Strategic planning maps the actions needed to deliver on long-term strategy. Use proven practices and tools to do it well.
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Strategic Planning: What, Why, How, Tools and Templates
Strategic planning that works — even in volatile times
A good strategic plan clearly and simply articulates where your organisation is going and how it can get there.
During the strategic planning process, make sure you:
Diagnose what drives success or failure for your organisation
Properly assess your organisation’s capabilities
Understand the external competitive environment
Set precise goals and a clear vision for the future
Clearly articulate the initiatives required to get you there
Measure progress properly
How to build a strategic plan you will actually use
Strategic plans must tie directly to long-term strategy and specify clear and achievable goals in an easily communicated format. Make sure to use proven tools to get you there.
Strategic planning basics
Strategic planning process
Strategic planning tools
Strategy and strategic plans: How they differ and why it matters
Strategy defines the long-term direction for the enterprise by describing what success looks like and what needs to be done to achieve that success.
Strategic plans cover the midterm horizon and describe how the strategy will be executed by identifying the roadmap of initiatives necessary to deliver the strategy.
Operational plans define the projects, programs and products required in the short term to deliver the initiatives identified in the strategic plans.
The strategic planning process must cover all three horizons, as they serve different purposes.
Strategy defines the long-term strategic ambition and focus of the enterprise
Strategy defines what the enterprise will do to compete and succeed in its chosen markets or, for the public sector, it describes what the enterprise will do to successfully fulfill its mission.
In this horizon, the enterprise will also define what functional leaders need to do to contribute to enterprise success. The strategy horizon typically covers a period of three to five years. However, this may be longer for certain sectors or industries.
Strategic plans define how strategy will be realized over the midterm
Strategic plans describe how the enterprise will realize its long-term ambitions. They identify the roadmap of initiatives and portfolio of investments that will be required to achieve the objectives defined in the strategy.
Strategic plans will be created for the key business domains such as IT, marketing and supply chain. For example, the strategic plan for information and technology will define the target architecture needed to deliver the strategic actions defined in the strategy, and the required target IT operating model. It will also identify the roadmap of initiatives and investments that will be required to reach those targets and execute the strategy.
Strategic plans typically cover a period of 12 to 24 months.
Operational plans cover the short-term execution
Operational plans identify the projects, programs and products required to deliver the initiatives identified in the strategic plans. They are focused on the execution of the changes required to realize the enterprise’s strategic ambition. Operational plans are usually closely related to the enterprise’s budget process and are not, therefore, typically affected by the same confusion as strategy and strategic plans.
Operational plans normally cover a period of six to 12 months.
Stay alert to disruption during strategic planning
It’s critical to scan and respond to trends and disruptions that could impact your strategy and strategic plans and change your strategic assumptions.
Strategic planning cycles should incorporate mechanisms, including scenario planning, to vet assumptions for relevance.
Ignoring or devaluing trends and disruptions can result in you overlooking threats and opportunities that could affect your value proposition and competitive positioning.
The strategic planning process must cover strategy, strategic plans and operational plans
The strategic planning process should cover both strategy and strategic plans — as well as operational plans.
Two mistakes to avoid:
Creating long strategy documents that don’t get read or used — and therefore fail to produce the desired value or business outcomes
Producing high-level strategy that lacks enough actionable content to drive execution — for example, by including a list of goals with no explanation of how those goals will be achieved or how success will be measured
One important way to keep strategic planning on track is to provide baseline definitions of terms that are key to the process. This will keep all stakeholders aligned on the core components of strategic plans required to drive business outcomes.
If strategic planning participants have only a generic understanding of key planning terms, it can be more difficult to collaborate and ultimately develop a clear, cohesive strategic plan.
Ensure stakeholders understand the key components in the strategic planning process
Align on these key terms to minimise confusion in strategic planning and set a baseline for collaboration:
Mission and vision. Missions and visions are often confused with one another, but they serve different functions for an organisation. A mission states an organisation’s essence (i.e., “Who are we?”). A vision describes what an organisation is working toward (i.e., “Where are we going?”).
Goals and objectives. Although commonly confused and conflated, goals and objectives serve distinct purposes. Goal statements articulate what the organisation aims to achieve, while objectives provide an important roadmap for how they will achieve it.
Action plans formally document the steps (or initiatives) required to attain an objective. This plan is the primary source of information for how an objective will be executed, sequenced, monitored, controlled and closed.
Measures and metrics are often treated as interchangeable. While they are related concepts, they are not exactly the same. A measure is the name of an observable business outcome (for example, employee engagement), while a metric describes the actual data being collected to quantify the measure (for example, percentage of “satisfied” employees in an annual survey).
Different stakeholders are required for the different elements of planning: Mission, vision and goals are best set by senior leadership, while objectives, action plans, measures and metrics are best left to managers with execution expertise.
Tools are key when you build and refine your strategic planning documents
Gartner has worked with clients to evaluate hundreds of strategic plans across industries, geographies and strategic contexts. The best plans are driven by information and data surfaced through diagnostics and when final, templatised for easy understanding and sharing.
These eight activities are especially improved by good tools and templates:
- Lookback. Organisations that fail to learn from their experience struggle to meaningfully improve their strategic performance. Use performance dashboards to understand the root causes of your successes and failures as an organization and extract and present lessons or imperatives to improve future performance.
- Internal scan. Companies that don’t assess core capabilities regularly, tend to under- or overestimate their ability to deploy successful strategies. Use tools like Gartner Score to:
Review your organisation’s capability strengths and gaps
Understand which capabilities need to be built to develop a competitive advantage
Close any capability gaps and inform future growth bets
- External scan. Without identifying early signs of threats and opportunities, strategic plans lack impact and expose the organization to the risk of gradually losing its relevance. Use tools like Gartner “Tapestry of Trends” (TPESTRE) to:
Review market dynamics and factors that govern the attractiveness of the market
Understand the trends among competitors and customers
Identify and act on market opportunities and threats
- Vision. Without a clear vision, strategic goals are imprecise, creating internal conflicts and strategy stalls. Templatise your mission and vision statements to:
Articulate an ambitious yet achievable vision statement that motivates employees and facilitates goal development
Present a comprehensive view of the end state envisioned for your organization
Identify strategic imperatives that must be realised to achieve the desired vision
- Goals. When goals are unclear, the strategy can be derailed by conflicting actions, confusion and misalignment. Use tools such as business-alignment conversation guides to:
Develop high-quality goals that will allow you to act on the imperatives
Ensure goals are aligned with the vision, external environment and internal function
Develop actionable roadmaps to enable effective execution
- Initiatives. Poorly articulated initiatives can lead the organisation to overinvest in ill-advised ventures or underinvest in prudent ones. Use tools such as decision-maker and portfolio scorecards to:
Make an action plan for the organisation to succeed in chosen markets
Prioritise the key initiatives to achieve the organisation’s objectives and goals.
Identify and close capacity constraints that can hinder the smooth execution of the strategy
- Measures. If measures do not directly support strategic goals, managers will make poor decisions during execution that will derail the strategy. Use tools to evaluate, select and track the right metrics to:
Improve the rigor and credibility of your metrics
Assign accountability for key actions and behaviors
Ensure capacity for course correction and timely execution
- Messaging. If the stated strategy does not engage and inspire the team, it is not the right strategy. Templatise your messaging to:
Build a clear communication plan that motivates stakeholders to execute the strategy
Ensure the information presented in your strategic plan documents is easily digestible
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Frequently asked questions
What is strategic planning?
Strategic planning is the process through which enterprises, functions and business units identify the roadmap of initiatives and portfolio of investments that will be required in the medium term to achieve long-term strategic objectives.
What are the four types of strategic planning and the three levels of strategic planning?
Strategic planning starts with setting strategy at the enterprise level, but that strategy must then be turned into action. The three levels of strategic planning typically refer to corporate versus business unit and functional. The four types of plans are typically strategic, operational, tactical and contingency.
What steps are involved in the strategic planning process?
To build a successful strategic plan with a consistent and sequential process, functional leaders should:
Ensure consistent usage of terms to minimise confusion in strategic planning and set a baseline for collaboration
Build a strong foundation for more detailed planning by setting or pressure-testing mission, vision and goal statements first
Streamline stakeholder input by limiting mission, vision and goal setting to senior leadership, and leaving objective, action plan, and measure and metric development to managers with execution expertise
What are the key elements of strategic planning?
The key elements of a successful strategic plan include:
Mission and vision. The organisation’s mission articulates its reasons for being, and the vision lays out where the organisation hopes to be. The strategic plan, which links the two, must be adaptive enough to respond if the context changes during execution.
Strategic assumptions. To build a successful strategic plan, leadership should scope for trends and disruptions, and assess their potential impact on enterprise goals.
Strategic plan design. A rigorous strategic planning design effectively translates the strategy into plans that can and will be executed. Poor plans lead to poor execution.
What are the key terms in strategic planning?
Mission: Organisation’s purpose
Vision: Desired future state
Goal: Aim
Objective: How to reach goals
Action plan: What’s needed to achieve objectives
Measures and metrics: To track progress toward goals
How do we design a strategic planning system?
Strategic planning “systems” refer to the tools used to document strategic plans. Gartner urges organisations not to focus on strategy in terms of the document they’re creating, but instead focus on turning strategy into an easily communicated action plan.
What is a strategic action plan?
The strategic action plan is a formal document that serves as the primary source of information for how objectives will be executed, monitored, controlled and closed. Many organisations also deploy an associated but separate “action plan” for achieving the operating model.
What are strategic measures and metrics?
Measures are observable outcomes that allow organisations to evaluate the efficacy of their action plans. Metrics quantify those observed changes to enable an organisation to concretely quantify its progress and stay aligned to its chosen measures.
What are the 7 key success factors involved in strategic planning?
These seven success factors are key to producing high-quality strategic plans that will be successfully executed yet responsive to change:
Focus on designing a minimally viable strategy.
Customise planning efforts to meet participants where they are.
Sketch out initiative design before prioritising strategic actions.
Be clear about who owns what.
Cascade plans side to side, not just top-down.
Focus performance measures on key assumptions.
Pressure-test plans against a narrow set of future scenarios.