Organizations are constantly seeking ways to improve. It’s how they keep their relevance and, more crucially, their profits. You don’t become well just by wishing for it, though. It takes a plan and then a model to put that approach into action.
It should come as no surprise that there are strategic planning models that can help with this. They’re ideal for both large and small firms, and they can help with project planning and implementing organizational goals in a systematic and organized manner. After you’ve decided on a goal, you’ll need to create a model that will help you achieve it.
There are many distinct strategic planning models, and they might be extremely different. Which strategic planning model gets utilized is frequently determined by the type of organization. We’ll go over five of the most popular ones after a little explanation. You’ll undoubtedly find a strategic planning approach that works for you among them.
What is a Strategic Planning Model?
Because the definition is included in the term, it’s simple to define what a strategic planning model is. A strategic planning model describes how an organization takes its strategy and develops a plan to put it into action to enhance operations and achieve its objectives.
To get to this stage, they must first figure out what the organization wants and how they plan to attain those goals shortly. It’s then a matter of working backward to figure out how to get there once they’ve set that aim.
This is, of course, easy to say but incredibly difficult to put into practice. The complexity of putting up a strategy to strategically fulfill your goals might sometimes feel like it requires its strategic planning model! That is why traditional models are already in place to assist you in achieving your objectives.
Do You Need a Strategic Planning Model?
If all of this sounds like a long way of saying that you need a strategy to attain your objectives, you’re correct. But that doesn’t negate its utility in accomplishing those goals. You’ll fail whether you’re a startup or a well-established, market-leading brand if you don’t have a strategy in place to achieve your objectives. That could mean losing market share or shutting down, neither of which is a viable business strategy.
There are numerous advantages to using a strategic planning methodology. For starters, it establishes a defined path that the organization follows and communicates to all of its employees. It’s quite effective to have all departments work together toward a single goal. The ramifications are disastrous.
You can’t hit your goal if no one knows what it is or how you plan to get there, whether it’s a year, five, or ten years down the road.
Consider it being focused. Every business encounter numerous distraction daily. Knowing what your topline is might help you prioritize and focus your efforts on the company’s overall goal.
Another advantage of using a strategic planning model is that it allows you to gain a better understanding of what works best in your firm. You have a clear view of your strengths and shortcomings, as well as where you stand in the market. It can also assist you in determining who your competitors are and how you can set yourself apart from them.
Best Practices for Strategic Planning Models
We’ll get to the examples later, but regardless of which option you choose as the best fit for your purposes, there are some best practices to follow to ensure success. Assemble a group that is diverse but also appropriate for the aim when conducting research. More ideas are generated as a result of diversity. You’ll need anywhere from six to ten people.
Give it time once you’ve started. The team must devise innovative solutions and then test them to ensure that they are the best line of action. You may wish to take the team off the job site. A change of scenery, away from the office distractions, can help them relax into a more meditative mood, allowing them to come up with better ideas.
Of course, you must gain team buy-in; else, all of your efforts would be for naught. Build trust once you’ve gotten them fully on board. You want everyone to take part, and you want it to be a free and open conversation. That is, from the top to the bottom. It might be beneficial to hire a third-party facilitator to oversee the procedure.
When making a plan, keep in mind that it must be reasonable. You haven’t done your job if you can’t carry it out. As a result, it must be actionable, with clearly defined goals, tasks, and duties, as well as responsibility and deadlines for all parties involved. That isn’t to say you can’t be adaptable. Plans change, therefore it’s important not to be to set in your ways.
Finally, don’t consider developing a strategic planning model for your company as a one-time task. Not only should your plan be flexible enough to change as internal and external circumstances dictate, but these meetings should also be planned frequently. Consider it a procedure. If possible, meet monthly or at least quarterly. You can talk about how the strategy is being carried out and keep people accountable for the tasks they’ve been given. This is how you ensure that your plan comes to fruition.
Popular Strategic Planning Models
As previously stated, there are numerous models to choose from, and we strongly encourage you to do so. You never know what you’ll come across. But, for our purposes, let’s limit it to five that have been demonstrated to work.
This is one of the most often used strategic alignment models (SAM). It consists of two components: strategic alignment and functional integration. That is to say, the model integrates business and IT strategy. To accomplish so, an organization’s core goals must first be identified, followed by the steps necessary to achieve those goals. To reach such objectives, the plan must maximize the process.
In this paradigm, there are four aspects to consider:
- The model is driven by the business strategy, which is called strategy execution.
- Technology potential, in which the business plan is also the driving force, but it is backed up by an IT strategy.
- The use of emerging IT capabilities to build new products and services is referred to as competitive potential.
- Finally, there’s the service level, which is concerned with developing the greatest IT system possible for the company.
Business strategy is vital here, but just as a starting point.
The balanced scorecard (BSC) is a visual representation of what has been accomplished. It prioritizes, measures, and monitors progress while aligning the task with the overarching strategy. The model’s goal is to strike a balance between strategy and financial metrics. One of the benefits of using BSC is that it makes it easier to see the connections between different aspects of your strategic management and planning.
Using BSC requires you to look into four different aspects of your company.
- One is the company’s financial performance and which financial resources have shown to be the most successful.
- You should also assess the performance of your stakeholders or consumers, as well as how you serve them.
- Internal processes should be evaluated not only for their efficiency but also for their quality.
- Then there’s organizational capacity, which considers your people, infrastructure, technology, culture, and anything else that can help you achieve your objectives.
This model, also known as the simple model, is frequently employed by newer businesses without a history of strategic planning to assist them in making decisions. It’s also a good model for any company that doesn’t have the time or money to devote to thorough strategic planning.
If your company does not yet have a mission statement, you must first create one. That is a statement of your objectives designed to motivate and transform the company. The next step is to determine what objectives must be met to meet the mission statement’s objectives. Break down the tasks that will help you achieve your objectives. Plan, track, and report on your progress.
Blue Ocean Strategy
The blue ocean strategy is intended to introduce your product to a market with little or no competition. As a result, the study is significantly skewed toward identifying a profitable niche, such as one where few businesses are selling a product that consumers have expressed interest in and there is little to no pricing pressure.
Unlike the red ocean approach, which describes a saturated market where products are endangered by pricing pressure, the blue ocean strategy seeks markets where there is potential to grow. You want to capture fresh demand with a product that is either unique or so much superior to the competition that it makes the competition obsolete.
Issue (Or Goal) Based
The issue-based (also known as goal-based) strategic planning model is the next step up from the basic strategic planning paradigm. It is designed for more established enterprises and builds on the basic model. As a result, it’s the most detailed and possibly the most popular of all the models we’ve discussed.
Start by conducting a SWOT analysis, which stands for Strengths, Weaknesses, and Threats Analysis. It aids in the identification and analysis of internal and external elements that influence your company, product, or service. The mission statement comes next, followed by planning, budgeting, and a timeline for implementation. After a year, you’ll want to review the outcomes and report on how things are going, making any necessary adjustments.
Porter’s Five Forces Model
In 1979, Michael Porter’s Five Forces Concept was a more traditional strategic management model. The five forces in Porter’s model are:
- The danger of being admitted
- Substitute products or services are a threat.
- The customer’s bargaining power
- The supplier’s bargaining power
- Existing companies’ competitive rivalry
The amount of pressure exerted by each of these Porter’s 5 forces can be used to predict how future outlets will affect future business.
In the strategic management concept, gap planning is also known as “the Strategic-Planning Gap,” “Need Assessment,” or “Need-Gap Analysis.” It’s used to evaluate where an organization is now with where it wants to go in the future and how to bridge the gap. It’s primarily utilized to locate specific internal shortages.
Investigators may also hear about a “shift chart” or “change agenda” during a gap planning examination. These are similar to gap planning in that they both analyze the gap between where the organization has been and where it intends to be on a variety of axes. The next step in the planning process is to figure out how to “close the gap.”
The discrepancy between the intended and predicted sales of a dummy company is used as an example of gap planning in the strategic management model:
Like SWOT analysis, PEST stands for “political, economic, social, and technological.” Each of these factors is used to evaluate a business environment and determine what factors may have an impact on an organization’s health. The PEST model of strategic management is frequently used in conjunction with the external variables of a SWOT analysis.
The PEST model adds a few extra letters since it considers “environmental” and “legal” issues, similar to PESTEL (or PESTLE). STEEPLED stands for “sociocultural, technical, economic, environmental, political, legal, education, and demographics,” and is an additional version.
So, these are some strategic planning models that can come to the rescue of your organization and improve it manifolds.