Strategic Planning | edX

What is strategic planning?Strategic planning is an essential business process that helps align your teams to achieve a common goal. Discover the benefits of strategic planning with edX.Create an accountBy: Shelby Campbell, Edited by: Valerie BlackPublished: June 5, 2025Does your team have a clear roadmap for how their work contributes to your organization's overarching goals? Strategic planning is a process that aligns everyone in a company on institutional initiatives, long-term objectives, and organizational challenges.Discover how strategic planning can transform your business's operations, and sign up for a leadership course on edX today.Why strategic planning is importantStrategic planning is how organizations create priorities and actionable strategies to achieve long-term goals. A strategic plan outlines what success looks like for a business, identifies barriers to that success, and guides employees toward making day-to-day work decisions that support organizational goals.While strategic planning can't help you predict the future, it can guide your team as they navigate business challenges. However, a strategic plan generally isn't permanent — it's an ongoing process that should respond to evolving challenges and business landscapes.At a moment in time, a properly configured strategy is a mixture of policy and action designed to surmount a high-stakes challenge, writes Richard P. Rumelt, professor emeritus at UCLA Anderson School of Management, in a 2022 McKinsey & Company article. It is not a financial goal, or a plan for hitting a financial goal, or a wished-for end state, or a long list of priorities.Components of strategic planningLong-term goalsWhere do you want your organization to be in a year, two years, five years? The answer will guide your strategy. Think outside the limits of financial success.Barriers to progressWhat limits your organization from accomplishing those goals? Your strategy should focus on overcoming the significant obstacles to progress.Feasible solutionsHow should your organization move forward to break down the barriers to success? Consider what you need from stakeholders (e.g., employees, investors, and customers) to overcome obstacles.Available resourcesHow can your organization allocate its resources to accomplish long-term goals? Determine what your stakeholders need from you to drive success.Facilitating strategic planningThe strategic planning process isn't uniform for every organization. However, organizations often take the following steps to formulate a strategic plan:Review mission: Align the strategic planning process with your organization's mission, purpose, and values.Analyze landscape: Analyze the organizational environment for social, economic, political, and competitor trends.Ideate goals: Create several overarching goals that align with your mission and fit within the possibilities of the current business landscape.Identify barriers: Determine what is stopping your organization from progressing.Strategize how to meet goals: Prioritize each objective and work with your team to understand what it will take to overcome obstacles. Objectives may have several actionable strategies that teams can use to accomplish them.Write an executive summary: Draft a one- to two-page document that outlines the general priorities and strategies your organization can take to meet its objectives. This document may be the only part of the strategic plan that external stakeholders, such as investors, review.Communicate strategy: Before you can enact your plan, communicate with the employees who will carry out the day-to-day operations outlined in your plan. Ensure your communication provides actionable strategies rather than vague priorities.3 Tips for improving strategic planningTip 1: Employ SWOT analysisCreated by the Stanford Research Institute from 1960-70, the SWOT method helps business leaders identify tangible results from their strategic plans. It consists of the following assessments:Strengths: What is your business doing that's working?Weaknesses: Where can your organization improve?Opportunities: How can your business capitalize on ideal conditions for growth and progress?Threats: How can you plan for and mitigate external forces that threaten your organization's progress?Tip 2: Look past the easy or obvious solutionsWhen developing a strategy to overcome a specific problem, there may be solutions that seem obvious. However, these solutions may not always take you as far in your plan for progress as other solutions that require more critical business analysis, creative thinking, and problem-solving. Make sure your team thinks beyond what's obvious or easy when creating a strategic plan.Tip 3: Identify important KPIsOnce you've formulated your strategic plan, you must assess its effectiveness. You can do this using key performance indicators (KPIs) such as:RevenueSpendingSocial media interactionsWebsite visitsSales leadsThe KPIs that make sense for one business may not apply to another. For example, if you're operating a nonprofit, you likely won't consider revenue as a relevant KPI. Instead, you may review the difference in the amount of donors or grants you receive.Learn more about strategy and discover new strategic planning techniques by taking a strategy executive education course on edX.Find the right management programs for youNo results.Frequently asked questions about strategic planningHow long should a strategic plan last?Strategic plans have no one-size-fits-all timeline — they should be dynamic for your business and shift with changes in market conditions. However, many organizations create one-, three-, and five-year strategic plans that align with their overall vision.Is strategic planning a leadership skill?Yes, strategic planning is a leadership skill. It involves several essential aspects of leadership, including:Goal-settingDecision-makingProblem-solvingResource and labor allocationCommunicationPriority-settingProgress monitoringWhich people are most likely to be involved in strategic planning?While executives may be responsible for initiating the strategic planning process, middle managers and department directors may better understand their teams' capabilities to accomplish strategic goals. Therefore, middle managers, directors, and executives will likely be the most instrumental in the strategic planning process.Who can be a strategic leader?Anyone can be a strategic leader. For example, an entry-level employee may notice a process hangup that hinders productivity. Because they have firsthand experience working with it, they can bring this matter to a higher-level employee's attention and work to change the process. Solving this problem to better accomplish a goal would make that entry-level employee a strategic leader.Share this articleShare on FacebookShare on XShare on LinkedinShare on Email