Best Practices

Strategic Planning Process Steps: How to Plan Effectively

Jonathan Friedman
April 3, 2021
Strategic Planning Process Steps: How to Plan Effectively

Is your organization struggling to stay on track? Do you find it challenging to manage your resources and focus on priorities? If so, we have the solution for you: the strategic planning process. 

Strategic planning is a tried and true method of establishing and meeting goals throughout all levels of an organization. It requires more discipline and planning than most companies are willing to give.

If you're ready to focus on the future and get your organization in better shape than ever, keep reading. We're going to talk about the strategic planning process and run through the strategic planning process steps.

Below is everything we will cover. Feel free to skip ahead.

What is the strategic planning process?

Strategic planning process infographic

Strategic planning is an organizational tactic that involves managing strategic objectives, focusing resources, and strengthening business operations. The strategic planning process is a way to align everyone around the company's vision, mission, and values. Strategic planning allows companies to work towards common goals and meet those goals with specific ideas in mind.

Often, strategic planning can lead to a complete shift in organizational thought processes and fundamentals. It forces higher-ups to reevaluate what the organization is, whom it serves, and what it sells. This deep dive into the bare bones of organizational planning helps revitalize companies who have driven far from their purpose.

No matter whether your company's management style is a top-down approach vs. a bottom-up approach, by creating a focus on the future while driving present change, strategic planning pushes companies to find their path and stick to it.

Simultaneously, the very strategic planning process definition serves to help companies notate progress as they go along. Through various measurable goals and indicators, your company will be able to tell whether or not you've made any progress during the strategic planning process.

Strategic planning process steps

If you're going to take advantage of the strategic planning process, you need to understand each step. Because this strategy is so precise (and so effective), there are several steps that you and your business are going to need to take.

We've broken down each step into multiple parts so that you understand precisely what you need to do as your business goes along the strategic planning trail.

We've also included a 'Phase 0,' which consists of the things that you need to do to get your company prepared for your annual operating plan and long-range plan.

Here is your strategic planning process step-by-step guide.

Phase 0: Getting started

Before you dive into the strategic planning process, you need to make sure that your company is ready for the change that is about to take place. There are a few things that you need to take care of:

Estimated Duration

Getting started may take 1-2 weeks, depending on the current efficiency of your company. Make sure that you're ready to communicate with higher-ups and get the company on track again.


Step 1: Determine organizational readiness

Before you get started with anything, you need to think about whether your company is ready for a strategic planning process. 

Does your company meet the conditions and criteria that it needs to implement a review of its strategy? Is now a good time for your organization to undergo a strategic planning process? Would there be a better time in the future to prepare for such a task?

Don't lie to yourself with these questions. Reviewing your company's strategy is exciting, but you can risk your company's future if you don't allocate the right resources or time.

Step 2: Develop your team and schedule

Your planning team is going to be the driving force behind your company's strategic planning process. This means that these are the members going to the forefront of your business's strategy.

Questions to answer

Once you've chosen your team, you should make sure that each person is aware of their roles and responsibilities within the team. Likewise, everyone should know who each other are and what everyone else's roles are within the team.

The better everyone understands the flow of the group, the better the group will work together.

We should also note that you should designate one individual as the 'Strategy Director.' This is the individual who will lead the group and help steer the group in the right direction to develop strategies for the company.

Next, you have to implement an effective planning schedule. This schedule is going to determine what times your strategic planning team is going to meet.

You'll want to meet more often during the first few months. After you have your schedule established and you've laid your expectations down, you can start meeting less often. Typically, there are progress reports quarterly and extensive replanning meetings annually.

Keep in mind that you can constantly shift your schedule if you feel that you're meeting too much or too little. Figure out what works best for your team and stick to it.

Step 3: Collect current data

You're about to make some changes, so you need to necessary documents to make the right changes. You're going to need to look for important financial documents, organizational documents, and other papers that you think could help you and your planning team determine what to change within your organization.

Here are some of the documents we recommend that you gather:

As you can see, there is a lot to look at here. It may seem overwhelming, but bringing all of this information together can help you and your employees look at the organization's big picture.

Step 4: Review collected data

Now, it's time to look at and review all of the data that you've collected. It's not enough to look at everything that you've gathered. You need to understand it in terms of your company's strategies and goals.

In other words, you need to sit with the Strategy Director and determine whether or not your organization has been following the goals and strategies you last set forth.

You should also note any general trends you see in the data. This can help you spot strengths and weaknesses within the company.

The more in-depth you review your company's record, the better set you'll be to make plans for the company during the actual strategic planning process.

Understanding the purpose of the strategic planning process before continuing, it's pertinent that you understand why you've completed all of these steps. Also, you should understand the role that setting up all of your documents serves.

The purpose of forming a strategic plan lies in a company being able to survive change over time. Whether the change is anticipated or not, your company should be able to stay relatively stable no matter what happens. By developing and executing a strategic plan, your company is setting itself up for success.

It's not all easy, however. The hardest part of strategic planning comes in the future changes.

As you're using your strategic plan, your planning committee may note that some things aren't working like you hoped they would. This means that your team needs to change its strategy.

Some organizations expect that these changes only need to be made every year. However, every organization is different. You should be changing your strategy as soon as you notice something is wrong, regardless of how far away from the starting point you are.

By ignoring the problem, you're only going to create a pitfall for your company; taking the time to switch strategies when necessary saves your company in the end.

The faster you can make the changes that your organization needs, the less impact your business will take from any changes. 

Phase 1: Determine your strategic position

Phase 1: Determine your strategic position infographic

Now, it's time to start the actual strategic planning process. First, you need to determine what your strategy is going to be. This includes taking the following strategic planning process steps, each of which has activities within them:

  1. Identify strategic issues
  2. Conduct an environmental scan
  3. Perform a competitive analysis
  4. Identify opportunities and threats
  5. Determine strengths and weaknesses
  6. Define customer segments
  7. Develop Your SWOT

We know that this is a lot, but we're going to break it down even further. You don't want to try to do all of this at once. Each of the strategic planning process steps within this phase can take up to a month to complete.

Strategic Planning Process Steps: Position

Step 1: Identify strategic issues

Your company's strategic issues are those problems that are likely keeping you up at night. They're often the reason that a company decides to embark on the strategic planning process in the first place. Strategic issues can be shifts in the market, economic risk, political risk, supply chain issues, customer demand challenges, or even new market entrants.

Questions to answer

Think about the issues, opportunities, or marketing shifts that you care about. Once you've composed your ideas, it's time to move to the next step.

Step 2: Conduct an environmental scan

You may have heard of an environmental scan before. Some people know it as a PEST scan. This refers to the identification of political, economic, social, and technological trends.

Others prefer the broader term - environmental scan - because the acronym 'PEST' does not include ecological and legal trends.

Whatever you refer to the process as you should take the time to complete it. By identifying and becoming comfortable with these trends and their current dominating characteristics, you and your team can become more successful.

These trends make up the current business environment. Therefore, becoming more accustomed to them can help your company become more comfortable with the current environment.

Step 3: Perform a competitive analysis

A competitive analysis consists of looking at what your competitors are or are not giving to their customer base. This gives you a clear look at what your customers want and what you should provide them to stand out from those competitors.

In other words, a competitive analysis can help you find opportunities to stand out from competitors while also helping you identify any threats that competitors may pose to your business.

Overall, competitive analysis helps your company confirm whether or not the advantages that you think your company has are actually advantages. 

It also enables you to identify your competitors' current and future strategies so that you can respond accordingly.

Lastly, competitive analysis helps your company gather the information that can help you evaluate future decisions. By posing your strategies against your competitors' strategies, you can predict whether those strategies will be successful.

Step 4: Identify opportunities and threats

Opportunities are the actions that your business should complete if they want to take advantage of whatever benefit that action will bring the company. If the company chooses to ignore the opportunity, it will not reap the benefits at stake.

On the other hand, threats are barriers or conditions that may stop your business from reaching a goal that it's set. These exist outside of business' control and usually have to do with a competitor's actions or the current trends.

Opportunistic questions to answer

Threat mitigation questions to answer:

Taking the time to identify opportunities and threats will set your business up for success in the future.

Step 5: Determine strengths and weaknesses

Just like it's essential to identify opportunities and threats, it's also important to identify strengths and weaknesses. As you may know, strengths are activities that your business does well, while weaknesses are those limitations of a company that prevents it from completing activities.

By identifying strengths, you can figure out what your company can advertise to its customers. These strengths are the qualities that separate a business from its competitors. This is especially if one of your company's strengths is one of your competitor's weaknesses.

Your company's strengths are the selling points of your brand. Ensure that you fortify these strengths and use them when discussing your company and its products and services.

Building on strength questions to answer

On the other hand, identifying weaknesses can help you figure out what your company needs to improve on. By working on your weaknesses, you can make them strengths. Your company is only as strong as its weakest link.

Take the time to identify your company's weaknesses so that you can strengthen these qualities. The better equipped your company is to locate and battle these weaknesses, the better you can compete with competitors.

Shore up weaknesses questions to answer

Step 6: Define customer segments

Many organizations use customer segmentation to define all of the different groups of customers that their companies can reach. It also helps organize those customers into groups based on their needs from the company.

If you take advantage of customer segmentation, your business can understand the people that they're appealing to more. More specifically, you can segment these customers in your company's communication channels to ensure that you're delivering the right messages to the right people.

By segmenting your customers into various groups, you can more easily communicate with them. Plus, this means that you can also target these customers more precisely. Having an idea of their wants and needs can help you figure out what to advertise to them.

Where we provide value questions to answer

Step 7: Develop Your SWOT

SWOT Analysis

Now that you've identified your company's strengths, weaknesses, opportunities, and threats (SWOT), it's time to bring it all together in a SWOT analysis. This layout makes it easy to compare your company's external opportunities and threats to its internal strengths and weaknesses.

A SWOT analysis is just four boxes arranged in a 2x2 square. The two boxes on the left look at the internal strengths and external opportunities, with the top box focusing on strengths and the bottom box concentrates on external opportunities—the two boxes on the right look at the weaknesses and threats. The top box is focusing on weaknesses, and the bottom box is focusing on threats.

The SWOT analysis layout allows your company to compare internal and external forces as well as positive and negative forces acting on your business.

Laying out these attributes in an easy-to-read format can help you, and your team easily communicate about them.

Now that you've identified and gathered all of the elements that you need to understand about your business, you need to make sure that your team gets to work on building your business from this point. Let's dive into your strategy for tackling all of these things.

Phase 2: Developing strategy

Phase 2: Developing strategy infographic

Developing your business strategy is almost as important as implementing the strategy. This includes taking the following strategic planning process steps, each of which has activities within them:

  1. Develop your mission statement
  2. Discover your values
  3. Create your vision statement
  4. Identify your competitive advantages
  5. Craft your organization-wide strategies
  6. Develop your long-term strategic objectives
  7. Build a financial model and forecast your company's future

Each of the strategic planning process steps in this phase can take up to a month. All of them involve gathering essential data, reviewing said data, and meeting with the planning team.

Strategic Planning Process Steps: Strategy

Let's dive into each detail.

Step 1: Develop your mission statement

Every organization should have a mission statement. Your company's mission statement can be as small as a sentence or as large as a document. However, the most effective mission statements are those short, concise statements that speak to an organization's scope.

All in all, your company's mission statement should state why the organization exists. It should capture the purpose/reason for your company's existence. This should serve as the inspiration that any employee needs when they're lost on what to do for the company.

Work with your planning team to create a statement that inspires all employees to work towards a common purpose.

Questions to answer


A short, concise, concrete statement that defines the scope of the organization.

Step 2: Discover your values

Next, you need to define the company's values. The company's values statement describes what your organization stands for. In other words, it represents the values that your organization believes in.

Along with your values statement, you should define the kind of behavior you expect the business and its employees to have due to these values.

Questions to answer


5-7 core values that you and your organization can look towards as a north star.

Step 3: Create your vision statement

Next is your vision statement. Similar to the mission and values statement, the vision statement serves as a way to inspire a company's personnel.

More specifically, your vision statement defines what you want your organization to be in the future. It provides a direction for the company to move in.

Questions to answer


A straightforward yet flexible vision for what you want the future of the company to look like.

Step 4: Identify your competitive advantages

As we've briefly discussed, a competitive advantage is a characteristic that allows one organization to meet consumers' needs better than their competition. In other words, it's the characteristics that make your business better than other companies that are doing the same thing.

Questions to answer


A list of two or three things that push your company in front of all of your competitors.

Step 5: Craft your organization-wide strategies

Now that you've laid out all of these statements and advantages, it's time to put them to good use. Create strategies that you believe will help your organization reach the vision you've laid out while following your values and vision statement and leveraging your advantages.

Overall, your strategy should tell you how you're going to get from 'Point A' to 'Point B.'

Questions to answer

Is our market or industry target broad or narrow?

Keep in mind that you should be developing broad strategies at this point. We'll discuss more specific goals next in phase three.

Step 6: Develop your long-term strategic objectives

Now that you have your strategy defined develop a list of up to six strategic objectives that your organization is working to achieve. Later, you'll break down these strategic objectives into more manageable OKRs, from which you'll have departments and teams create goals to accomplish the OKRs.

Long-term strategic objectives are broad and continuous statements that address all of the areas within your organization. This will likely look at the overall financial or social health of your organization.

Also, it may look at how you're delivering products and services to your customers.

All in all, these broad statements will evaluate the kind of organizational structure that you want your company to have.

Questions to answer

Step 7: Build a financial model and forecast your company's future

The last step within this phase of the strategic planning process is to develop a 3-year financial model. You'll want to model your business to have a sense of the growth you anticipate and the operating expenses and capital expenses you should expect to achieve the growth.

The financial model provides you a blueprint for how you'll achieve your medium-term and long-term strategic objectives. Don't forget to have your FP&A team document every assumption! You'll be revisiting and updating this model annually.

Phase 3: Strategic plan development

Phase 3: Strategic plan development infographic

During phase three, your team is going to work on developing more specific goals to match the broad ones you've just set. This includes taking the following strategic planning process steps, each of which has activities within them:

  1. Use your SWOT to set priorities
  2. Establish organization-wide OKRs
  3. Develop KPIs
  4. Cascade your strategic objectives to department goals
  5. Push department goals to teams and individuals
  6. Develop annual budgets to achieve goals

Strategic Planning Process Steps: Planning

Let's dive in and look at how your company can set OKRs, KPIs, and specific goals for the entire company.

Step 1: Use your SWOT to set priorities

Earlier, you developed your SWOT (Strengths, Weakness, Opportunities, Threats) layout. Now, it's time to use this to help you think about steps that you can take. Match external opportunities and threats to your internal strengths and weaknesses as shown in the following:

Look at all of the potential strategies that you've made using the SWOT analysis. Then, choose the ones that will benefit your company the most while aligning with your company's mission, values, and vision.

Step 2: Establish organization-wide OKRs

Now, you can set short-term goals that you'd like your company to accomplish in one to three years. We recommend setting Objectives & Key Results (OKR).

OKRs are like goals, but they split the goal into two parts: (1) Objective and (2) Key Result.

As you're creating these OKRs, you should make sure that they are 1-3 years in duration and aligned to achieve your strategic objectives.

Step 3: Develop KPIs

Key performance indicators (KPIs) are important measures that can help your company realize whether or not it's meeting its goals. KPIs are essential for any company to use.

Make sure that you pick five to seven KPIs to watch over time. By using these specific measurements, you can help your company grow more clearly.

Step 4: Cascade your strategic objectives to department goals

Now, it's time to list actions that your organization can take to meet the strategic objectives that you just set. The more specific these actions are, the more likely you are to meet the goals that you've set.

You have moved from strategic planning to executing against the strategy; from strategic planning to annual planning. That said, the only way strategy gets implemented is to align resources and actions from the bottom-up to drive your vision.

Questions to answer

In the end, you should have goals, actions, measures, and targets for the entire company, within each department or support function, for the next 12 to 24 months.

Step 5: Push department goals to teams and individuals

You've created targets and goals for the entire departments. Now, it's time to cascade those goals to teams and individuals. The goals should be SMART and short in duration, which you can achieve in 12-18 months.

Each team and individual should have the next 90 days laid out in front of them. They should understand what they have to achieve in that amount of time to meet their goals.

At the end of the 90-day period, your employees should come together to evaluate how the last 90 days went. You should make changes as you see fit.

Strategic planning pyramid

Step 6: Develop annual budgets to achieve goals

The final step in this phase is to create an annual budget to help the departments, teams, and individuals achieve the goals.

Phase 4: Executing strategy and managing performance

Phase 4: Executing strategy and managing performance infographic

The last phase of the strategic planning process includes the following steps, each of which has activities within them:

  1. Rollout the strategy and create an implementation timeline
  2. Leverage tools
  3. Hold quarterly reviews
  4. Conduct annual reviews

Strategic Planning Process Steps: Execution

Step 1: Rollout the strategy and create an implementation timeline

It's time to make the implementation schedule that will drive the change for the entire company. This changes strategies and plans into actions and goals.

This is the time to do the following:

Step 2: Leverage tools

As you're going along with your plan, you need to make sure that you're reviewing those KPIs that we talked about previously. Keeping an eye on these metrics can help you figure out whether or not the goals you're looking at are working towards your company's betterment.

Overall, you should make sure to keep an eye on your company's goals and actions. Keep them aligned to ensure your company's success.

Step 3: Hold quarterly reviews

As your team is working on implementing changes, you may notice that one thing or another needs some working on. It's okay to change your goals and action steps as you go if you find that the goal or action step isn't doing what you want it to do.

For example, you may find that a goal doesn't align with your mission statement. It's okay to change this goal and reset. There's no point in keeping a goal or action item that isn't going to help you meet your long-term goals.

We recommend meeting quarterly to address more minor issues. 

Step 4: Conduct annual reviews

Make sure that your team is taking the time to update one another on significant changes every year. Keep your quarterly reviews and tack on an annual meeting to look at the greater scope of what your organization wants to accomplish.

For example, you may take another look at the mission and values statements that you made earlier during this meeting. This is the time to make any more extensive changes that may help the organization refine its strategy.

Leverage software to manage your strategic planning process steps

Going through the strategic planning process steps is not easy. It involves juggling many things at once. This causes some things to get lost in the shuffle.

To ensure that you and your organization stay on track, you should invest in software to help you plan and execute your strategic planning process steps. Taking the time to learn about and invest in software like TrueNxus will make a massive difference in how your company works together.

Try it for free today!