What is Strategic Planning?

Have you ever built a home, planned a family vacation, or made a major purchase? The answer is likely an astounding, yes. How do you feel as you plan to make serious life changes like these? Certainly, you and your family are excited for the future and confident in your decisions, but maybe a little apprehensive and nervous. The better we understand the change, we can then lessen any risks and fears we may face during these new ventures while achieving our goals as quickly as possible. Predominately in business, good leadership reduces the time we spend during these periods of change, but how does leadership help a company accomplish our goals, effectively? The answer is a process called Strategic Planning. Simply, we can accomplish this like we accomplish any goal; one step at a time, while following a series of key steps as shown below. Basically, Strategic Planning is a term that describes a more complex process of planning for a goal or many goals.

At many companies, you may see a Vision and Mission statements posted around the offices, on a website, or talked about by company leadership in regards of where and whom they want to be as a company. This isn’t much different than your dream of owning a home, or a much harder challenge of building a home. In our personal lives we may have several missions, but in this example your mission could be to “earn a good wage and save your income” as a purposeful approach to achieve your dream of owning a new home. From a previous employer, one company’s Vision statement could sound like, “Loram will be respected globally as the leader in the railway infrastructure markets we serve.”

I often ask employees, “Is this true?” and most will correctly say, “I don’t believe we’re there, yet.” Regardless, it’s okay that we have yet to achieve our vision, but it’s most important that we’re taking the appropriate steps through focused planning to get to our next target condition. At Loram Maintenance of Way, the Mission Statement is, “Our people deliver advanced equipment, innovative solutions, and unrivaled customer service in a safe and reliable manner to maintain and improve railway infrastructure.”

If we maintain this purpose, one day will achieve our Vision, but not without proper planning. Regardless, agreeing and documenting our goals, albeit to build a home or advance a business, is how we set an objective. Objectives are written statements that communicate what will be accomplished and when that goal shall be completed.

Planning for a new home takes many steps to achieve, especially if you’re building a home. What is this experience like for someone new to the home buying or building experience? Surely, without a plan, the vision could seem out of reach and extremely daunting. For a business, strategic planning helps a team develop a plan through a series of steps like a game plan for any aspect of the business. Also, it helps every member of the team know exactly how they contribute to the plan. Could you imagine if your framing contractor didn’t know when to arrive to the site to construct your home? Where defining a vision as a goal is the first step of determining “WHAT” will be accomplished, determining the strategic steps and key objectives defines “HOW” it will get completed. Defining your next target condition with an objective that describes how and when each step will be accomplished (like accomplishing framing or installing kitchen cabinets) is the strategic aspect of the strategic planning process. These goals or objectives can be as simple as “John must order materials for the framing crew by the first of the month,” or “the framing crew of 4 employees will work 5 ten-hour days for a month to complete the framing”. Knowing how you will build your home or how a business will achieve their goals is determining the strategy.

In summary, reaching any goal (small or large) can benefit through the basic steps of strategic planning. Starting with a vision and defining it as an objective is only the start. Developing this vision through a series of steps provides a clear playbook that defines the plan for all activities to achieve these objectives. Strategic Planning can also detail the methodologies and tactics used to meet each step in your plan. You may need to understand the tricks of the trade in carpentry if you intend to frame your own home. Companies have many specialists who understand best practices in achieving company goals. Employees can contribute as part of a strategic plan to achieve a company’s vision. In order to remain competitive, all employees are members of a team with very important roles to play in a company’s approach to be in business for years to come.