Strategic planning: 5 essential steps for efficiency

Strategic planning is a crucial process for the survival of any business. It helps the company seize the best opportunities, develop its positioning, and take actions that contribute to achieving its goals.

It is an execution map of what the company is expected to achieve and, at the same time, serves to guide teams regarding when, how, and what needs to be done. Of course, to accomplish this, it is necessary to dedicate time to studying internal and external scenarios and adopting smart measures to advance within them.

Want to know more about the subject? Then let's get straight to the point. Enjoy your reading!

What is strategic planning?

Strategic planning is an instrument for the efficient management of a business. This plan is nothing more than an orderly process for identifying opportunities that will enable a company to reach the goals it wants to achieve.

For this to happen, it is necessary to define objectives and targets, identify the company's strengths and weaknesses, analyze scenarios, and establish guidelines that will guide collaborators along the way. Thus, with all efforts focused in the same direction, it becomes easier and faster for the business to reach its goals and improve its market performance.

What is the importance of strategic planning?

As you have seen, the ultimate goal of high-quality strategic planning is to serve as guidance, as a process guide, so that departments and collaborators can move toward a common direction.

Planning is also called a map, being composed of a major objective and smaller goals or milestones, indicating that the teams are on the right track. Based on all this, strategic planning benefits the company from different perspectives:

• improves business organization, especially regarding vision, mission, and values;

• increases the effectiveness of decisions, making them more aligned with the overarching objective;

• enables a data-driven decision process, as it increases knowledge about business metrics;

• increases the productivity of teams, who operate with more clarity, motivation, and focus;  

• improves the quality of deliveries to consumers;

• provides a holistic view of the business, showing that all its sectors are interdependent;

• proposes contingency plans, ensuring the company is not caught off guard;

• increases competitiveness, making the business a threat to competitors.  

How to put together a good strategic planning?

Keep an eye on some tips for business strategic planning.

1. Identify priorities

The best way to start good strategic planning is by investing in a practice called self-knowledge. You need to know what your business's purpose is and why it exists. This is possible through the definition of your mission, vision, and values.

Basically, these three values will determine:

• why your company exists;

• where it intends to go;

• what it believes in.

The next step is to perform a detailed analysis of your current moment. For this, there is a very powerful tool: SWOT analysis, which helps determine your main strengths, opportunities, weaknesses, and threats.

STRENGTHS

Those positive attributes about the company that you control (quality, competitive price, good relationships with suppliers, etc.).

OPPORTUNITIES

All those external opportunities to the company that can facilitate its growth (tax incentives, opening of new markets, technological innovations, etc.).

WEAKNESSES

The negative factors about the company that you can control (high costs, lack of professional qualification, manual processes, etc.).

THREATS

Everything that can threaten the business and does not depend on it (entry of new competitors, high taxation, restrictive legislation, etc.).

From this, you will have the diagnosis you need to do and what is within your reach to make the company a true powerhouse, optimizing your strengths, seizing opportunities, and working on your weaknesses.

To take the first initiatives, you will need to know the current situation of the business. What are your priorities? You need to know if the company needs to expand its operations, if it should invest in digital marketing, or increase the team of collaborators, for example. These needs will only be identified through a thorough analysis of the enterprise.

2. Map investments with return potential

Business strategic planning primarily points to the need for investments so the company can reach where it desires. Remember when we mentioned the importance of defining mission, vision, and values? If, among your values, there is a commitment to sustainability, for example, you will need to adapt environmentally.

This evolution will inevitably involve a commitment to renewable energy sources. First, by aligning with a global carbon emission reduction agenda, essential for the planet's sustainability. Second, by aiming for greater business security and short-, medium-, and long-term cost reduction.

3. Establish clear goals and objectives

Imagine your goal is to reach the top of the highest mountain in the world, but you won't be able to take just one step and get there. Instead, you need to establish a series of smaller goals that will lead you to the summit—among them, stops to sharpen your tools and rest.

Goals and objectives are the map you will use to fulfill your strategic planning. If you want a higher market share, you will need to establish a value or percentage for that, a metric to track. Along with it will come smaller goals, such as those of your sales team or cost-reduction targets, for example.

Nếu você quer diminuir a emissão de carbono da sua empresa, precisa adotar medidas como:

If you want to decrease your company's carbon emissions, you need to adopt measures such as:

• investing in renewable energy sources;  

• looking for suppliers more aligned with your objectives;

• betting on cleaner consumption throughout the company;

• resorting to the Free Energy Market (Mercado Livre de Energia).

All these initiatives should be translated into traceable numbers, such as "reduce the electricity bill by 5% per month" or "hire a new supplier by February 2022".

4. Create action plans

The clearer the information is to people, the easier it will be for them to understand the message and do what you expect. Try translating goals and objectives into actionable planning. An interesting methodology for this is 5W2H, used to understand or identify a problem through seven questions listed below:

• What needs to be done? (What?)

• Why does it need to be done? (Why?)

• Who should do it? (Who?)

• Where should it be done? (Where?)

• When should it be done? (When?)

• How should it be done? (How?)

• How much will it cost to be done? (How much?)

5. Track goals at every stage

The final stage concerns tracking metrics, which is what will effectively define whether the objectives were met or not. The choice of these indicators varies according to what you intend to evaluate:

• customer satisfaction can be measured by the Net Promoter Score (NPS);  

• customer churn rate, by the Churn Rate;

• financial performance evaluation, by the profitability index and return on investment (ROI).

This tracking of results can show deviations along the process, highlighting the need for modifications and adjustments in the strategic planning, which can be altered at any time.

As you have seen, strategic planning is a crucial way for the company to shorten paths toward achieving its goals. Although it is not a shortcut, it helps redirect and concentrate everyone's efforts toward a common goal, enhancing the actions taken.

Now that you are up to speed on strategic planning, how about understanding how to make a company sustainable with 8 simple and effective gestures?

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