How to write a strategic plan

But many businesses go through a time-consuming and costly strategic planning exercise, only to find themselves with a plan that is ignored or just glanced at once a year. A common reason is that the plan itself isn’t written properly.

A strategic plan must give you and your team a simple, clear roadmap of what to do next. At its heart should be a prioritized list of your best ideas and specific steps to achieve your company’s goals.

“A strategic plan has to be actionable and easy to understand so your team can execute it and use it as a daily reference,” says Devesh Dwivedi, a Senior Business Advisor with BDC’s Advisory Services, who specializes in counselling businesses on strategic planning.

“The plan shouldn’t be academic or stuck in theory. It has to be boiled down to the basics so it is very clear to everyone what your goals are and what actions are needed from each employee.”

Dwivedi gives this advice for what a strategic plan should contain and how it should be written. After each step, Dwivedi prepares a report to sum up the discussion and key findings. This report is then validated with the CEO and key employees and any input integrated before work starts on the next step.

What is the strategic planning process? 

Strategic plans typically include four elements. Dwivedi writes them in this order:

1. Current state section

Dwivedi begins by preparing a section on the company’s current state, which answers the question: “Where are we?”

The current state section is about 15 to 20 pages in length and includes:

• A company overview — past milestones and achievements, current products or services, markets, key competencies, financial analysis, sales performance and trends in recent years, current key performance indicators
• Strategic analysis of the internal and external environments — this may include:
  
  • Current organizational structure, vision and mission statements and value chain
  • Challenges by department
  • A PESTEL analysis chart identifying external or macro factors affecting the business (PESTEL is an acronym for political, economic, social, technological, environmental and legal)
  • Porter’s Five Forces (tool for analyzing the competition)
  • A 7-S Assessment (review of your skills, style, strategy, staff, structure, systems and shared values)
  • A BCG Growth Share Matrix (chart devised by Boston Consulting Group to illustrate each strategic business area according to growth rate and market share)
• SWOT analysis (an acronym for strengths, weaknesses, opportunities and threats)

An appendix may be added at the end with extra information, such as:

• Risks and barriers to implementation
• One-page summaries of the future and current state sections

2. Future state section

The next section describes the desired future state of the company. This section is typically around 10 to 15 pages long and is based on workshops and interviews that Dwivedi holds with key employees.

The future state section should include these elements:

• Strategic objectives
• Vision statement summarizing the company’s aspirations for the future
• Mission statement and core values and any anticipated changes
• Broad, high-level goals, expressed in long-term statements
• Future business model — this can be described with a business model canvas
• Desired future value proposition
• Aspirational statements that expand on the vision statement

One or more subsections can be included to give additional details on various elements and why they’ve been adopted.

3. Strategic plan section

This section describes how your company will bridge the gap between its current state and the desired future state.

Dwivedi holds a series of strategic planning workshops and interviews with the CEO and key employees to brainstorm ideas on how to achieve the company’s goals. These sessions usually lead to a short list of five to 10 ideas to research further. Based on the company’s capabilities, these should be narrowed down to three to five initiatives that will lead the business to its goals in a sustainable and profitable fashion. Throughout the process, the entrepreneur and their team work closely with the consultant.

“Strategic planning is the art of saying no more than the art of saying yes,” Dwivedi says. “As a business, you can do a million things. The reason the entrepreneur is often running in circles is they don’t know what to work on. They get distracted by a red shiny ball, like a logo or website redesign, or the latest social media platform. Strategic planning is about finding a short list of the highest-impact projects. It’s a filter.”

The section is generally 10 to 15 pages long and includes these elements:

• Corporate directions — a broad overview of what you need to do to achieve your goals
• Strategic priorities — a list of your main projects
• Details on actions needed for each strategy
• Financial projections by market, product and other potential categories
• Action plan — a one-page spreadsheet listing each action, who is responsible for carrying it out and otherwise involved, a timeline for its completion and a key performance indicator to monitor progress

“The action plan is a simplified summary of the whole plan and should be referred to continually by your team to make sure their daily actions add up to the strategic plan,” Dwivedi says.

4. Executive summary

When Dwivedi works with his clients, he normally ends the strategic planning process by writing a one- or two-page executive summary. Although it’s written last, the executive summary is presented first in the final report.

“Think of it as developing a book summary: You can only do it if you have read the entire book,” Dwivedi says.

The executive summary includes the company’s vision and mission statements and a very brief description of these elements:

• The company and its products or services
• Strategic objectives
• Major internal and external challenges
• Financial overview
• Strategic priorities — projects needed to achieve the objectives
• Action plan — specific steps in each project

It can also be useful to include a small subsection or box highlighting key observations or findings about the company and its goals.

Tips for strategic planning

Dwivedi shares a few extra tips about how strategic plans should be written:

• The final strategic plan is presented in reverse order
  In order to make them more actionable, strategic plans are often presented in reverse order as compared to the order in which each area is discussed in the strategic planning exercise.

In the final plan, the sections appear in this order:

1. Executive summary
2. Future state plan
3. Strategic plan with action plan
4. Current state

“The executive summary and future state plan come first in the plan because we want to emphasize the purpose of the whole exercise, which is creating a roadmap to achieve your goals,” Dwivedi says.

“You don’t want to move forward to the future state if the current state isn’t accurate.”

• Be clear and concise
  The plan should be clear and concise. It’s useful to present it as a PowerPoint document, which offers a visually accessible format in which information is easy to find and see. The optimal length is about 40 to 70 pages. Any shorter and you risk skipping important information; if longer, the plan may get bogged down in excessive detail, making it harder to implement.
  
  Making a strategic plan is a complex and time-consuming process, but it is worth it to guide your long-term growth. To learn more about how you can work with Dwivedi or one of our other BDC experts, please consult our strategic planning services.