Overview of the Strategic Planning Process

Summary

In this video, Erica Olsen outlines the strategic planning process through four key phases: Assess, Design, Build, and Manage. The process begins by assessing the current state through SWOT analysis. Next, it moves into designing the strategy by defining the mission, vision, competitive advantages, and strategic objectives. The plan is built with SMART goals and cascaded through all organizational levels. Finally, effective execution requires individual accountability, performance tracking systems, and regular reviews. The video emphasizes the importance of turning plans into actionable strategies for organizational success.

Takeaways

• 🔍 The strategic planning process consists of four phases: Assess, Design, Build, and Manage.
• 📝 Strategic plans are dynamic, involving periodic reviews and revisions if execution is not delivering desired results.
• 📊 Assessing the current state (Point A) involves gathering external (opportunities and threats) and internal (strengths and weaknesses) perspectives and summarizing them in a SWOT analysis.
• 🏢 The mission statement is crucial to defining the organization’s core purpose, specifying what's in and what's out.
• 🌟 The vision statement defines the future state and provides a roadmap for where the organization wants to go.
• 💼 Competitive advantages and long-term strategies guide the plan and ensure the organization remains competitive.
• 🔗 The strategic framework consists of long-term objectives in four areas: financial, customer, operational/internal, and people perspectives.
• 🎯 Corporate goals should be SMART (Specific, Measurable, Attainable, Realistic, and Time-bound) and cascaded from strategic objectives down to individual contributors.
• 👥 Effective execution requires three key elements: individual ownership/action plans, a system for tracking and managing performance, and regular performance reviews.
• 📆 Monthly or quarterly reviews are essential to ensure ongoing performance management and execution of the plan.

Q & A

What are the four phases of the strategic planning process mentioned in the video?

The four phases are Assess, Design, Build, and Manage.

Why is it important to assess the current state before designing a strategy?

Assessing the current state helps to understand where the organization stands today by gathering external and internal perspectives, which is essential for making informed strategic decisions.

What tool does the speaker suggest using to summarize external and internal perspectives?

The speaker suggests using a SWOT analysis to summarize opportunities, threats, strengths, and weaknesses.

How does a mission statement help in the strategic planning process?

A mission statement clarifies an organization's core purpose and defines what is in and out of scope for the organization, guiding its actions and priorities.

What role does the vision statement play in strategic planning?

The vision statement defines the organization's future state, guiding it from where it is today (Point A) to where it wants to be in the future (Point B).

What are competitive advantages and why are they important in the strategy design phase?

Competitive advantages are key factors that help an organization succeed and differentiate itself from competitors. They act as an umbrella over the strategic plan to ensure the organization remains competitive.

Why does the speaker suggest using fewer than six long-term strategic objectives in the framework?

Fewer than six objectives help create a focused and holistic framework, ensuring the plan addresses key areas without overwhelming the organization.

What does SMART stand for, and why is it important when setting corporate goals?

SMART stands for Specific, Measurable, Attainable, Realistic, and Time-Bound. It ensures that corporate goals are clear, quantifiable, and achievable within a specified timeframe.

How does cascading goals through different organizational levels improve plan execution?

Cascading goals from corporate to department and then to individual levels ensures alignment across the organization, with each person understanding their role in achieving the broader strategic objectives.

What are the three key elements required for effective execution of a strategic plan?

The three key elements are: 1) ensuring people have individual action plans, 2) using a system to track and manage performance, and 3) conducting regular performance reviews.

Outlines

00:00

📋 Overview of the Strategic Planning Process

In this video, Erica Olsen introduces the strategic planning process, highlighting four main phases: Assess, Design, Build, and Manage. She emphasizes that while the process is often iterative, the goal is to develop a plan and manage its execution. Sometimes, parts of the process are revisited to achieve desired outcomes. The key takeaway is that the process is flexible, and viewers can focus on individual components if necessary. The video will cover the entire process, starting with assessing the current state through external and internal analysis.

05:04

🧐 Assessing the Current State

The first step in strategic planning is assessing the current situation, or 'Point A.' This involves gathering external insights on opportunities and threats, as well as internal assessments of strengths and weaknesses. All this information is consolidated into a SWOT analysis. Erica mentions that there are more in-depth videos available for those interested in digging deeper into this step. Once the assessment is complete, the next step is designing the strategy, starting with the mission statement.

🎯 Mission and Vision Statements

Designing the strategy begins with defining the mission statement, which clarifies the organization’s core purpose and boundaries. The mission statement helps answer what the organization stands for and what it doesn't. With a clear mission, the organization can move on to crafting a vision statement, which outlines the desired future state. The vision statement serves as the guiding goal for the strategic plan, laying the foundation for how the organization will move from its current state to where it aims to be.

🛤️ Defining Success: Competitive Advantages and Long-term Strategies

The strategy design phase continues with defining how the organization will achieve success through identifying competitive advantages and long-term strategies. These serve as an overarching guide, ensuring the plan is built with competitive and successful outcomes in mind. Using a visual analogy, Erica explains how these elements act as an umbrella over the entire plan, shaping the direction of the organization’s strategy moving forward.

🏗️ Building a Strategic Framework

With a guideline for success in place, the next step is to build a strategic framework through long-term objectives. These objectives provide a holistic structure that covers four key areas: financial, customer, operational/internal, and people perspectives. Erica suggests limiting the framework to fewer than six categories for clarity. The rest of the strategic plan will cascade from these objectives, ensuring a well-rounded and comprehensive approach to planning.

📈 Setting Corporate Goals

After establishing the framework, the next phase involves setting quantifiable, outcome-based corporate goals. These goals should articulate where the organization wants to be over the next few years. Erica emphasizes the importance of making these goals SMART (Specific, Measurable, Attainable, Realistic, and Time-Bound). Each goal should align with the long-term objectives and serve as a measurable milestone for tracking progress.

⚙️ Cascading Goals Through the Organization

The strategic planning process continues by cascading corporate goals down to the department level and then to individual contributors. This ensures that everyone in the organization is working toward the same outcomes. Once goals have been set at all levels, the third phase of the process is complete, and the organization has a clear and actionable plan in place.

🚀 Managing Execution of the Plan

With a plan in place, the focus shifts to managing its execution. Erica stresses that the plan should not just sit on a shelf; it needs to be actively managed. Three key elements are necessary for successful execution: people, systems, and processes. First, every individual must have an action plan with clear ownership and accountability. Second, the organization must have a system (such as software or spreadsheets) to track performance. Lastly, regular performance reviews should be scheduled to ensure that the plan is being followed and adjusted as necessary.

🔄 The Importance of Performance Reviews

To effectively execute the strategic plan, it’s essential to conduct regular performance reviews, either monthly or quarterly. Without these check-ins, the rest of the plan remains theoretical. Performance reviews help ensure that the plan stays on track, making adjustments when needed. This final step ties the entire strategic planning process together and ensures that good ideas are translated into real-world results. Erica closes by encouraging viewers to subscribe and continue their journey in strategic planning.

Keywords

💡Strategic Planning Process

The strategic planning process is the systematic approach outlined in the video to guide organizations in achieving long-term goals. It involves four main phases: Assess, Design, Build, and Manage. This process ensures that an organization evaluates its current position, designs a forward-looking strategy, builds actionable plans, and manages the execution of those plans. The video emphasizes the iterative nature of the process, where organizations might revisit stages if results aren't achieved.

💡SWOT Analysis

SWOT Analysis stands for Strengths, Weaknesses, Opportunities, and Threats. It is a critical tool used in the 'Assess' phase of the strategic planning process to evaluate both internal and external factors that affect the organization. The internal perspective focuses on strengths and weaknesses, while the external perspective addresses opportunities and threats. This analysis provides a foundation for understanding the organization's current state and informing strategic decisions.

💡Mission Statement

A mission statement defines the core purpose of an organization, outlining 'what's in and what's out.' It answers fundamental questions about why the organization exists and what it aims to achieve. The video explains that a clear mission statement helps guide decision-making and ensures alignment within the organization. In the strategic planning process, it is a key element in the 'Design' phase.

💡Vision Statement

A vision statement describes the future state an organization aspires to achieve. It is a forward-looking declaration of where the organization wants to go and serves as a long-term goal. In the video, the vision statement is presented as the guiding light that connects the organization's current state to its desired future. This concept plays a crucial role in shaping the strategy and driving the overall plan.

💡Competitive Advantages

Competitive advantages refer to the unique strengths or qualities that give an organization an edge over its competitors. In the video, these are identified in the 'Design' phase as factors that help the organization succeed and remain competitive in the market. They serve as an overarching guide for the strategic plan, ensuring that the organization's strategies are built with a focus on leveraging these advantages.

💡Long-term Strategic Objectives

Long-term strategic objectives are broad, overarching goals that guide the organization over an extended period. In the strategic planning process, these objectives form the framework of the plan and are typically divided into key categories such as financial, customer, operational, and people perspectives. The video emphasizes that these objectives should be holistic and balanced, as they cascade into more specific goals and action plans.

💡SMART Goals

SMART is an acronym that stands for Specific, Measurable, Attainable, Realistic, and Time-Bound. In the video, SMART goals are highlighted as essential for ensuring that corporate goals are clear and achievable. These goals are quantifiable, outcome-based statements that guide an organization’s progress. The use of SMART goals ensures that each step in the strategic plan is actionable and trackable.

💡Cascading Goals

Cascading goals refer to the process of breaking down high-level strategic objectives into smaller, more specific goals at different levels of the organization, such as department and individual contributor goals. In the video, this is part of the 'Build' phase, where corporate goals are translated into actionable plans throughout the organization. This ensures alignment and clarity at every level of the organization, from the top down.

💡Performance Tracking System

A performance tracking system is a tool or method used to monitor and measure the progress of the strategic plan. This can take the form of software, spreadsheets, or other systems that collect and analyze data. In the 'Manage' phase, the video stresses the importance of having a system in place to regularly track performance against goals, ensuring that the organization stays on course and can make adjustments as needed.

💡Execution Reviews

Execution reviews are scheduled meetings or processes where an organization reviews its progress toward strategic goals. In the video, these are described as essential for keeping the strategic plan alive and ensuring that it does not just exist on paper. Regular reviews, whether monthly or quarterly, allow the organization to assess performance, make adjustments, and maintain accountability throughout the implementation phase.

Highlights

The strategic planning process is divided into four phases: Assess, Design, Build, and Manage.

Strategic plans start by understanding the current state through external perspectives (opportunities and threats) and internal perspectives (strengths and weaknesses).

A SWOT analysis is used to summarize internal and external assessments.

Mission statements define an organization's core purpose, explaining what is included and excluded.

Vision statements outline the future state, showing where the organization wants to go.

Competitive advantages and long-term strategies guide the organization’s success and keep the plan focused.

The strategic framework is built around long-term objectives that cover four key perspectives: financial, customer, operational/internal, and people.

Corporate goals are quantifiable, outcome-based statements, which can be tracked using key performance indicators (KPIs).

SMART goals (Specific, Measurable, Attainable, Realistic, and Time-Bound) ensure corporate goals are clear and actionable.

Goals should cascade from corporate goals to department goals, down to individual contributor goals.

Execution is a key part of the strategic process, requiring personal accountability and ownership through individual action plans.

Tracking and managing performance is essential, with systems like software or spreadsheets to organize and analyze data.

Regular performance reviews, scheduled monthly or quarterly, ensure the strategic plan stays on track and adaptable.

Effective strategic planning requires both a solid plan and the continuous management of that plan.

The entire process may be revisited periodically as part of a 'rinse and repeat' approach to improve execution.

Transcripts

Hi, my name's Erica Olsen.

Today's whiteboard video is an overview of the strategic planning process.

Instead of going through a bullet-pointed list, we'll do it in the form of an illustration.

To orient ourselves, I want to outline the four phases of the process over here: Assess,

Design, Build and Manage.

The phases of planning are assess, designing and building, and we spend a couple of months

per year doing that.

We spend the rest of the year managing the performance and the execution of our plan.

Oftentimes, we get into execution and we're not exactly realizing the results that we

want, in which case we go back in into some parts of the planning process, sort of rinse

and repeat.

Today's video is going through the whole process, but sometimes you just may pick pieces of

it.

So let's jump in.

Great strategic plans start with understanding where we are today, assessing the current

state.

Point A. We do that by gathering external perspective, opportunities and threats.

And internal perspective, strengths and weaknesses.

And we summarize all that information into a SWOT analysis.

And as a little asterisk, we have detailed whiteboard videos on each point today, so

if you need to dig deeper, check those out.

So once we're clear about where we are today, we can move into the second part of our process,

which is designing the strategy, starting with our mission statement.

Our mission statement is a square here because great mission statements tell us what's in

and what's out.

Why do we exist as an organization?

What's our core purpose?

And then by default, what's not?

With clarity on our mission, we can move to casting our vision or our future state.

Strategic plans are all about moving organizations from where we are today to where we want to

be in the future and that's what our vision statement does for us.

It tells us where we want to go.

The rest of our plan builds a road map from today to tomorrow, starting with a couple

of things that help us answer, how will we succeed?

Our competitive advantages and our long-term organization-wide strategies.

These come in different names, but let's just use the analogy and the visual to keep us

grounded.

These help guide, they act as an umbrella over our entire plan to make sure that we're

building a plan that we can succeed and be successful and be competitive with.

So with that guideline in place, we can move to building our framework.

Our long-term strategic objectives are our framework.

Again, there are different names for this.

Let's just use that for today.

I like to see them in four categories because we want a holistic framework.

We want to make sure that our plan covers our financial perspective, our customer perspective,

our operational and internal perspective, and our people perspective.

Less than six is a pretty good idea when you're looking at your framework because we're gonna

cascade the rest of the plan from these.

From there, we're ready to move into the next phase, which is building our plan.

That looks like starting with our goals, our corporate goals.

And we're using the word "goals" to articulate quantifiable, outcome-based statements.

Where do you want to be in year one?

In year two?

In year three?

And most of the time, we use key performance indicators to help guide us along the way.

So we like our corporate goals...and again we're gonna cascade from our strategic objectives...we

like our corporate goals to be SMART.

SMART's a great acronym to make sure you have good, quantifiable, outcome-based goals: Specific,

Measurable, Attainable, Realistic and Time-Bound.

Once we have our corporate goals in place, a couple per each long-term strategic objective,

we're ready to move into annual operating plans and that looks like building goals and

cascading into each level of the organization.

So that looks like corporate goals being cascaded into department goals and department goals

being cascaded into individual contributor goals.

Once we've cascaded it down that far, we have a plan and we're done with the third phase.

So now we have a plan, now what?

We want to move into managing execution because nobody wants to build a plan that sits on

a shelf.

So there are three things you have to have in place to effectively execute.

Number one, people.

You need to make sure that every person in your organization has an individual action

plan that expresses ownership and accountability for what they need to get done by when.

And with that, that matters because all the rest of this, it's just on paper if we're

not clear about that, that very specific piece.

The second thing is we need to make sure that we have a system in place to track and manage

performance.

A software system, spreadsheets, whatever it looks like, you're gonna gather a lot of

data on a monthly or a quarterly, an annual basis, you need a place to put that and everybody

needs to be working on the same system.

The third thing is process.

You need to schedule at least monthly or quarterly reviews of your performance because without

that review, all the rest of this is just again good ideas on paper.

So with that, that's an overview of the strategic planning process.

Subscribe to our channel.

Happy strategizing.