Strategic Planning: Build a Clearer Path to Business Success

What is Strategic Planning?

Strategic planning is the art of creating specific business strategies, implementing them, and evaluating the results of executing the plan, in regard to a company’s overall long-term goals or desires. It is a concept that focuses on integrating various departments (such as accounting and finance, marketing, and human resources) within a company to accomplish its strategic goals. The term strategic planning is essentially synonymous with strategic management.

The concept of strategic planning originally became popular in the 1950s and 1960s, and enjoyed favor in the corporate world up until the 1980s, when it somewhat fell out of favor. However, enthusiasm for strategic business planning was revived in the 1990s and remains relevant in modern business.

CFI’s Course on Corporate & Business Strategy is an elective course for the FMVA Program.

Strategic Planning Process: 6 Key Steps

Strategic planning separates intention from execution. No matter the industry or size, organizations that follow a clear, repeatable process are better positioned to act with purpose and adjust when conditions shift. The six steps outlined below form a practical framework to achieve strategic objectives, while building the advantage required to lead over time. 

1. Define Mission and Strategic Objectives

Before developing any strategic planning strategies, an organization must define its mission, clarify its vision, and establish measurable objectives. These elements guide the planning process by aligning decisions with a long-term direction. A clearly defined mission captures the organization’s core purpose, while the vision describes its goal. Together, they provide a foundation for setting strategic objectives that are both actionable and relevant to key stakeholders.

Strategic planning succeeds when teams share a unified sense of purpose. By setting clear objectives early, companies are better positioned to build employee engagement and ensure alignment across departments.

This step also helps assess how goals interact with internal dynamics, including organizational culture, leadership style, and operational constraints. Whether planning for growth, sustainability, or digital transformation, clarity at this stage keeps future decisions grounded and consistent.

2. Strategy Formulation

When formulating a strategy, a company will first assess its current situation by performing an internal and external audit. The purpose is to identify the organization’s strengths and weaknesses, as well as opportunities and threats (SWOT Analysis).

Based on the analysis, managers decide which plans or markets they should focus on or abandon, how to best allocate the company’s resources, and whether to take actions such as expanding operations through a joint venture or merger.

Business strategies have long-term effects on organizational success. Only upper management executives are usually authorized to assign the resources necessary for their implementation.

3. Strategy Implementation

After a strategy is formulated, the company needs to establish specific targets or goals related to putting the strategy into action and allocate resources for the strategy’s execution. The success of the implementation stage is often determined by how clearly upper management communicates the chosen strategy and gets all of its employees to “buy into” the desire to put the strategy into action.

Effective strategy implementation involves developing a solid framework for implementing the strategy, maximizing the utilization of relevant resources, and redirecting marketing efforts in line with the strategy’s goals and objectives.

4. Translate Strategy into Actionable Plans

Once a strategy is formulated, it must be translated into concrete actions. This phase of the planning process involves assigning responsibilities, setting timelines, and allocating resources to support execution. While upper management shapes the overarching strategy, operational planning requires close collaboration across departments.

Frameworks like the balanced scorecard connect strategic goals to measurable outcomes. These tools align team activities with broader priorities, track progress using key performance indicators (KPIs), and reinforce organizational accountability. By clearly defining who is responsible and when deliverables are due, companies reduce ambiguity and accelerate execution.

This step also supports cross-functional coordination and builds momentum before full rollout. Without this, strategies often stall or drift. Detailing the path forward ensures everyone understands what action looks like.

5. Strategy Evaluation

Any savvy business person knows that success today does not guarantee success tomorrow. As such, it is important for managers to evaluate the performance of a chosen strategy after the implementation phase.

Strategy evaluation involves three crucial activities: reviewing the internal and external factors affecting the implementation of the strategy, measuring performance, and taking corrective steps to make the strategy more effective. For example, after implementing a strategy to improve customer service, a company may discover that it needs to adopt a new customer relationship management (CRM) software program to attain the desired improvements in customer relations.

6. Review and Adjust the Strategic Plan

Strategic plans must evolve as conditions change. After implementation and evaluation, organizations should revisit the original strategy to assess its continued relevance. This step involves reviewing lessons learned, identifying shifts in the external environment, and adjusting to remain aligned with current demands and internal capabilities.

Incorporating middle management and front-line employee feedback enhances future planning cycles and reinforces operational cohesion. These insights often reveal hidden obstacles or new opportunities related to employee morale, emerging technologies, or customer expectations.

Many companies adopt a quarterly or annual review process, supported by frameworks like OKRs. This structured rhythm keeps plans responsive without losing direction.

As the curriculum emphasizes, adaptive planning is a key trait of resilient organizations. A willingness to refine direction ensures that strategic planning strategies stay relevant long after launch.

All six steps in strategic planning occur within three hierarchical levels: upper management, middle management, and operations. Thus, it is imperative to foster communication and interaction among employees and managers at all tiers to help the firm operate as a more functional and effective team.

Benefits of Strategic Planning

The volatility of the business environment causes many firms to adopt reactive strategies rather than proactive ones. However, reactive strategies are only viable for the short term, even though they may require spending a significant amount of resources and time to execute. Strategic planning helps firms prepare proactively and address issues with a longer-term view. They enable a company to initiate influence instead of just responding to situations.

Among the primary benefits derived from strategic planning are the following:

1. Helps formulate better strategies using a logical, systematic approach

This is often the most important benefit. Some studies show that the strategic planning process itself makes a significant contribution to improving a company’s overall performance, regardless of the success of a specific strategy.

2. Enhanced communication between employers and employees

Communication is crucial to the success of the strategic planning process. It is initiated through participation and dialogue among the managers and employees, which shows their commitment to achieving organizational goals.

Strategic planning also helps managers and employees show commitment to the organization’s goals. This is because they know what the company is doing and the reasons behind it. Strategic planning makes organizational goals and objectives real, and employees can more readily understand the relationship between their performance, the company’s success, and compensation. As a result, both employees and managers tend to become more innovative and creative, which fosters further growth of the company.

3. Empowers individuals working in the organization

The increased dialogue and communication across all process stages strengthen employees’ sense of effectiveness and importance in the company’s overall success. For this reason, it is important for companies to decentralize the strategic planning process by involving lower-level managers and employees throughout the organization. A good example is Walt Disney Co., which dissolved its separate strategic planning department in favor of assigning the planning roles to individual Disney business divisions.

The Long-Term Value of Strategic Planning

An increasing number of companies use strategic planning to formulate and implement effective decisions. While planning requires a significant investment of time, effort, and money, a well-thought-out strategic plan efficiently fosters company growth, goal achievement, and employee satisfaction.

Continue Advancing Your Career

Thank you for reading CFI’s guide to Strategic Planning. To keep learning and advancing your career, the additional CFI resources below will be useful:

• Auditing
• Broad Factors Analysis
• Scalability
• Systems Thinking
• See all management & strategy resources