Every business needs direction to achieve its mission and vision. Strategic planning provides this direction. This is prepared by top management with the assistance of senior managers. This article provides a detailed explanation of the term.
Strategic Planning Explained
Strategic planning is the organisation's long-term plan that sets direction for the attainment of strategic objectives and its mission and vision.
Corporate planning, also known as long-term plans, refers to plans that span at least three years. They show how the company intends to use its current and future resources to meet the planned objectives.
When strategy is included in a long-term plan, it becomes strategic planning. Note that strategy is the way and manner in which an entity intends to achieve its objectives.
A strategy shows direction or a map that managers will follow to attain planned strategic goals. That is, it is a guide that reveals the different actions to be taken by managers to achieve goals and objectives.
Most organisations set out their mission (why they are in existence) and vision (where they want to be in the future) in a mission and vision statement. These required direction. And that is where strategic planning comes into play.
For example, the mission of a financial technology company might be to provide payment services for educational institutions. This will help them process student school fees, dues, and subscription payments. Its vision could be to become the market leader in this business area.
To achieve it, the company must prepare a strategic plan that shows the direction towards the attainment of the corporate mission and vision.
Strategic planning criteria
According to the ATSWA study pack, strategic planning must meet the following three criteria:
1. Proactivity
Proactivity is the ability of an individual or group to take control of the situation before any damage is done. A good strategic plan should reflect the proactive minds of the board of directors. The strategic direction should be capable of watering down any obstacle.
2. Congruency
Every organisation is unique in character. Also, entities face opportunities and threats in their external environment. Strategic planning should be in congruence with the organisational features and external environment.
3. Synergy
Another criterion for a good strategic plan is synergy. It should bring together all units and departments of the organisation. When they work together less resources will be required to achieve higher goals and objectives.