Basic Description of Strategic Planning (including key terms to know)

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    Basic Description of Strategic Planning
    (including key terms to know)

    © Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC.
    Adapted from the Field Guide to Nonprofit Strategic Planning and Facilitation.

    (This page is referenced from Strategic Planning.)

    (Key terms to know in the following descriptions are included
    in italics and bolding.)

    Sections of This Topic Include

    What is Strategic Planning?
    How to Get a Feel for Strategic Planning
    One Way to Look at Strategic Planning
    Basic Overview of Variety of Planning
    Models

    Also consider
    Related Library Topics

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    What is Strategic
    Planning?

    Simply put, strategic planning determines where an organization
    is going over the next year or more and how it’s going to get
    there. Typically, the process is organization-wide, or focused
    on a major function such as a division, department or other major
    function. (The descriptions on this page assume that strategic
    planning is focused on the organization.)

    How to Get a
    Feel for Strategic Planning — There’s No Perfect Way to Do It

    Planning typically includes several major activities
    or steps in the process. Different people often have different
    names for these major activities. They might even conduct them
    in a different order. Strategic planning often includes use of
    several key terms. Different people might use apply different
    definitions for these terms, as well.

    Don’t be concerned about finding the “perfect way”
    to conduct strategic planning.
    You’ll soon notice that
    each writer seems to have their own particularly interpretation
    of the activities in strategic planning. However, as you read
    the materials linked from the topic Strategic Planning in this library, you’ll begin to notice some information
    that is common to most writers.

    Read the basic description described below on this page. Then
    review the various materials linked from the library in the topic
    Strategic Planning. Once you start
    strategic planning, you’ll soon find your own particular approach
    to carrying out the process.

    One Way to Look
    at Strategic Planning

    One interpretation of the major activities in strategic planning
    activities is that it includes:

    1. Strategic Analysis

    This activity can include conducting some sort of scan, or review,
    of the organization’s environment (for example, of the political,
    social, economic and technical environment). Planners carefully
    consider various driving forces in the environment, for example,
    increasing competition, changing demographics, etc. Planners also
    look at the various strengths, weaknesses, opportunities and threats
    (an acronym for this activity is SWOT) regarding
    the organization.

    (Some people take this wide look around after they’ve identified
    or updated their mission statement, vision statement, values statement,
    etc. These statements are briefly described below. Other people
    conduct the analysis before reviewing the statements.)

    (Note that in the past, organizations usually referred to the
    phrase “long-range planning“. More
    recently, planners use the phrase “strategic planning”.
    This new phrase is meant to capture the strategic (comprehensive,
    thoughtful, well-placed) nature of this type of planning.)

    2. Setting Strategic Direction

    Planners carefully come to conclusions about what the organization
    must do as a result of the major issues and opportunities facing
    the organization. These conclusions include what overall accomplishments
    (or strategic goals) the organization should
    achieve, and the overall methods (or strategies)
    to achieve the accomplishments. Goals should be designed and worded
    as much as possible to be specific, measurable, acceptable to
    those working to achieve the goals, realistic, timely, extending
    the capabilities of those working to achieve the goals, and rewarding
    to them, as well. (An acronym for these criteria is “SMARTER”.)

    At some point in the strategic planning process (sometimes
    in the activity of setting the strategic direction), planners
    usually identify or update what might be called the strategic
    “philosophy”. This includes identifying or updating
    the organization’s mission, vision and/or values statements. Mission
    statements
    are brief written descriptions of the purpose
    of the organization. Mission statements vary in nature from very
    brief to quite comprehensive, and including having a specific
    purpose statement that is part of the overall mission statement.
    Many people consider the values statement and vision statement
    to be part of the mission statement. New businesses (for-profit
    or nonprofit) often work with a state agency to formally register
    their new business, for example, as a corporation, association,
    etc. This registration usually includes declaring a mission statement
    in their charter (or constitution, articles of incorporation,
    etc.).

    It seems that vision and values statements are increasingly
    used. Vision statements are usually a compelling
    description of how the organization will or should operate at
    some point in the future and of how customers or clients are benefiting
    from the organization’s products and services. Values statements
    list the overall priorities in how the organization will operate.
    Some people focus the values statement on moral values. Moral
    values are values that suggest overall priorities in how people
    ought to act in the world, for example, integrity, honesty, respect,
    etc. Other people include operational values which suggest overall
    priorities for the organization, for example, to expand marketshare,
    increase efficiency, etc. (Some people would claim that these
    operational values are really strategic goals. Don’t get hung
    up on wording for now.)

    3. Action Planning

    Action planning is carefully laying out how the strategic
    goals will be accomplished. Action planning often includes specifying
    objectives, or specific results, with each strategic
    goal. Therefore, reaching a strategic goal typically involves
    accomplishing a set of objectives along the way — in that sense,
    an objective is still a goal, but on a smaller scale.

    Often, each objective is associated with a tactic, which
    is one of the methods needed to reach an objective. Therefore,
    implementing a strategy typically involves implementing a set
    of tactics along the way — in that sense, a tactic is still a
    strategy, but on a smaller scale.

    Action planning also includes specifying responsibilities
    and timelines with each objective, or who needs
    to do what and by when. It should also include methods to monitor
    and evaluate the plan, which includes knowing how
    the organization will know who has done what and by when.

    It’s common to develop an annual plan (sometimes
    called the operational plan or management
    plan
    ), which includes the strategic goals, strategies,
    objectives, responsibilities and timelines that should be done
    in the coming year. Often, organizations will develop plans for
    each major function, division department, etc., and call these
    work plans.

    Usually, budgets are included in the strategic
    and annual plan, and with work plans. Budgets specify the money
    needed for the resources that are necessary to implement the annual
    plan. Budgets also depict how the money will be spent, for example,
    for human resources, equipment, materials, etc.

    (Note there are several different kinds of budgets. Operating
    budgets are usually budgets associated with major activities over
    the coming year. Project budgets are associated with major projects,
    for example, constructing a building, developing a new program
    or product line, etc. Cash budgets depict where cash will be spent
    over some near term, for example, over the next three months (this
    is very useful in order to know if you can afford bills that must
    be paid soon. Capital budgets are associated with operating some
    major asset, for example, a building, automobiles, furniture,
    computers, etc.

    Basic Overview of Variety of Planning Models

    Here’s a quick overview of a variety of strategic planning.
    This overview will help you get a feel for the variety of perspectives
    on strategic planning.
    Basic Overview of Various Models

    Now that you have some basic sense about what strategic planning
    is, you can go on to polish your understanding by returning to
    the topic Strategic Planning, starting with in the section
    Basic Overviews of Strategic
    Planning Process (basics, special topics and sample plans)


    For the Category of Strategic Planning:

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