Transforming your vision into a lucrative business seems like the biggest challenge for most people. However, there has been a steady increase in business applications as of June 2023, adjusted for seasonal variation, was 465,906, an increase of 6.2 percent compared to May 2023. This means that there is still hope for startups, provided you know how to handle your company.
One thing you should have in place when starting your company is a strategic plan. Strategic planning entails a team process that details how your company will attain its goals. It considers your current position, where you are heading, and how you will get there. A strategic plan essentially becomes the blueprint you will follow when making decisions in your company. But how do you ensure you have a long-term strategic plan?
First, you need to have the six elements of creating an effective strategic plan in place. Here are these elements:
The following is all the information you should have when executing your strategic plan to maximize your odds of success.
One of the terms you will come across in strategic planning is the ‘strategic planning model’. This is a collective term for the elements involved in the strategic planning process. A strategic planning model has three core components. These include:
You can think of the strategic planning model as the template into which you drop your ideas. When you are through, you come up with a sensibly structured strategic plan with a clear set of actions and measurable goals to guide your work. There are different strategic models. The following are the most common:
No model from the above is better than the others. Your best choice depends on the dynamics of your organization.
Some online platforms use the terms strategic planning framework and strategic planning model interchangeably. While the model describes how various elements in your strategic plan interact, the framework denotes a conceptual approach to the details of your strategic plan. Simply put, a strategic plan framework will help you delve deeper into one section of your overall strategic plan to create a comprehensive plan that helps you turn the ideas in the section into action.
When a strategic planning framework is paired with the right strategic planning tools like Frictionless, you can easily get exceptional results with your strategic plan. With our platform, you can visualize the strategy and organize your data.
To help you pick a strategy framework that best works for your company, below is an overview of the common types of strategic planning frameworks:
This framework outlines what your organization or team wants to accomplish and what every team member or employee should do to make it happen. The balanced scorecard helps you understand your objectives, prioritize your daily tasks and monitor the progress you make based on your established metrics. With the flexible framework, you will identify your objectives, metrics, initiatives, and action items.
Robert S. Kaplan and David P. Norton published the balanced scorecard in 1992 based on the results of a research study. This strategic planning framework viewed a company from four perspectives, including internal process, finances or stewardship, learning and growth or organizational capacity, and stakeholder & customer.
The balanced scorecard framework is straightforward because it uses only one or two measures to evaluate each of your strategic objectives. Moreover, it recognizes the power of customers and customer intimacy in your business. It also helps in executing a single part of your strategic plan by assigning specific initiatives, objectives, and performance indices for a task thus maximizing the odds of actualizing your plans. However, the balanced scorecard process can be complex and might need additional resources for its implementation.
This can be traced to the reconstruction efforts in Japan after World War II. The name comes from the Japanese word ‘’Ho’’ signifying direction and ‘’shin’’ which means needle making one word ‘’Hoshin’’ meaning compass. ‘’Kan’’ means controlling or channeling while ‘’Ri’’ means logic or reason to form ‘’Kanri’’. As such, the phrase Hoshin Kanri can be loosely interpreted to mean direction-setting management.
Hoshin Kanri as a strategic planning framework comprises a seven-step cycle with these steps:
The Hoshni Kanri framework unifies your company around a common goal, thus encouraging inter-departmental cooperation. It also helps employees understand their contribution to your company so that they feel like important constituents of your business. Nonetheless, the Hoshni Kanri framework needs a lot of discipline and coordination from all departments to actualize your goals. Hence, it works best for companies with individual contributors and strong departmental capabilities.
This framework was developed by Renee Mauborne and W. Chan Kim following the results of a study among thirty industries that spanned a hundred years. The Blue Ocean framework emphasizes value innovation, a business approach that encourages companies to generate new demand in untapped markets while minimizing their costs.
Approximately 50% of Americans believe businesses that embrace innovation have a huge advantage in meeting their clients’ demands. Results of the Blue Ocean framework are achieved by focusing on four actions that connect new demand and low costs.
The four actions included in Blue Ocean include:
The Blue Ocean strategy is as simple as sailing your business in a competition-free market, thus getting untapped markets. Though hard, when done well, your competitors will often copy your strategy and then slowly enter your market, hence turning it into a red ocean; one with a lot of competition.
One thing that the blue ocean strategy will use to help you create value innovation is a strategy canvas that differentiates your brand from your competitors. The strategy is meant to reduce risk and is supported by strategic planning tools. Unfortunately, it can excessively focus on differentiation in a new market that takes time to adapt to your service or product lines, meaning you might suffer huge losses.
Like the organic planning model, the real-time strategic planning framework is a nontraditional fluid system. This makes it an ideal choice for companies that are reactive and need to handle their strategic planning as events unfold. For these businesses, a long-term detailed plan would be irrelevant because the business environment changes rapidly. This explains its popularity among disaster relief agencies that need to adopt a strategy quickly in response to a crisis.
There are three levels involved in real-time strategic planning including, operational, programmatic and organizational. At the organizational level, you define the market position, trends, vision, mission and competitors of your business.
The programmatic level involves research into the outside environment to pick the critical elements that will help you achieve your objectives and issues that might hamper your goal’s attainment. The operational level is the final one in which you analyze your internal strengths and weaknesses.
The three levels of real-time strategic planning are considered as a whole so that business leaders come up with criteria for implementing, testing, developing, and adapting the best strategy for your company. This way, you can have thoughtful and quick responses to the issues your company faces.
Having gone through the above types of strategic planning models and frameworks, you can now pick the best one for your company. Once you have put in the hard work of picking a framework and model, the next step will be checking the progress that your company is making. A BDC study comprising more than 1100 companies cited constantly measuring progress as one hallmark of a successful venture. Businesses that grow fast use at least three metrics to measure their performance.
Linking the key performance indices {KPIs} that you use to measure the performance of your strategic plan with your goals might seem challenging. Thankfully, platforms like Frictionless can help you expedite this strategic planning process and help your business achieve its goals.
