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Summary
A strategic plan helps you define and share the direction your company will take in the next three to five years. It includes your company’s vision and mission statements, goals, and the actions you’ll take to achieve those goals. In this article we describe how a strategic plan compares to other project and business tools, plus four steps to create a successful strategic plan for your company.
If you work for a small company or start up, you could likely benefit from creating a strategic plan. When you have a clear sense of where your organization is going, you’re able to ensure your teams are working on projects that make the most impact.
The strategic planning process doesn’t just help you identify where you need to go—during the process, you’ll also create a document you can share with employees and stakeholders so they stay informed. In this article, we’ll walk you through how to get started and develop a strategic plan.
What is a strategic plan?
A strategic plan is a tool to define where your organization wants to go and what actions you will take to achieve those goals. Typically, a strategic plan will include your company’s vision and mission statements, your long-term goals (as well as short-term, yearly objectives), and an action plan of the steps you’re going to take to move in the right direction.
A solid strategic plan can give your organization clarity and focus. This level of clarity isn’t always a given—according to our research , only 16% of knowledge workers say their company is effective at setting and communicating company goals. By investing time into strategic planning, you can build out a three to five year vision for the future of your company. This strategy will then inform your yearly and quarterly company goals.
Do I need a strategic plan?
A strategic plan is one of many tools you can use to plan and hit your goals. Here’s how a strategic plan compares to other project and business tools:
Strategic plan vs. business plan
You should create a business plan when you’re either starting a business or pivoting your business strategy significantly. A business plan can help you document your strategy as you’re getting started so every team member is on the same page about your core business priorities and goals. This tool can help you document and share your strategy with key investors or stakeholders as you get your business up and running.
If your business is already established, consider creating a strategic plan instead of a business plan. Even if you’re working at a relatively young company, your strategic plan can build on your business plan to help you move in the right direction. During the strategic planning process, you’ll draw from a lot of the fundamental business elements you built early on to establish your strategy for the next three to five years.
Strategic plan vs. mission and vision statements
Your strategic plan, mission statement, and vision statements are all closely connected. In fact, during the strategic planning process, you will take inspiration from your mission and vision statements in order to build out your strategic plan.
As a result, you should already have your mission and vision statements drafted before you create a strategic plan. Ideally, this is something you created during the business planning phase or shortly after your company started. If you don’t have a mission or vision statement, take some time to create those now. A mission statement states your company’s purpose and it addresses what problem your organization is trying to solve. A vision statement states, in very broad strokes, how you’re going to get there.
A strategic plan should include your mission and vision statements, but it should also be more specific than that. Your mission and vision statements could, theoretically, remain the same throughout your company’s entire lifespan. A strategic plan pulls in inspiration from your mission and vision statements and outlines what actions you’re going to take to move in the right direction.
For example, if your company produces pet safety equipment, here’s how your mission statement, vision statement, and strategic plan might shake out:
Mission statement: “To ensure the safety of the world’s animals.”
Vision statement: “To create pet safety and tracking products that are effortless to use.”
Your strategic plan would outline the steps you’re going to take in the next few years to bring your company closer to your mission and vision. For example, you develop a new pet tracking smart collar or improve the microchipping experience for pet owners.
Strategic plan vs. company objectives
Company objectives are broad goals. You should set these on a yearly or quarterly basis (if your organization moves quickly). These objectives give your team a clear sense of what you intend to accomplish for a set period of time.
Your strategic plan is more forward-thinking than your company goals, and it should cover more than one year of work. Think of it this way: your company objectives will move the needle towards your overall strategy—but your strategic plan should be bigger than company objectives because it spans multiple years.
Strategic plan vs. business case
A business case is a document to help you pitch a significant investment or initiative for your company. When you create a business case, you’re outlining why this investment is a good idea, and how this large-scale project will positively impact the business .
You might end up building business cases for things on your strategic plan’s roadmap—but your strategic plan should be bigger than that. This tool should encompass multiple years of your roadmap, across your entire company—not just one initiative.
Strategic plan vs. project plan
A strategic plan is a company-wide, multi-year plan of what you want to accomplish in the next three to five years and how you plan to accomplish that. A project plan , on the other hand, outlines how you’re going to accomplish a specific project. This project could be one of many initiatives that contribute to a specific company objective which, in turn, is one of many objectives that contribute to your strategic plan.
A project plan has seven parts:
Goals
Success metrics
Stakeholders and roles
Scope and budget
Milestones and deliverables
Timeline and schedule
Communication plan
What is strategic planning?
Strategic planning is the process of creating a plan in order to hit your strategic objectives. The strategic planning process has multiple parts—it involves gathering insight, developing strategy, and managing performance once the plan is in place.
When should I create a strategic plan?
A strategic plan is a tool that can help you define and share the direction your company will take in the next three to five years. With this type of plan, you can define big bets and investments, outline how these big initiatives will help you achieve your company mission and vision, and create a blueprint for how your everyday projects connect to these business initiatives. If your team or company doesn’t currently have a strategic plan, you should create one. If you do have a strategic plan, you should update it when you’ve hit most or all of your goals.
Aim to create a strategic plan every three to five years, depending on how quickly your organization moves. If your organization moves quickly, consider creating a strategic plan every two to three years to keep up with any new or shifting business priorities.
The benefits of strategic planning
Strategic planning can help you create defined goals to explain how your company will move towards your mission and vision statements in the next three to five years. If you think of your company trajectory as a line on a map, a strategic plan can help you better quantify how you’ll get from point A (where you are now) to point B (where you want to be in a few years).
When you create and share a clear strategic plan with your team, you can:
Align everyone around a shared purpose
Proactively set objectives to help you get where you want to go
Define long-term goals, and then set shorter-term goals to support them
Assess your current situation and any opportunities—or threats
Help your business be more durable because you’re thinking long-term
Increase motivation and engagement
The strategic planning process
The strategic planning process should be run by a small team of key stakeholders who will be in charge of building your strategic plan. This group, which is sometimes called the management committee, should be a small team of five to 10 key stakeholders and decision-makers for the company. They won’t be the only people involved—but they will be the people driving the work.
Once you’ve established your management committee, you can get to work on the strategic planning process.
Step 1: Determine your position
Before you can create your strategic plan and define where you’re going, you first need to define where you are. To do this, your management committee should collect a variety of information from additional stakeholders—like employees and customers. In particular, plan to gather:
Relevant industry and market data to inform any market opportunities, as well as any potential upcoming threats in the near future.
Customer insights to understand what your customers want from your company—like product improvements or additional services.
Employee feedback that needs to be addressed—whether in the product, business practices, or company culture.
A SWOT analysis to help you assess both current and future potential for the business. SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. You’ll return to this analysis periodically during the strategic planning process.
To fill out each letter in the SWOT acronym, your management committee will answer a series of questions:
Strengths:
What does your organization currently do well?
What separates you from your competitors?
What are your most valuable internal resources?
What tangible assets do you have?
What is your biggest strength?
Weaknesses:
What does your organization do poorly?
What do you currently lack (whether that’s a product, resource, or process)?
What do your competitors do better than you?
What, if any, limitations are holding your organization back?
What processes or products need improvement?
Opportunities:
What opportunities does your organization have?
How can you leverage your unique company strengths?
Are there any trends that you can take advantage of?
How can you capitalize on marketing or press opportunities?
Is there an emerging need for your product or service?
Threats:
What emerging competitors should you keep an eye on?
Are there any weaknesses that expose your organization to risk?
Have you or could you experience negative press that could reduce market share?
Is there a chance of changing customer attitudes towards your company?
Step 2: Develop your strategy
This is where the magic happens. To develop your strategy, take into account your current position, which is where you are now. Then, draw inspiration from your original business documents—these are your final destination. To develop your strategy, you’re essentially pulling out your compass and asking “Where are we going next?” This can help you figure out exactly which path you need to take.
During this phase of the planning process, take inspiration from important company documents to ensure your strategic plan is moving your company in the right direction like:
Your mission statement , to understand how you can continue moving towards your organization’s core purpose.
Your vision statement , to clarify how your strategic plan fits into your long-term vision.
Your company values , to guide you towards what matters most towards your company.
Your competitive advantages, to understand what unique benefit you offer to the market.
Your long-term goals, to track where you want to be in five or 10 years.
Your financial forecast and projection , to understand where you expect your financials to be in the next three years, what your expected cash flow is, and what new opportunities you will likely be able to invest in.
Step 3: Build your strategic plan
Now that you understand where you are and where you want to go, it’s time to put pen to paper. Your plan will take your position and strategy into account to define your organization-wide plan for the next three to five years. Keep in mind that even though you’re creating a long-term plan, parts of your strategic plan should be created as the quarters and years go on.
As you build your strategic plan, you should define:
Your company priorities for the next three to five years, based on your SWOT analysis and strategy.
Yearly objectives for the first year. You don’t need to define your objectives for every year of the strategic plan. As the years go on, create new yearly objectives that connect back to your overall strategic goals .
Related key results and KPIs for that first year. Some of these should be set by the management committee, and some should be set by specific teams that are closer to the work. Make sure your key results and KPIs are measurable and actionable.
Budget for the next year or few years. This should be based on your financial forecast as well as your direction. Do you need to spend aggressively to develop your product? Build your team? Make a dent with marketing? Clarify your most important initiatives and how you’ll budget for those.
A high-level project roadmap . A project roadmap is a tool in project management that helps you visualize the timeline of a complex initiative, but you can also create a very high-level project roadmap for your strategic plan. Outline what you expect to be working on in certain quarters or years to make the plan more actionable and understandable.
Step 4: Share, monitor, and manage your strategic plan
At this point, you should have created your strategic plan. The final step of the planning process is to monitor and manage your plan.
Share your strategic plan —this isn’t a document to hide away. Make sure your team has access to it so they can understand how their work contributes to company priorities and your overall strategic plan. We recommend sharing your plan in the same tool you use to manage and track work, so you can more easily connect high-level objectives to daily work. If you don’t already, consider using a work management tool .
Update your plan regularly (quarterly and annually) . Make sure you’re using your strategic plan to inform your shorter-term goals. Your strategic plan also isn’t set in stone. You’ll likely need to update the plan if your company decides to change directions or make new investments. As new market opportunities and threats come up, you’ll likely want to tweak your strategic plan to ensure you’re building your organization in the best direction possible for the next few years.
Keep in mind that your plan won’t last forever—even if you do update it frequently. When you’ve achieved most of your strategic goals, or if your strategy has evolved significantly since you first made your plan, it might be time to create a new one.
Sticking to the plan
To turn your company strategy into a plan—and ultimately, impact—make sure you’re proactively connecting company objectives to daily work. When you can clarify this connection, you’re giving your team members the context they need to get their best work done. With clear priorities, team members can focus on the initiatives that are making the biggest impact for the company—and they’ll likely be more engaged while doing so.
If you’re interested in getting started, learn more about how to connect goals to everyday work with UDN Task Manager .
