Formal Strategic Planning Process

This tool is useful for visualizing the steps in a typical strategic planning process, from the initial environmental scan to the narrowing of strategies and developing of related performance targets. Managers and leaders can use this tool to communicate their planning process to other managers, employees, board members and other stakeholders.

This tool is best used in conjunction with Leading at Light Speed, our strategic planning book that helps leaders build trust, spark innovation and implement the 10 best practices of high performing organizations.

The strategic planning process should unfold in the following sequence:

Step 1: The CEO or board chair should take the lead in working with major stakeholders to hear their perspectives on what’s working well, what’s not, and identifying priorities for change. A SWOT analysis (strengths, weaknesses, opportunities, threats) is a convenient instrument for collecting and organizing this data.

Step 2: A planning group composed of the senior management team should define the outcomes they hope to achieve from the process and rationales for change. The planning horizon should be expressed: either five or ten years is normal. Record and communicate all of this information.

Step 3: Use a flow chart to broadly define and convey the planning process. The role of major stakeholders, such as unions board of directors and customer groups should be agreed upon now, before the process begins in earnest. Utilize the Six Rings Model to define the procedure.

Step 4: The planning group should focus on the purpose of the organization and its core values. Purpose establishes what the organization will and won’t do. Core values define the things that are essential the organization’s success.

Step 5: Illustrate the scope. Where does the organization want to be in 5 or ten years? Reiterate steps 4 and 5 until the planning group has a strong definition of the organization’s purpose, core values and vision (the strategic focus). This can take multiple meetings.

Step 6: The planning group should focus on the areas where the organization needs to move the farthest in order to sustain and achieve the purpose, core values and vision. Remember that goals are big pushes to advance the organization and should be limited in number (no more than 4-5). Not every value has to have a goal attached to it.

Step 7: Performance objectives should be assigned to each value and each goal. Performance monitoring frequency and system should be defined. Frequency can be every one, three, six or twelve months. Financial targets (revenues, expenses, profits) should be developed for each year of the plan.

Step 8: The plan should succinctly communicate all the elements described above. Providing credentials and some background may be beneficial. High level financials should be included. The plan should be broadly communicated in draft form for comment and review prior to being adopted.

Step 9: The senior level management team and board should overlook the performance marks affiliated with each element of the plan on a frequency defined in the plan.

Each individual organization within a greater organization should have its own business plan to support the strategic plan. The planning thus cascades from the senior-most level outward to the front lines until everyone has been engaged in some aspect of planning. Each unit’s plan should have its own performance management system tied to the overall plan.

Accelerate the Pace of Change

To speak with a strategic planning consultant about how LRI can help you develop and implement a strategic plan for accelerating the pace of change, call (916) 325-1190 or email