business planning strategic management

Strategic Planning

The art of formulating business strategies, implementing them, and evaluating their impact based on organizational objectives

What is Strategic Planning?

Strategic planning is the art of creating specific business strategies, implementing them, and evaluating the results of executing the plan, in regard to a company’s overall long-term goals or desires. It is a concept that focuses on integrating various departments (such as accounting and finance, marketing, and human resources) within a company to accomplish its strategic goals. The term strategic planning is essentially synonymous with strategic management.

The concept of strategic planning originally became popular in the 1950s and 1960s, and enjoyed favor in the corporate world up until the 1980s, when it somewhat fell out of favor. However, enthusiasm for strategic business planning was revived in the 1990s and strategic planning remains relevant in modern business.

CFI’s Course on Corporate & Business Strategy is an elective course for the FMVA Program.

Strategic Planning Process

The strategic planning process requires considerable thought and planning on the part of a company’s upper-level management. Before settling on a plan of action and then determining how to strategically implement it, executives may consider many possible options. In the end, a company’s management will, hopefully, settle on a strategy that is most likely to produce positive results (usually defined as improving the company’s bottom line) and that can be executed in a cost-efficient manner with a high likelihood of success, while avoiding undue financial risk.

The development and execution of strategic planning are typically viewed as consisting of being performed in three critical steps:

1. Strategy Formulation

In the process of formulating a strategy, a company will first assess its current situation by performing an internal and external audit. The purpose of this is to help identify the organization’s strengths and weaknesses, as well as opportunities and threats ( SWOT Analysis ). As a result of the analysis, managers decide on which plans or markets they should focus on or abandon, how to best allocate the company’s resources, and whether to take actions such as expanding operations through a joint venture or merger.

Business strategies have long-term effects on organizational success. Only upper management executives are usually authorized to assign the resources necessary for their implementation.

2. Strategy Implementation

After a strategy is formulated, the company needs to establish specific targets or goals related to putting the strategy into action, and allocate resources for the strategy’s execution. The success of the implementation stage is often determined by how good a job upper management does in regard to clearly communicating the chosen strategy throughout the company and getting all of its employees to “buy into” the desire to put the strategy into action.

Effective strategy implementation involves developing a solid structure, or framework, for implementing the strategy, maximizing the utilization of relevant resources, and redirecting marketing efforts in line with the strategy’s goals and objectives.

3. Strategy Evaluation

Any savvy business person knows that success today does not guarantee success tomorrow. As such, it is important for managers to evaluate the performance of a chosen strategy after the implementation phase.

Strategy evaluation involves three crucial activities: reviewing the internal and external factors affecting the implementation of the strategy, measuring performance, and taking corrective steps to make the strategy more effective. For example, after implementing a strategy to improve customer service, a company may discover that it needs to adopt a new customer relationship management (CRM) software program in order to attain the desired improvements in customer relations.

All three steps in strategic planning occur within three hierarchical levels: upper management, middle management, and operational levels. Thus, it is imperative to foster communication and interaction among employees and managers at all levels, so as to help the firm to operate as a more functional and effective team.

Benefits of Strategic Planning

The volatility of the business environment causes many firms to adopt reactive strategies rather than proactive ones. However, reactive strategies are typically only viable for the short-term, even though they may require spending a significant amount of resources and time to execute. Strategic planning helps firms prepare proactively and address issues with a more long-term view. They enable a company to initiate influence instead of just responding to situations.

Among the primary benefits derived from strategic planning are the following:

1. Helps formulate better strategies using a logical, systematic approach

This is often the most important benefit. Some studies show that the strategic planning process itself makes a significant contribution to improving a company’s overall performance, regardless of the success of a specific strategy.

2. Enhanced communication between employers and employees

Communication is crucial to the success of the strategic planning process. It is initiated through participation and dialogue among the managers and employees, which shows their commitment to achieving organizational goals.

Strategic planning also helps managers and employees show commitment to the organization’s goals. This is because they know what the company is doing and the reasons behind it. Strategic planning makes organizational goals and objectives real, and employees can more readily understand the relationship between their performance, the company’s success, and compensation. As a result, both employees and managers tend to become more innovative and creative, which fosters further growth of the company.

3. Empowers individuals working in the organization

The increased dialogue and communication across all stages of the process strengthens employees’ sense of effectiveness and importance in the company’s overall success. For this reason, it is important for companies to decentralize the strategic planning process by involving lower-level managers and employees throughout the organization. A good example is that of the Walt Disney Co., which dissolved its separate strategic planning department, in favor of assigning the planning roles to individual Disney business divisions.

An increasing number of companies use strategic planning to formulate and implement effective decisions. While planning requires a significant amount of time, effort, and money, a well-thought-out strategic plan efficiently fosters company growth, goal achievement, and employee satisfaction.

Additional Resources

Thank you for reading CFI’s guide to Strategic Planning. To keep learning and advancing your career, the additional CFI resources below will be useful:

• Broad Factors Analysis
• Scalability
• Systems Thinking
• See all management & strategy resources
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Essential Guide to the Strategic Planning Process

By Joe Weller | April 3, 2019 (updated March 26, 2024)

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In this article, you’ll learn the basics of the strategic planning process and how a strategic plan guides you to achieving your organizational goals. Plus, find expert insight on getting the most out of your strategic planning.

Included on this page, you'll discover the importance of strategic planning , the steps of the strategic planning process , and the basic sections to include in your strategic plan .

What Is Strategic Planning?

Strategic planning is an organizational activity that aims to achieve a group’s goals. The process helps define a company’s objectives and investigates both internal and external happenings that might influence the organizational path. Strategic planning also helps identify adjustments that you might need to make to reach your goal. Strategic planning became popular in the 1960s because it helped companies set priorities and goals, strengthen operations, and establish agreement among managers about outcomes and results.

Strategic planning can occur over multiple years, and the process can vary in length, as can the final plan itself. Ideally, strategic planning should result in a document, a presentation, or a report that sets out a blueprint for the company’s progress.

By setting priorities, companies help ensure employees are working toward common and defined goals. It also aids in defining the direction an enterprise is heading, efficiently using resources to achieve the organization’s goals and objectives. Based on the plan, managers can make decisions or allocate the resources necessary to pursue the strategy and minimize risks.

Strategic planning strengthens operations by getting input from people with differing opinions and building a consensus about the company’s direction. Along with focusing energy and resources, the strategic planning process allows people to develop a sense of ownership in the product they create.

“Strategic planning is not really one thing. It is really a set of concepts, procedures, tools, techniques, and practices that have to be adapted to specific contexts and purposes,” says Professor John M. Bryson, McKnight Presidential Professor of Planning and Public Affairs at the Hubert H. Humphrey School of Public Affairs, University of Minnesota and author of Strategic Planning for Public and Nonprofit Organizations: A Guide to Strengthening and Sustaining Organizational Achievement . “Strategic planning is a prompt to foster strategic thinking, acting, and learning, and they all matter and they are all connected.”

What Strategic Planning Is Not

Strategic planning is not a to-do list for the short or long term — it is the basis of a business, its direction, and how it will get there.

“You have to think very strategically about strategic planning. It is more than just following steps,” Bryson explains. “You have to understand strategic planning is not some kind of magic solution to fixing issues. Don’t have unrealistic expectations.”

Strategic planning is also different from a business plan that focuses on a specific product, service, or program and short-term goals. Rather, strategic planning means looking at the big picture.

While they are related, it is important not to confuse strategic planning with strategic thinking, which is more about imagining and innovating in a way that helps a company. In contrast, strategic planning supports those thoughts and helps you figure out how to make them a reality.

Another part of strategic planning is tactical planning , which involves looking at short-term efforts to achieve longer-term goals.

Lastly, marketing plans are not the same as strategic plans. A marketing plan is more about introducing and delivering a service or product to the public instead of how to grow a business. For more about marketing plans and processes, read this article .

Strategic plans include information about finances, but they are different from financial planning , which involves different processes and people. Financial planning templates can help with that process.

Why Is Strategic Planning Important?

In today’s technological age, strategic plans provide businesses with a path forward. Strategic plans help companies thrive, not just survive — they provide a clear focus, which makes an organization more efficient and effective, thereby increasing productivity.

“You are not going to go very far if you don’t have a strategic plan. You need to be able to show where you are going,” says Stefan Hofmeyer, an experienced strategist and co-founder of Global PMI Partners . He lives in the startup-rich environment of northern California and says he often sees startups fail to get seed money because they do not have a strong plan for what they want to do and how they want to do it.

Getting team members on the same page (in both creating a strategic plan and executing the plan itself) can be beneficial for a company. Planners can find satisfaction in the process and unite around a common vision. In addition, you can build strong teams and bridge gaps between staff and management.

“You have to reach agreement about good ideas,” Bryson says. “A really good strategy has to meet a lot of criteria. It has to be technically workable, administratively feasible, politically acceptable, and legally, morally, and ethically defensible, and that is a pretty tough list.”

By discussing a company’s issues during the planning process, individuals can voice their opinions and provide information necessary to move the organization ahead — a form of problem solving as a group.

Strategic plans also provide a mechanism to measure success and progress toward goals, which keeps employees on the same page and helps them focus on the tasks at hand.

When Is the Time to Do Strategic Planning?

There is no perfect time to perform strategic planning. It depends entirely on the organization and the external environment that surrounds it. However, here are some suggestions about when to plan:

If your industry is changing rapidly

When an organization is launching

At the start of a new year or funding period

In preparation for a major new initiative

If regulations and laws in your industry are or will be changing

“It’s not like you do all of the thinking and planning, and then implement,” Bryson says. “A mistake people make is [believing] the thinking has to precede the acting and the learning.”

Even if you do not re-create the entire planning process often, it is important to periodically check your plan and make sure it is still working. If not, update it.

What Is the Strategic Planning Process?

Strategic planning is a process, and not an easy one. A key is to make sure you allow enough time to complete the process without rushing, but not take so much time that you lose momentum and focus. The process itself can be more important than the final document due to the information that comes out of the discussions with management, as well as lower-level workers.

“There is not one favorite or perfect planning process,” says Jim Stockmal, president of the Association for Strategic Planning (ASP). He explains that new techniques come out constantly, and consultants and experienced planners have their favorites. In an effort to standardize the practice and terms used in strategic planning, ASP has created two certification programs .

Level 1 is the Strategic Planning Professional (SPP) certification. It is designed for early- or mid-career planners who work in strategic planning. Level 2, the Strategic Management Professional (SMP) certification, is geared toward seasoned professionals or those who train others. Stockmal explains that ASP designed the certification programs to add structure to the otherwise amorphous profession.

The strategic planning process varies by the size of the organization and can be formal or informal, but there are constraints. For example, teams of all sizes and goals should build in many points along the way for feedback from key leaders — this helps the process stay on track.

Some elements of the process might have specific start and end points, while others are continuous. For example, there might not be one “aha” moment that suddenly makes things clear. Instead, a series of small moves could slowly shift the organization in the right direction.

“Don’t make it overly complex. Bring all of the stakeholders together for input and feedback,” Stockmal advises. “Always be doing a continuous environmental scan, and don’t be afraid to engage with stakeholders.”

Additionally, knowing your company culture is important. “You need to make it work for your organization,” he says.

There are many different ways to approach the strategic planning process. Below are three popular approaches:

Goals-Based Planning: This approach begins by looking at an organization’s mission and goals. From there, you work toward that mission, implement strategies necessary to achieve those goals, and assign roles and deadlines for reaching certain milestones.

Issues-Based Planning: In this approach, start by looking at issues the company is facing, then decide how to address them and what actions to take.

Organic Planning: This approach is more fluid and begins with defining mission and values, then outlining plans to achieve that vision while sticking to the values.

“The approach to strategic planning needs to be contingent upon the organization, its history, what it’s capable of doing, etc.,” Bryson explains. “There’s such a mistake to think there’s one approach.”

For more information on strategic planning, read about how to write a strategic plan and the different types of models you can use.

Who Participates in the Strategic Planning Process?

For work as crucial as strategic planning, it is necessary to get the right team together and include them from the beginning of the process. Try to include as many stakeholders as you can.

Below are suggestions on who to include:

Senior leadership

Strategic planners

Strategists

People who will be responsible for implementing the plan

People to identify gaps in the plan

Members of the board of directors

“There can be magic to strategic planning, but it’s not in any specific framework or anybody’s 10-step process,” Bryson explains. “The magic is getting key people together, getting them to focus on what’s important, and [getting] them to do something about it. That’s where the magic is.”

Hofmeyer recommends finding people within an organization who are not necessarily current leaders, but may be in the future. “Sometimes they just become obvious. Usually they show themselves to you, you don’t need to look for them. They’re motivated to participate,” he says. These future leaders are the ones who speak up at meetings or on other occasions, who put themselves out there even though it is not part of their job description.

At the beginning of the process, establish guidelines about who will be involved and what will be expected of them. Everyone involved must be willing to cooperate and collaborate. If there is a question about whether or not to include anyone, it is usually better to bring on extra people than to leave someone out, only to discover later they should have been a part of the process all along. Not everyone will be involved the entire time; people will come and go during different phases.

Often, an outside facilitator or consultant can be an asset to a strategic planning committee. It is sometimes difficult for managers and other employees to sit back and discuss what they need to accomplish as a company and how they need to do it without considering other factors. As objective observers, outside help can often offer insight that may escape insiders.

Hofmeyer says sometimes bosses have blinders on that keep them from seeing what is happening around them, which allows them to ignore potential conflicts. “People often have their own agendas of where they want to go, and if they are not aligned, it is difficult to build a strategic plan. An outsider perspective can really take you out of your bubble and tell you things you don’t necessarily want to hear [but should]. We get into a rhythm, and it’s really hard to step out of that, so bringing in outside people can help bring in new views and aspects of your business.”

An outside consultant can also help naysayers take the process more seriously because they know the company is investing money in the efforts, Hofmeyer adds.

No matter who is involved in the planning process, make sure at least one person serves as an administrator and documents all planning committee actions.

What Is in a Strategic Plan?

A strategic plan communicates goals and what it takes to achieve them. The plan sometimes begins with a high-level view, then becomes more specific. Since strategic plans are more guidebooks than rulebooks, they don’t have to be bureaucratic and rigid. There is no perfect plan; however, it needs to be realistic.

There are many sections in a strategic plan, and the length of the final document or presentation will vary. The names people use for the sections differ, but the general ideas behind them are similar: Simply make sure you and your team agree on the terms you will use and what each means.

One-Page Strategic Planning Template

“I’m a big fan of getting a strategy onto one sheet of paper. It’s a strategic plan in a nutshell, and it provides a clear line of sight,” Stockmal advises.

You can use the template below to consolidate all your strategic ideas into a succinct, one-page strategic plan. Doing so provides you with a high-level overview of your strategic initiatives that you can place on your website, distribute to stakeholders, and refer to internally. More extensive details about implementation, capacity, and other concerns can go into an expanded document.

Download One-Page Strategic Planning Template Excel | Word | Smartsheet

The most important part of the strategic plan is the executive summary, which contains the highlights of the plan. Although it appears at the beginning of the plan, it should be written last, after you have done all your research.

Of writing the executive summary, Stockmal says, “I find it much easier to extract and cut and edit than to do it first.”

For help with creating executive summaries, see these templates .

Other parts of a strategic plan can include the following:

Description: A description of the company or organization.

Vision Statement: A bold or inspirational statement about where you want your company to be in the future.

Mission Statement: In this section, describe what you do today, your audience, and your approach as you work toward your vision.

Core Values: In this section, list the beliefs and behaviors that will enable you to achieve your mission and, eventually, your vision.

Goals: Provide a few statements of how you will achieve your vision over the long term.

Objectives: Each long-term goal should have a few one-year objectives that advance the plan. Make objectives SMART (specific, measurable, achievable, and time-based) to get the most out of them.

Budget and Operating Plans: Highlight resources you will need and how you will implement them.

Monitoring and Evaluation: In this section, describe how you will check your progress and determine when you achieve your goals.

One of the first steps in creating a strategic plan is to perform both an internal and external analysis of the company’s environment. Internally, look at your company’s strengths and weaknesses, as well as the personal values of those who will implement your plan (managers, executives, board members). Externally, examine threats and opportunities within the industry and any broad societal expectations that might exist.

You can perform a SWOT (strengths, weaknesses, opportunities, and threats) analysis to sum up where you are currently and what you should focus on to help you achieve your future goals. Strengths shows you what you do well, weaknesses point out obstacles that could keep you from achieving your objectives, opportunities highlight where you can grow, and threats pinpoint external factors that could be obstacles in your way.

You can find more information about performing a SWOT analysis and free templates in this article . Another analysis technique, STEEPLE (social, technological, economic, environmental, political, legal, and ethical), often accompanies a SWOT analysis.

Basics of Strategic Planning

How you navigate the strategic planning process will vary. Several tools and techniques are available, and your choice depends on your company’s leadership, culture, environment, and size, as well as the expertise of the planners.

All include similar sections in the final plan, but the ways of driving those results differ. Some tools are goals-based, while others are issues- or scenario-based. Some rely on a more organic or rigid process.

Hofmeyer summarizes what goes into strategic planning:

Understand the stakeholders and involve them from the beginning.

Agree on a vision.

Hold successful meetings and sessions.

Summarize and present the plan to stakeholders.

Identify and check metrics.

Make periodic adjustments.

Items That Go into Strategic Planning

Strategic planning contains inputs, activities, outputs, and outcomes. Inputs and activities are elements that are internal to the company, while outputs and outcomes are external.

Remember, there are many different names for the sections of strategic plans. The key is to agree what terms you will use and define them for everyone involved.

Inputs are important because it is impossible to know where you are going until you know what is around you where you are now.

Companies need to gather data from a variety of sources to get a clear look at the competitive environment and the opportunities and risks within that environment. You can think of it like a competitive intelligence program.

Data should come from the following sources:

Interviews with executives

A review of documents about the competition or market that are publicly available

Primary research by visiting or observing competitors

Studies of your industry

The values of key stakeholders

This information often goes into writing an organization’s vision and mission statements.

Activities are the meetings and other communications that need to happen during the strategic planning process to help everyone understand the competition that surrounds the organization.

It is important both to understand the competitive environment and your company’s response to it. This is where everyone looks at and responds to the data gathered from the inputs.

The strategic planning process produces outputs. Outputs can be as basic as the strategic planning document itself. The documentation and communications that describe your organization’s strategy, as well as financial statements and budgets, can also be outputs.

The implementation of the strategic plan produces outcomes (distinct from outputs). The outcomes determine the success or failure of the strategic plan by measuring how close they are to the goals and vision you outline in your plan.

It is important to understand there will be unplanned and unintended outcomes, too. How you learn from and adapt to these changes influence the success of the strategic plan.

During the planning process, decide how you will measure both the successes and failures of different parts of the strategic plan.

Sharing, Evaluating, and Monitoring the Progress of a Strategic Plan

After companies go through a lengthy strategic planning process, it is important that the plan does not sit and collect dust. Share, evaluate, and monitor the plan to assess how you are doing and make any necessary updates.

“[Some] leaders think that once they have their strategy, it’s up to someone else to execute it. That’s a mistake I see,” Stockmal says.

The process begins with distributing and communicating the plan. Decide who will get a copy of the plan and how those people will tell others about it. Will you have a meeting to kick off the implementation? How will you specify who will do what and when? Clearly communicate the roles people will have.

“Before you communicate the plan [to everyone], you need to have the commitment of stakeholders,” Hofmeyer recommends. Have the stakeholders be a part of announcing the plan to everyone — this keeps them accountable because workers will associate them with the strategy. “That applies pressure to the stakeholders to actually do the work.”

Once the team begins implementation, it’s necessary to have benchmarks to help measure your successes against the plan’s objectives. Sometimes, having smaller action plans within the larger plan can help keep the work on track.

During the planning process, you should have decided how you will measure success. Now, figure out how and when you will document progress. Keep an eye out for gaps between the vision and its implementation — a big gap could be a sign that you are deviating from the plan.

Tools are available to assist with tracking performance of strategic plans, including several types of software. “For some organizations, a spreadsheet is enough, but you are going to manually enter the data, so someone needs to be responsible for that,” Stockmal recommends.

Remember: strategic plans are not written in stone. Some deviation will be necessary, and when it happens, it’s important to understand why it occurred and how the change might impact the company's vision and goals.

Deviation from the plan does not mean failure, reminds Hofmeyer. Instead, understanding what transpired is the key. “Things happen, [and] you should always be on the lookout for that. I’m a firm believer in continuous improvement,” he says. Explain to stakeholders why a change is taking place. “There’s always a sense of re-evaluation, but do it methodically.”

Build in a schedule to review and amend the plan as necessary; this can help keep companies on track.

What Is Strategic Management?

Strategic planning is part of strategic management, and it involves the activities that make the strategic plan a reality. Essentially, strategic management is getting from the starting point to the goal effectively and efficiently using the ongoing activities and processes that a company takes on in order to keep in line with its mission, vision, and strategic plan.

“[Strategic management] closes the gap between the plan and executing the strategy,” Stockmal of ASP says. Strategic management is part of a larger planning process that includes budgeting, forecasting, capital allocation, and more.

There is no right or wrong way to do strategic management — only guidelines. The basic phases are preparing for strategic planning, creating the strategic plan, and implementing that plan.

No matter how you manage your plan, it’s key to allow the strategic plan to evolve and grow as necessary, due to both the internal and external factors.

“We get caught up in all of the day-to-day issues,” Stockmal explains, adding that people do not often leave enough time for implementing the plan and making progress. That’s what strategic management implores: doing things that are in the plan and not letting the plan sit on a shelf.

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Strategic Planning: How to Write a Strategic Plan That Works

Learn the essential steps to writing a strategic plan that delivers real results and aligns with your business objectives. Contact us for more information!

Strategic planning is essential for any organization aiming to achieve its long-term goals and sustain growth. ClearPoint Strategy offers a powerful platform that streamlines the strategic planning process, making it easier for your organization to develop, implement, and monitor your strategic initiatives.

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“Why isn’t my strategy working?”

Statistics around the failure rates of corporate strategies vary—some put it as high as 9 out of 10 while others say nearly 7 out of 10.

It doesn’t matter which number is right; both estimates are higher than they should be. That means the majority of organizations are floundering when it comes to crafting and executing their strategy. Many executives, when faced with these stats, are wondering, “How do I avoid coming up short in my strategy?”

But don’t worry—these abysmal statistics don’t mean you’re doomed to failure. You can be in the small percentage of businesses that actually achieve the goals in their strategic plans, and we’re here to tell you how. (You’re already a step ahead of your competitors simply by taking the time to research the problem!)

Over the years, we’ve helped hundreds of clients beat the odds using the steps outlined in the guide below. It covers everything you need to know about strategy planning and execution, from beginning to end, in each of the three critical phases:

• Preparing for strategic planning
• Creating your strategic plan
• Putting your strategic plan into practice

Based on our experience, we know that following this three-phase approach will significantly increase your odds of getting high-quality results. ‍

So let’s get started.

What is Strategic Planning and Why is It Important?

Strategic planning is an organization's process of defining its direction and long-term goals, creating specific plans to achieve them, implementing those plans , and evaluating the results. On one hand, that definition makes strategy planning sound like a Business 101 concept—define your goals and a plan to achieve them. Unfortunately, the strategic planning process isn’t as straightforward as it seems, especially for large companies.

Some experts say there’s a simple explanation behind the dismal statistics mentioned above: companies are failing to strategize at all. They may talk a good game and be able to explain an innovative new mission, but they cannot articulate the processes and business models that will make it happen.

As a result, nothing about their way of doing business—including their priorities, projects, or culture—changes. Months or years later, strategic leaders are left wondering why the company never achieved what was intended.

This absence of a strategic plan demonstrates why having one is so important.

The strategic planning process is about looking forward, outside the immediate future for your organization, to reach a particular set of goals. But as noted in the definition above, it also involves laying out—step-by-step—how you’re going to get there. Without this foundation in place, you’ll either continue on a path to nowhere, or get caught up in a tornado of urgent activities that may not actually benefit your organization in the long term. Neither of these scenarios will give you the competitive edge you hoped for.

Why Strategic Planning Fails

There are also plenty of organizations that do take steps to fulfill the requirements of strategic planning, yet still fail to see results. These strategies fail for many reasons, including:

• Lack of communication : This is a big one. Research shows that 95% of most companies’ employees don’t understand their organization’s strategy, and 85% of executive leadership teams spend less than one hour per month discussing strategy.
• Poor research around customer trends, organizational threats, and market opportunities : Companies tend to spend more time on internal issues (resolving conflicts and reconciling budgets) than they do analyzing important external information.
• Lack of management support : Organizations neglect to rally support for middle managers, who are key to making sure strategy is executed on a daily basis.
• Ineffective or inefficient performance evaluations : Organizations dedicate all their time to coming up with a plan, but either forget to follow through by tracking progress or have no organized, reliable way to track performance data.
• Lack of clear priorities : Organizations try to do too much at once and/or fail to identify the right activities that will help them achieve their strategy.
• Insufficient resources : Companies don’t acquire new resources, or shift existing resources, to support identified priorities.
• Disjointed departmental goals and activities : There’s no alignment of departmental goals with organizational strategy. Without everyone working together, goals become more difficult to reach.

Whatever is preventing you from meeting your strategic goals—whether it’s the absence of a strategic plan altogether or an imperfect plan execution—it’s worth your time to address the issue.

Analysis has shown that strategic planning has a positive and significant impact on organizational performance. Most importantly, it enhances an organization’s ability to achieve its goals, but there’s more to it than that. Because strategic planning forces companies to adopt a long-term view, it helps them better prepare for the future, setting them up to initiate influence instead of just responding to situations.

It also strengthens communication between employers and employees. The participation and dialogue that takes place among managers and employees throughout the strategic planning process improves transparency and engagement on everyone’s part.

However, the same team that conducted the above analysis also noted that, for strategic planning to work, it requires some specific ingredients, including formal analysis of the internal and external environment, consideration of several strategic options, and careful consideration around whom to involve during the different steps of the strategic planning process. We’ll go through all these ingredients—and more—in the strategic planning guide that follows.

Claim your FREE eBook on 8 effective strategic planning templates here

1. preparing for strategic planning, - gather your team, set up meetings, and create a timeline, get the right people involved.

Let’s get one thing straight right now: If your organization has turned to you (or your department, a colleague, etc.) and requested that you “make a strategic plan and then report back to the leadership team when you’re done”—stop right where you are. That’s not an effective plan. Why? You need to have buy-in across your organization, and so you need leadership involvement from the beginning.

Now let’s talk about the major player needed for this process: The strategic planner. The strategic planner’s job is to align thoughts from the leadership team with a process the organization can use to execute on their strategy. If this is your role (or even if you’re just highly involved in the process), this guide will be immensely helpful as you navigate the coordination of the strategy.

The strategic planner will also need the help of a cross-functional team that involves members of the board or leadership, along with representatives from finance, human resources, operations, sales, and any other critical functions. We’ll discuss this further when we talk through the Office of Strategy Management.

Set up your strategy review meetings

This is also a good time to think about your strategy review meetings, which are a necessity for staying on track over the long haul. However, try to avoid adding yet another meeting onto everyone’s plates; instead, there may be a current meeting you can replace or redesign to make time for strategy discussion.

For now, decide how often you’ll meet and who should be involved. As for timing, there are three types of strategy review meetings:

• Monthly , where you review progress on projects and initiatives
• Quarterly , where you review progress on strategy and discuss key action items
• Annually , where you review year-to-date performance and adjust the strategy as needed

For each of these, you’ll want to send out calendar invites in advance and make sure people know these meetings are a top priority.

Monthly meetings typically include department heads and subject matter experts. Quarterly review meetings may include department heads and upper management. Annual refresh meetings may include upper levels of management and occasionally board members.

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Create a reasonable timeline.

Next, you need to work out a timeline in which you can complete your strategic plan and move through the process. Reasonable is the key word here, as that depends on your organization’s maturity level with regard to strategic planning.

• If you refresh your strategic plan every year, you might be able to work through this process in 4-5 weeks .
• If you’ve never done strategic planning before, 6 months could be more realistic.

Whatever the case, don’t expect this to be done by the end of the week. You’ll be disappointed.

It’s important to understand strategy vs. tactics . Strategy is focused on the destination and how you are going to get there, and tactics are focused on the specific actions you plan to take along the way.

So while this whole process is focused on your overall strategy (i.e. your long-term goals and how you’ll achieve them), we’ll be placing a lot of emphasis on the smaller steps (i.e. practices, resources, initiatives) you’ll take to get there. Make sure your leadership team knows the difference between strategy and tactics going forward!

Sometimes it is smart to keep leadership out of the tactics, but other times, you might need a strong hand to guide the organization through some details.

- Gather the inputs to your Strategic Plan

Get appropriate background information for your strategic plan.

Now it’s time to dig into your internal and external information.

• Internal inputs : Do you know if one branch of your business is growing faster than another? If so, does this mean you’ll focus more energy on the faster growing area, or shift to help the underperforming areas? These are key questions you’ll have to assess. ‍
• External inputs : You may find that parts of your business have shifted, or outside factors are playing a role in where your business is headed. For example, in the late 1990s, the music industry evolved from albums to streaming, impacting many businesses who were associated with the industry. Or if you’re in the manufacturing industry and do a great deal of business overseas, political unrest or a trade dispute between your country and the foreign one you operate in could impact your strategy.

Once you’ve gathered up the quantitative data from the sources above, you’ll also want to get feedback from a number of different sources:

• Discuss the above findings with your leadership team and managers to see what their thoughts are about the future of the business.
• Talk with board members, customers, and industry experts to see what they think your organization is doing well and what needs improvement. These suggestions could deal with anything from operations to company culture.

Combined, all of this data will help you get a better grasp on the future of the business.

‍ Don’t reinvent the wheel—use our assortment of strategic planning templates to get your strategy up and running more easily. See our most popular templates here.

‍ A SWOT Analysis stands for Strengths, Weaknesses, Opportunities, and Threats. This exercise offers a helpful way to think about and organize your internal and external data.

• What are your organization’s strong points?
• What are your organization’s weak points?
• Where are your biggest opportunities in the future?
• What are the largest threats to your business?

Sometimes it is helpful to use the SWOT analysis framework to organize your interview questions for your qualitative data gathering.

‍ Porter’s Five Forces is another tool used to find these inputs. It’s a time-honored strategy execution framework built around the competition in your industry. Who are your rivals? What are they doing? You then need to look at the threat of substitutes. Is there another product consumers could purchase instead of your industry’s product, for example, substituting natural gas or solar for coal when it comes to electricity generation?

Now that you’ve prepared for your strategy...

• You have a team of people who can help you with the strategic planning process.
• You have the raw material for strategy evaluation, including internal and external data.
• You can organize your raw data into a SWOT analysis, Porter’s Five Forces, or another strategy planning framework as you begin to create your strategic plan.

Pro tip You may have researched risk assessments, core competencies, scenario planning, or industry scans as part of your strategic planning. If you’re wondering where these tools fit, they’re all relevant to this first stage of strategic planning. They help you prepare to create the strategic plan. If you have worked through one of these tools before, the results can act as inputs to help you in the next stage.

2. Creating your strategic plan

You now have all the background information necessary to create your strategic plan! But this plan doesn’t live in a vacuum—so we’ll start by revisiting your mission and vision statements and then get into the nuts and bolts of the planning process.

- Confirm your mission and vision statements.

Mission & vision.

If you haven’t created formal mission and vision statements, this is the time to do so.

• Your mission statement describes what your company does and how it is different from other organizations in your competitive space
• Your vision statement describes a future state of what your organization wants to achieve over time.

Where the mission is timeless, your vision is time-bound and more tangible.

‍ Two tools that will help build your mission and vision statements:

• OAS statement : OAS stands for Objective, Advantage, Scope. Talking through these concepts as they apply to your organization will help formulate a vision that is tangible and interactive. Note that while this exercise may be helpful to you, it is optional. You can read more about creating your OAS statement here .
• Strategic shifts: A second tool some people find helpful is called Strategic Shifts. These are exercises for the leadership team to help them define today’s strategic priorities vs. tomorrow’s . For example, your leadership team may say, “We want to shift from central control to autonomy when it comes to our decision-making capability.” If the whole team can get on the same page with these shifts, it can help tremendously once you define your objectives, measures, and projects.

If you’ve already created mission and vision statements, confirm that both are aligned with your current strategy before proceeding to the next step.

During your search for strategic planning tools, you’ve almost certainly come across a Strategy Pyramid (shown below). This pyramid can be visualized in countless different ways, the order of the pyramid isn’t what’s important. The importance lies in ensuring you’ve chosen the elements in the pyramid that work best for your organization, and making sure those components are going to help you achieve strategic success.

- Build out your five-year plan

Develop the framework that will hold your high-level priorities.

You can use your OAS or Strategic Shift exercises to help you define your priorities and objectives—but more importantly, you need a way to manage these elements. The way to do that is by selecting and developing a strategy management framework that will bring all your priorities together in one cohesive format.

Using a framework such as Balanced Scorecard (BSC), Theory of Change (TOC), or Objectives and Key Results (OKR) is critical to your strategic success. Many management teams fail at this point simply because of their disorganization!

Note: Choose only one of these three frameworks, as they have numerous similarities!

The Balanced Scorecard

The Balanced Scorecard , developed by Robert S. Kaplan and David P. Norton, has been one of the world’s top strategy management frameworks since its introduction in the early 1990s. Those who use the BSC do so to bring their strategy to life, communicate it across their organization , and track their strategy progress and performance.

‍ The BSC divides up your objectives by perspectives—financial, customer, process, and people—and themes, like innovation, customer management, operational excellence, etc. (The idea of perspectives is fully developed in Norton and Kaplan’s book The Balanced Scorecard: Translating Strategy into Action .) Here’s an example:

• Financial goals —“What financial goals do we have that will impact our organization?”
• Customer goals —“What things are important to our customers, which will in turn impact our financial standing?”
• Process goals —“What do we need to do well internally, to meet our customer goals, that will impact our financial standing?”
• People (or learning and growth) goals —“What skills, culture, and capabilities do we need to have in our organization to execute on the process that would make our customers happy and ultimately impact our financial standing?”

For an in-depth look at how your organization could use the BSC, check out this Full & Exhaustive Balanced Scorecard Example .

Claim your FREE Balanced Scorecard Excel template for better strategic management

Theory Of Change (TOC)

The Theory of Change is a logic model that describes a step-by-step approach to achieving your vision. The TOC is focused on how to achieve the change you’re looking for , and is popular amongst mission-driven organizations who are describing a change they’re making in the world instead of putting change in their pockets.

The idea behind TOC is that if you have the right people doing the right activities, they’ll affect change on your customers, which will impact your financials, and bring you closer to your vision. A great example of a this theory of change is the nonprofit RARE .

According to the Harvard Family Research Project , the steps to create a TOC are:

• Identify a long-term goal.
• Conduct “backwards mapping” to identify the preconditions necessary to achieve that goal.
• Identify the interventions that your initiative will perform to create these preconditions.
• Develop indicators for each precondition that will be used to assess the performance of the interventions.
• Write a narrative that can be used to summarize the various moving parts in your theory.

Objectives & Key Results (OKR)

OKR was originally created by Intel and is used today in primarily two ways: At the enterprise/department level and at the personal performance level.

• Objectives are goals.
• Key results are quantitative measures that define whether goals have been reached.

Claim your FREE Excel OKR template to set and achieve key objectives here

The idea is that your defined objectives and measurements help employees, managers, and executives link to and align with overall strategic priorities. Not only does OKR strive to measure whether objectives are successful, but also how successful they are.

Define your objectives, measures, and projects.

‍ The strategic planning frameworks above are all meant, in different ways, to help you organize your objectives, measures, and projects. So it’s critical that these elements are well thought-out and defined.

Here’s how objectives, measures, and projects interact:

‍ You have a high-level goal in mind—your objective. Your measures answer the question, “How will I know that we’re meeting our goal?” From there, initiatives, or projects, are put in place to answer the question, “What actions are we taking to accomplish our goals?”

‍ We’ve defined each of these concepts more thoroughly below with a few business strategy examples:

• Objectives are high-level organizational goals. The typical BSC has 10-15 strategic objectives.

Examples include:

• Increase Market Share Through Current Customers (Financial)
• Be Service Oriented (Customer)
• Achieve Order Fulfillment Excellence Through On-Line Process Improvement (Internal)
• Align Incentives And Rewards With Employee Roles For Increased Employee Satisfaction (Learning & Growth)
• Measures help you understand if you’re accomplishing your objectives strategically. They force you to question things like, “How do I know that I’m becoming an internationally recognized brand?” Note that while your measures might change, your objectives will remain the same. You may select 1-2 measures per objective, so you are aiming to come up with 15-25 measures at the enterprise level.
• Cost Of Goods Sold
• Customer Satisfaction & Retention
• Percentage Of Product Defects
• Percentage Of Response To Open Positions
• Initiatives are key action programs developed to achieve your objectives. You’ll see initiatives referred to as “projects,” “actions,” or “activities outside of the Balanced Scorecard.” Most organizations will have 0-2 initiatives underway for every objective (with a total of 5-15 strategic initiatives).
• Develop Quality Management Program
• Install ERP System
• Revamp Supply Chain Process
• Develop Competencies Mode

- Create your strategy map or graphic strategic model

Whether or not you’re using a Balanced Scorecard as your strategy framework, you’ll benefit from using a graphic model to represent your strategic plan. While many people use a strategy map (shown in the example below), you could also use icons or a color-coding system to visually understand how the elements of your strategy work together.

If you’re just becoming familiar with how strategy mapping works, this article will teach you exactly how to read one—and what you need to do to create one.

Get your FREE eBook with Balance Scorecard strategy maps for better strategic visualization

Now that you’ve created your strategic vision...

• You have a fully-defined mission and vision to use as you move forward with your strategy implementation process.
• You have chosen a strategic framework that will hold your five-year strategic plan.
• You have defined objectives, measures, and projects, and you know how they work together.
• You have a graphic representation of your strategic model.

Feeling the strategic fatigue? It’s okay! This is a tiring process—so be careful to tailor everything in this section to what those in your organization will tolerate. Putting your strategic plan into practice (our final step) is the key to making it all work during the strategy implementation plan, and getting these details 80% right in a timely fashion is much more important than getting them 100% right in a year.

3. Putting your strategic plan into practice

You’ve made it this far—now you have to be sure you launch correctly! To do so, you need someone from the Office of Strategy Management to push that process, ensure resources are aligned to your strategy, put a solid strategy communication program in place, and get technology to keep you organized.

- Launch your strategy

Ensure the office of strategy management (osm) is pushing things forward.

The Office of Strategy Management is comprised of a group of people responsible for coordinating strategy implementation. This team isn’t responsible for doing everything in your strategy, but it should oversee strategy execution across the organization. Typically, the OSM lives in the finance department—or it could be its own separate division that reports directly to the CEO.

Create your internal and external strategy communication plan

Internal— Be sure all elements of your strategy—like strategy maps or logic models—are contained within a larger strategic plan document. (If you use strategy software , the strategic plan document will likely be contained there.) A great way to be sure your leadership team has a firm grasp on your strategy is to ensure they each have a copy of this document, and they can describe the strategy easily to someone who wasn’t involved in the creation process .

More broadly, the strategy must be communicated throughout your organization. You should be shouting it from the rooftops to keep it top-of-mind across your organization. People won’t give it a passing thought unless you engage them—so every department head should be charged with explaining how their team fits into the strategy and why it matters. For actionable tips, check out this article that highlights how you can effectively communicate your strategic plan across your organization.

‍ External— You also need to be sure you have a plan for communicating your strategy outside the organization—with board members, partners, or customers (particularly if your organization is municipal or nonprofit). Think through how it will be shared, and which parts of it are relevant to outside parties.

Align your resources to your strategy

In the short term—which would be your next budgeting cycle or something similar—work to structure the budget around the key components of your strategy. You don’t need to completely rewire your budget, but you do need to create direct linkages between how your resources are allocated and how those efforts support your strategy. Over time, the areas that contribute less directly to strategic goals will become clear, and you can work on gradually aligning everything you fund.

But even if your budget only extends through the fiscal year, consider how you’ll align your strategy to projects in the future. For future resource allocation, link your operations (what some refer to as the “work planning process”) to your strategy. Your expectation should be that the process of aligning your resources to your strategy can happen within year two of your strategic planning execution.

- Evaluate your strategy

At this point, your strategy has been launched: Now you need to know whether or not you’re making progress! Here’s how to do that.

Claim your FREE Measure & Goal Evaluation Toolkit for streamlined analysis

Create reports to highlight your results

Ten years ago, you may have evaluated your strategy annually. But in today’s business environment, that’s not a feasible option. At a minimum, you should be reporting on your entire strategy on a quarterly basis, or breaking down your strategy into pieces and reporting on one of those pieces each month.

The report you use should highlight progress on your measures and projects, and how those link to your objectives. The point is to show how all these elements fit together and relate to the strategic plan as a whole.

Hold regular strategy meetings

Report on strategy progress via the quarterly or monthly review meetings you scheduled early in the process.

It’s important to note that throwing together an impromptu meeting to go over results isn’t going to get you anywhere. Instead, your strategy review meetings should be meticulously organized and accompanied by an agenda. (See this article for a sample agenda.)

‍ Your meetings should revolve around three key issues:

• What is your organization trying to accomplish? This may include reiterating your mission and vision to add context around the conversation.
• Are you making progress toward these goals? You might review key metrics and the status of initiatives and milestones.
• What actions need to be taken to continue making progress? If metrics are off-track, for example, what can be done to get back on course.

Encourage candid dialogue and make sure the discussion stays focused.

You may want a facilitator for the first few meetings, and you may want to script a few open discussions where a goal owner explains why they are behind schedule (red) on their goal, and the business leader offers support, not criticism. This will generate the atmosphere you need for everyone to start reporting honestly and working together to achieve the organization’s goals.

Deploy strategy reporting software (if you haven’t already)

To make strategy execution work, reporting is unavoidable. While you might be able to track your first strategy meeting in Excel or give your first presentation via PowerPoint, you’ll quickly realize you need some kind of software to track the continuous gathering of data, update your projects, and keep your leadership team on the same page.

If you want to learn more about the major areas of responsibility you should be covering in your strategy management process—and how strategy software can help with that— take a look at our ClearPoint tour .

Here are two additional helpful pieces of content as you move forward:

You’ve probably seen reference to the “Plan, Do, Check, Act” framework before. If you want to integrate this checklist, this is the time to do so. Here’s a breakdown on what it means:

• Plan refers to creating your strategic plan.
• Do refers to making progress on or executing on the plan.
• Check refers to the reporting and monitoring process.
• Act refers to taking action through projects, work plans, or the budgeting process to continue to manage and execute on the strategy.

The Benefits Of Strategic Planning (& Challenges You Should Be Aware Of)

Done right, strategy planning can benefit your business tremendously, but a certain degree of stick-to-itiveness is required to get the job done. (As we noted at the beginning of this guide, organizations that actually meet their strategic objectives are in the minority. Don’t worry, though, yours can be one of the success stories.) But those that develop a disciplined approach to both planning and execution have been shown to improve performance significantly.

‍ Why is strategic planning so effective? Because it fosters healthy organizational practices that drive better outcomes. Engaging in strategic planning will benefit you in multiple ways:

1. You have quality data available to support better decisions

Setting goals and choosing the relevant metrics to track progress toward achieving them means you always have meaningful data to reference. That naturally leads to faster, more efficient decision-making, especially when that data is readily accessible to employees at every level.

Timely, valid, and actionable information is especially valuable in situations where organizations need to react quickly, so they can make the best decisions possible for all their stakeholders.

2. You allocate resources more effectively

In Chapter 3, we discussed structuring the budget around the key components of your strategy. Doing so helps ensure resources are allocated correctly, and in a way that aligns with your goals.

Tying the budget directly to goals also makes it easy to adjust when necessary, if circumstances change and new goals are prioritized over old. For example, a local government may have had a goal to develop a green infrastructure plan at the beginning of 2020, but then had to pivot with the onset of COVID-19.

To support a new goal of developing a COVID-19 response plan, they could simply review the resources used by current projects, evaluate those projects’ priorities and budget needs in comparison to the new goal, and reallocate funds as necessary.

3. You maintain focus

Having a strategic plan brings your main focus points to the forefront, so you don’t have to dig into the details of everything your organization is doing. That means there’s no time wasted analyzing irrelevant and extensive data points in strategic meetings; instead, everyone stays focused on what is most important or where improvements need to be made.

4. You improve communication and build employee engagement.

Strategic planning is intended to create a single, focused vision of where an organization is headed. When that shared vision is communicated clearly and consistently, it inspires employees to take ownership over their role in the plan, and they are typically more motivated to do their best work. High engagement will directly impact your organization’s financial health and profitability.

3 Things To Consider Before You Embark On A Strategic Plan

Having helped hundreds of organizations—for-profit, nonprofit, and local governments included—navigate through the strategic planning and implementation process, we’ve seen firsthand the many challenges that arise along the way. There’s no “typical” scenario, but there are some common pitfalls that have the power to make or break your chances of success. Below are three things you should be aware of going into the process.

1. Everything about strategic planning takes time

Don’t expect your plan to materialize after a few meetings. The initial planning activities usually unfold over the space of several months, but strategy execution itself is an ongoing process. Anticipate devoting extensive time and effort in particular to:

• Choosing the appropriate planning model . Before you can even begin to articulate your strategy, you need to choose a strategy framework that fits your organization’s needs. All models can be customized to suit the way your business works, but this is a key decision that will shape all your efforts going forward.
• Creating a plan that everyone agrees on. It’s crucial for your leadership team to support the plan’s objectives if you want it to be adopted. Making sure everyone on the team has been heard and gaining a consensus is a time-consuming process.
• Getting “buy-in” for the plan. Research shows that, on average, 95% of an organization’s employees don’t understand its strategy—there’s no surer way to guarantee failure than to neglect communicating your goals to your employees. You must continuously keep your strategy top-of-mind in a creative and meaningful way over the long term to gain the buy-in you need to succeed.

2. There is a danger of “analysis paralysis”

Data and analytics are an integral part of strategic planning. And while it may be tempting to use all your available metrics, charts, and graphs for every business decision, doing so unnecessarily can be a detriment to the decision-making process. It’s easy to find yourself drilling deeper into data when perhaps only a high-level view of the information is needed. Avoid squandering time and energy on excessive analysis by making sure the right people are focusing on the right data and actions:

Leadership should focus on organization-wide goals and progress. Teams should focus on the individual projects and daily tasks that are helping to accomplish those goals (and the data that goes with them).

3. Having a plan doesn’t mean your organization will execute on it

Good planning is only half the battle; the lion’s share of forward progress is in executing that plan. But the execution stage is where many organizations stumble. They aren’t prepared for the work involved with follow-through, both in terms of the time commitment and the tools necessary to support performance improvement. Strategy consultants are excellent guides for plan creation, but most offer no guidance on how to carry it out; as a result, organizations are left floundering.

It’s imperative to have a system in place that will measure and monitor your progress toward goals during the execution phase. Performance management tools like ClearPoint allow organizations to track a variety of metrics related to strategic projects, helping to maintain focus over the long term. And our team of strategy implementation experts is always available to provide guidance on every aspect of execution, from setting up an efficient management process to using our reporting tools optimally.

With the right plan in place, tools to support it, and committed leadership, every organization has a good chance of seeing their strategy come to life.

See ClearPoint Strategy in action! Click here to watch our quick 6-minute demo

You’ve made it through these steps…..

...but be sure to place a great deal of emphasis on rightsizing this process for your own organization.

Did you recently do a SWOT analysis and create new vision and mission statements? Don’t do it again.

Do you already manage with a robust set of KPIs ? Use them.

Do you currently create reports for your board and management team? Modify them or use a strategy evaluation framework to make sure they’re focused and move on.

Rather than doing everything, it’s more important to realize there is overlap between these steps. Understand how they all fit into your own strategic planning process, and then move forward with the sections you’re missing.

And if you have any questions along the way, get in touch with us. We live and breathe strategic planning and are here to help!

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Our software is designed to address the common pitfalls in strategy execution, such as poor communication, misaligned goals, and ineffective tracking. By booking a demo with us, you’ll see firsthand how ClearPoint can enhance transparency, improve alignment, and boost execution efficiency across your organization.

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What are strategic planning tools.

Strategic planning tools are methodologies and frameworks that help organizations formulate, implement, and monitor their strategic plans. Common strategic planning tools include:

- SWOT Analysis: Identifies strengths, weaknesses, opportunities, and threats. - PESTEL Analysis: Examines political, economic, social, technological, environmental, and legal factors. - Balanced Scorecard: Links strategic objectives to performance metrics across financial, customer, internal processes, and learning and growth perspectives. - Porter’s Five Forces: Analyzes competitive forces within an industry to understand its attractiveness. - Scenario Planning: Envisions different future scenarios to plan for uncertainties. Gap Analysis: Identifies the gap between current performance and desired goals.

What are strategic planning techniques?

Strategic planning techniques are methods used to develop and implement strategies effectively. These include:

- Visioning: Creating a clear, compelling vision of the future state. - Benchmarking: Comparing performance against industry leaders or best practices. - Stakeholder Analysis: Identifying and understanding the needs and influences of stakeholders. - Environmental Scanning: Systematically analyzing external and internal environments. - Strategy Mapping: Visualizing the relationships between different strategic objectives and actions. - Resource Allocation: Determining the best use of resources to achieve strategic goals.

How can strategic planning improve the performance of an organization?

Strategic planning can improve the performance of an organization by:

- Providing Direction: Clarifies the long-term vision and mission, guiding all organizational activities. - Aligning Resources: Ensures that resources are allocated efficiently and effectively to priority areas. - Enhancing Coordination: Fosters better communication and collaboration across departments. - Facilitating Decision-Making: Supports informed, data-driven decisions aligned with strategic goals. - Tracking Progress: Establishes benchmarks and performance metrics to monitor progress and make necessary adjustments. - Encouraging Innovation: Promotes creative thinking and innovation to achieve competitive advantage.

What is strategic planning in healthcare?

Strategic planning in healthcare involves developing long-term goals and strategies to improve healthcare delivery, patient outcomes, and operational efficiency. It includes:

- Assessing Needs: Evaluating patient demographics, healthcare trends, and community needs. - Setting Objectives: Defining specific goals related to patient care, quality, and efficiency. - Resource Management: Allocating resources such as staff, technology, and funding to meet healthcare goals. - Implementing Policies: Developing and implementing policies and procedures to enhance healthcare services. - Monitoring Outcomes: Continuously tracking performance metrics to ensure goals are being met and to identify areas for improvement.

Why is strategic planning important in business?

Strategic planning is important in business because it:

- Provides Clarity and Focus: Establishes clear goals and priorities, aligning efforts toward achieving them. - Enhances Competitiveness: Helps businesses identify opportunities and threats, enabling them to stay competitive. - Improves Resource Allocation: Ensures that resources are used efficiently to achieve the most significant impact. - Fosters Long-Term Thinking: Encourages a forward-looking approach, preparing the organization for future challenges and opportunities. - Increases Accountability: Sets clear expectations and performance metrics, holding individuals and teams accountable for results. - Drives Growth and Innovation: Supports the development of new products, services, and processes to drive growth and innovation.

Ted Jackson

Ted is a Founder and Managing Partner of ClearPoint Strategy and leads the sales and marketing teams.

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How to improve strategic planning

In conference rooms everywhere, corporate planners are in the midst of the annual strategic-planning process. For the better part of a year, they collect financial and operational data, make forecasts, and prepare lengthy presentations with the CEO and other senior managers about the future direction of the business. But at the end of this expensive and time-consuming process, many participants say they are frustrated by its lack of impact on either their own actions or the strategic direction of the company.

This sense of disappointment was captured in a recent McKinsey Quarterly survey of nearly 800 executives: just 45 percent of the respondents said they were satisfied with the strategic-planning process. 1 1. “ Improving strategic planning: A McKinsey Survey ,” The McKinsey Quarterly , Web exclusive, September 2006. The survey, conducted in late July and early August 2006, received 796 responses from a panel of executives from around the world. All panelists have mostly financial or strategic responsibilities and work in a wide range of industries for organizations with revenues of at least $500 million. Moreover, only 23 percent indicated that major strategic decisions were made within its confines. Given these results, managers might well be tempted to jettison the planning process altogether.

But for those working in the overwhelming majority of corporations, the annual planning process plays an essential role. In addition to formulating at least some elements of a company’s strategy, the process results in a budget, which establishes the resource allocation map for the coming 12 to 18 months; sets financial and operating targets, often used to determine compensation metrics and to provide guidance for financial markets; and aligns the management team on its strategic priorities. The operative question for chief executives is how to make the planning process more effective—not whether it is the sole mechanism used to design strategy. CEOs know that strategy is often formulated through ad hoc meetings or brand reviews, or as a result of decisions about mergers and acquisitions.

Our research shows that formal strategic-planning processes play an important role in improving overall satisfaction with strategy development. That role can be seen in the responses of the 79 percent of managers who claimed that the formal planning process played a significant role in developing strategies and were satisfied with the approach of their companies, compared with only 21 percent of the respondents who felt that the process did not play a significant role. Looked at another way, 51 percent of the respondents whose companies had no formal process were dissatisfied with their approach to the development of strategy, against only 20 percent of those at companies with a formal process.

So what can managers do to improve the process? There are many ways to conduct strategic planning, but determining the ideal method goes beyond the scope of this article. Instead we offer, from our research, five emergent ideas that executives can employ immediately to make existing processes run better. The changes we discuss here (such as a focus on important strategic issues or a connection to core-management processes) are the elements most linked with the satisfaction of employees and their perceptions of the significance of the process. These steps cannot guarantee that the right strategic decisions will be made or that strategy will be better executed, but by enhancing the planning process—and thus increasing satisfaction with the development of strategy—they will improve the odds for success.

Start with the issues

Ask CEOs what they think strategic planning should involve and they will talk about anticipating big challenges and spotting important trends. At many companies, however, this noble purpose has taken a backseat to rigid, data-driven processes dominated by the production of budgets and financial forecasts. If the calendar-based process is to play a more valuable role in a company’s overall strategy efforts, it must complement budgeting with a focus on strategic issues. In our experience, the first liberating change managers can make to improve the quality of the planning process is to begin it by deliberately and thoughtfully identifying and discussing the strategic issues that will have the greatest impact on future business performance.

Granted, an approach based on issues will not necessarily yield better strategic results. The music business, for instance, has discussed the threat posed by digital-file sharing for years without finding an effective way of dealing with the problem. But as a first step, identifying the key issues will ensure that management does not waste time and energy on less important topics.

We found a variety of practical ways in which companies can impose a fresh strategic perspective. For instance, the CEO of one large health care company asks the leaders of each business unit to imagine how a set of specific economic, social, and business trends will affect their businesses, as well as ways to capture the opportunities—or counter the threats—that these trends pose. Only after such an analysis and discussion do the leaders settle into the more typical planning exercises of financial forecasting and identifying strategic initiatives.

One consumer goods organization takes a more directed approach. The CEO, supported by the corporate-strategy function, compiles a list of three to six priorities for the coming year. Distributed to the managers responsible for functions, geographies, and brands, the list then becomes the basis for an offsite strategy-alignment meeting, where managers debate the implications of the priorities for their particular organizations. The corporate-strategy function summarizes the results, adds appropriate corporate targets, and shares them with the organization in the form of a strategy memo, which serves as the basis for more detailed strategic planning at the division and business-unit levels.

A packaged-goods company offers an even more tailored example. Every December the corporate senior-management team produces a list of ten strategic questions tailored to each of the three business units. The leaders of these businesses have six months to explore and debate the questions internally and to come up with answers. In June each unit convenes with the senior-management team in a one-day meeting to discuss proposed actions and reach decisions.

Some companies prefer to use a bottom-up rather than top-down process. We recently worked with a sales company to design a strategic-planning process that begins with in-depth interviews (involving all of the senior managers and selected corporate and business executives) to generate a list of the most important strategic issues facing the company. The senior-management team prioritizes the list and assigns managers to explore each issue and report back in four to six weeks. Such an approach can be especially valuable in companies where internal consensus building is an imperative.

Bring together the right people

An issues-based approach won’t do much good unless the most relevant people are involved in the debate. We found that survey respondents who were satisfied with the strategic-planning process rated it highly on dimensions such as including the most knowledgeable and influential participants, stimulating and challenging the participants’ thinking, and having honest, open discussions about difficult issues. In contrast, 27 percent of the dissatisfied respondents reported that their company’s strategic planning had not a single one of these virtues. Such results suggest that too many companies focus on the data-gathering and packaging elements of strategic planning and neglect the crucial interactive components.

Strategic conversations will have little impact if they involve only strategic planners from both the business unit and the corporate levels. One of our core beliefs is that those who carry out strategy should also develop it. The key strategy conversation should take place among corporate decision makers, business unit leaders, and people with expertise essential to the discussion. In addition to leading the corporate review, the CEO, aided by members of the executive team, should as a rule lead the strategy review for business units as well. The head of a business unit, supported by four to six people, should direct the discussion from its side of the table (see sidebar, "Things to ask in any business unit review").

Things to ask in any business unit review

Are major trends and changes in your business unit’s environment affecting your strategic plan? Specifically, what potential developments in customer demand, technology, or the regulatory environment could have enough impact on the industry to change the entire plan?

How and why is this plan different from last year’s?

What were your forecasts for market growth, sales, and profitability last year, two years ago, and three years ago? How right or wrong were they? What did the business unit learn from those experiences?

What would it take to double your business unit’s growth rate and profits? Where will growth come from: expansion or gains in market share?

If your business unit plans to take market share from competitors, how will it do so, and how will they respond? Are you counting on a strategic advantage or superior execution?

What are your business unit’s distinctive competitive strengths, and how does the plan build on them?

How different is the strategy from those of competitors, and why? Is that a good or a bad thing?

Beyond the immediate planning cycle, what are the key issues, risks, and opportunities that we should discuss today?

What would a private-equity owner do with this business?

How will the business unit monitor the execution of this strategy?

One pharmaceutical company invites business unit leaders to take part in the strategy reviews of their peers in other units. This approach can help build a better understanding of the entire company and, especially, of the issues that span business units. The risk is that such interactions might constrain the honesty and vigor of the dialogue and put executives at the focus of the discussion on the defensive.

Corporate senior-management teams can dedicate only a few hours or at most a few days to a business unit under review. So team members should spend this time in challenging yet collaborative discussions with business unit leaders rather than trying to absorb many facts during the review itself. To provide some context for the discussion, best-practice companies disseminate important operational and financial information to the corporate review team well in advance of such sessions. This reading material should also tee up the most important issues facing the business and outline the proposed strategy, ensuring that the review team is prepared with well-thought-out questions. In our experience, the right 10 pages provide ample fuel to fire a vigorous discussion, but more than 25 pages will likely douse the level of energy or engagement in the room.

Adapt planning cycles to the needs of each business

Managers are justifiably concerned about the resources and time required to implement an issues-based strategic-planning approach. One easy—yet rarely adopted—solution is to free business units from the need to conduct this rigorous process every single year. In all but the most volatile, high-velocity industries, it is hard to imagine that a major strategic redirection will be necessary every planning cycle. In fact, forcing businesses to undertake this exercise annually is distracting and may even be detrimental. Managers need to focus on executing the last plan’s major initiatives, many of which can take 18 to 36 months to implement fully.

Some companies alternate the business units that undergo the complete strategic-planning process (as opposed to abbreviated annual updates of the existing plan). One media company, for example, requires individual business units to undertake strategic planning only every two or three years. This cadence enables the corporate senior-management team and its strategy group to devote more energy to the business units that are “at bat.” More important, it frees the corporate-strategy group to work directly with the senior team on critical issues that affect the entire company—issues such as developing an integrated digitization strategy and addressing unforeseen changes in the fast-moving digital-media landscape.

Other companies use trigger mechanisms to decide which business units will undergo a full strategic-planning exercise in a given year. One industrial company assigns each business unit a color-coded grade—green, yellow, or red—based on the unit’s success in executing the existing strategic plan. “Code red,” for example, would slate a business unit for a strategy review. Although many of the metrics that determine the grade are financial, some may be operational to provide a more complete assessment of the unit’s performance.

Freeing business units from participating in the strategic-planning process every year raises a caveat, however. When important changes in the external environment occur, senior managers must be able to engage with business units that are not under review and make major strategic decisions on an ad hoc basis. For instance, a major merger in any industry would prompt competitors in it to revisit their strategies. Indeed, one advantage of a tailored planning cycle is that it builds slack into the strategic-review system, enabling management to address unforeseen but pressing strategic issues as they arise.

Implement a strategic-performance-management system

In the end, many companies fail to execute the chosen strategy. More than a quarter of our survey respondents said that their companies had plans but no execution path. Forty-five percent reported that planning processes failed to track the execution of strategic initiatives. All this suggests that putting in place a system to measure and monitor their progress can greatly enhance the impact of the planning process.

Most companies believe that their existing control systems and performance-management processes (including budgets and operating reviews) are the sole way to monitor progress on strategy. As a result, managers attempt to translate the decisions made during the planning process into budget targets or other financial goals. Although this practice is sensible and necessary, it is not enough. We estimate that a significant portion of the strategic decisions we recommend to companies can’t be tracked solely through financial targets. A company undertaking a major strategic initiative to enhance its innovation and product-development capabilities, for example, should measure a variety of input metrics, such as the quality of available talent and the number of ideas and projects at each stage in development, in addition to pure output metrics such as revenues from new-product sales. One information technology company, for instance, carefully tracks the number and skill levels of people posted to important strategic projects.

Strategic-performance-management systems, which should assign accountability for initiatives and make their progress more transparent, can take many forms. One industrial corporation tracks major strategic initiatives that will have the greatest impact, across a portfolio of a dozen businesses, on its financial and strategic goals. Transparency is achieved through regular reviews and the use of financial as well as nonfinancial metrics. The corporate-strategy team assumes responsibility for reviews (chaired by the CEO and involving the relevant business-unit leaders) that use an array of milestones and metrics to assess the top ten initiatives. One to expand operations in China and India, for example, would entail regular reviews of interim metrics such as the quality and number of local employees recruited and the pace at which alliances are formed with channel partners or suppliers. Each business unit, in turn, is accountable for adopting the same performance-management approach for its own, lower-tier top-ten list of initiatives.

When designed well, strategic-performance-management systems can give an early warning of problems with strategic initiatives, whereas financial targets alone at best provide lagging indicators. An effective system enables management to step in and correct, redirect, or even abandon an initiative that is failing to perform as expected. The strategy of a pharmaceutical company that embarked on a major expansion of its sales force to drive revenue growth, for example, presupposed that rapid growth in the number of sales representatives would lead to a corresponding increase in revenues. The company also recognized, however, that expansion was in turn contingent on several factors, including the ability to recruit and train the right people. It therefore put in place a regular review of the key strategic metrics against its actual performance to alert managers to any emerging problems.

Integrate human-resources systems into the strategic plan

Simply monitoring the execution of strategic initiatives is not sufficient: their successful implementation also depends on how managers are evaluated and compensated. Yet only 36 percent of the executives we surveyed said that their companies’ strategic-planning processes were integrated with HR processes. One way to create a more valuable strategic-planning process would be to tie the evaluation and compensation of managers to the progress of new initiatives.

Although the development of strategy is ostensibly a long-term endeavor, companies traditionally emphasize short-term, purely financial targets—such as annual revenue growth or improved margins—as the sole metrics to gauge the performance of managers and employees. This approach is gradually changing. Deferred-compensation models for boards, CEOs, and some senior managers are now widely used. What’s more, several companies have added longer-term performance targets to complement the short-term ones. A major pharmaceutical company, for example, recently revamped its managerial-compensation structure to include a basket of short-term financial and operating targets as well as longer-term, innovation-based growth targets.

Although these changes help persuade managers to adopt both short- and long-term approaches to the development of strategy, they don’t address the need to link evaluation and compensation to specific strategic initiatives. One way of doing so is to craft a mix of performance targets that more appropriately reflect a company’s strategy. For example, one North American services business that launched strategic initiatives to improve its customer retention and increase sales also adjusted the evaluation and compensation targets for its managers. Rather than measuring senior managers only by revenue and margin targets, as it had done before, it tied 20 percent of their compensation to achieving its retention and cross-selling goals. By introducing metrics for these specific initiatives and linking their success closely to bonus packages, the company motivated managers to make the strategy succeed.

An advantage of this approach is that it motivates managers to flag any problems early in the implementation of a strategic initiative (which determines the size of bonuses) so that the company can solve them. Otherwise, managers all too often sweep the debris of a failing strategy under the operating rug until the spring-cleaning ritual of next year’s annual planning process.

Some business leaders have found ways to give strategic planning a more valuable role in the formulation as well as the execution of strategy. Companies that emulate their methods might find satisfaction instead of frustration at the end of the annual process.

Renée Dye is a consultant in McKinsey’s Atlanta office, and Olivier Sibony is a director in the Paris office.

This article was first published in the Autumn 2007 issue of McKinsey on Finance . Visit McKinsey’s corporate finance site to view the full issue.

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How to implement a strategic management process

Strategic management is the ongoing process of strategy formulation, evaluation, and improvement in order to gain a competitive advantage. Learn about the five stages of strategic management and how implementing a strategic management process benefits your organization.

Clear eyes, full hearts, can’t lose. When your team has a clear sense of where you’re going and why, they’re empowered to get their best work done efficiently and effectively. 

But building that level of clarity takes time—and effort. That’s where strategic management comes in. In this article, we’ll take a look at what strategic management is and how your team can benefit from the strategic management process. 

What is strategic management?

Strategic management is the organization and execution of business resources in order to achieve your company goals. This isn’t an individual initiative but rather an ongoing process of strategy formulation, evaluation, and improvement in order to gain a sustainable competitive advantage. 

The strategic management process includes:

Long-term, large-scale goal setting, like BHAGs

SWOT analysis

Strategy evaluation

Internal analysis of your organizational structure

Analysis of your external, competitive environment

Strategic planning

Process implementation plans to achieve your organization’s objectives

Competitive strategy implementation

Strategic management might sound similar to several other critical business elements. Here’s how it stacks up in the business environment. 

Strategic management vs. strategy

At first glance, strategic management and strategy seem like the same thing. The easiest way to differentiate between the two is to think of strategic management as the implementation of your corporate strategy. 

In a business setting, strategy is the process of formulating decisions to hit your organization’s goals. An effective strategy is critical to help your business team understand what your priorities are and where you’re going. But to put the strategy into motion, you need strategic management. Strategic management takes your competitive environment into account and factors in how you’ll execute against your company’s strategy. 

Strategic management vs. strategic planning

A strategic plan is a tool to define where your organization wants to go and what actions you need to take to achieve those goals. Strategic planning is the process of creating a plan in order to hit your strategic objectives.

Strategic management includes the strategic planning process, but also goes beyond it. In addition to planning howyou will achieve your big-picture goals, strategic management also helps you organize your resources and figure out the best action plans for success. 

Strategic management vs operational management

Even though the terms are very different, strategic management is often confused with operational management. Operational management is what your company does. This includes your organization’s value chain—in other words, the processes and practices your organization does on a regular basis in order to deliver a final product, good, or service.

If operational management is the “what,” strategic management is the “why” and “how.” To start, strategic management helps you define why you’re prioritizing different business initiatives and what you’re aiming to achieve in the long term. Then, during the implementation and planning phase, strategic management also defines how you’ll achieve your goals. 

Strategic management example

Strategic management helps companies achieve ambitious goals that require strategic alignment across departments. 

For example, imagine your company is introducing a brand new service line and wants to implement a strategic management process to ensure execution goes smoothly. You’ll first want to evaluate a few things about your current processes and future goals. 

What are the goals of introducing a new service? 

What areas have we struggled with in the past?

What is our budget?

How can we differentiate ourselves in our industry?

By using the strategic management process, you can use the questions above to create a coordinated plan that helps you reach your target goals. Keep reading as we break down the five stages of the strategic management process along with some benefits strategic management can have for your organization. 

5 stages of the strategic management process

The important concepts of strategic management can be viewed in five stages:

1. Identify your goals

The first step in the strategic management process is to evaluate where you’re going, and why. Ideally, you already have some goal materials in place, including: 

Your vision statement

Your mission statement

Your long-term goals and/or BHAGs

Your company’s core competencies

There are additional documents you can consider at this point, including:

Your strategic plan

Your yearly objectives, OKRs , and KPIs

It’s critical to identify your goals and plans in order to understand how you’re going to achieve them. Your goals form the basis of your strategic decisions.

2. Analyze your current situation

Once you’ve compiled a list of where you want to go, it’s helpful to get a bearing on where you are. The second step of strategic management is to take a look inwards at your current processes. If you haven’t already, run a SWOT analysis to get a better understanding of your organization’s strengths, weaknesses, opportunities, and threats. 

Also consider:

What’s currently working? 

What competitive advantages does your company have? 

What isn’t working? 

What, if any, operational issues have you run into? 

What is your current market share, and how does it compare to your goals? 

What are your current business needs, and are they being met? 

What, if anything, could potentially impact your organization’s goals? 

How does the external environment (including public opinion and the competitive environment) impact your business?

How does your internal environment (including your operations, employee retention and satisfaction, and team morale ) impact your business? 

What does your organization need to do to achieve profitability?

3. Form your strategy

If you haven’t already, this is the step where you build your strategic plan to describe exactly where you want to go and how you plan to achieve those goals. Depending on your organization, and whether or not you’re a new business, this is also when you’d use business process management (BPM) to improve processes.

Key questions to ask during this stage include:

What steps do you need to take to reach your goals? 

How will you measure success? 

What are your current processes, and are you able to achieve your goals with them? 

4. Implement your strategy

You’ve identified your strategy—now it’s time to put it into action. The fourth step of the strategic management process takes the longest. This is where you implement your strategic plan and see it come to life. 

This step depends largely on your business strategy. Essentially, you’re deciding which processes you need to evaluate, monitor, and improve—and putting those process improvement plans into action. This includes anything from better resource allocation or implementing business process automation (BPA) to streamline processes, to developing a company-wide project management office (PMO) . 

Remember that implementing your strategy is a long-term process. In addition to your long-term strategic goals , make sure to set short-term goals to guide your strategy implementation and make sure you remain on track.

5. Evaluate your process

Strategic management isn’t a one-and-done thing. Your management strategy and business environment also change as your company matures. Similar to how you should revisit your strategic plan every three to five years, make sure you’re revisiting your overall strategic management plan regularly as well. Take into consideration any new potential threats, relevant success metrics, and developing avenues your business may want to pursue.

Strategic management frameworks

There are a number of frameworks that can help you approach strategic management. Some of the most popular include:

A SWOT analysis guides you in identifying your strengths, weaknesses, opportunities, and threats for your business strategy. When working through the strategic management process, factor a SWOT analysis into the “Analyze” phase, as it helps establish your baseline and where you can go from there. 

Balanced scorecard

 A balanced scorecard can help you evaluate four major elements of a business: learning and growth, business processes, customer satisfaction, and financial performance. By analyzing these aspects separately, you can visualize where your organization has a competitive advantage and where you can make improvements. 

Like a SWOT analysis, this framework can help you during the “Analyze” phase, as it dives into your baseline for each aspect of your business model. 

Value chain analysis

The value chain describes the systems and processes involved in producing new products or services. Analyzing the value chain allows organizations to identify opportunities for improvement within the project life cycle. Some questions that come from value chain analysis include:

Is there an opportunity for cost reduction? 

Can we streamline this process? 

What can we do to make our product or service different from competitors? 

Diving into a value chain analysis will help you pick apart your process and add more specific plans to your strategic management process.  

Why is strategic management important?

Strategic management benefits every level of your organization. While the process takes time, energy, and effort, the upsides are immense and echo throughout the entire organization. With effective strategic management, you’re building:

Clear plans on how you’ll reach organizational goals

At its core, strategic management is a roadmap for achieving company goals. Using the frameworks stated above, strategic management paints a clear picture of an organization’s goals and outlines the path to reach them. 

A team-wide understanding of organizational priorities

The strategic management process ensures that your goals align with what’s best for your organization. By diving into techniques like SWOT analyses and value chain analyses, you’ll discover what opportunities should be at the forefront of your improvement efforts. 

Strategic alignment across the organization

When you establish and communicate your company’s goals and priorities, strategic improvement will trickle down from the leadership level to the whole organization. 

The strategic management process is so effective because it takes strategic initiatives from ideation to execution. By establishing the right goals in the first stage of the process, you’ll find your whole organization aligned with the plan to achieve them.                                                                                             

An ongoing business process

Perhaps the most beneficial aspect of the strategic management process is that it creates a system that is ongoing. The end result of the strategic management process should be a new system that you can tweak as your company evolves. 

Reach new heights with strategic management

Strategic management doesn’t happen in a vacuum. You need key business units and project stakeholders to buy into your strategic plan. Effective strategic management permeates all levels of your organizational structure and factors in all of your organization’s resources in order to build the best long-term strategy for your business.

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The seven keys to successful strategic planning.

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Strategic planning is a critical business practice for positioning an organization for success, aligning leaders to a common plan, and guiding management decisions. Most companies conduct some form of strategic planning event before starting a new year. However, most strategic planning processes fail to deliver real value due to some common pitfalls.

All too often, leaders view strategic planning as an event, not an annual process. This results in strategic plans that are not fully implemented since, once they are done, they are seldom reviewed throughout the year. Managers who seemed to support the strategic plan may not be fully aligned to the organization’s goals and priorities, undermining execution. In addition, it is common that without a proper assessment of the industry and the organization’s capabilities, the plan lacks true strategic thinking, and becomes more of a projection of past performance into the next year.

To address these concerns, the following seven steps will guide the creation of a successful strategic planning process.

1. Assess your industry, competitors and market trends.

The initial step in creating an effective strategic plan is to assess the external forces shaping your industry, understanding the competitive and regulatory landscape and identifying market trends. If data is not already available, conduct an efficient external assessment before the strategic planning event to provide insights and valid data to inform decisions and test assumptions. This results in more strategic conversations during the event.

2. Identify opportunities and threats by conducting a SWOT analysis.

In conjunction with an external market assessment, an internal organizational review will ground the strategy and set a baseline for the organization’s culture and capabilities. A SWOT analysis will reveal the organization’s strengths, weaknesses, opportunities and threats. With this information, leaders will be able to draw a set of offensive and defensive strategies that capitalize on opportunities and offset the risks of potential threats.

3. Review your organization’s mission and vision.

One of the values of a successful strategic event is to inspire leaders to achieve meaningful goals. Reviewing the organization’s mission and vision is an important step at the start of the strategic planning event. An engaging envisioning session helps leaders collaborate in creating a shared story of success. This activity unites and inspires the leaders and ultimately everyone to embrace the organization’s greater purpose.

4. Set business goals and priorities.

Leveraging the external and internal assessments and guided by a compelling vision, it is important to focus on the specific goals and priorities to achieve that vision. This is a critical stage for decision making. It is where leaders engage in rich decision-making conversations that define the big plays that will move the organization forward towards its goals. Having an objective, skilled facilitator can be useful at this point to help bring up, clarify, test and harmonize leadership's views.

5. Define functional objectives and key initiatives.

With a clear set of business goals and priorities, the next step is to define the specific objectives and initiatives that activate the strategic plan. This is best done at the functional level to enable alignment and increase ownership. It is important to keep the number of initiatives per function to what can be realistically done in a year. It is also important that these initiatives truly align and help deliver on the business goals.

6. Determine staffing, budgets and financing needs.

The strategic plan is operationalized by assigning sponsors, champions and resources behind the plan. Senior leaders act as the sponsors of specific initiatives, managing their budgets and staff. At this point, it may be necessary to identify and deploy strategic activation teams representing the various functions charged to tackle cross-functional strategic initiatives.

7. Identify and track success measures monthly and quarterly.

Tracking progress on strategic goals and objectives on a regular basis is key to ensuring that the plan is being implemented and to making course corrections as needed. The discipline to make progress and report on success measures on a regular basis ensures accountability and follow-through. It may be helpful to assign a person responsible for collecting, tracking and reporting progress on the strategic plan using scorecards and dashboards. A quarterly business review includes a status report on strategy implementation through key performance indicators.

These seven steps will ensure that your strategic planning process is successful, and more importantly, that your organization is on the right track. Making the right strategic choices will accelerate your organization to the next level.

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Strategic planning: Read this before it's that time again

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What is strategic planning?

What is strategic plan management?

Benefits of robust strategic planning and management

10 steps in the strategic planning process.

Plans are worthless, but planning is everything. - Dwight D. Eisenhower

It’s that time again. 

Every three to five years, most larger organizations periodically plan for the future. Many times strategic planning documents are shelved and forgotten until the next cycle begins. On the other hand, many smaller and newer organizations, propelled by urgency, may not devote the necessary time and energy to the strategic planning process. 

Only 63% of businesses plan more than a year out. They fail to see that — contrary to Alice in Wonderland’s Cheshire cat — “any way” does not take you there. 

For all organizations, a more rigorous annual planning process is critical for driving future success, profitability, value, and impact.

John Kotter, a former professor at Harvard Business School and noted expert on innovation says, “ Strategy should be viewed as a dynamic force that constantly seeks opportunities, identifies initiatives that will capitalize on them, and completes those initiatives swiftly and efficiently.”

There’s hardly a better case that can be made for dynamic planning than in the tech industry, where mergers and acquisitions are accelerating exponentially. Companies need to be nimble enough to navigate rapid change . In this case, planning should occur quarterly.

Strategic planning is an ongoing process by which an organization sets its forward course by bringing all of its stakeholders together to examine current realities and define its vision for the future.

It examines its strengths and weaknesses, resources available, and opportunities. Strategic planning seeks to anticipate future industry trends .  During the process, the organization creates a vision, articulates its purpose, and sets strategic goals that are long-term and forward-focused. 

Those strategic goals inform operational goals and incremental milestones that need to be reached. The operational plan has clear objectives and supporting initiatives tied to metrics to which everyone is accountable . The plan should be agile enough to allow for recalibrating when necessary and redistributing resources based on internal and external forces.

The output of the planning process is a document that is shared across the enterprise. 

Strategic planning for individuals

Strategic planning isn’t just for companies. At BetterUp, strategic planning is one of the skills that we identify, track, and develop within the Whole Person Model . For individuals, strategic planning is the ability to think through ways to achieve desired outcomes. Just as strategic planning helps organizations realize their goals for the future, it helps individuals grow and achieve goals in a unified direction. 

Working backward from the desired outcome, effective strategic planning consists of coming up with the steps we need to take today in order to get where we want to be tomorrow. 

While no plan is infallible, people who develop this skill are good at checking to make sure that their actions are in alignment with the outcomes that they want to see in the future. Even when things don’t go according to plan, their long-term goals act as a “North star” to get them back on course. In addition, envisioning desired future states and figuring out how to turn them into reality enhances an individual’s sense of personal meaning and motivation. 

Whether we’re talking about strategic planning for the company or the individual, strategic plans can go awry in a variety of ways including: 

• Unrealistic goals and too many priorities
• Poor communication
• Using the wrong measures
• Lack of leadership

The extent to which that document is shelved until the next planning cycle or becomes a dynamic map of the future depends on the people responsible for overseeing the execution of the plan.

What is strategic plan management? 

"Most people think of strategy as an event, but that’s not the way the world works," according to Harvard Business School Professor Clayton Christensen. "When we run into unanticipated opportunities and threats, we have to respond. Sometimes we respond successfully; sometimes we don’t. But most strategies develop through this process. More often than not, the strategy that leads to success emerges through a process that works 24/7 in almost every industry."

Strategic business management is the ongoing process by which an organization creates and sustains a successful roadmap that moves the company in the direction it needs to move, year after year, for long-term success. It spans from research and formulation to execution, evaluation, and adjustment. Given the pace of change, strategic management is more relevant and important than ever for assigning measurable goals and action steps

Many organizations fail because they don’t have the strategic management team at the table right from the beginning of the planning process. A strategic plan is only as good as its ability to be executed and sustained. 

A strategic management initiative might be driven by an internal group — many companies have an internal strategy team — or an outside consulting firm. Ultimately company leaders need to own executing and sustaining the strategy. 

Strategic management teams

In this Harvard Business Review article, Ron Carucci from consulting firm Navalent reports that 61% of executives in a 10-year longitudinal study felt they were not prepared for the strategic challenges they faced upon being appointed to senior leadership roles. Lack of commitment to the plan is also a contributing factor. In addition, leaders attending to quarterly targets, crisis management , and reconciling budgets often consider the execution of a long-term strategy a low priority.

A dedicated strategic management team works with those senior leaders and managers throughout the organization to communicate, coordinate and evaluate progress against goals. They tie strategic objectives to day-to-day operational metrics throughout the enterprise. 

A good strategic management group can assist in creating a culture of empowerment and learning . It holds regular meetings with employees. It sets a clear agenda and expectations to make the strategic plan real and compelling to the organization through concrete objectives, results, and timelines. 

Strategy development is a lot of work, but the benefits are lasting. After all, as the saying goes, "If you fail to plan, you plan to fail." Taking the time for review and planning activities has the following benefits:

• Organizations and people are set up to succeed
• Increased likelihood of staying on track
• Decreased likelihood of being distracted or derailed
• Progress through the plan is communicated throughout the organization
• Metrics facilitate course correction
• Budgets enterprise-wide are based on strategy
• Cross-organization alignment
• Robust employee performance and compensation plans
• Commitment to learning and training
• A robust strategic planning process gets everyone involved and invested in the organizations
• Employees inform management about what’s working or not working at the operational level
• Innovation is encouraged and rewarded
• Increased productivity

1. Define mission and vision  

Begin by articulating the organization's vision for the future. Ask, "What would success look like in five years?" Create a mission statement describing organizational values and how you intend to reach the vision. What values inform and determine mission, vision, and purpose?

Purpose-driven strategic goals articulate the “why” of what the corporation is doing. It connects the vision statement to specific objectives, drawing a line between the larger goals and the work that teams and individuals do.

2. Conduct a comprehensive assessment  

This stage includes identifying an organization’s strategic position.

Gathering data from internal and external environments and respective stakeholders takes place at this time. Involving employees and customers in the research.

The task is to gather market data through research. One of the most critical components of this stage is a comprehensive SWOT analysis that involves gathering people and bringing perspectives from all stakeholders to determine:

• W eaknesses
• O pportunities

Strengths and weaknesses  — In this stage, planners identify the company’s assets that contribute to its current competitive advantage and/or the likelihood of a significant increase in the organization’s market share in the future. It should be an objective assessment rather than an inflated perspective of its strengths. 

An accurate assessment of weaknesses requires looking outward at external forces that can reveal new opportunities as well as threats. Consider the massive shift in multiple industries whose strategy has been disrupted by the COVID-19 pandemic. While it was disastrous to the airline and restaurant industries’ business models , tech companies were able to seize the opportunity and address the demands of remote work. 

Michael Porter’s book Competetive Strategy: Techniques for Analyzing Industries and Competitors claims that there are five forces at work in an industry that influence that industry’s ability to develop a competitive strategy. Since the book was published in 1979, organizations have turned to Porter’s theory to create their strategic framework. 

Here are the 5 forces (and key questions) that determine the competitive strategy for most industries.

• Competitive rivalry : When considering the strengths of an organization’s competitors it’s important to ask: How do our products/services hold up to our competition? If the rivalry is intense, companies need to consider what capacity they have to gain leverage through price cuts or bold marketing strategies. If there is little competition, the organization has a substantial gain in the market.
• Supplier power: How might suppliers influence strategy? For example, what if suppliers raised their prices? To what extent would a company need a particular supplier for our product(s)? Is it possible to switch suppliers in a way that is more cost effective and efficient? The number of suppliers that exist will determine your ability to keep costs low.
• Buyer power: To what extent do buyers have the ability to shop around right into the hands of your competitors? How much power does your customer base have in determining price? A small number of well-informed buyers shifts the power in their direction while a large pool may give you the strategic advantage
• Threat of substitution:  What is the threat of a company’s buyer substituting your services/products from the competition? What if the buyer figures out another way to access the services/products that it offers?
• Threat of new entry:  How easy is it for newcomers to enter the organization’s market?

3. Forecast  

Considering the factors above, determine the company’s value through financial forecasting . While almost certainly to become a moving target influenced by the five forces, a forecast can assign initial anticipated measurable results expected in the plan or ROI: profits/cost of investment.

4. Set the organizational direction of the business

The above research and assessment will help an organization to set goals and priorities. Too often an organization’s strategic plan is too broad and over-ambitious. Planners need to ask, ”What kind of impact are we seeking to have, and in what time frame?” They need to drill down to objectives that will have the most impact. 

5. Create strategic objectives

This next phase of operational planning consists of creating strategic objectives and initiatives. Kaplan and Norton posit in their balanced scorecard methodology that there are four perspectives for consideration in identifying the conditions for success. They are interrelated and must be evaluated simultaneously.

• Financial : Such considerations as growing shareholder value, increasing revenue, managing cost, profitability, or financial stability inform strategic initiatives. 
• Customer-satisfaction:  Objectives can be determined by identifying targets related to one or some of the following: value for the cost, best service, increased market share, or providing customers with solutions.
• Internal processes such as operational processes and efficiencies, investment in innovation, investment in total quality and performance management , cost reduction, improvement of workplace safety, or streamlining processes.
• Learning and growth: Organizations must ask: Are initiatives in place in terms of human capital and learning and growth to sustain change? Objectives may include employee retention, productivity, building high-performing teams, or creating a pipeline for future leaders .

6. Align with key stakeholders

It’s a team effort. The success of the plan is in direct proportion to the organization’s commitment to inform and engage the entire workforce in strategy execution. People will only be committed to strategy implementation when they're connected to the organization's goals. With everyone pulling in the same direction, cross-functional decision-making becomes easier and more aligned.

7. Begin strategy mapping

A strategy map is a powerful tool for illustrating the cause-effect of those perspectives and connecting them to between 12 and 18 strategic objectives. Since most people are visual learners, the map provides an easy-to-understand diagram for everyone in the organization creating shared knowledge at all levels.

8. Determine strategic initiatives

Following the development of strategic objectives, strategic initiatives are determined. These are the actions the organization will take to reach those objectives. They may relate initiatives related to factors such as scope, budget, raising brand awareness, product development, and employee training.

9. Benchmark performance measures and analysis

Strategic initiatives inform SMART goals to which metrics are assigned to evaluate performance. These measures cascade from senior management to management to front-line workers. At this stage, the task is to create goals that are specific, measurable, attainable, relevant, and time-based informing the operational plan.

Benchmarks are established against so that performance can be measures, and a time frame is created. Key performance indicators (KPI’s) are assigned based on organizational goals. These indicators align workers’ performance and productivity with long-term strategic objectives. 

10. Performance evaluation

Assessment of whether the plan has been successful . It measures activities and progress toward objectives and allows for the creation of improved plans and objectives in order to improve overall performance . 

Think of strategic planning as a circular process beginning and ending with evaluation. Adjust a  plan as necessary. The pace at which review of the plan is necessary may be once a year for many organizations or quarterly for organizations in rapidly evolving industries. 

Prioritizing the strategic planning process

The strategic planning meeting may have a reputation for being just another to-do, but it might be time to take a second look. With the right action plan and a little strategic thinking, you can reinvigorate your business environment and start planning for success.

It's that time to get excited about the future again.

Elevate your strategic planning

Discover how targeted coaching can enhance your strategic insight and execution across all levels of your organization.

Meredith Betz, M.S.Ed, M.S.O.D.

Meredith Betz is a Betterup Fellow Coach. As an organizational consultant and Executive Coach, Meredith's work focuses on leaders, teams, and the dynamics in the systems in which they live and work. She helps people become more influential and exhibit executive presence. Meredith is a certified Conscious Business Coach who helps leaders to exercise empathy and lead in a way that is consistent with their values. She gives them the tools to communicate and negotiate effectively with their stakeholders. Meredith recently co-wrote a memoir with a 103-year-old Estonian man who lived through the Nazi and Soviet occupations of Estonia in the 1940s. It was a profound experience. A seminal book for her is Man's Search for Meaning by Viktor Frankl, an Austrian Holocaust survivor and psychiatrist.

Strategic plan vs. work plan: What's the difference?

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What Is Strategic Management?

• How It Worls
• The 5 Phases
• Strategic Management FAQs

The Bottom Line

• Business Essentials

Investopedia / Alex Dos Diaz

Strategic management is the management of an organization’s resources to achieve its goals and objectives.

Strategic management involves setting objectives, analyzing the competitive environment, analyzing the internal organization, evaluating strategies, and ensuring that management rolls out the strategies across the organization .

Key Takeaways

• Companies, universities, nonprofits, and other organizations can use strategic management as a way to make goals and meet objectives.
• Flexible companies may find it easier to make changes to their structure and plans, while inflexible companies may chafe at a changing environment.
• A strategic manager may oversee strategic management plans and devise ways for organizations to meet their benchmark goals. 

Understanding Strategic Management

Strategic management is divided into several schools of thought. A prescriptive approach to strategic management outlines how strategies should be developed, while a descriptive approach focuses on how strategies should be put into practice. These schools differ on whether strategies are developed through an analytic process, in which all threats and opportunities are accounted for, or are more like general guiding principles to be applied.

Business culture , the skills and competencies of employees, and organizational structure are all important factors that influence how an organization can achieve its stated objectives. Inflexible companies may find it difficult to succeed in a changing business environment. Creating a barrier between the development of strategies and their implementation can make it difficult for managers to determine whether objectives have been efficiently met.

While an organization’s upper management is ultimately responsible for its strategy , the strategies are often sparked by actions and ideas from lower-level managers and employees. An organization may have several employees devoted to strategy, rather than relying solely on the chief executive officer ( CEO ) for guidance.

Because of this reality, organizational leaders focus on learning from past strategies and examining the environment at large. The collective knowledge is then used to develop future strategies and to guide the behavior of employees to ensure that the entire organization is moving forward. For these reasons, effective strategic management requires both an inward and outward perspective.

Strategic management extends to internal and external communication practices as well as to tracking, which ensures that the company meets goals as defined in its strategic management plan.

The 5 Phases of Strategic Management

Strategic management involves managing an organization's resources, analyzing internal and external forces, and developing strategies to realize goals and objectives. There are five key phases that can help businesses execute their strategies.

• An organization must first establish clear, realistic goals. Its goals should answer what the company wants to achieve and why. Once set, the company can then identify the objectives, or how the goals will be reached. During this phase, the company can articulate its vision and long and short-term goals.
• Organizations must then be able to examine, understand, and codify what internal and external forces affect their business and goals, as well as what it needs to remain competitive. Analytical tools, such as SWOT analysis, are helpful during this phase.
• Based on the results of the analysis, the company can then develop its strategy, outlining how the company will achieve its goals and how. In this phase, the company will identify the needed people, technology, and other resources; how these resources will be allocated to fulfill tasks, and what performance metrics are needed to measure success. It is also critical to gain buy-in from stakeholders and business leaders.
• Once the strategies are defined, it is time for execution. The strategy is taken from planning to implementation. During this phase, the allocated resources are placed into action based on their roles and responsibilities.
• The final stage of strategic management is to evaluate the effectiveness of implemented strategies using defined metrics. The company will also visit whether ineffective strategies should be replaced with more viable ones. The company should continue to monitor the business landscape and internal operations, as well as maintain strategies that have proven effective.

Example of Strategic Management

For example, a for-profit technical college wishes to increase new student enrollment and enrolled student graduation rates over the next three years. The purpose is to make the college known as the best buy for a student's money among five for-profit technical colleges in the region, with a goal of increasing revenue.

In that case, strategic management means ensuring the school has funds to create high-tech classrooms and hire the most qualified instructors. The college also invests in marketing and recruitment and implements student retention strategies. The college’s leadership assesses whether its goals have been achieved on a periodic basis.

Why Is Strategic Management Important?

Helping their company find ways to be more competitive is the purpose of strategic management. To that end, putting strategic management plans into practice is the most important aspect of the planning itself. Plans in practice involve identifying benchmarks, realigning resources—financial and human—and putting leadership resources in place to oversee the creation, sale, and deployment of products and services.

In business, strategic management is important because it allows a company to analyze areas for operational improvement. In many cases, they can follow either an analytical process, which identifies potential threats and opportunities, or simply follow general guidelines. Given the structure of the organization, a company may choose to follow either a prescriptive or descriptive approach to strategic management. Under a prescriptive model, strategies are outlined for development and execution. By contrast, a descriptive approach describes how a company can develop these strategies. 

Strategic management is the process of setting goals, procedures, and objectives in order to make a company or organization more competitive. Typically, strategic management looks at effectively deploying staff and resources to achieve these goals. Often, strategic management includes strategy evaluation, internal organization analysis, and strategy execution throughout the company.

What Is an Example of Strategic Management?

Consider a large company that wants to achieve more ambitious online sales rates. To meet these goals, the company will develop a strategy, communicate this strategy, apply it across various units and departments in the organization, integrate this with employee goals, and execute accordingly. If an effective strategy is applied, ideally, it will help the company achieve its targets through a single, coordinated process. 

What Are the Key Elements of Strategic Management?

Strategic management is not a one-size-fits-all strategy. However, there are key elements that are found to be critical. These include goal setting, industry and organizational analyses, strategy formation, strategy implementation; and the measurement, monitoring, and controlling of strategies.

Strategic management is the assembling and management of resources to achieve a company's goals and objectives. Although it is often segmented into either prescriptive or descriptive schools of thought, many businesses subscribe to a combined philosophy, defining how a strategy should be developed and how the strategies will be employed. Strategic management helps companies set goals, gain a competitive edge, better manage their resources, and more. There is not one prescription for all. Companies must create and adapt a strategic management process that works best for their company and those they serve. Strategic management does not end with the successful implementation of strategies; it continues for the life of the business.

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Strategic Planning

Strategic Planning is a comprehensive process for determining what a business should become and how it can best achieve that goal.

• April 02, 2018

Strategic Planning is a comprehensive process for determining what a business should become and how it can best achieve that goal. It appraises the full potential of a business and explicitly links the business’s objectives to the actions and resources required to achieve them. Strategic Planning offers a systematic process to ask and answer the most critical questions confronting a management team—especially large, irrevocable resource commitment decisions.

Usage and satisfaction among survey respondents

How Strategic Planning works:

A successful Strategic Planning process should:

• Describe the organization’s mission, vision and fundamental values
• Target potential business arenas and explore each market for emerging threats and opportunities
• Understand the current and future priorities of targeted customer segments
• Analyze the company’s strengths and weaknesses relative to competitors and determine which elements of the value chain the company should make vs. buy
• Identify and evaluate alternative strategies
• Develop an advantageous business model that will profitably differentiate the company from its competitors
• Define stakeholder expectations and establish clear and compelling objectives for the business
• Prepare programs, policies and plans to implement the strategy
• Establish supportive organizational structures, decision processes, information and control systems, and hiring and training systems
• Allocate resources to develop critical capabilities
• Plan for and respond to contingencies or environmental changes
• Monitor performance

Companies use Strategic Planning to:

• Change the direction and performance of a business
• Encourage fact-based discussions of politically sensitive issues
• Create a common framework for decision making in the organization
• Set a proper context for budget decisions and performance evaluations
• Train managers to develop better information to make better decisions
• Increase confidence in the business’s direction

• Management Tools & Trends

Five key trends emerged from Bain's survey of 1,268 managers.

Selected references

Collis, Daniel J., and Michael G. Rukstad. “Can You Say What Your Strategy Is?” Harvard Business Review , April 2008, pp. 82–90.

Drucker, Peter F. Managing in a Time of Great Change . Harvard Business Press, 2009.

Gottfredson, Mark, and Steve Schaubert. The Breakthrough Imperative: How the Best Managers Get Outstanding Results . HarperBusiness, 2008.

Hamel, Gary, and C. K. Prahalad. Competing for the Future . Harvard Business School Press, 1994.

Mankins, Michael C. “ Stop Wasting Valuable Time .” Harvard Business Review , September 2004, pp. 58–65.

Mintzberg, Henry. The Rise and Fall of Strategic Planning: Reconceiving Roles for Planning, Plans, Planners . Free Press, 1994.

Mintzberg, Henry, Joseph Lampel, and Bruce Ahlstrand. Strategy Safari: A Guided Tour Through the Wilds of Strategic Management . Free Press, 1998.

Porter, Michael E. Competitive Strategy: Techniques for Analyzing Industries and Competitors . Free Press, 1998.

Porter, Michael E. “What Is Strategy?” Harvard Business Review , November/December 1996, pp. 61–78.

Zook, Chris, and James Allen. The Founder’s Mentality: How to Overcome the Predictable Crises of Growth . Harvard Business Review Press, 2016.

Zook, Chris, and James Allen. Repeatability: Build Enduring Businesses for a World of Constant Change . Harvard Business Review Press, 2012.

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Strategic Management

(15 reviews)

Kennedy B. Reed, Virginia Tech

Copyright Year: 2020

ISBN 13: 9781949373950

Publisher: Virginia Tech Publishing

Language: English

Formats Available

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Reviewed by Jiwon Suh, Assistant Professor, University of Texas at Arlington on 3/7/24

This book covers core topics that should be included in a strategic management textbook. I particularly like that the book has a chapter devoted to corporate governance, ethics, and social responsibility. I hope to see that vertical and horizontal... read more

Comprehensiveness rating: 4 see less

This book covers core topics that should be included in a strategic management textbook. I particularly like that the book has a chapter devoted to corporate governance, ethics, and social responsibility. I hope to see that vertical and horizontal alignment within an organization is highlighted at the beginning of the book. I see it in Chapter 10.

Content Accuracy rating: 5

This book contains core and major models, concepts, frameworks, and theories that should be included in a strategic management textbook. Especially, this book also explains a balanced scorecard and its linkage with organizational mission and vision.

Relevance/Longevity rating: 5

The main content is highly relevant. The concepts and frames that are included in the book are not fast-changing. This book uses a variety of examples to explain concepts to help students understand. These examples are a good mixture of timing (old and relatively new) and I believe such examples should be aged well to evaluate.

Clarity rating: 5

This book was well-written. This book uses clear language so that students including undergraduates can easily follow.

Consistency rating: 5

This book is consistent with all the structures and contents that are expected in the strategic management textbooks.

Modularity rating: 5

The topics in this book are well divided into 11 chapters so that faculty members can easily develop a semester-long course. On page 2, the authors also provide 6 modules on how these chapters can be used in a shorter course.

Organization/Structure/Flow rating: 5

The way of chapter sequencing is easy to follow: understanding strategic management -> external analysis -> internal analysis -> strategy development -> implementation. Every chapter provides ‘Learning Objectives,’ ‘Key Takeaway,’ and ‘Exercises’ from which students can effectively learn about the topics in the chapters. Also, figures, pictures, videos, and other sources are very helpful.

Interface rating: 4

External sources were hyperlinked with the original sources. This book also provides enough space between paragraphs and the next sections. This helps readers. It would be very helpful if the book included an Index at the end of the book.

Grammatical Errors rating: 5

I didn’t find any grammatical errors.

Cultural Relevance rating: 5

This book uses examples from different cultural backgrounds, such as an example of ancient China and wars on Russian soil on pages 18-20 and an example of Starbucks in Korea on page 33.

I'd like to use this book for my Strategic HR management course in the public and nonprofit sectors. Although this book doesn't 100% fit my course, I can use this book to explain and provide core/major concepts of strategic management.

Reviewed by Sergiy Dmytriyev, Assistant Professor of Management, James Madison University on 9/10/23

The textbook covers all key topics in the strategic management such as overall strategy, business- and corporate-level strategies, the analysis of external and internal environments, international strategy, organizational design, innovation, etc.... read more

Comprehensiveness rating: 5 see less

The textbook covers all key topics in the strategic management such as overall strategy, business- and corporate-level strategies, the analysis of external and internal environments, international strategy, organizational design, innovation, etc. Each sections ends with the reference list of the cited sources, and the Glossary of key terms is provided at the end of the book.

The book is well-written which makes it an easy read.

The content is up-to-date, with plenty of contemporary business situations and examples. At the same time, these examples are of general nature and can be used in a classroom for many years ahead, without become obsolete. Having said that, the textbook also has a number of historical examples which is a must to have in order to learn from strategic successes and failures.

The text is written in a more informal way than in some other strategic management textbook. This makes this textbook better perceived by undergraduate students, who are rather more excited by its interesting and accessible prose.

Consistency rating: 4

The textbook utilized common terminology and frameworks used in the strategic management field, and is consistent throughout the whole text. The only thing, sometimes I could have a feeling that there were many interesting narratives and examples, but some of them might not be well connected among themselves, which could make the reading slightly less coherent, though it wasn't a big deal.

Indeed, the text is readily divisible into smaller reading section since many of them start and end in a similar fashion making them standalone pieces. I didn't find many self-references which serves the modality purpose well.

The book is well organized in terms of the sequence of introduced topics and the transitions between them.

Interface rating: 5

The textbook offers an easy-to-follow navigation structure such as a numeration for each section/subsection as well as consistent headings' styles and the use of colors and graphical designs.

I didn't find any grammatical errors or typos in the text which speaks to its high quality.

Cultural Relevance rating: 3

The textbook is full of various examples from different countries which helps keep the reader's mind open to insights from different cultural environments. Yet, I wish there would be more examples with female and minority managers - I realize that today those groups are still underrepresented in leadership roles, but the author could have considered purposefully selecting those stories/backgrounds which may appeal to and inspire different audiences.

Most sections in the textbook end with discussion questions (often provoking ones) which can help with kicking off interactive discussion in class. The key information is summarized in the form of tables or graphs that make it easy to review the summarized learnings. There are also many videos throughout the book which can help break the monotony of reading with interesting visual experiences.

To sum it up, the textbook offers a typical content for a strategic management textbook (in terms of key strategic topics, terminology, theories and frameworks, etc.), yet it does it in a more appealing way compared to some more "formal" available textbooks in the market. In addition to offering discussion questions and exercises at the end of each section, the textbook also utilizes a more accessible prose for undergraduate students, as well as provides many illustrative or summary tables and graphs, as well as short business stories and videos done in an interesting way.

I really like the textbook and this year I started using it in my Strategic Management course.

Reviewed by Jeffrey Gale, Professor Emeritus of Strategic Management, Loyola Marymount University on 4/10/23

[Note: I used the book in my Strategic Management class in Spring 2023 semester. I have, in the past, used the open textbook, Mastering Strategic Management on which this one is based as well as a commercial version of the text which was picked up... read more

[Note: I used the book in my Strategic Management class in Spring 2023 semester. I have, in the past, used the open textbook, Mastering Strategic Management on which this one is based as well as a commercial version of the text which was picked up by a pubisher.] The coverage in the book is pretty standard for Strategic Management texts. It's a little light on implementation/execution particularly on reward systems, strategic leadership and a bit on culture. Like most of the texts, it really doesn't cover the online world. Because it was done in 2020 and used some of the materials some of the materials need newer examples--and to reflect lessons of the pandemic and de-globalization (in Chap. 9) There is a glossary but no index.

The coverage of the book is accurate in the concepts handled.

Relevance/Longevity rating: 4

All strategic management textbooks suffer from obsolescence--it is the nature of the subject matter and the need for ongoing revision of relevant examples. The concepts change more slowly. Use of the book requires instructors to fill that in to make the material relevant. The prior book (from 2020) was not updated for years which made it hard to use. Hopefully this one will be.

The book was extremely well-written and edited. This is remarkable since there was a team who worked on it at VPI. Kudos for doing a good job.

It is consistent. The framework used is very standard in strategic management texts.

The book is well done with coherent chapters and headings and subheading breaking up the text. I was able to use some of the materials out of order.

Strategic management textbooks lend themselves to a logical organization based on the analytic process common to the topic. This book is consistent with that. I did find that references and credits, which are listed in the chapter sections, are a bit distracting and would be better, in my opinion, at the end of the chapters. Likewise, I would prefer that the Exercises be at the chapter end as well. Learning Objectives at the beginning of each chapter are useful as well as the Takeaways in the sections.

My students and I used the PDF version of the book which is pretty standard with only limited jumps for Table of Contents. .

I didn't find any grammatical errors.

Cultural Relevance rating: 4

I did not see anything culturally insensitive or offensive in the book. There is, as is typical in the texts in the field, not a lot of cultural variety. There are no Black or Hispanic business in the examples.

The book did what I wanted it to in the course. I thought that Chapter 7 on Innovation is a bit of a hodge-podge of topics and doesn't flow all that well. The Powerpoint slides that the author made available are very uneven and I wasn't able to really use them--though I didn't really need to since I have taught the course for so long. They are not the equivalent of what commercial publishers provide with their texts. I did not use the text bank that is also available.

Overall, a good quality textbook that is usable with the caveats I raised earlier.

Reviewed by Stephen Horner, Associate Professor, Allen Community College on 6/9/21

Chapter one is a good an example of the type of comprehensiveness that I like. The text addresses most of the major models and concepts within the strategy domain. It also includes examples of strategy and strategic management from antiquity and... read more

Chapter one is a good an example of the type of comprehensiveness that I like. The text addresses most of the major models and concepts within the strategy domain. It also includes examples of strategy and strategic management from antiquity and classic military history encompassing ancient, modern, and postmodern eras. In addition, the critique of strategic management is refreshing to see in an introductory textbook chapter.

I find no glaring inaccuracies.

The cross disciplinary relevance of the text is demonstrated by allusion in chapter one to strategy throughout history. The text also has relevance in terms of relating the topic to contemporary issues.

This text is written at a basic level easily accessible to the common reader and especially suited to today's college senior.

The text uses the A-F-I framework consistently throughout.

The chapter topics are organized following the traditional analysis-formulation-implementation (A-F-I) framework allowing the course to be easily divided into modules. In addition, the authors have developed their own modular framework overlaying the A-F-I model.

The text uses the traditional analysis-formulation-implementation framework while taking a critical asssessment of the use of that framework.

The layout and flow of the text are satisfactory. In addition, I appreciate the smaller chunks in each chapter supplemented by references cited only in those specific chunks.

The writing demonstrates no systematic grammatical difficulties. The use of the Engish language is proper and acceptable.

The authors recognize changing sociocultural values and demonstrate sensitivity of the theory and practice of strategic management to such changes.

I found the text to be quite readable. It spawned in me new ideas for ways of reaching my students.

Reviewed by Yuan Li, Assistant Professor, James Madison University on 5/29/20

The text covers all major topics discussed in a standard strategic management textbook. Some topics that could be included or discussed more in detail are strategic leadership, innovation management, and corporate entrepreneurship. The pdf version... read more

The text covers all major topics discussed in a standard strategic management textbook. Some topics that could be included or discussed more in detail are strategic leadership, innovation management, and corporate entrepreneurship. The pdf version of the text does not include an index or glossary, which can be an enhancement to the book.

The content is accurate, error-free, and unbiased. However, there are a few typos in the book. Some of the labels are incorrect. For example, Level 3 of Table 10.4 is labeled incorrectly.

The content is up-to-date. For the most part, the examples are classic and do not need to be updated frequently. However, some of the examples, especially those related to movies are dated. Nevertheless, necessary updates can be easily implemented.

One of my favorite things about this text is its clarity. The text is written in a language that is accessible to all undergraduate students, including freshmen. Jargon and technical terms are explained in layman’s terms using real-world examples.

The text is internally consistent in terms of terminology and framework.

The chapters of the text are self-contained and can be individually assigned to students or used as additional readings to supplement a different text.

The structure of the text is clear and follows the structure of a standard strategic management textbook. The only difference is that international strategies are discussed before corporate-level strategies. Many of the tables and the text repeat each other. I think some of the tables can be eliminated.

There are no significant interface issues in the text. There are no hyperlinks in the pdf version of the book. All navigation is done through the search and find function of the pdf reader. The text in the examples and vignettes is too small and hard to read, at least for the pdf version I have. Overall, I would describe it as a no-frills text.

The text contains no grammatical errors.

The text is not culturally offensive in any way. The examples include both American and non-American firms mostly competing in the US market.

This is a great book for an introductory level strategic management class. Students do not have to be a management major to understand the book. Instructors can easily supplement the book with examples that are relevant to the background and major of their students. I find the book an interesting and enjoyable read. The authors did a great job in making strategic management interesting to students.

Reviews prior to 2020 are for a previous edition.

Reviewed by David Flanagan, Professor of Management, Western Michigan University on 12/12/19

This book covers all the major topics needed in a strategic management course plus a few other useful topics. read more

This book covers all the major topics needed in a strategic management course plus a few other useful topics.

First rate book. Easy to read with no errors (conceptually or grammatically).

All the conceptual information is up to date. I do have students do assignments where they research more recent examples.

Students comment that it is straight forward and easy to read. Key concepts are defined.

The text flows well from start to finish.

The chapters break up the material well as do sections within chapters.

good structure

easy to interface with

Well edited and credibly written

I detected nothing that could be insensitive

The authors are outstanding in their field. Can't find more credible sources.

Reviewed by Jason Kiley, Assistant Professor, Oklahoma State University on 5/21/18

Overall, the book has very good coverage of the topics typically included in a strategy textbook. To be more specific, I reviewed the book against a commercial book that I have used in the past. I looked at 43 topics that is a union of the content... read more

Overall, the book has very good coverage of the topics typically included in a strategy textbook. To be more specific, I reviewed the book against a commercial book that I have used in the past. I looked at 43 topics that is a union of the content I would use across the two books. The commercial book covered 41 topics, and Mastering Strategic Management ("MSM") covered 39. Of the discrepancies, three topics in the commercial book and one topic in MSM were topics that were probably timely when written but are less relevant now. Excluding those, each book had one topic that I would have liked to have seen in the other.

Across a number of topics, the exposition that fit my expectations about the material covered, explanations of the material, and examples that fit the material. Strategy covers a number of models that have been around for some time, and the authors seemed to do a good job of thinking about which models are reasonable to describe as they were conceived and which ones should be adjusted a bit to better reflect the underlying mechanisms or modern circumstances.

One small exception (shared in most strategy books) is the description of the BCG matrix using market share (as originally conceived). That notion is very sensitive to specification of markets, and I've seen more helpful formulations that describe it a little more generally as having dimensions that reflect using and generating cash.

The main content is fine and highly relevant. However, there are some examples which have not aged well. This is not so much the fault of the authors, as the business-relevant content is fine, but an example using Jared from Subway reads very differently in light of subsequent revelations. That is perhaps the most glaring, but there are a few others that have not aged well (e.g., the AppleTV has become reasonably successful in subsequent iterations). That said, this book is well within the norms of example relevance over time.

The book is written directly and clearly. In terms of style, it is more approachable than some alternatives, in part because I never got the sense that the authors were lowering the information density to produce more text.

Terminology and approach are generally consistent. Strategy is at the intersection of other disciplines, so there is often a change of perspective, but that comes with the content. That said, the authors have combined those well into a logical, consistent narrative.

For the most part, this book would be easy to use out of order or as selections. The chapters have numbered subdivisions that are logically coherent, and, in my view, it would be clear to students to assign selections. My initial read suggests that the brief motivating examples to begin chapters and the conclusions of chapters would be helpful to include even if the middle sections are selected from or reordered.

Overall, the organization and flow are consistent and logical, and it generally mirrors that of most strategy books. In a couple of places, the ordering is a bit different (e.g., international strategy before corporate-level strategy), but the broader logic may actually be more linear that way.

I used the epub 3 version of the book. The table elements tended to be built with markup instead of images, so they rendered nicely on a high-resolution display. Cross references were often done with links, and many text boxes were also done with markup, so the book takes advantage of the technology it uses for distribution. Given the prevalence of mobile devices among students, this is a strong positive for this book compared to others.

The writing is clear, error-free, and straightforward, including the consistent use of active voice.

Though the book (like many strategy and business textbooks) has a somewhat US-centric presentation, there are plenty of examples that include diversity along a number of dimensions where that kind of diversity is not the topic of the example. That broad level of inclusiveness is a positive for the book.

Overall, I found the book to be consistently high in quality, coverage, and consistency with other books in this area. Using it as an alternative or replacement for other books should be straightforward. The anonymous authors have done the field and our students a real service in writing this book.

Reviewed by Jiyun Wu, Associate Professor , Rhode Island College on 5/21/18

The book covers key areas of strategic management, much like other strategic management textbooks. read more

The book covers key areas of strategic management, much like other strategic management textbooks.

The content is accurate, though there are a few typos.

Relevance/Longevity rating: 3

The examples are a few years old and need to be updated.

The book is very lucidly written. I think it is one of the best written textbooks.

The book is internally consistent in terms of terminology and framework.

The text is easy to follow.

The topics are organized well and easy to follow.

I didn't encounter any problem with navigation.

I did not detect any grammar errors, although I did find a few typos.

The book is culturally relevant.

Please update the examples and correct the few typos in the text.

Reviewed by Edward Ward, Professor, Saint Cloud State University on 2/1/18

Relative to the other textbooks I have used in my strategic management course, this textbook is comprehensive. Topics include analyzing the environment, leading strategically, selection of business level strategies, ethics, organization design,... read more

Relative to the other textbooks I have used in my strategic management course, this textbook is comprehensive. Topics include analyzing the environment, leading strategically, selection of business level strategies, ethics, organization design, and more. However, it does not have a separate chapter about small business strategy.

This book is accurate as evidenced by the frequent references from both research journals and practitioners' publications. There is little in the way of the author's opinions, rather facts are emphasized.

The relevance of the book is excellent in that historical examples are often used, which by definition will not need to be updated. The examples of recent strategy uses (e.g. a goal by Coca-Cola on page 40 is for 2012) are in need of only slight modifications.

This is the paramount strength of the book. When the vocabulary (i.e. jargon) of strategic management is used, facile explanations and examples are used to clarify the term. An example is Figure 2.5, which explains financial performance measures for students who did not major in finance or accounting.

What is admirable as to the book's consistency is it's sequence of chapters, such as starting with "Mastering Strategy" as chapter one, through "Selecting Business Level Strategies" in the middle of the text, and concluding with corporate governance and ethics. There is also consistency in terms of the key takeaways and exercises throughout the book.

This is another strength of the book. For example, in clarifying "Entrepreneurial Orientation" sections such as "Autonomy", "Competitive Aggressiveness", and "Innovativeness" are presented in small sections that in total describe the term. This is done consistently in the book, such as in chapter eight the terms vertical integration, backward vertical integration, and forward vertical integration.

The topics are presented in a deductive order, starting with a superordinate term such as "Strategies for Getting Smaller", followed by retrenchment and restructuring. By describing a construct by its dimensions, the construct is more readily understood by students.

I don't think there are any such problems.

There are not any grammatical errors. I do think the reading level is for undergraduates rather than MBA students.

The photographs and examples are varied in terms of surface characteristics.

It is superior to my present textbook in terms of being written in a conversational style, which is complemented by useful tables such as 8.7 on page 293. These tables and other graphics will assist students with a visual learning style. The only negative that comes to mind is if this textbook is to be used for a MBA course, outside readings will need to be assigned.

Reviewed by Jorge Zazueta, Adjunct Professor, American University on 2/1/18

The book covers all the standard topics in Strategic Management in a well-structured and cohesive manner. The table of contents provides detail on contents and the interactive PDF version is an excellent way to navigate the text. Electronic... read more

The book covers all the standard topics in Strategic Management in a well-structured and cohesive manner. The table of contents provides detail on contents and the interactive PDF version is an excellent way to navigate the text. Electronic versions are searchable, obviating the need for an index.

I didn't find any inaccuracies or biases in the text (although I ran into a few minor typos). Each concept follows a critical discussion inviting the reader to reflect on the topic, rather than being dogmatic.

The topics covered are well established Strategic Management ideas with direct application in actual business practice, making the content both relevant and time enduring.

Clarity rating: 4

The book is clearly written and enjoyable. It provides straight commentary on the ideas discussed and is very easy to read. A minor drawback is that it lacks memorable design around many of the classic frameworks. For example, when discussing the diamond model in chapter 7, its elements are defined in the form of a table--rather than in a diamond shape.

The narrative is consistent throughout both in depth and style.

While the content follows a logical path, chapters are concise and mostly stand-alone, making it easy to use individual chapters or to tailor content for a class.

The topics follow a standard order of ideas in a consistent and logical flow, while maintaining modularity.

The interactive PDF version is clean and easy to use. A comprehensive table of contents is always available without being intrusive and the book is fully searchable. Making it convenient for student research or review. A keyword search results in a list of references to different chapters in the book, with a short summary of the content discussed.

Grammatical Errors rating: 4

Other than a few minor spelling typos. I found no errors.

The nature of the book is mostly transparent to cultural issues. Examples are business focused and do reflect a wide world view.

It is a great introductory text to Strategic Management. It covers all the standard material in a concise, easily accessible way. I would have enjoyed a bit more quantitative material, such as basic formulas from economics or discussions about how to quantify market competitiveness for example. Perhaps, that´s the material for a second book….

Reviewed by Bill Rossman, Instructor, Penn State University on 2/1/18

The book covers the major topics expected to be covered in a strategic management textbook. read more

The book covers the major topics expected to be covered in a strategic management textbook.

The material covered in the textbook is accurate and error-free.

Th material is up-to-date, however, some of the examples in the book could quickly become outdated. For example, there is an example referencing a 2001 movie which students may not understand. The book could easily be updated to keep examples up-to-date.

The book is clearly written without unnecessary jargon. Definitions for key terms could be emphasized to help students identify key terms and concepts. Additionally a glossary would be beneficial for students to quickly reverence the definition of key terms.

The book is consistent with other texts on the topic of strategic management.

The book is modular and chapters could be reorganized without issue. Instructors could assign chapters or subsections as they see fit without loss of educational value.

The book flowed well, the only change I would make is to move the corporate-level strategies to follow the business-level strategies. The instructor could easily make this change when assigning chapters in the textbook.

I did not encounter any issues with the interface of the textbook. The location of charts and images were appropriate and supported the material.

The book was free of grammatical errors.

The text was not insensitive or offensive.

Supporting material such as glossary, online assignments or self check exercises could be included. Overall, the book is well thought out and easily adaptable for instructors to use.

Reviewed by Sam Cappel, Professor, Southeastern Louisiana University on 6/20/17

I found the book to be comprehensive, covering in detail important parts of strategic management. read more

I found the book to be comprehensive, covering in detail important parts of strategic management.

I found the book to be accurate and well referenced. Examples were used which were most instrumental in helping students to understand important concepts.

The text is written and/or arranged in such a way that necessary updates will be relatively easy and straightforward to implement. Many of the examples used are classic or very timely. It would require little work to update concepts and examples.

The book is written without unnecessary jargon. Terms commonly used in the study of Strategy are fully explained.

The framework of the book allows for easy transitions from one topic to another. Throughout the book there is consistency in the straight forward approach to topics. There is a consistent attempt within this book to explain complex concepts in such a way as to allow undergraduate students to master them easily.

Modularity rating: 4

The text is well divided into a logical sequence of intuitively developed reading sections. Sections within the book serve to reduce confusion which can occur when learning a subject area with the diversity and complexity of Business Strategy

Organization/Structure/Flow rating: 4

I like the flow of the text but prefer a flow which started by simply following the strategic management process step by step.

I had no issues with the interface of the textbook. Navigation was simple and charts were well placed and clear.

I found no grammatical errors i the text.

Culturally the book was sensitive in dealing with issues such as ethics and the role of diversity in the workplace.

With the current push for on-line offerings I feel that it is now imperative that offerings include test banks, power-points, on-line readings, films and perhaps simulation tools that can be used on-line. I love the book for in-class use but feels that it does not offer enough support to be viable for extensive on-line offerings,

Reviewed by Cynthia Steutermann, Multi-Term Lecturer, University of Kansas on 8/21/16

This book does a somewhat good job of covering many aspects of strategic analysis. For instance, the discussions relative to cost leadership, differentiation, and focused strategies were good. However, I found this book to be lacking in critical... read more

Comprehensiveness rating: 3 see less

This book does a somewhat good job of covering many aspects of strategic analysis. For instance, the discussions relative to cost leadership, differentiation, and focused strategies were good. However, I found this book to be lacking in critical discussion areas, such as the importance of evaluating a firm's internal financial assets. While it mentioned current ratio, debt to equity ratio, and net income .. it does not show how to calculate those ratios. And, there are many, many more financial ratios that should be covered in great detail to effectively analyze an organization's internal financial capabilities. This was an area I would consider to be seriously lacking in content.

Other critical areas missing from this textbook were the discussion of entrepreneurial strategy and competitive dynamics, as well as managing innovation and corporate entrepreneurship. Likewise, this textbook did not include any strategic management cases which greatly supports a student's ability to apply concepts to a multi-page case of an organization they may be familiar with.

Also, while there was included on the website a table of contents, no such table of contents exists in the .pdf version that students would actually use. In general, this book is not written at the level of sophistication and comprehensiveness I would expect to use for college students, particularly since a strategic analysis course is often taught as a capstone course (undergraduate senior level of student). In my opinion, this textbook is written more at the senior in high school or college freshman level.

Content Accuracy rating: 4

The book's accuracy is adequate, although there are many areas of strategic analysis which I would consider to be missing in this textbook.

The one area of relevance and longevity I found to be questionable was the various references to "At the Movies". Some of the movies are quite dated and students may not have even heard of them. Or, if they have heard of the movie, they may not have seen it. While the intent seems to be a creative way to illustrate basic concepts, the use of movies is not (in my opinion) the most relevant way to accomplish this, at least to the extent that this is repeated throughout the textbook.

The book is written clearly, although not at the college reading level I would expect it to be written at.

Consistency rating: 3

The text is inconsistent since it references certain figures that actually do not exist. For instance, the Boston Consulting Group (BCG) matrix is referenced to be in figure 8.7. There is no BCG matrix figure, nor any figure 8.7. In fact, there are very few figures in the book. There are some pictures (unidentified mostly) but no figures that illustrate important concepts.

The book's modularity is done well. Within each chapter there are several smaller reading sections.

The book's organization/structure flow is generally good. I believe the organization and flow would be better if corporate-level strategies followed business-level strategy, and then the chapter about international markets would follow after that. This textbook, instead, has business-level strategy, international markets, then corporate-level strategy.

The images are generally not distorted, although on page 172 the Arby's graphic and text are out of proportion. Page 177 includes some type of graphic that is only shades of grey. I don't know what that is intended to represent.

The text contains no grammatical errors that I observed.

The text is not culturally insensitive or offensive in any way that I observed.

Reviewed by Daniel Forbes, Associate Professor, U. of Minnesota on 6/10/15

The book covers most of the chapters commonly found in a strategy textbook, and the content within each chapter is also similar in terms of the key topics & models addressed. One exception is strategic entrepreneurship, which is not covered as... read more

The book covers most of the chapters commonly found in a strategy textbook, and the content within each chapter is also similar in terms of the key topics & models addressed. One exception is strategic entrepreneurship, which is not covered as a separate chapter as is often the case but is instead partially covered under "Entrepreneurial orientation" within Chapter 2, "Leading strategically". Another exception is that there is only one chapter on corporate strategy, whereas many books have a second chapter on strategy alternatives (M&A, etc.). However, some of this content has been folded into the corporate strategy chapter. The PDF I reviewed did not contain a glossary or index.

The book provides an accurate introduction to contemporary strategic management. The authors' perspective is consistent with mainstream scholarly views in the field.

Most strategy textbooks tend to gravitate towards concepts and models that have a relatively long "shelf life," and this one is no exception. The book contains current examples and timely content. The book also does a good job presenting strategy in ways that undergraduate students, in particular, will find relevant. It does this through an emphasis on familiar, everyday brands (Facebook, Redbox) and through cultural references, such as its "Strategy at the movies" segments, which link concepts in the book to recent popular films.

The book is written in clear and accessible prose, and it carries a sense of humor. At times I would have liked to see clearer definitions that were easier to find in the text (e.g., highlighted or placed in sidebars). For example, the concept of "cost leadership" is introduced with good examples, but a concise definition seems lacking. Having clear definitions on key concepts is helpful to students studying for exams and for faculty who want to check concepts for consistency across materials without re-reading entire sections.

The book is internally consistent. It provides a framework for understanding strategy that is coherent and, at the same time, generally consistent with other major texts.

The text seems modular, and reorganizing the material is unlikely to pose a problem. It would be easy to rearrange the materials within a strategy course - provided, of course, that foundational concepts (e.g., "capabilities") have been established early on, as would be required in working with any major strategy text.

The book's flow is logical and it adheres to a structure that is common in strategy texts. One slightly unusual sequencing is the presentation of international strategy before corporate strategy (the reverse is more common), but these two chapters remain adjacent and there is a reasonable case for doing this. Given the overall modularity of the book, moreover, instructors can rearrange chapters as they see fit without much difficulty.

The interface reflects the thoughtful and creative selection of accompanying visual materials, especially photos and illustrations. There are fewer charts and tables than in the average strategy text. Some instructors and MBA students might find the text easier to navigate with fewer visual interruptions overall and perhaps more data or charts included in addition to the pictures. Overall, I think this interface that would be well received by undergraduate students, in particular.

The book's grammar is fine.

The book does not appear to be culturally insensitive. Examples are drawn primarily from the U.S., as is common in many major strategy texts, but there are also many examples drawn from outside the U.S.

Overall, I think this book is a very solid and worthwhile contribution to the set of available strategy textbooks. A particular strength of the book is its accessible writing style and its selection of "user-friendly" illustrations and examples. I think the book would be especially well-suited to first-time students of strategy who seek a general introduction. I also like that the book avoids delivering long, arbitrary lists of items in presenting material (e.g., "the nine reasons firms do acquisitions"), which is a common weakness of strategy textbooks. Instead, this book is generally succinct and reasonably comprehensive. At the same time, instructors & students seeking a more advanced treatment of strategy may find coverage of some topics to be relatively light. For example, limitations of the 5 Forces model are only briefly addressed and issues of industry evolution do not seem to be addressed.

Reviewed by David Try Ph.D., Instructor , Northwest Community College on 10/9/13

I found this text to be well-written and high quality, with up-to-date material, examples and case studies. In my experience, both as an instructor and retired practitioner, this textbook covers all basic concepts and topics at an appropriate... read more

I found this text to be well-written and high quality, with up-to-date material, examples and case studies. In my experience, both as an instructor and retired practitioner, this textbook covers all basic concepts and topics at an appropriate depth for an Introduction to Business Strategy/Policy course. The backend - index, glossary, on-screen reader and search engine - were accurate and faultless.

Diagrams, tables and case studies were up-to-date, professional quality and accurate. I found the text well supported by the supplemental teaching resources (quizzes, PowerPoint's, teaching notes, etc.) As with any USA based textbook, and to be fair hardly unique to this one, the content is USA-centric. Examples and in-text case studies do tend to examine issues through the lens of USA companies, and occasionally USA laws/regulations. Within this caveat, all material was well-edited, error-free, unbiased and including appropriate supplemental instructor material.

As with most introductory courses, the basic components of Business Strategy tend not to change rapidly. New tools, techniques, occasionally fads, as well as the inevitable rebranding (i.e. Management by Objectives [MBO] becomes Outcome Based Key Performance Indicators) are adopted by Business relatively slowly. The textbook covers certain recent advances in strategic and policy, as appropriate for a textbook at an introductory level. Looking forward, advances to this textbook would tend to focus on maintaining current and timeliness of in-text examples, update trends and data, and incorporate emergent strategies which could emerge in response to changing economic, business or global events, such as a global recession.

The textbook to be quite readable and engaging, and makes good use of current business examples. Terms and business jargon are properly defined, both within the text and by using small ‘call-out' (?) boxes on the side of pages and through the use of examples.

The concepts and ideas in the textbook are presented in a clear and logical order. Terminology is used consistently. As well, I found the ‘readability' of the textbook to be internally consistent – with no sense that different authors/editors had writte

The material is covered in 12 chapters, with 2 to 4 sections each, making it easy to assign weekly readings and cover the content within one semester. Chapters are fairly consistent in length and complexity. Instructors have the option to re-organize the course / subject order prior to students downloading the textbook should they wish. The text is not overly self-referential.

The flow or order of idea/concept presentation is consistent to most Strategy texts, and appropriate for an introductory textbook. Within Chapter layout is consistent; each chapter begins with "Learning Outcomes" and concludes with "Key Takeaways" and exercises, which can be assigned as homework.

Neither I, nor any of my students, experienced any interface issues at all. The underlying technology appeared faultless. The navigation process is logical and all images and text were clear and high quality, even on smaller e-reading devices. As well, color use is consistent, assisting in overall navigation. Interestingly, as the first e-textbook for NWCC Business, my students appreciated the ability to perform in-text searches and hyper-link to external electronic references (in text URLs), as well as textbook's cost of course!

I found zero (0) grammatical errors, or ‘broken' URL links. Well edited

This text is not culturally or sexually insensitive, or offensive. Overall, examples are based on business culture with limited applicability on cultural relevance. One chapter focuses on Ethics and Social Responsibility and examines these issues from a strategic perspective, with examples. However, the focus is principally from a business perspective, as compared to social, legal or moral perspectives. As the text is fairly USA-centric, Canadian students may feel that Canadian and possibly Asian business strategies should receive greater emphasis.

Overall, I was very impressed with the quality and professionalism of the text. A ‘newbie' to e-textbooks, I was surprised by the usefulness of additional features available with electronic textbooks (searching, imbedded URLs, etc.). As noted above, the textbook content is somewhat USA-centric. Examples and in-text case studies tend to focus on USA companies, and occasionally USA laws/regulations. However, given the highly integrated nature of Canadian and USA business environments, there is some value in this. And, it was certainly not difficult to incorporate Canadian examples into the Lectures. This review originated in the BC Open Textbook Collection and is licensed under CC BY-ND.

Table of Contents

• I. Chapter 1: Mastering Strategy: Art and Science
• II. Chapter 2: Assessing Organizational Performance
• III. Chapter 3: Evaluating the External Environment
• IV. Chapter 4: Evaluating the Internal Environment
• V. Chapter 5: Synthesis of Strategic Issues and Analysis
• VI. Chapter 6: Selecting Business-Level Strategies
• VII. Chapter 7: Innovation Strategies
• VIII. Chapter 8: Selecting Corporate-Level Strategies
• IX. Chapter 9: Competing in International Markets
• X. Chapter 10: Executing Strategy through Organizational Design
• XI. Chapter 11: Leading an Ethical Organization: Corporate Governance, Corporate Ethics, and Social Responsibility

Ancillary Material

• Virginia Tech Publishing

About the Book

STRATEGIC MANAGEMENT  offers an introduction to the key topics and themes of strategic management. The authors draw on examples of familiar companies and personalities to illustrate the different strategies used by today’s firms—and how they go about implementing those strategies. Students will learn how to conduct a case analysis, measure organizational performance, and conduct external and internal analyses. In short, they will understand how organizations operate at the strategic level to be successful.

An older version of Mastering Strategic Management  (2015) by University of Minnesota Libraries Publishing can be found here: https://open.lib.umn.edu/strategicmanagement/

About the Contributors

Reed B. Kennedy, Associate Professor of Practice, Pamplin College of Business, Virginia Tech

Reed B. Kennedy is an Associate Professor of Management Practice in the Management Department, where he teaches management courses. He began his career as a naval officer before entering his primary career in healthcare administration, where he served in senior executive roles in various hospitals for over 20 years. He then worked as a business consultant for the Small Business Development Center for the New River Valley at Radford University. His education includes a Bachelor of Science in Aerospace Engineering from the U.S. Naval Academy, a Masters of Healthcare Administration from Medical College of Virginia / Virginia Commonwealth University, a Masters in Public Health and a Graduate Certificate in Global Planning and International Development from Virginia Tech. Reed served as the chief textbook reviser on this project. He worked with the contributor and editorial teams from project start to completion.

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6 business analysis techniques to use in your strategic plans

August 10, 2021 by MindManager Blog

By: Emily Finlay

For businesses, efficiency and effectiveness are key. Whether you’re executing a major project or determining the best ways to train new employees, it’s important to use best practices to achieve exceptional results.

Business analysis uncovers the strategies and processes that can help your business improve. You can find the flaws in your operations while determining what you need to change to fix them. Auditing and refining your business also offers the insights you and your leadership need to make informed decisions that will benefit your work moving forward.

Like any method, however, the power of business analysis depends on the methods used to execute it. In this guide, we’ll walk you through the top business analysis techniques. You’ll learn what each option offers and how you can use them to analyze your own processes.

What are business analysis techniques?

Business analysis techniques are the specific processes used to audit and improve business operations. These step-by-step procedures help analysts stay organized and make strategic decisions during the analysis.

What are the different types of business analysis techniques?

The most common types of business analysis include BPM, SWOT, MOST, CATWOE, PESTLE, and Six Hats Thinking. These planning methods can be used in a variety of industries and projects. From streamlining your operations to aligning your company’s purpose, these tactics can maintain your organization’s long-term success.

Business Process Modeling (BPM)

This technique, also known as business process mapping , creates a visual representation of the procedures a company uses. By visualizing the processes, teams and analysts can identify any problems. They can also see where efficiency is lost.

As you develop strategies to address these shortcomings, you can apply them to the model to see how they will affect the targeted process. This will also highlight any potential problems that these changes might create in other areas.

Business analysis steps: BPM

According to the International Institute of Business Analysis , here are the steps you should follow:

• Strategic planning – Start by researching and understanding the processes and problems you’re going to solve. Discover everything involved before creating your model.
• Business Model Analysis – Develop a model (such as mind mapping , flow charting, or diagramming) of the business processes with the information gained in step one. Analyze this visual and use it to guide your strategies.
• Define and design the process – Create the solutions you need and apply them to the model.
• Technical Analysis for complex business solutions – Use your visualization to analyze and improve the solutions.

Business analysis example: BPM

If a company is changing the way they produce a specific product, this technique can help them understand how adjusting that element will impact others. Rather than theorizing, they can use a visual flow to pinpoint obstacles and areas of improvement.

Strength, Weakness, Opportunities, Threats (SWOT)

These four elements define this technique, identifying internal (Strengths and Weaknesses) and external (Threats and Opportunities) factors. The most popular type of business analysis, SWOT drives informed decision making in nearly every area of business.

Business analysis steps: SWOT

Create a map with four quadrants, as outlined below, and use it guide your solutions and decisions:

• Strengths – What processes, resources, and other factors give us an advantage over competitors?
• Weaknesses – What holds us back from doing better and growing?
• Opportunities – What is happening outside the business that we can use to our advantage?
• Threats – What external factors can limit or hurt our success?

Business analysis example: SWOT

You can apply this technique to performance reviews, using the information you gain to help employees make improvements and celebrate strengths.

Mission, Objectives, Strategies, and Tactics (MOST)

If you want to make sure your company is maintaining its main goals through every decision and transition, MOST is the best tactic to use. By analyzing your business based on the following elements, you can turn big-picture objectives into achievable actions.

• Mission – Your overarching purpose that defines everything you do.
• Objectives – The goals necessary to accomplish your mission.
• Strategies – What you need to do to reach your objectives.
• Tactics – How everyone in the organization can execute your strategies.

Business analysis steps: MOST

Starting from the top down, define these four elements for your business. Then, use them to create processes that prioritize your main goals throughout the organization.

Business analysis examples: MOST

When rebranding a company, the MOST technique helps you discover and refine the heart of your organization. You can realign your processes, products, and marketing efforts to reflect your goals more accurately. If your company has strayed from these primary values or shifted to new ones, MOST will help you clearly define your views and objectives.

Customers, Actors, Transformation, Worldview, Owner, Environmental constraints (CATWOE)

Your individual stakeholders’ viewpoints affect your goals and processes. Every change also affects all of your stakeholders. With CATWOE, you can understand how any action impacts your organization, customers, leadership, and more.

Business analysis steps: CATWOE

This technique should be used at the start of the project or strategizing process. Begin by defining these parties and asking these questions:

• Customers – Who benefits from your work and products? How does this issue or the proposed solution affect them?
• Actors – Who is directly involved in this process? How will they affect it?
• Transformation – What are the ultimate changes that will occur by implementing this solution or new procedures?
• Worldview – How will this change affect the organization’s mission and big picture?
• Owner – Who is responsible for the affected system and how are they related to it?
• Environmental constraints – On every level, what are the limitations that affect the solution?

Once you have these answers, use them to guide your strategies and final solutions.

Business analysis examples: CATWOE

If a development company wanted to build a new shopping center, they could use this technique to understand the impact it would have on the company, their future customers, and the people living in the surrounding community.

Political, Economic, Social, Technological, Legal, Environmental (PESTLE)

Decisions and changes aren’t made in a vacuum. PESTLE identifies outside factors that will affect the decisions made within an organization, as well as how the company’s changes will impact other factors. This technique allows businesses to plan for any potential threats that might develop and strategize for seizing new opportunities.

Business analysis steps: PESTLE

Walk through the following list to determine the forces that can impact your organization.

• Political – How do government policies, initiatives, and financial support affect your business and your proposed solution?
• Economical – What is the economic climate and how does it affect you?
• Social – How do trends and attitudes concerning population, media, culture, lifestyle, and education affect the business?
• Technology – What is the rate of technological development, particularly for information and communication, and how does it impact your changes?
• Legal – Do local and national regulations and employment standards affect your work? How?
• Environmental – Are weather, pollution, waste, and recycling factors a concern for your organization? What is their impact?

Use this information to prepare for threats and opportunities that might affect your business’ ongoing performance.

Business analysis examples: PESTLE

When using the SWOT technique to evaluate your company’s direction and future, you can use PESTLE to develop and analyze each element of the process. This will help you create a more detailed understanding of your business, particularly concerning threats and opportunities.

Six Thinking Hats

Often, teams lack enough diverse viewpoints to find and understand the issues that are keeping them from full success. With the Six Thinking Hats technique , you can use different ways of thinking to uncover new perspectives. Using these new insights during brainstorming sessions can hone your team’s ideas for better results.

Business analysis steps: Six Thinking Hats

In your meetings, consider the problem and possible solutions with the type of thinking dictated by each “hat” and step.

• Start with the White Hat, which focuses on hard data and logic. What information do you know or need?
• Move to the Yellow Hat, which stands for brightness and positivity. Look for the possible values and benefits through optimistic thinking
• Now play devil’s advocate with the Black Hat of judgment. Find potential problems, obstacles, and threats.
• The Red Hat focuses on intuition. Share your feelings, fears, hunches, and emotions associated with the solution or process.
• Use the Green Hat of creativity to consider possibilities, thoughts, and ideas. Try to think outside the box.
• With the Blue Hat, you will bring your brainstorming back to earth. Consider the big picture of the project or changes. Ensure your ideas fit your operations and procedures.
• Use this process to hone your solutions and approach to problems.

Business analysis example: Six Thinking Hats

The next time you think your project needs fresh eyes, gather your team for a Six Thinking Hats brainstorming session. You will be able to view your work in a new light and uncover ways to improve.

There isn’t a “right” technique for business analysis. Instead, use these tactics as they best fit your objectives. And don’t be afraid to combine these techniques for a single problem. As you analyze your business through different lenses, you can find the solutions that will offer the greatest benefits.

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What is strategic management? A definitive overview

Last updated

4 July 2024

Reviewed by

Mary Mikhail

Strategic management is a philosophy that involves implementing precise plans with the intent of helping a company formulate its goals and business objectives. Every decision should be aligned with that overarching plan.

This practice happens at an organizational level and on a smaller scale, such as within a team or department.

• What is strategic management?

Strategic management concerns how to properly use a company's resources to achieve its goals.

This approach involves several components, including:

Identifying business challenges

Determining high-level goals

Tweaking the established strategy to enhance your team's performance

While there are different approaches to strategic management, it involves some distinguishing elements. Strategic management is meant to be fluid. Every company and team leader should adapt their processes and procedures accordingly, based on what best suits the needs of the business.

Strategic management vs strategy

Strategy is typically associated with a business's long-term goals and requires some level of executive involvement.

Strategic management can be done at all levels of an organization, from individual small teams to executive rooms.

Strategic management vs strategic planning

A business uses strategic planning to steer its direction. It can be part of a company's vision or mission statement.

Strategic management can be part of every plan a department executes.

Strategic management vs operational management

Operational management is about setting specific procedures, including targeted outcomes for short-term goals and projects.

Strategic management is a philosophy that is part of current and future destinations.

Strategic management vs tactical planning

Much like operational management, tactical planning can be used for day-to-day challenges every business faces, including managing people and outlining expenses.

Strategic management involves overall planning, including defining and implementing procedures that include general guiding principles.

• What are the five types of strategic management?

There are five types of strategic management, each with their own approach:

Linear strategic management

Adaptive strategic management

Interpretive strategic management

Expressive strategic management

Transcendent strategic management

Each type features its own unique "flavor." Linear strategic management is the most common and conventional, and transcendent is the highest level of strategic management.

If you're working to develop your strategic management style, don't feel compelled to stick with one style or formula. Many successful leaders blend elements of all five styles to create something unique that works for them and defines their personal management style.

• The benefits of strategic management

At its most basic level, strategic management helps a company achieve its goals. However, those willing to invest time and resources into this philosophy will reap a host of benefits.

Notably, by employing strategic management, a company might be more likely to reach its goals. Through outlining clear, dynamic processes, project leaders, company stakeholders, and individual team members can easily see the organization's goals and how they can be achieved. This gives everyone a North Star to refer to and work toward.

Including strategic management in your processes can lead to more sustainable growth because it enables more efficient organizational performance. This helps any company, large or small, grow at an enhanced pace.

Strategic management can also improve communication company-wide. By using strategic management, everyone in your company will understand they are working toward a common goal. This improves camaraderie and can lead to better communication and a more cohesive organization.

• Why is understanding strategic management so important?

The business landscape is constantly changing. With the advent of new technological tools and advances and the increase of remote and hybrid work, finding ways to keep your company competitive is more important than ever. By outlining clear plans and processes, a company can not only work toward its goals in a more streamlined way but also identify areas for operational improvement and enhancement.

Before you start outlining these goals, take time to figure out how people in your organization work best. Do some research in your team about various work styles and what motivates members to work toward goals.

Incorporate your findings into your strategic management strategy. This could include anything from regular check-ins with executives and company stakeholders to including special incentives in meetings.

• What happens if you don't invest in strategic management?

A few issues could occur if you don't invest in strategic management. At the highest level, your company could suffer from a lack of direction and purpose. If your employees don't have goals or specific objectives to work toward, they could flounder, ultimately turning in inconsistent performances and struggling with a lack of motivation.

Additionally, your company could fall behind competitors if you don't involve strategic management in your daily processes. Strategic management helps you differentiate yourself from competitors and stay aware of changes in the market.

Finally, if you don't have strategic management in your business processes, you could suffer from poor resource management. A large part of strategic management is allocating resources properly and planning for how to make the biggest impact with what you already have in-house. 

Without the ability to see what is being used and how, you could miss opportunities and waste finances.

• Five stages of the strategic management process

Although every company should identify for themselves how to best apply strategic management to their processes, there are five general stages of strategic management.

Here are five phases you can use to properly plan and execute key initiatives.

1. Goal-setting

Establishing clear, realistic goals can help you and your team members better understand what the company hopes to achieve and why those goals are so important.

Goals should be set at the start of every project, with project leaders and company stakeholders working side by side to identify short- and long-term goals.

2. Analysis

Performing analysis, including market research and other types of data gathering, is essential to understanding how to remain competitive in a tough landscape.

Employ any analytical tools that make sense for your organization during this phase and understand that it can take time to perform in-depth analysis.

3. Strategy formulation

After you review the numbers that result from your analysis, you can form an overall company strategy.

During the strategy formulation phase, you and your team members can identify how resources will be used, who will perform certain tasks, and whether specific teams are needed to accomplish various goals.

4. Strategy implementation

Strategy implementation, also known as the execution phase, is when your strategy is taken from plan to implementation.

Execution isn't always a linear process. While you and your team should be tracking toward established goals, depending on the nature of your vision and the steps required to accomplish each step, full implementation and execution can take a long time, even years.

5. Evaluation and control

After your goals have been set and achieved, it's time to review what went well and what didn't. During the evaluation and control phase, your company can decide if certain strategies should be phased out or whether what you have in place is ideal for your organization.

• What careers involve strategic management?

Almost every career can include some aspect of strategic management, but those who study business are most likely to use this approach in their day-to-day work life.

Middle and top managers can benefit from learning about strategic management and can generally apply what they've learned to most facets of their careers, as can anyone who goes into the finance sector.

Start-ups and small businesses are often still learning how to define themselves in business and with employees. They can benefit from employing people with experience in strategic management.

If you want to study strategic management, most major colleges offer a degree in this field.

Knowing the basics of strategic management and understanding how to apply this line of thinking to your work can help you become a motivating, encouraging leader as well as an employee capable of getting great results.

• Final thoughts on strategic management

Strategic management can help almost any company reach its internal and external goals. However, it can take trial and error to figure out what works best for you and what motivates your employees to consistently work towards those goals.

Don't get discouraged; stay curious. The path to growth is through continuous discovery and a willingness to try new approaches.

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How to Write a Business Plan: Your Step-by-Step Guide

So, you’ve got an idea and you want to start a business —great! Before you do anything else, like seek funding or build out a team, you'll need to know how to write a business plan. This plan will serve as the foundation of your company while also giving investors and future employees a clear idea of your purpose.

Below, Lauren Cobello, Founder and CEO of Leverage with Media PR , gives her best advice on how to make a business plan for your company.

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What is a business plan, and when do you need one?

According to Cobello, a business plan is a document that contains the mission of the business and a brief overview of it, as well as the objectives, strategies, and financial plans of the founder. A business plan comes into play very early on in the process of starting a company—more or less before you do anything else.

“You should start a company with a business plan in mind—especially if you plan to get funding for the company,” Cobello says. “You’re going to need it.”

Whether that funding comes from a loan, an investor, or crowdsourcing, a business plan is imperative to secure the capital, says the U.S. Small Business Administration . Anyone who’s considering giving you money is going to want to review your business plan before doing so. That means before you head into any meeting, make sure you have physical copies of your business plan to share.

Different types of business plans

The four main types of business plans are:

Startup Business Plans

Internal business plans, strategic business plans, one-page business plans.

Let's break down each one:

If you're wondering how to write a business plan for a startup, Cobello has advice for you. Startup business plans are the most common type, she says, and they are a critical tool for new business ventures that want funding. A startup is defined as a company that’s in its first stages of operations, founded by an entrepreneur who has a product or service idea.

Most startups begin with very little money, so they need a strong business plan to convince family, friends, banks, and/or venture capitalists to invest in the new company.

Internal business plans “are for internal use only,” says Cobello. This kind of document is not public-facing, only company-facing, and it contains an outline of the company’s business strategy, financial goals and budgets, and performance data.

Internal business plans aren’t used to secure funding, but rather to set goals and get everyone working there tracking towards them.

As the name implies, strategic business plans are geared more towards strategy and they include an assessment of the current business landscape, notes Jérôme Côté, a Business Advisor at BDC Advisory Services .

Unlike a traditional business plan, Cobello adds, strategic plans include a SWOT analysis (which stands for strengths, weaknesses, opportunities, and threats) and an in-depth action plan for the next six to 12 months. Strategic plans are action-based and take into account the state of the company and the industry in which it exists.

Although a typical business plan falls between 15 to 30 pages, some companies opt for the much shorter One-Page Business Plan. A one-page business plan is a simplified version of the larger business plan, and it focuses on the problem your product or service is solving, the solution (your product), and your business model (how you’ll make money).

A one-page plan is hyper-direct and easy to read, making it an effective tool for businesses of all sizes, at any stage.

How to create a business plan in 7 steps

Every business plan is different, and the steps you take to complete yours will depend on what type and format you choose. That said, if you need a place to start and appreciate a roadmap, here’s what Cobello recommends:

1. Conduct your research

Before writing your business plan, you’ll want to do a thorough investigation of what’s out there. Who will be the competitors for your product or service? Who is included in the target market? What industry trends are you capitalizing on, or rebuking? You want to figure out where you sit in the market and what your company’s value propositions are. What makes you different—and better?

2. Define your purpose for the business plan

The purpose of your business plan will determine which kind of plan you choose to create. Are you trying to drum up funding, or get the company employees focused on specific goals? (For the former, you’d want a startup business plan, while an internal plan would satisfy the latter.) Also, consider your audience. An investment firm that sees hundreds of potential business plans a day may prefer to see a one-pager upfront and, if they’re interested, a longer plan later.

3. Write your company description

Every business plan needs a company description—aka a summary of the company’s purpose, what they do/offer, and what makes it unique. Company descriptions should be clear and concise, avoiding the use of jargon, Cobello says. Ideally, descriptions should be a few paragraphs at most.

4. Explain and show how the company will make money

A business plan should be centered around the company’s goals, and it should clearly explain how the company will generate revenue. To do this, Cobello recommends using actual numbers and details, as opposed to just projections.

For instance, if the company is already making money, show how much and at what cost (e.g. what was the net profit). If it hasn’t generated revenue yet, outline the plan for how it will—including what the product/service will cost to produce and how much it will cost the consumer.

5. Outline your marketing strategy

How will you promote the business? Through what channels will you be promoting it? How are you going to reach and appeal to your target market? The more specific and thorough you can be with your plans here, the better, Cobello says.

6. Explain how you’ll spend your funding

What will you do with the money you raise? What are the first steps you plan to take? As a founder, you want to instill confidence in your investors and show them that the instant you receive their money, you’ll be taking smart actions that grow the company.

7. Include supporting documents

Creating a business plan is in some ways akin to building a legal case, but for your business. “You want to tell a story, and to be as thorough as possible, while keeping your plan succinct, clear, interesting, and visually appealing,” Cobello says. “Supporting documents could include financial projects, a competitive analysis of the market you’re entering into, and even any licenses, patents, or permits you’ve secured.”

A business plan is an individualized document—it’s ultimately up to you what information to include and what story you tell. But above all, Cobello says, your business plan should have a clear focus and goal in mind, because everything else will build off this cornerstone.

“Many people don’t realize how important business plans are for the health of their company,” she says. “Set aside time to make this a priority for your business, and make sure to keep it updated as you grow.”

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MoSCoW Prioritization

What is moscow prioritization.

MoSCoW prioritization, also known as the MoSCoW method or MoSCoW analysis, is a popular prioritization technique for managing requirements. 

  The acronym MoSCoW represents four categories of initiatives: must-have, should-have, could-have, and won’t-have, or will not have right now. Some companies also use the “W” in MoSCoW to mean “wish.”

What is the History of the MoSCoW Method?

Software development expert Dai Clegg created the MoSCoW method while working at Oracle. He designed the framework to help his team prioritize tasks during development work on product releases.

You can find a detailed account of using MoSCoW prioritization in the Dynamic System Development Method (DSDM) handbook . But because MoSCoW can prioritize tasks within any time-boxed project, teams have adapted the method for a broad range of uses.

How Does MoSCoW Prioritization Work?

Before running a MoSCoW analysis, a few things need to happen. First, key stakeholders and the product team need to get aligned on objectives and prioritization factors. Then, all participants must agree on which initiatives to prioritize.

At this point, your team should also discuss how they will settle any disagreements in prioritization. If you can establish how to resolve disputes before they come up, you can help prevent those disagreements from holding up progress.

Finally, you’ll also want to reach a consensus on what percentage of resources you’d like to allocate to each category.

With the groundwork complete, you may begin determining which category is most appropriate for each initiative. But, first, let’s further break down each category in the MoSCoW method.

Start prioritizing your roadmap

Moscow prioritization categories.

1. Must-have initiatives

As the name suggests, this category consists of initiatives that are “musts” for your team. They represent non-negotiable needs for the project, product, or release in question. For example, if you’re releasing a healthcare application, a must-have initiative may be security functionalities that help maintain compliance.

The “must-have” category requires the team to complete a mandatory task. If you’re unsure about whether something belongs in this category, ask yourself the following.

If the product won’t work without an initiative, or the release becomes useless without it, the initiative is most likely a “must-have.”

2. Should-have initiatives

Should-have initiatives are just a step below must-haves. They are essential to the product, project, or release, but they are not vital. If left out, the product or project still functions. However, the initiatives may add significant value.

“Should-have” initiatives are different from “must-have” initiatives in that they can get scheduled for a future release without impacting the current one. For example, performance improvements, minor bug fixes, or new functionality may be “should-have” initiatives. Without them, the product still works.

3. Could-have initiatives

Another way of describing “could-have” initiatives is nice-to-haves. “Could-have” initiatives are not necessary to the core function of the product. However, compared with “should-have” initiatives, they have a much smaller impact on the outcome if left out.

So, initiatives placed in the “could-have” category are often the first to be deprioritized if a project in the “should-have” or “must-have” category ends up larger than expected.

4. Will not have (this time)

One benefit of the MoSCoW method is that it places several initiatives in the “will-not-have” category. The category can manage expectations about what the team will not include in a specific release (or another timeframe you’re prioritizing).

Placing initiatives in the “will-not-have” category is one way to help prevent scope creep . If initiatives are in this category, the team knows they are not a priority for this specific time frame. 

Some initiatives in the “will-not-have” group will be prioritized in the future, while others are not likely to happen. Some teams decide to differentiate between those by creating a subcategory within this group.

How Can Development Teams Use MoSCoW?

  Although Dai Clegg developed the approach to help prioritize tasks around his team’s limited time, the MoSCoW method also works when a development team faces limitations other than time. For example: 

Prioritize based on budgetary constraints.

What if a development team’s limiting factor is not a deadline but a tight budget imposed by the company? Working with the product managers, the team can use MoSCoW first to decide on the initiatives that represent must-haves and the should-haves. Then, using the development department’s budget as the guide, the team can figure out which items they can complete. 

Prioritize based on the team’s skillsets.

A cross-functional product team might also find itself constrained by the experience and expertise of its developers. If the product roadmap calls for functionality the team does not have the skills to build, this limiting factor will play into scoring those items in their MoSCoW analysis.

Prioritize based on competing needs at the company.

Cross-functional teams can also find themselves constrained by other company priorities. The team wants to make progress on a new product release, but the executive staff has created tight deadlines for further releases in the same timeframe. In this case, the team can use MoSCoW to determine which aspects of their desired release represent must-haves and temporarily backlog everything else.

What Are the Drawbacks of MoSCoW Prioritization?

  Although many product and development teams have prioritized MoSCoW, the approach has potential pitfalls. Here are a few examples.

1. An inconsistent scoring process can lead to tasks placed in the wrong categories.

  One common criticism against MoSCoW is that it does not include an objective methodology for ranking initiatives against each other. Your team will need to bring this methodology to your analysis. The MoSCoW approach works only to ensure that your team applies a consistent scoring system for all initiatives.

Pro tip: One proven method is weighted scoring, where your team measures each initiative on your backlog against a standard set of cost and benefit criteria. You can use the weighted scoring approach in ProductPlan’s roadmap app .

2. Not including all relevant stakeholders can lead to items placed in the wrong categories.

To know which of your team’s initiatives represent must-haves for your product and which are merely should-haves, you will need as much context as possible.

For example, you might need someone from your sales team to let you know how important (or unimportant) prospective buyers view a proposed new feature.

One pitfall of the MoSCoW method is that you could make poor decisions about where to slot each initiative unless your team receives input from all relevant stakeholders. 

3. Team bias for (or against) initiatives can undermine MoSCoW’s effectiveness.

Because MoSCoW does not include an objective scoring method, your team members can fall victim to their own opinions about certain initiatives. 

One risk of using MoSCoW prioritization is that a team can mistakenly think MoSCoW itself represents an objective way of measuring the items on their list. They discuss an initiative, agree that it is a “should have,” and move on to the next.

But your team will also need an objective and consistent framework for ranking all initiatives. That is the only way to minimize your team’s biases in favor of items or against them.

When Do You Use the MoSCoW Method for Prioritization?

MoSCoW prioritization is effective for teams that want to include representatives from the whole organization in their process. You can capture a broader perspective by involving participants from various functional departments.

Another reason you may want to use MoSCoW prioritization is it allows your team to determine how much effort goes into each category. Therefore, you can ensure you’re delivering a good variety of initiatives in each release.

What Are Best Practices for Using MoSCoW Prioritization?

If you’re considering giving MoSCoW prioritization a try, here are a few steps to keep in mind. Incorporating these into your process will help your team gain more value from the MoSCoW method.

1. Choose an objective ranking or scoring system.

Remember, MoSCoW helps your team group items into the appropriate buckets—from must-have items down to your longer-term wish list. But MoSCoW itself doesn’t help you determine which item belongs in which category.

You will need a separate ranking methodology. You can choose from many, such as:

• Weighted scoring
• Value vs. complexity
• Buy-a-feature
• Opportunity scoring

For help finding the best scoring methodology for your team, check out ProductPlan’s article: 7 strategies to choose the best features for your product .

2. Seek input from all key stakeholders.

To make sure you’re placing each initiative into the right bucket—must-have, should-have, could-have, or won’t-have—your team needs context. 

At the beginning of your MoSCoW method, your team should consider which stakeholders can provide valuable context and insights. Sales? Customer success? The executive staff? Product managers in another area of your business? Include them in your initiative scoring process if you think they can help you see opportunities or threats your team might miss. 

3. Share your MoSCoW process across your organization.

MoSCoW gives your team a tangible way to show your organization prioritizing initiatives for your products or projects. 

The method can help you build company-wide consensus for your work, or at least help you show stakeholders why you made the decisions you did.

Communicating your team’s prioritization strategy also helps you set expectations across the business. When they see your methodology for choosing one initiative over another, stakeholders in other departments will understand that your team has thought through and weighed all decisions you’ve made. 

If any stakeholders have an issue with one of your decisions, they will understand that they can’t simply complain—they’ll need to present you with evidence to alter your course of action.  

Related Terms

2×2 prioritization matrix / Eisenhower matrix / DACI decision-making framework / ICE scoring model / RICE scoring model

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Home » Agile Development » Prioritizing Requirements with MoSCoW Method: A Guide for Agile Projects

Prioritizing Requirements with MoSCoW Method: A Guide for Agile Projects

• Posted on March 28, 2023
• / Under Agile & Scrum , Agile Development , Project Management

The MoSCoW method is a prioritization technique used in project management, software development, and business analysis. It helps to prioritize requirements based on their importance and urgency, and allows project managers to allocate resources and budget accordingly. In this article, we will explore the MoSCoW method and provide an example of its implementation.

What is the MoSCoW Method?

The MoSCoW method is a prioritization technique that categorizes requirements into four groups: Must-haves, Should-haves, Could-haves, and Won’t-haves. The acronym MoSCoW stands for:

• Must have: critical requirements that are essential for the project’s success. These requirements are mandatory and must be included in the project scope.
• Should have: important requirements that are necessary for the project’s success but can be delayed if necessary. These requirements are important, but not critical, and can be deferred to a later phase of the project.
• Could have: desirable requirements that are not essential for the project’s success, but can enhance the project’s value. These requirements are optional and can be included if time and budget allow.
• Won’t have: requirements that are not needed for the project’s success and are not included in the project scope.

The MoSCoW method helps project managers prioritize requirements based on their importance and urgency. It allows them to focus on the critical requirements and allocate resources and budget accordingly.

Example of MoSCoW Method

Let’s consider an example of a software development project to understand how the MoSCoW method works.

Suppose a company wants to develop a new mobile app for its customers. The app should allow customers to order products, track their orders, and receive notifications. The company also wants to include some additional features to make the app more appealing to customers.

The project team identifies the following requirements:

• Must have: The app must allow customers to order products, track their orders, and receive notifications.
• Should have: The app should have a search feature that allows customers to search for products, and a payment feature that allows customers to pay for their orders using various payment methods.
• Could have: The app could have a loyalty program feature that rewards customers for their purchases, and a referral program feature that incentivizes customers to refer the app to their friends and family.
• Won’t have: The app won’t have a social media integration feature that allows customers to share their purchases on social media platforms.

Using the MoSCoW method, the project team has prioritized the requirements based on their importance and urgency. The must-have requirements are critical for the success of the project and must be included in the app. The should-have requirements are important, but can be deferred to a later phase of the project if necessary. The could-have requirements are optional and can be included if time and budget allow. The won’t-have requirements are not needed for the project’s success and are not included in the project scope.

Real-life Example – CRM System

Project Description: Development of a Customer Relationship Management (CRM) System

The objective of this Agile project is to develop a CRM system for a small business that specializes in providing customized solutions to its clients. The CRM system will be designed to streamline the sales process and improve customer interactions, allowing the business to enhance customer satisfaction and loyalty.

The project will follow the Agile methodology, which involves iterative and incremental development. The Agile team will work closely with the client to gather requirements, develop prototypes, and deliver functional software increments in short iterations, typically two weeks.

Identify a List of User Stories

To create the list of user stories, you can considered the different roles that would interact with the system, such as sales representatives, managers, and customers, and thought about the various tasks they would need to perform in order to achieve their goals. you can also considered the different types of data that would need to be stored and managed within the system, such as customer information, sales data, and marketing campaigns.

Based on this analysis, you can then generated a list of user stories that covered a broad range of functionality, from lead tracking and customer service, to sales proposals and reporting. The list of user stories is intended to provide a starting point for the development team to use in prioritizing and planning the development of the CRM system.

Here is a list of user stories for the CRM system development project:

• As a sales representative, I want to be able to track all of my leads in one place so that I can easily manage my sales pipeline.
• As a sales manager, I want to be able to view and monitor my team’s progress in real-time so that I can provide coaching and support as needed.
• As a customer service representative, I want to be able to view all of a customer’s interactions with our company so that I can provide personalized support.
• As a marketing manager, I want to be able to segment our customers based on their preferences and behavior so that I can target them with relevant campaigns.
• As a customer, I want to be able to view my purchase history and account information so that I can easily manage my relationship with the company.
• As a customer service representative, I want to be able to log and track customer complaints and inquiries so that I can ensure that they are addressed in a timely manner.
• As a sales representative, I want to be able to generate quotes and proposals quickly and easily so that I can close deals faster.
• As an administrator, I want to be able to manage user permissions and access levels so that I can control who has access to sensitive information.
• As a sales representative, I want to be able to schedule and manage appointments with my clients so that I can stay organized and on top of my schedule.
• As a manager, I want to be able to generate reports on sales performance, customer satisfaction, and other metrics so that I can make informed business decisions.

These user stories cover a range of functionality that the CRM system should provide. The development team can use these user stories to prioritize the most important features for the system, and to ensure that the system meets the needs of all stakeholders.

In table format, let’s present a clear and concise summary of the 10 user stories related to a business scenario to provide an overview of the user stories.

The table provides information on the user role, the specific goal they want to achieve, and the user story number to easily reference each story. By organizing the user stories in a table, it is easier to understand and prioritize the features that need to be developed to meet the needs of the stakeholders involved in the project. This table can serve as a reference for the development team to design and implement features that align with the needs of the end-users and stakeholders.

Prioritize the User Stories

It is important to prioritize the user stories based on their business value and impact on the project goals. This ensures that the development effort is focused on the most important and valuable features, and that the project can be delivered on time and within budget.

Prioritization can be done using various techniques such as the MoSCoW method, which categorizes user stories as “must-haves,” “should-haves,” “could-haves,” and “won’t-haves.” User stories categorized as “must-haves” are the most critical and should be developed first, while “should-haves” and “could-haves” can be developed later in subsequent iterations or releases.

Here’s a table for the 10 user stories mentioned earlier, with the relevant information and prioritization based on the MoSCoW method:

In this table, the user stories are listed in order of priority, with the “must-have” features listed first, followed by the “should-haves” and “could-haves.” The “won’t-haves” feature is not planned for implementation in this project, but may be considered for future development.

By prioritizing the user stories, the development team can ensure that the most critical features are developed first, providing value to the stakeholders and enabling the project to meet its objectives within the time and budget constraints.

Example: A Scrum Development Plan for the CRM

here is a high-level outline for a Scrum development plan to start the agile project. However, the specific details of the plan will depend on the project requirements, team structure, and other factors. Here’s an example of a Scrum development plan:

• Define the Product Backlog: The first step is to define the product backlog, which is a prioritized list of all the features, functionalities, and requirements that need to be implemented in the project. This backlog will be maintained throughout the project and will be continually refined and updated based on the changing needs of the stakeholders.
• Conduct Sprint Planning: After the product backlog has been defined, the team will conduct a sprint planning meeting to select a set of user stories from the backlog to be developed in the upcoming sprint. The team will estimate the effort required for each user story, and select the user stories that can be completed within the sprint timeframe.
• Conduct Daily Scrum Meetings : Once the sprint has started, the team will conduct daily scrum meetings to review progress, identify any obstacles or challenges, and adjust the plan as needed. The daily scrum meetings should be short and focused, with each team member providing an update on their progress.
• Develop the Product Increment: During the sprint, the team will work on developing the selected user stories, focusing on delivering a working product increment by the end of the sprint. The team will collaborate closely, with developers, testers, and other team members working together to deliver the product increment.
• Conduct Sprint Review: At the end of the sprint, the team will conduct a sprint review meeting to demonstrate the product increment to the stakeholders, gather feedback, and review the progress made during the sprint.
• Conduct Sprint Retrospective: After the sprint review, the team will conduct a sprint retrospective meeting to review the sprint process, identify areas for improvement, and plan for the next sprint.
• Repeat the process: The team will repeat this process for each subsequent sprint, continuing to refine and update the product backlog, and focusing on delivering a working product increment at the end of each sprint.

This Scrum development plan provides a framework for managing the agile project, with regular meetings and reviews to ensure that the project is on track and delivering value to the stakeholders.

The article discusses the MoSCoW method, which is a prioritization technique used in Agile project management to prioritize project requirements. The MoSCoW method divides requirements into four categories: Must-have, Should-have, Could-have, and Won’t-have. The article provides a real-life example of an Agile project and how to identify user stories for the project. The user stories are then prioritized using the MoSCoW method, with the Must-have requirements given top priority.

The article also outlines a Scrum development plan, which includes defining the product backlog, conducting sprint planning, daily scrum meetings, developing the product increment, sprint review, sprint retrospective, and repeating the process. The Scrum development plan provides a framework for managing the Agile project, ensuring that the project is on track, and delivering value to stakeholders.

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