It’s not the plan that is important, it’s the planning.
Dr. Graeme Edwards
I am often asked by my client what is meant by “strategic planning” and how it defers from a traditional Business Plan. Understanding these two tools and the relationship between them is a critical component of growing and optimizing your business.
Imagine you are asked to design your dream house. Even if you have a pretty good idea of what you love and hate in different house styles, you would still want to make sure that you sat down and identified the “must haves” and the “must not haves”. Do you want three bathrooms, or will two suffice? Do you want a balcony in your master bedroom, or do you prefer a wraparound patio? There a dozens of decisions that must be made, even in the vision stage of development.
Strategic Planning is much like this process. It is where you examine the goals and your vision for the future of your business. Depending on your industry, a thorough Strategic Plan could include among other tools a Mission (or mantra), Vision and Values Analysis, a Situational Analysis which analyses the current internal reality of your business, an Environmental Scan which analyzes the external political, environmental, economic, social, technological, legal and ethical trends that impact your business, and one (or more) of the 7 management and planning tools (various system of organizing the goals and strategies that emerge from the planning process).
Ultimately, the goal of a strategic plan is to answer the following: How do we get from where we are to where we want to be? This question is answered by examining the current status (where you are), your desired destination (the overarching vision and goals) and the best course to get there (action plans, target objectives and deliverables).
While a traditional Strategic Plan will usually result in a summary report, this is not its primary objective. It is very much the journey and the process that leads to the report that matters. In fact, some strategic plans that took weeks to develop are only one or two page documents!
So how is a Strategic Plan different from a Business Plan? Let’s look back at our dream house analogy and see!
We’ve gone through the planning process and have met with the architect to tell them exactly what we would like our house to look like. They return to us with beautiful pictures and draft plans which show us how our dream will appear in ‘real’ life. It is a beautiful house, and the pictures are exactly right! But they are only pictures…and you can’t live in in a picture!
And so we begin the process of planning things out structurally and turning our picture (vision) into reality! This process is just as involved (if not more so!) as the visioning stage and if it isn’t properly structured it is very easy for things to get missed or otherwise not go as planned.
A Business Plan is like the blueprint to your Strategic Plan. In a Business Plan, you take the goals and visions you’ve identified and bring them to life by setting tangible timelines and outcomes, as well as the action plans on how to achieve them. Business Plans operate much more on the practical level than the philosophical Strategic Plan and include both operational and financial planning elements. They also include the methods of evaluating the success of each element of the plan by using Key Performance Indicators (KPIs).
Business Plans often have sections on Risk/Threat analysis, Market and Competition analysis, and a Financial Analysis. However, just as no two businesses are alike, no two Business Plans will cover the exact same materials since the needs of every organization differ immensely.
Strategic Planning and Business Planning are journeys that can be critical to your success as an organization. For many business owners, these are foreign territories that they may not have the experience or knowledge to explore on their own. This is why many businesses, both large and small, often seek out business specialists who are external to the organization and who can act as guides and facilitators to the process.
Stay tuned for PT 3 of this three part series on Strategic Planning which will include an overview of the various tools used by Strategic Planners in the analytical process.
Zita Dube-Lockhart is an independent business consultant and CEO of Ignite Strategic Solutions. With over a decade in business management, she specializes in business development and strategic planning for small and mid-sized businesses. She is based out of Edmonton, Alberta.