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Strategic planning is all about identifying goals and objectives and then working out how to achieve them. The strategic plan is a document that contains the details on how they’re going to achieve those goals in a given time period. These help enterprises set priorities, allocate resources and make decisions.
Strategic planning is often compared to a road map. Just as a driver needs one to reach their destination, so too does an organisation. Without a strategic planning model, companies lose sight of their goals and lack structure in their decision-making. With a strategic plan, enterprises can stay focused, making steady progress towards their clearly defined goals.
But it’s not a one-size-fits-all situation. There are different types of strategic planning models, each with their own unique approach.
Here are four of the most popular strategic planning models used today:
The Balanced Scorecard
This approach was developed by Robert Kaplan and David Norton in the early 1990s. The model is based on four areas: time, quality, performance and service, which in total become the basis for goal setting and measuring progress.
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The beauty of the Balanced Scorecard is that it can be tailored to the specific needs of any organisation, whether you’re looking to improve customer satisfaction or increase efficiency. It’s valuable for enterprises looking to split higher-level goals into smaller, more specific, measurable objectives.
Objectives and Key Results (OKRs)
As the name suggests, the OKR system focuses on setting specific, measurable objectives and tracking key results to meet objectives.
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This approach was popularised by Silicon Valley companies like Google and Intel. OKRs are typically set on a quarterly basis and cover both individual and organisational objectives. Each objective should have one or more key results associated with it.
Theory of Change (TOC)
The theory of change is a strategic tool used to map out long-term goals and then work backwards to attain them. You begin with the vision and then determine the necessary steps required to reach that vision. The casual relationships that lead to success are identified in the process, from which priorities can be set. CEOs, COOs and other leaders can use the TOC model for organisational or systemic change.
Typically, this involves six steps, as shown below.
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Five Strategic Planning Tools
In addition to these approaches, a number of strategic planning tools can be used to provide insight for intelligent decision-making. Whilst no single tool is perfect, each of them can offer unique insights to support the organisation. By understanding how and when to use them, you can develop a strategic plan that will help ensure long-term success.
Porter’s Five Forces
Named after Harvard Business School professor Michael E. Porter, Porter’s Five Forces is a framework for evaluating the competitive forces shaping any industry.
The five forces are:
- Supplier power
- Buyer power
- The threat of substitutes
- The threat of new entrants
- Degree of rivalry among existing competitors.
By understanding these forces, you can develop strategies for mitigating their negative impact and capitalising on their positive effects.
SWOT Analysis
A SWOT analysis is an acronym for ‘strengths, weaknesses, opportunities, and threats.’ It’s a simple but effective tool for identifying factors that could impact success. Once you’ve identified your company’s strengths and weaknesses and the opportunities and threats, you can develop strategies for taking advantage of the former while minimising the latter.
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PESTLE Analysis
PESTLE stands for “political, economic, social, technological, legal, and environmental.” This type of analysis is similar to a SWOT in that it helps you identify both internal and external factors that could impact your business. However, PESTLE analysis goes a step further by including political and legal factors as well as economic, social, and technological factors. As such, it can be a helpful tool for companies operating in regulated industries.
VRIO Framework
The VRIO framework is an acronym for ‘value, rarity, imitability, and organisation’. It’s a tool for evaluating an organisation’s internal resources and capabilities to determine whether they provide a sustainable competitive advantage.
If a resource or capability meets all four criteria such ‘it has value’, ‘it’s rare among competitors’, ‘it can’t be easily imitated’ and the ‘company has the organisational structure in place to capitalise on it’, then it can be considered to have true competitive advantage.
Visioning
Visioning is a strategic planning tool that involves setting long-term goals and then developing actionable steps for achieving those goals. The first step is to identify where you want your business to be. Once you have that vision, you can develop annual goals to help close the gap between where you are now and where you want to be.
Strategic Support for your Organisation
No matter what strategic planning model you choose, Oriri will help you achieve your goals. We specialise in assisting businesses to adapt, transform and develop by working alongside them to bring about a better, more efficient way of working. We help create profitability, efficiency and sustainability in the process.
With an experienced team of experts and associates, Oriri are here to help your organisation overcome strategic challenges every step of the way, from change management to operational recruitment and more.
If you’d like to talk to us, then please get in touch.
