Unit Two: strategic planning

2.1. Developing a strategic plan

2.1.1. Types and definition of plan

Planning, in general, is defined as the process of determining organizational goals and the
courses of actions for attaining these goals. There are three levels of planning that are
different from each other in terms of scope, timeframe, complexity and preparation. The three
levels of planning are:

1. Strategic planning- strategic planning is the process of setting project/organizational long

run objectives through gathering external and internal information and developing alternative
courses of actions needed for achieving the set goals of an organization. The time frame for
strategic planning is between five to ten years. The top managers are mainly responsible for
preparing strategic plans.

2. Tactical (Intermediate planning)- This is the process of translating strategic plans in to

specific objectives that must be achieved and specific actions that must be done by each
individual department/division of an organization. The time frame for tactical planning
usually covers between two and five years. Usually the middle level managers are responsible
for preparing departmental plans with the aim these plans contribute to the achievement of
organization’s broad goals.

3. Operational plans- this plan show how departmental plans can be implemented by each
section of the department on a daily basis. In most cases the time frame for this kind of
planning is between one and two years. The operational level managers are responsible for
preparing daily, weekly and monthly schedules of activities and targets of their units in line
with the objective and goal set for their departments.

Based on the above levels of planning, the essential point is to understand the logical
relationships existing between planning and projects. The first step of organizations is to
determine what and when to achieve their goals. The second step is to formulate strategies on
how to achieve their goals. Strategies answer the “how?” question of planning. The levels of
courses of actions are strategies, programs and projects. The major difference between a
project and a program is not so much in the objectives stated, but lies more in scope, details,
and accuracy.

2.1.2. Concepts of strategic plan

A strategic plan is a document used to communicate with the organisation the organisations
goals, the actions needed to achieve those goals and all of the other critical elements
developed during the planning exercise.

Ultimately, strategic planning allows a business to take control of its vision and turn
projected results into reality. This emphasizes its importance for project managers, who are

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responsible for the success or failure of a project and for ensuring an organization operates at
optimal efficiency.

Without an effective strategic planning process, it’s difficult to achieve success in project
management. Strategic planning focuses on a business’s future by understanding operational
priorities and resource availability, setting out clear strategic objectives for desired business
results, and developing an action plan on how to achieve them. The process creates and
implements decisions that guide an organization’s direction, ensuring that it’s adaptable to a
changing business environment.

Importance of developing strategic planning

Strategic planning defines he following four aspects in project development.

1. The mission. Strategic planning starts with a mission that offers a company a sense of
purpose and direction. The organization's mission statement describes who it is, what it does
and where it wants to go. Missions are typically broad but actionable. For example, a
business in the education industry might seek to be a leader in online virtual educational tools
and services.

2. The goals. Strategic planning involves selecting goals. Most planning uses SMART goals;
specific, measurable, achievable, realistic and time-bound -- or other objectively measurable
goals. Measurable goals are important because they enable business leaders to determine how
well the business is performing against goals and the overall mission. Goal setting for the
fictitious educational business might include releasing the first version of a virtual classroom
platform within two years or increasing sales of an existing tool by 30% in the next year.

3. Alignment with short-term goals. Strategic planning relates directly to short-term,

tactical business planning and can help business leaders with everyday decision-making that
better aligns with business strategy.

4. Evaluation and revision. Strategic planning helps business leaders periodically evaluate
progress against the plan and make changes or adjustments in response to changing
conditions. For example, a business may seek a global presence, but legal and regulatory
restrictions could emerge that affect its ability to operate in certain geographic regions. As
result, business leaders might have to revise the strategic plan to redefine objectives or
change progress metrics.

2.1.3. Steps in Developing Strategic Planning

Every strategic plan has developed through the following five steps

Step 1: Determine where you are

Before you can get started with strategy development and define where you’re going, you
first need to define where you are. To do this, your management committee should collect a

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variety of information from additional stakeholders like employees and customers. In
particular, plan to gather:

 Relevant industry and market data to inform any market opportunities, as well as any
potential upcoming threats in the near future
 Customer insights to understand what your customers want from your company like
product improvements or additional services
 Employee feedback that needs to be addressed whether in the product, business
practices, or company culture

A SWOT analysis to help you assess both current and future potential for the business (you’ll
return to this analysis periodically during the strategic planning process).

Strengths:

 What does your organization currently do well?

 What separates you from your competitors?
 What are your most valuable internal resources?
 What tangible assets do you have?
 What is your biggest strength?

Weaknesses:

 What does your organization do poorly?

 What do you currently lack (whether that’s a product, resource, or process)?
 What do your competitors do better than you?
 What, if any, limitations are holding your organization back?
 What processes or products need improvement?

Opportunities:

 What opportunities does your organization have?

 How can you leverage your unique company strengths?
 Are there any trends that you can take advantage of?
 How can you capitalize on marketing or press opportunities?
 Is there an emerging need for your product or service?

Threats:

 What emerging competitors should you keep an eye on?

 Are there any weaknesses that expose your organization to risk?
 Have you or could you experience negative press that could reduce market share?
 Is there a chance of changing customer attitudes towards your company?

Step 2: Identify your goals and objectives

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This is where the magic happens. To develop your strategy, take into account your current
position, which is where you are now. Then, draw inspiration from your original documents
—these are your final destination.

To develop your strategy, you’re essentially pulling out your compass and asking, “Where
are we going next?” This can help you figure out exactly which path you need to take.

During this phase of the planning process, take inspiration from important company
documents to ensure your strategic plan is moving your company in the right direction like:

Your mission statement, to understand how you can continue moving towards your
organization’s core purpose

Your vision statement, to clarify how your strategic plan fits into your long-term vision

Your company values, to guide you towards what matters most towards your company

Your competitive advantages, to understand what unique benefit you offer to the market

Your long-term goals, to track where you want to be in five or 10 years

Your financial forecast and projection, to understand where you expect your financials to be
in the next three years, what your expected cash flow is, and what new opportunities you will
likely be able to invest in.

Step 3: Develop your plan

Now that you understand where you are and where you want to go, it’s time to put pen to
paper. Your plan will take your position and strategy into account to define your
organization-wide plan for the next three to five years. Keep in mind that even though you’re
creating a long-term plan, parts of your strategic plan should be created as the quarters and
years go on.

As you build your strategic plan, you should define the following conditions:

1. Your company priorities for the next three to five years, based on your SWOT analysis
and strategy.

2. Yearly objectives for the first year. You don’t need to define your objectives for every year
of the strategic plan. As the years go on, create new yearly objectives that connect back to
your overall strategic goals.

3. Related key results and Key Performance Indicators (KPIs) for that first year. Some of
these should be set by the management committee, and some should be set by specific teams
that are closer to the work. Make sure your key results and KPIs are measurable and
actionable.

4. Budget for the next year or few years. This should be based on your financial forecast as
well as your direction. Do you need to spend aggressively to develop your product? Build

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your team? Make a dent with marketing? Clarify your most important initiatives and how
you’ll budget for those.

5. A high-level project roadmap. A project roadmap is a tool in project management that

helps you visualize the timeline of a complex initiative, but you can also create a very high-
level project roadmap for your strategic plan. Outline what you expect to be working on in
certain quarters or years to make the plan more actionable and understandable.

Step 4: Execute your plan

After all that buildup, it’s time to put your plan into action. New strategy execution involves
clear communication across your entire organization to make sure everyone knows their
responsibilities and how to measure the plan’s success.

Map your processes with key performance indicators, which will gauge the success of your
plan. You have to consider `the following condition:

 Align tasks with job descriptions to make sure people are equipped to get their jobs
done
 Communicate clearly to your entire organization throughout the implementation
process
 Fully commit to your plan.

Step 5: Revise and restructure as needed

At this point, you should have created and implemented your new strategic framework. The
final step of the planning process is to monitor and manage your plan.

 Share your strategic plan this isn’t a document to hide away. Make sure your team
(especially senior leadership) has access to it so they can understand how their work
contributes to company priorities and your overall strategic plan. We recommend
sharing your plan in the same tool you use to manage and track work, so you can
more easily connect high-level objectives to daily work. If you don’t already, consider
using a
 Update your plan regularly (quarterly and annually). Make sure you’re using your
strategic plan to inform your shorter-term goals. Your strategic plan also isn’t set in
stone. You’ll likely need to update the plan if your company decides to change
directions or make new investments. As new market opportunities and threats come
up, you’ll likely want to tweak your strategic plan to ensure you’re building your
organization in the best direction possible for the next few years.

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