All businesses have a goal to achieve. They need to learn where they stand currently and what methods they are going to use to achieve their goals. Strategic planning is the process of defining the elements or action points necessary to achieve goals.
Strategic Planning Lingo
Organizations use various strategic planning terminology to develop strategic plans. Understanding these terminologies is very important for any organization. Let's look at these key terminologies in detail.
The mission statement is a written statement explaining the overall goals or the key purpose of an organization. In 1998, Christopher Bart conducted research on organizational behavioral changes. According to Bart in his Mission Matters published in The CPA Journal, a mission statement consists of three critical elements:
Target Market - Who are your key clients? Which geographical location you are aiming at? Who is your target audience? Who are the stakeholders?
Contribution - What exactly your company offers its clients?
Distinction - How different your product / service is? What difference will it make to your clients?
Example Mission Statement from Starbucks:
“To Inspire and nurture the human spirit - one person, one cup and one neighborhood at a time"
Starbucks further explains this mission statement through principles they have adopted to run a business.
The vision statement is considered as the framework of the organization’s strategic planning. Vision is the key strategic planning terminology used to explain which direction the company is growing to achieve its goal.
Example Vision Statement of Infosys, India based global IT organization:
“We will be a globally respected corporation"
Difference Between Mission and Vision Statement
There is a key difference between the mission and vision statement. Mission statements are written for all the stakeholders including clients and vendors. Whereas vision statements are written only for you and the company you belong to.
Core values are the essential values used by the organization to reach its mission. Companies are best known for these values among clients and other stakeholders. Employers and employees are expected to adhere to these values. Core values of an organization highly influence clients in their decision making.
Example of Core Values from the PMI - Project Management Institute:
- Project Management Impact
These core values influence organizations such that project managers are expected to have PMP certifications from PMI. Project managers with a PMP certification from PMI are considered to be performing well in the organization.
Milestones are the action points or events occurring in different phases in an orderly fashion with a fixed timeline. Milestones are a vital strategic planning terminology used to define phases or accomplishments in the corporate planning processes. These phases or accomplishments take the organization toward meeting work deadlines and reaching its goals.
A process or a course of action in planning process to achieve organizational objectives is known as strategy. This is not a statement or a document, but processes or action items leading the organization to reach its goals.
The objective is the strategic planning terminology used to specify what the organization is planning to achieve. The objective can either be specific to one function in the organization or for the whole organization.
The below criteria is used while evaluating the objectives:
Is your objective to help convert your mission and vision into an action?
Is your objective continuous?
Is your objective help to achieve competitive advantage?
Example of client specific strategic objective:
“To achieve success with product X among new and the existing clients"
The goals are very important in strategic planning. Goals define an organization’s plan to achieve the overall desired outcomes and be successful among competitions.
Examples of Goals:
- Increase sales by 25 percent
- Reduce employee attrition rate by 12 percent
- Reduce customer attrition rate by 20 percent
- Develop three new products in 2012
Outcomes are the end results achieved after implementing processes in strategic planning. It could be a new product development, increased sales, new customers, new businesses and many more. There are various business research methods used in determining these outcomes.
The power to start a plan or a first step or an introductory move is known in strategic planning terminology as ‘Initiatives.' Be it a small, medium level, or big organizations, initiatives lead the strategic planning processes to make it successful. Initiatives taken by the right people at the right time help organizations to achieve its goals triumphantly.
Institutional Planning and Review Committee (IPRC)
An IPRC or institutional planning and review committee is responsible for various activities in strategic planning.
- Goal Setting
- Budget Planning
- Strategy Formulation
- Annual Assessments of Process, Resources and Products
- Overall Program Management
Action plans are the step by step processes designed and implemented in order to achieve organizational goals. Action plans are designed in a way to complete each milestone set for each objective.
Action plans normally include:
- Timelines set to start and end the process or activity
- Budget allocated to complete each task
- Objectives set for completing each step in the process
- Determine stakeholders for each activity
Internal Assessments and Environmental Scanning
Internal assessments and environmental scanning are important tasks in strategic planning. A SWOT analysis is used to scan and analyze the situation in strategic planning.
Internal assessments and environmental scanning help to identify organization’s,
- Strength in the existing business model
- Weaknesses in the existing business model
- New internal and external opportunities for growth
- Threats that can harm organizational growth
External opportunity is the strategic planning terminology used to find out new business opportunities. Environmental scanning using a SWOT analysis is the way used to identify external opportunities. Below are a few external opportunities to support organizations to reveal the right set of circumstances for profit and business growth.
- Identifying new technology
- Unsatisfied customer requirement
- Changes in rules and regulations
Success indicators are the specific performance measurement processes designed in strategic planning. Have you come across this strategic planning terminology uttered in your organization? What does this mean? Your organization has a planned approach to measure the performance of key indicators in processes, projects and services.
Understanding the Strategic Planning Terminology
The most important strategic planning terminologies widely used in organizations are discussed in this article. Some organizations may choose to use different terminologies and definitions. In order to achieve business objectives, it is important for the people involved in strategic planning to understand what each strategic planning terminology means.
Common Terms Used in Strategic Planning by Dr. Dilip Abayasekara, Ph.D., A.S. referred at http://drdilip.com/stratplanning.htm
Bart, Christopher (1998) - Mission Matters - The CPA Journal referred at http://www.nysscpa.org/cpajournal/1998/0898/Departments/D56898.htm
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