Steps in the Strategic Planning Process

A process followed by organizations through various procedures and operations, in order to reach the state that is envisioned by the management of the company is called strategic planning. The future course of a company is decided with the help of strategic planning. Various techniques of analyzing the company's performance such as the SWOT (Strengths, Weaknesses, Opportunities and Threats), STEER (Socio-cultural, Technological, Economic, Ecological, and Regulatory factors) and PEST (Political, Economic, Social, and Technological analysis) are used in strategic planning.

Different Steps in Strategic Planning Process

The important steps in the strategic planning process include plan development, testing, implementation and the maintenance phase. Let us get into the details of these phases.

Plan Development: This step in strategic planning is subdivided into four phases i.e. visioning, mission formulation, business modeling and strategy development.

• Visioning: It is an activity of forming an idealized image of the company's future position. It is the driving force in guiding the company's progress towards goals.
• Mission Formulation: It is a brief description about the purpose of an organization's existence. It explains the company's services or products, the segmentation of the market, the distribution strategy, etc.
• Business Modeling: This activity involves identifying the Lines of Business (LOB) and establishing the Critical Success Indicators (CSI).
• Strategy Development: This process identifies the thrust areas and provides a culture that helps meet the goals specified under the thrust areas.

Testing the Plan: This phase of strategic planning involves performance audit and gap analysis.

• Performance Audit: It helps gauge the ability of an organization in reaching the targets set. In this process, the line of business that helps in moving the business forward are identified. The performance of tracking systems is checked. The strengths and weaknesses of the organization are identified with the help of the SWOT test. The ability to grab opportunities and overcome threats is also tested. Risk assessment is a part of the performance audit. In this activity, the hidden risks that might affect the company in the future are uncovered. It helps in dealing with the problems effectively.
• Gap Analysis: It helps in determining where the company stands, in terms of achieving targets. The difference between the current and the desired position of the company is marked with the help of gap analysis.

Implementation: This phase of the planning process deals with implementation of the plans devised by the company. It is checked whether there is a consensus among employees in following a set plan. It is also checked whether the plans affect the inter-functional performance of different departments. Human capital planning is a part of the implementation phase. It stresses on the importance of having the right people at the right positions in an organization. The Balanced Scorecard is a method used to monitor the implementation of business strategies. It checks the effects of methods and businesses adopted in implementing business strategy. The balanced scorecard method operates within the framework of the following points

• Customer orientation
• Financial objectives and measurements
• Learning and capability growth
• Internal Processes

Maintenance: It is a kind of feedback system which helps in taking corrective action to deal with problems in the planning process.

Planning helps in meeting the objectives or goals of an organization in an effective manner. The plans that are prepared also help in monitoring the implementation of an activity. Thus, strategic planning is an important activity from the point of view of the development of an organization.