Today’s Definition of Strategic Planning

Posted by on July 22, 2010

A quick Google search for definitions of strategic planning will yield numerous variations. Often these definitions point to the blatant misunderstanding of what strategic planning truly is.  At other times the term is flat out misused. In the end, we find that strategic planning lacks a widely accepted definition.  It seems everyone in the field of planning has a different view on the exact definition. Yet, the definitions we most embrace, convey in one form or fashion, that the idea of strategic planning is to build and sustain competitive advantage by defining desired outcomes and creating some sort of go-forward plan to achieve those outcomes.

Our definition of strategic planning:

Strategic planning is the process of devising a plan of both offensive and defensive actions intended to maintain and build competitive advantage over the competition through strategic and organizational innovation. 

From any definition of strategic planning, you’ll find a spectrum of corporate strategic planning models and processes that enable the strategic plan to take form.  Our process, known as Plan4 is one such example of the process we’ve created to support our planning definition. This process supports the notion that a well-formed corporate strategy guides organizational momentum in the direction of desired outcomes and is accomplished through clearly-expressed strategic goals and operational actions to achieve the desired outcomes. 

Sound like a mouthful?  Maybe it is.  But it works and we can prove it. (Find out how.)



How Strategic Planning Yields Competitive Advantage:

Looking at the definition of strategic planning it begs the question, “how does strategic planning bring about this promised competitive advantage?”  Since the whole idea of strategic planning is to deliver an advantage to the organizations that partake in its process, strategic planning must, at a minimum, address these three key questions:

1. "What do we do?"

2. "Who are our customers?"

3. "How do we do what we do better than our competitors?"

What do we do?

Sounds obvious, doesn’t it?  Yet, if an organization cannot succinctly explain what they do, how can they expect anyone else to understand (especially their prospective customers)?  It’s amazing how often this simple question unveils a deep divide among company leaders who differ in their opinions of “what the heck are we doing here?” What’s more, when we clearly know what we do, it’s that much easier to assess what we should be doing, which is often an issue addressed in the strategic planning process.

Who are our customers?

Often overlooked by companies who are inwardly focused on a strategic planning exercise, the most important stakeholder in any organization is its customers.  If your strategic planning process fails to understand and analyze the role your customers will play in the success or failure of the plan, the likelihood of success is minimal at best. Instead, knowing the attributes of the organization’s customer profiles enables the planning process to build in customer value, sales growth, product and service innovation, and ultimately profits.

A thorough understanding of major customer segments according to their loyalty to the organization, profitability of the segment, annual spend, and the like will enable planners to consider why customers are still buying and how stable the long term buying relationship really is.

How do we do what we do better than our competitors?

To understand competitive advantage, an organization must first examine its core “reason for being” and identify what it is that compels customers to buy from their company instead of a competitor.  This is commonly known as the value proposition. Often the reasons customers choose one company over another include service, product superiority, and pricing -- but it could very easily be something else. When you clearly understand your unique difference you can leverage it to the fullest extent.

Bringing it All Together


When you can succinctly answer (at a minimum) the questions above, you may be ready to bring it all together into an advantage-building strategic plan.  It stands to reason that the ability to define and explain what we do, who our customers are, and how we do what we do better than our competitors, is strongly related to our ability to innovate and create value that can be implemented across the organization to benefit both the organization and its customers.

To get more information on building competitive advantage, read "The Definition of Strategic Planning:  A White Paper".

 

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For permission to use or reprint any portions of this copyrighted article, contact Method Frameworks at articles@methodframeworks.com.

About the Author:

Joe Evans is the President and CEO of Method Frameworks.  Joe is a published author, frequent speaker and recognized expert in corporate strategic planning. To contact Method Frameworks about scheduling Mr. Evans about an upcoming speaking engagement, visit www.methodframeworks.com/business-speaker or email requests to media_relations@methodframeworks.com.

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Method Frameworks is a leading business strategy and management consulting company, based in the Dallas / Fort Worth area and serving clients nationally and internationally.

Discover our capabilities and learn why Method Frameworks is the strategic planning partner chosen by Fortune-500 companies and small businesses alike. Let us show you how to realize 140%+ ROI on your strategic planning efforts through our unique Plan4^SM process that brings together strategy and execution into a powerful plan.   Plan4 is our proprietary business planning process that involves an integrated set of actions designed to help companies gain sustainable advantage. Download our brochure to learn more about Method Frameworks and our services or download our Plan4 Planning Process Overview.

You can contact Method Frameworks at 877-317-5264 (877-31PLAN4) or follow this link to request a meeting with a planning consultant. Check our articles and blog often at www.methodframeworks.com to get many more planning tips and information about our Plan4 process.

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