Strategic planning is an organization’s process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy.
In many organizations, this is viewed as a process for determining where an organization is going over the next year or—more typically—3 to 5 years (long term), although some extend their vision to 20 years.
The key components of strategic planning include an understanding of the firm’s vision, mission, values and strategies … often captured in a Vision or Mission Statement.
Vision: outlines what the organization wants to be, or how it wants the world in which it operates to be. It is a long-term view and concentrates on the future.
Mission: Defines the fundamental purpose of an organization or an enterprise, describing why it exists and what it does to achieve its vision.
Values: Beliefs that are shared among the stakeholders of an organization. Values drive an organization’s culture and priorities and provide a framework in which decisions are made.
Strategy: A combination of the ends or goals for which the firm is striving and the means or policies by which it is seeking to get there. The most important part of implementing the strategy is ensuring the company is going in the right direction which is towards the end vision.
For a company’s vision and mission to be effective, they must become assimilated into the organization’s culture. They need to be assessed internally and externally. The internal assessment should focus on how members inside the organization interpret their mission statement. The external assessment offers a different perspective. These discrepancies between these two assessments can provide insight into their effectiveness.
Robert Pestreich is a Director at Harrison, Stone & Associates, Inc., an executive search firm specializing in financial services recruiting. You can connect with Robert on LinkedIn or follow @rpharrisonstone on Twitter.