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Six Steps to Successfully Executing a Strategic Plan

A strategic planning process (SPP) provides a systematic way of mapping the handful of key decisions that an organization must get right in order to survive—and thrive—during the next several years.

By definition:

Strategic = gaining a competitive advantage, long term
Planning = preparation for certainty
Process = systematic approach to a conclusion

The proposed annual six-step strategic planning process may prove essential for those working in most corporations. It provides an opportunity for senior leaders to assist in formulating a company’s strategic plan, implementing the strategic plan and connecting strategy and implementation to a rewards system.

First, before starting the process, secure the commitment of the leadership team up front—or quickly abort. Bring the right people together. Those who carry out strategy should develop it. And remember, if you want to accomplish a strategy, agree to focus on it, and then plan ahead to make it an ongoing process. 

The Six Steps of the Strategic Planning Process 

Steps 1-3, Strategy Formulation: Looking Within, Looking Around, Looking Ahead

Step #1 in the process consists of conducting an internal strategic audit—or critically looking within your own organization—to answer where are we now?

  • Determine your competitive strengths—measurable attributes that make you better than your competition
  • Determine your competitive weaknesses—what prevents you from achieving better results; identify recurring weaknesses
  • Determine people opportunities, challenges and concerns
  • Determine if you can finance the future

Takeaway: Never state a critical weakness unless you make a commitment to fix it.

Step #2 requires you to conduct an external strategic audit to identify trends—or critically look around—outside of your organization. Identify favorable and unfavorable trends and your largest single threat regarding:

  • Customers and customer demand
  • Products and technologies
  • Competitors
  • Economics
  • Government policy (healthcare reform, regulatory, reimbursement, compliance, quality systems, etc.)

Takeaways:

  • Never select a future trend that is not supported by an existing one.
  • When identifying the most favorable trend, determine how you can capitalize on it—and track it—over the next three years.
  • For key favorable and unfavorable trends, ensure that you monitor and confirm a “trigger,” a pre-determined level that causes you to take action or make a change in strategy.

Step #3 proposes that you identify critical planning assumptions, including opportunities and threats—by looking ahead:

Determine opportunities and threats related to:

  • Market assumptions
  • Key customers or repeat business
  • Costs
  • Key competitor analysis
  • Line items (cash flow, P&L, balance sheet)
  • Key technological improvements and forecast
  • Government policy assumptions and interactions
  • People planning assumptions

Takeaway: Critically identify and openly discuss which opportunities and threats will have the greatest impact on future business performance.

The initial three steps—looking within, around and ahead—are the building blocks to develop the strategic plan. The next three steps will allow you to implement the strategic plan.

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