What Are the Components of a Strategic Plan?
Making a strategic plan is resource-consuming. After all, a lot of research and effort from the whole team goes into it. A company has to take care of multiple components while making a strategic plan that propels it towards growth.
Is it worth it? Yes, even if your business is highly successful or at the starting phase. History has shown that even giants make critical mistakes when they lack vision. On the flip side, having a strategic plan has accelerated the growth of startups.
Key Components of a Powerful Strategic Plan
1. Mission and Vision
The mission statement is first on the list. It defines the business, and guides employees on their journey, as well defines how the organization is different from the competitors.
The mission statement summarizes what the organization hopes to achieve.
A 2016 survey revealed that 64.7% of job-seekers say that not knowing or disagreeing with a company’s vision and mission is a deal-breaker.
Let’s review LinkedIn’s mission statement: “Connect the world’s professionals to make them more productive and successful.” It’s self-explanatory; LinkedIn wants to make professionals productive and successful.
The strategic vision also outlines where the company sees itself in the long run. Take LinkedIn’s example: “Create economic opportunity for every member of the global workforce.”
Achievement of the vision is directly dependent on the mission.
Check out our article that will help you ask the right questions while forming your vision and mission statements.
2. Core Values
Core values are the standards your company will stick to while performing its day-to-day activities.
These are the beliefs that guide your company’s growth. In practical terms, the core values are principles that your team adheres to in conjunction with:
- Making decisions
- Serving customers
- Communicating externally and internally
- Solving operational problems
Core values play a part in your company branding by attracting clients, talent, and shareholders with the same values.
A 2018 Jobvite study found that 46% of job-seekers consider company culture very important, while 88% consider company culture of relative importance.
Another report by 5WPR stated that “83% of Millennials find it important for the companies they buy from to align with their values.”
Some examples of core values:
- Evolve and adapt
- Honesty and integrity
- Deliver outstanding results
- Build for durability
- Equal opportunity for all
- Work-life balance
- Give back
- Build relationships
A company value can be an action sentence like “communicate transparently, share and set expectations” or one word like “collaborate.”
Every company has core values, even if they’re not written on paper.
For inspiration, look at the culture of your organization. Your colleagues form one community that shares common values. You can start by jotting down those values and building on them as you find values that define your organization better.
3. Strengths, Weaknesses, Opportunities, and Threats
A SWOT analysis gives a realistic view of your standing in the market. You make short-term and long-term strategic decisions based on this analysis.
The four elements of swot analysis – strengths, weaknesses, opportunities and threats – help you find the right ways to grow your business and avoid the wrong ones. For example, if an eCommerce business finds that its employees are not trained for face-to-face communication with customers, it should not invest in a bricks-and-mortar store unless this weakness is addressed.
To create a SWOT analysis chart, you can record input from personnel in all your departments. Compile the data in a format that makes sense, and then make it available to your employees. Strengths and weaknesses are internal factors that can be controlled.
Examples of Strengths:
- Employees with diverse skill sets.
- A strong collaborative workplace culture.
Examples of Weaknesses:
- Products updates too technical for the customer base
- High employee turnover
On the other hand, opportunities and threats are external factors that affect your business directly but can’t be controlled.
Examples of Opportunities:
- Customers are leaning towards environmentally sustainable products.
- The government has lenient tax policies.
Examples of Threats:
- An increase in the cost of raw materials.
- A competitor launching an innovative product
4. Business Goals
Business goals state what your organization wants to achieve. Goals can be set for both the short-term and long-term, and they are intended for the organization as a whole or individual departments
Goals also aid the planning process but don’t have many actionable elements. The achievement of measurable goals is further dependent upon business objectives and strategies.
However, being short and concise, business goals are memorable and help the leadership team easily determine the top priorities. This is a much-needed tool. A survey found that only one-third of leaders who participated in a study of 400 companies were able to name their firm’s top three priorities.
Examples of Goals:
- Improve the customer experience
- Increase sales in the next quarter
- Enhance the lives of patients suffering from Alzheimer’s disease
5. Objectives, Strategies, and Operational Tactics
Objectives can be considered an even more specific version of the vision statement. An organization can have multiple business objectives at the same time, and branches of the same organization can have different ones.
Objectives are SMART (specific, measurable, achievable, realistic, and timely).
Examples of Objectives:
- Improve customer satisfaction, and dedicate 4 hours to resolving customer complaints every day.
- Achieve sales of $50K worth of dairy products
- Treat a thousand Alzheimer’s patients in the next 4 months
Strategies define how you’re going to achieve your objectives. Simply put, these are actionable steps that guide the organization.
Examples of Strategies:
- Hire 4 customer representatives and provide them with the training and tools they need to respond to 100 emails every day
- Buy enough raw materials to increase the number of dairy products your company offers and expand into new markets by approaching more retail stores to sell products
- Invest in equipment, research and training of doctors to make the treatment of Alzheimer’s disease more feasible
Operational tactics are the methods your team will use on a day-to-day basis to achieve the business objectives
Examples of Operational Tactics:
- Use a customer-service training tool for 2 hours per day
- Produce 40 pounds of cheese per week
- Conduct physical and neurological exams of patients
Create a Strategic Planning Template
Before you start working on the effective plan, make sure you have a way to record all this information in one place.
Use a word-processing application or spreadsheet, and start a document from scratch or download a template.
The template should contain:
- Mission statement
- Vision statement
- Elevator pitch
- SWOT analysis
- Short-term goals and long-term goals
- Strategic Objectives
- Marketing Strategies
- Branding guidelines
- Target market
Save Time and Create the Right Plan of Action with Frictionless
According to an Organization Synergies report, only 42% of managers and 27% of employees have access to the strategic plan.
A strategic planning platform like Frictionless can give you a headstart with the strategic planning process.
It offers market research and competitive analysis tools you can use to build a strategic plan based on solid data. It also allows you to revise the plan as the market shifts and gather feedback from your team.
Frictionless also acts as a consultant. It gives you a step-by-step framework for strategic growth at a fraction of the cost of high-priced consultancy.
Using this platform, you can build and share your tactical plan while collaborating with your team and business partners.