strategy’s success, they must become strategic planners and the
details of the business’s strategic plan must be organized and understood by
each person responsible.
Leaders and managers need to communicate the strategic plan through consistent
discussions that foster collaborative decision-making. Responsibilities for
the planning process and success also extend beyond the leader and onto each
individual employee to help realize the steps of an effective strategic plan.
Companies must set clear strategic objectives that align with their mission
and strategic goals while preparing business leaders to carry out those plans.
When done correctly, with careful attention paid to all levels of the
organization, successful strategic planning can lead a company in the right
direction toward long-term sustainability and future opportunities.
Conclusion
Having a clear strategic plan is one of those obvious items that every company
should have in place yet many companies don’t.
Although the effort of investing the time and resources into creating a
strategic planning template can be demanding, the value and impact of your
investment can return a healthy multiple.
Once your mission and vision statements and strategic plan are in place they
become a touchstone to focus your business, align teams, and what makes your
way of navigating your market and competition unique.
We hope that this resource provides a road map and helps facilitate the
development of your strategic plan if you don’t have one yet. For those that
do have strategic plans, we hope this resource helps act as a checklist to
fortify the strategy development you’ve already created.