Strategic Planning Tools for 2024

What is strategic planning, what are the benefits of strategic planning, types of strategic planning tools, which strategic planning method is right for your business, charting your course.

Ever feel like your small business is navigating a never-ending maze of decisions, deadlines, and daily demands? You're not alone. Small and midsize businesses (SMBs) struggle with many issues, like being short-staffed, having limited resources, and more. In this environment, making the right decisions and keeping things running can seem like monumental tasks.

But they don't have to be. Strategic planning can help you conquer this chaos. It's not a magic wand, but it's a structured step-by-step process that enables you to define your vision, set achievable goals, and chart a course for growth.

Strategic planning is the process of laying out a clear path for your business. It's about defining what you want to achieve, how you'll get there, and what steps you need to take along the way. Think of it as a map that guides you from where you are now to where you want to be.

SMBs often grapple with many challenges, including limited resources and fierce competition. Strategic planning is the antidote to these challenges. It's not just a theoretical exercise but a practical solution that allows you to identify, prioritize, and tackle the hurdles obstructing your path to success.

Strategic planning can unlock tangible benefits for your business by removing the obstacle of uncertainty and opening up a path to smoother, more efficient growth . Here are just a few of the benefits:

Sharper focus and increased clarity : By defining your core values, long-term goals, and target audience, you give everyone in your organization a shared understanding of where you're heading.

Improved decision-making: Strategic planning facilitates important big-picture conversations among leadership about capabilities, market forces, and scenarios. This aligns everyone on where they should be heading in the future.

Increased productivity: Strategic planning provides a roadmap for action, streamlining your workflow and maximizing your team's potential.

Better motivation and improved morale: By creating a shared vision and purpose, you give your team a reason to feel invested in the business's success, leading to a more engaged and productive workforce .

Greater adaptability: Strategic planning equips you with the tools to anticipate change and adapt quickly. By identifying potential risks and opportunities early on, you can develop contingency plans and adjust your course as needed.

There are many tools for strategic planning, each offering a unique perspective and approach. These tools serve as the strategic gears that set your business in motion toward its envisioned future.

According to Gartner, “CIOs should use strategic principles to provide a framework that ensures all decisions made when creating and executing strategy are aligned with the enterprise's objectives, goals, and strategies.” [1]

Strategic principles come first, and they guide how you use strategic planning frameworks. Here are some common strategic planning tools, along with strategic plan examples.

SWOT analysis

In SWOT analysis, strategic planning teams brainstorm to come up with several strengths, weaknesses, opportunities, and threats for their business and list those items in four quadrants.

SWOT analysis helps teams visualize strengths, opportunities, and threats to their business

Teams identify connections between the quadrants—especially connections between strengths and opportunities—to inform their strategy. The thing about SWOT analysis is that you can use it for annual strategic planning or everyday decision-making. Adapt SWOT analysis to a rapidly evolving market by using it at the individual project level.

For example, say your office cleaning service is considering expanding. Using SWOT, you could come up with the following assessment:

Strength: Efficient, established cleaning teams

Weakness: Limited client base

Opportunity: Expand services to home cleaning

Threat: Market is nearly saturated with existing home cleaning services

In this case, the business could match its strength to the opportunity to expand and leverage its experienced teams to make headway in an already competitive market.

OKRs work by establishing a clearly defined goal (the objective ) along with a handful of key results —that is, measurable checkpoints that are designed to achieve the target goal. Here is how it works:

Define your objective: Articulate a clear and inspiring goal that captures your team's aspirations.

Identify key results: Establish three to five measurable outcomes that, when achieved, will demonstrate meaningful progress toward your objective.

Track and adapt: Regularly assess your progress for each key result, typically on a quarterly or monthly basis.

The key to OKRs is their adaptability. They empower you to respond to shifts in market conditions, seize emerging opportunities, and pivot strategies when needed. An example is adapting to the Great Resignation:

Original objective: Achieve a 95% employee retention rate

By adjusting key results, the company can tackle the challenges of the Great Resignation head-on, fostering a more engaged and resilient workforce.

PEST analysis

With PEST (political, economic, socio-cultural, and technological) analysis, strategic planning teams weigh socioeconomic factors into their business forecasting . PEST analysis can also include legal and environmental factors (PESTLE analysis). For PEST analysis to be used effectively, it helps to have representatives on the strategic planning team with a working knowledge of the component factors.

PEST analysis is somewhat complex due to the breadth and depth of the factors it accounts for. On one hand, this necessitates an experienced strategic planning team to use PEST analysis effectively. On the other hand, this makes PEST adaptable to changing conditions. Think of each of the factors that make up PEST as levers. When the market changes, you may have to pull one or more of those levers to adjust your planning.

Here is an example of PESTLE analysis on the rise of electric vehicles:

Political: Government incentives for EV adoption

Economic: Fluctuations in oil prices

Social: Growing awareness of climate change

Technological: Advancements in battery technology

Legal: Intellectual property rights for battery technology

Environmental: Impact of lithium mining on natural resources

Balanced scorecard

Balanced scorecard is a strategic planning model designed to incorporate both financial and non-financial (customer, internal, innovation) measures.

To use the balanced scorecard, strategic planning teams seek to answer the following four questions:

How do customers see us?

What must we excel at?

Can we continue to improve and create value?

How do we look to shareholders?

Teams should answer those questions in four quadrants, linking them together where possible (similar to SWOT analysis), then translate those answers into operational strategy , individual performance goals , and business planning.

Here is an example of balancing financial goals with non-financial measures using this model for a small independent bookstore:

Customer perspective: Achieve a 95% positive rating on online review platforms.

Internal process perspective: Train staff on hosting author talks and literary workshops to create engaging experiences.

Growth and learning perspective: Invest in staff development by sponsoring book club memberships and industry conferences.

Financial perspective: Increase revenue year-over-year by 5% through diversified income streams from events and merchandise.

Hoshin planning

Hoshin planning guides your organization toward long-term goals through a collaborative, step-by-step process. Its core lies in a top-down vision, where leadership sets ambitious company-wide objectives. These goals then cascade down through the organization, transforming them into smaller, achievable objectives customized for each department and team.

Through open dialogue and feedback, every level of the organization participates, fostering understanding, buy-in, and a shared sense of ownership. Visual management tools, like strategic boards, become the canvas upon which progress is tracked, keeping everyone on the same page and celebrating victories along the way.

Here's an example of Hoshin planning in a manufacturing company that wants to increase production by 20%:

This vision cascades down to departments and goals like reducing setup time by 10% and minimizing waste by 5%, which become part of it.

Each department then creates action plans to achieve its objectives.

Regular meetings facilitate communication, address roadblocks, and ensure alignment.

Progress is visualized on Hoshin boards, motivating teams and celebrating success.

Throughout the process, the company learns from setbacks and adapts its strategies for continuous improvement.

Selecting the ideal strategic planning techniques requires considering your unique needs and goals. While each tool offers valuable insights, its strengths and complexities cater to different business types. Here's a quick guide to finding the best match:

Common mistakes to avoid during strategic planning

Once you choose a strategic planning method, make sure to steer clear of these pitfalls:

Going solo: Strategic planning thrives on collaboration , with perspectives from different levels of the organization. According to Gartner, CIOs should work with key stakeholders to develop strategic principles to provide a shared view of business goals. [1]

Vagueness: Set clear, measurable goals with concrete timelines and actionable steps.

Data blindness: Back up your decisions with data and insights to avoid guesswork and ensure evidence-based planning.

Ignoring reality: Be realistic about your resources, capabilities, and market conditions. Don't set yourself up for failure with unrealistic goals.

Static vision: The world is constantly changing. Be flexible and adaptable, revisiting and adjusting your plan as needed.

Navigating the ever-changing business landscape doesn't have to be a guessing game. By exploring the diverse world of strategic planning processes, you can identify the perfect map for your specific journey. From the adaptable flexibility of OKRs to the comprehensive foresight of PESTLE analysis, there's a tool perfectly suited to help you achieve your vision.

Now it's your turn to:

Evaluate your business context and goals to identify the tool that best fits your size, stage, and industry context.

Involve key stakeholders , gather diverse perspectives, and leverage the collective intelligence of your team.

Regularly revisit and adapt your strategic approach and embrace the mindset of continuous improvement.

In the meantime, here are some resources that will help you plan your business's future:

Strategic Planning Software

How to Balance Short-Term Execution and Long-Term Strategy

How To Track Project Progress Effectively in 4 Easy Steps

Use Strategic Principles to Provide Direction for Strategic Planning and Execution , Gartner

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9 effective strategic planning models for your business

useful planning tools and techniques that are being used in business organization

Strategic planning models can make a big difference to your organization. That remains true whether you’re a startup developing an overall strategy or an established business fine-tuning internal processes.

But there are many strategic planning models, and it’s vital to pick one that suits your purpose and needs. The right framework will help you streamline processes, drive alignment, and propel your business.

To help your research process, we’ve compiled a list of the most effective strategic planning models and their top use cases. Let’s take a look.

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What is a strategic planning model?

A strategic planning model is a framework that allows organizations to map out their short- and long-term business plans. They can help:

  • Identify and overcome obstacles 
  • Improve and streamline operations
  • Reach overarching business goals
  • Create alignment between different departments
  • Track progress over time

And you don’t have to limit your organization to one strategic planning model. Businesses can benefit from using multiple approaches, even simultaneously. But different strategic planning models are best suited for different situations, so make your choice based on your business type, growth stage, priorities, and goals. 

9 models for strategic planning

These are some of the most popular strategic planning models. Our list covers a definition of each model, an example of it in action, and which use cases it works best for.

1. Objectives & key results (OKRs)

OKRs are a popular goal-setting framework that organizations, teams, and individuals use to define long-term objectives and track progress. To better understand the meaning of OKRs , let’s unpack the acronym:

  • Objectives — ambitious but achievable long-term goals
  • Key results — milestones used to measure progress toward each objective

When establishing your OKRs, create quarterly objectives for all company levels — Leapsome has a free OKR template to help you get started. Then, revisit your OKRs regularly to monitor your progress and make adjustments if necessary. You can also introduce regular OKR meetings to your organization’s internal processes.

OKR example

Here’s an example of an OKR for a B2B SaaS company:

Objective | Significantly scale our customer base and deliver our great product to more people

  • Key results: 
  • Increase sales conversion rate from 25% to 30%
  • Reduce user churn from 5% to 3%
  • Publish a successful case study on our website every quarter
  • Achieve a minimum of 4.7 out of 5 rating across all major review sites

OKRs work best for organizations that want to create more alignment behind their goals. By breaking down company-wide objectives into smaller, more manageable tasks, OKRs ensure everyone works toward a common purpose.

‍ OKRs also show employees how their work contributes to the big picture, giving them a sense of purpose and boosting employee engagement . Research by Gallup links engaged employees to lower turnover rates, better work performance, and a thriving work culture. Consequently, OKRs help companies build successful workplaces.

A screenshot of Leapsome’s Goals & OKRs product showing company-wide objectives.

💡 Wondering how to introduce OKRs to your organization? Use Leapsome’s flexible framework to set company-wide objectives and track them in one intuitive place. 👉 Learn more

2. SWOT analysis

SWOT stands for strengths , weaknesses , opportunities , and threats . Use the SWOT model to define internal and external factors affecting your business. Then, compare the different factors to assess the risk of a potential strategy. 

For example, if your organization’s strengths match opportunities in the market — say, you have a lot of capital, and your competitors don’t — you know you have a competitive advantage. In that scenario, you can take an offensive business strategy with relatively low risk.

SWOT example

Here’s a SWOT example for a sales-based organization:

  • Strengths — We have an excellent rapport with our customers and a loyal customer base.
  • Weaknesses — Our current supply chain is inadequate.
  • Opportunities — There’s high customer demand for one of our products.
  • Threat — Our main competitor is developing a similar product.

Based on this SWOT analysis, our example organization isn’t in a strong strategic position. There’s a risk they won’t produce or distribute enough of their product to meet demand, and their competitor has the potential to outperform them. They should prioritize optimizing their product offering and solving supply chain issues over generating leads or working on an aggressive marketing campaign.

Any business can benefit from SWOT analysis. However, it’s best to use it at the beginning stages of a new strategy and with a specific goal in mind. You could try a SWOT approach when deciding priorities, like implementing new technology or restructuring your organization.

3. PEST or PESTLE analysis

PEST analysis focuses on external factors that can affect your organization. The letters stand for:

  • Socio-cultural
  • Technological

And depending on your industry, you might add legal and environmental factors to make PESTLE. 

PEST or PESTLE example

Here’s an example of a PESTLE analysis for a multinational confectionery company:

  • Political factors — The government of a country where we sell many products is planning to raise import tariffs.
  • Economic factors — Our target demographic (13 to 21-year-olds) has more disposable income now that Covid-19 restrictions have been lifted.
  • Socio-cultural factors — Surveys report that customers consider our products healthy.
  • Technological factors — Engineers devised a more efficient way to farm the main ingredient in half our products.
  • Legal factors — The FDA approved our latest chocolate bar.
  • Environmental factors — NGOs are pressuring us to use more environmentally friendly processes.

PEST analysis lets you assess the business environment for a product or service, so it’s best used during the beginning stages of a project.

4. The Balanced Scorecard framework

The Balanced Scorecard framework lets you take a holistic approach to business planning that doesn’t just focus on economic performance. Instead, you look at four perspectives: 

  • Financial perspective — how well your organization is performing economically
  • Customer perspective — your customer satisfaction and retention levels
  • Internal business perspective — the quality and efficiency of your internal operations
  • Innovation and learning perspective — your ability to improve, pivot, and grow your business

Then, create objectives and define measures to track your progress for each perspective. Those measures will support you in planning and executing initiatives to achieve your goals. And as you carry out this strategy, you can update your scorecard to show your progress.

Balanced Scorecard example

The management at ECI (Electronic Circuits Inc.) wanted to improve their delivery times. But when they talked to customers about the issue, the organization received unreliable feedback — different people had different definitions of being ‘on time.’

Using the Balanced Scorecard framework, managers shifted focus to their operations and checked the efficiency of their manufacturing process. They discovered ways to optimize the business’s cycle time, yield, and costs. 

Despite not having a reliable customer perspective, the Balanced Scorecard’s comprehensive overview of the ECI organization provided a versatile solution for reducing delivery times and streamlining the business’s overall operations.

The Balanced Scorecard framework is best for understanding your business health and creating alignment across your company.

5. Porter’s Five Forces

Porter’s Five Forces is an approach that lets you assess your product or service’s competitive advantage in the market. Identifying potential threats can guide your organization in developing a more dynamic strategic plan.

The ‘Five Forces’ that may affect your product are:

  • The threat of new competitors — Are many new businesses popping up in your industry? How easy is it for new companies to develop a product or service similar to yours?
  • The number of existing competitors — How many direct competitors are you contending with? What about adjacent competitors? Are any of them growing quickly?
  • The bargaining power of suppliers — Could suppliers put pressure on you to lower costs or change your business model?
  • The bargaining power of customers — Are your products or services available elsewhere? Is there a demand for them? Do people have issues with your pricing or quality?
  • The threat of a substitute — How likely is a similar product or service to enter the market?

Porter’s Five Forces example

Let’s take the example of a cosmetics company planning to release a shampoo with SPF 50:

  • The threat of new competitors — The shampoo requires expertise to develop, which is an obstacle for competitors entering the market.
  • The number of existing competitors — Two companies with similar products are poised to grow. They could create an almost identical product and pressure them to lower costs.
  • The bargaining power of suppliers — There’s a large number of suppliers, so they have little bargaining power.
  • The bargaining power of customers — Depending on where customers live, they’ll consider the shampoo a seasonal product. As it’s almost winter in the countries with the largest customer base, demand is lower.
  • The threat of a substitute — Research suggests that no products currently in development could fill the same need (protecting the scalp from sunburn).

Porter’s Five Forces are best for evaluating your product or service after development but before entering the market. It’s also helpful for assessing an organization’s overall competitive position. 

6. The VRIO framework

The VRIO framework helps organizations determine whether they can turn a resource into a competitive advantage. These can be physical resources like inventory, tools, and technology, or nonphysical ones like patents, skills, and work culture.

Let’s break down the VRIO acronym to understand how to evaluate each resource:

  • Valuable — The resource increases revenue or decreases operational costs.
  • Rare — The resource is limited or you control the supply.
  • Inimitable — The resource is unique or complex, meaning it’s difficult for competitors to copy.
  • Organizational — Your organization can exploit the full potential of the resource.

VRIO example

Here’s an example of a delivery company determining whether they can exploit their resource — distribution centers — to gain a competitive advantage:

  • Valuable — All the distribution centers are in strategic positions, which makes them a valuable resource as the company can use their location to create more efficient delivery routes.
  • Rare — The distribution network is a scarce resource because there are only a few ports for international delivery.
  • Inimitable — Competitors could build distribution centers in nearby locations.
  • Organizational — Delivery drivers aren’t using the most efficient routes between distribution centers.

The delivery company could have a temporary competitive advantage, but they’re not exploiting this resource. Management needs to address whatever stops delivery drivers from using the fastest route before rival delivery companies copy and control the same resource. ‍

Photo of professionals evaluating their organization's resources around a table.

The VRIO framework works best for businesses deciding how to launch a new product or service or determining how to improve their existing business model. 

Specifically, the organizational metric shows how efficiently your organization uses its resources. If you have a high score for the first three metrics but consistently fail to capture the value of your resources, it’s a sign you need to improve your internal processes.

Combine the VRIO framework with Porter’s Five Forces for a clear strategic direction when launching a new product.

7. The Hoshin Planning framework

The Hoshin Planning framework is mainly a top-down approach. This method outlines seven strategic planning stages, which are:

  • Define your vision to clarify your organization’s primary purpose.
  • Develop your main objectives to give your organization a competitive advantage.
  • Break down objectives into smaller annual goals.
  • Set goals across your entire organization — at C-level, managerial, departmental, and individual levels.
  • Implement your plans.
  • Perform monthly reviews to reflect and monitor progress.
  • Do an annual review to determine if you’ve achieved your goals and what to work on next.

It’s worth noting that the Hoshin Planning framework doesn’t have to be strictly top-down. Another core idea behind this method is that managers should ‘play catch ball’ — that is, bounce ideas between management, department heads, and team members during the first four stages.

Hoshin Planning example

Here’s how a car manufacturer might implement the Hoshin Planning framework:

  • Management shares their vision of developing the most innovative technology on the market.
  • They decide their main goal is to develop the first self-driving car by the end of 2025. But when leadership talks to the head of engineering, they say this breakthrough won’t be possible by 2025. They collectively adjust the deadline to 2027.
  • Management breaks this goal down into smaller targets. One of them is mapping out what the self-driving car should be able to do in every scenario. The engineering department agrees with this plan.
  • ​​Those targets inform detailed initiatives, like observing real-life driving incidents and collecting data on traffic and accidents.
  • All parties carry out the agreed-upon initiatives. After a month, management conducts a meeting to check everyone’s progress.
  • A year later, the engineering department has data on most scenarios the self-driving car would encounter on the road.

Companies with complex processes — like manufacturing and tech businesses — are more likely to use the Hoshin Planning framework. Their operations benefit from the ‘catch ball’ idea because it’s easier to spot problems when you filter them through diverse teams.

The Hoshin Planning Framework is also ideal for creating alignment within your company. Consider it for a larger organization that’s experienced project issues and bottlenecks.

8. The Theory of Change model

The Theory of Change model involves establishing long-term goals and working backward. Start with your desired outcome and go through all preconditions necessary for it to become a reality. During this process, you determine what needs to change to reach your objectives.

Theory of Change example

Nonprofit organizations with specific missions often use the Theory of Change model. Take adult literacy, for example. The project team would start with an ideal situation — like their country having a 100% literacy rate — and work backward to find out what’s preventing them from achieving that aim. The issues might range from a lack of funding to a need to increase awareness about resources that are already available. Then, the nonprofit team could start addressing the issues they identified.

Any organization can benefit from the Theory of Change framework. Still, it works best for specific projects, like expanding your company abroad or opening a new department, as it involves scenario planning. 

9. The Blue Ocean strategy

The Blue Ocean strategy is a strategic planning model that’s become popular recently. Developed in 2004, this method assesses whether your organization operates in a saturated market. If so, the underlying assumption of the Blue Ocean strategy is that it’s better to create new demand.

In the strategy, the ‘ocean’ is a metaphor for the market. The ‘red ocean’ is full of predators (large companies) competing for food (customers) and turning the water red, whereas the ‘blue ocean’ is deep, unexplored water that’s full of potential (uncontested market space). Here’s a list of indicators that you’re in a ‘blue ocean’:

  • You’ve found uncontested market space
  • You’ve made the competition irrelevant
  • You’re creating and capturing new demand
  • You’re breaking the value-cost trade-off

Blue Ocean example

Apple is a famous example of a business that operates in a ‘blue ocean.’ Although it’s one of the leading technology companies in the world, the Apple team still prefers to innovate new products rather than beat the competition.

The Blue Ocean strategy is ideal for small businesses and start-ups trying to establish themselves among larger organizations. Established companies in dynamic industries like tech can also use it to stay ahead of their competition.

How to implement a strategic planning model

Once you’ve set up your strategic plan, you’ll want to utilize it to its full potential. Here are some tips to make sure your strategy goes into action.

Align your approach to strategic planning with your values

There are many strategic planning models to choose from, and your organization can only implement so many. Although all of them have pros and cons, none are necessarily better than the others. So, choose the strategic planning models that reflect your organization’s values. That way, it’ll be easier to introduce your strategy and get all team members on board.

If you’re a people-first organization, OKRs are an ideal choice. OKRs involve your employees in company initiatives, make internal decisions more transparent, and give everyone a sense of purpose. 

Allocate resources to the strategic planning process

Strategic planning is like any other task: It requires resources like funding, time, and research. You should have a budget and schedule for every part of the process.

The employees helping you with strategic planning and implementation are also vital assets — offer them training and consistent support. Free up their schedule for strategic planning and create a timeline for the entire process to set your team up for success. ‍

Photo of a group of professionals working on a strategic plan around a table.

Review your progress

Aside from planning and implementing your strategy, you’ll need to check on your progress regularly. That means monthly and annual reviews at all levels.

Many strategic planning models already have reviews built into their stages. But even if they don’t, you should reevaluate at regular intervals. You can define some key performance indicators (KPIs) to measure the success of your initiatives and your overall business health. Popular KPIs include revenue growth, client retention rate, and employee satisfaction.

Be ready to adjust your strategic plan

As the saying goes, even the best-laid plans often go awry. You may find that conditions change as you implement your strategic plan or that you didn’t predict certain issues. The key isn’t necessarily to strategize better, but to have a dynamic strategy. This will allow you to adjust your plan and deal with problems as they arise.

For instance, you might opt for the PEST analysis, but be open to considering important legal and environmental factors when they come up. You can try to predict what new legislation or world events may affect your industry. Then, if any conditions arise that affect your business, you’ll be able to pivot your strategy without too much additional effort.

Boost your organization’s performance with strategic planning models

Strategic planning models help you assess the current state of your organization, decide which direction to take in the future, and communicate your plans to your employees. They can be the difference between your business merely sustaining itself and thriving.

If you’re wondering how to implement a new strategic planning model, Leapsome can offer professional support. Our Goals and OKR Management Software provides an adaptable framework for your chosen strategic model.

🚀 Kickstart your strategic plan with Leapsome Our goals and OKR management tools make it easy to implement your strategy of choice. 👉 Book a demo

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9 Strategic Planning Models and Tools for the Customer-Focused Business

Meredith Hart

Published: July 11, 2023

strategic plan abstract visual of hands holding a tablet with a plan on it and chess pieces to the right.

As the economist and business strategy guru, Michael Porter, says, “The essence of strategy is choosing what not to do.”

With strategic planning, businesses identify their strengths and weaknesses, choose what not to do, and determine which opportunities should be pursued. In sales operations, having a clearly defined strategy will help your organization plan for the future, set viable goals, and achieve them.

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So, how do you get started with strategic planning? You‘ll begin with strategic planning models and tools. Let’s take a look at nine of the most prominent ones here.

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Strategic planning models.

Strategic planning is used to set up long-term goals and priorities for an organization. A strategic plan is a written document that outlines these goals.

Don't confuse strategic planning and tactical planning . Strategic planning is focused on long-term goals, while tactical planning is focused on the short-term.

Here are a few strategic planning models you can use to get started.

1. The Balanced Scorecard

The Balanced Scorecard is one of the most prominent strategic planning models, tailored to give managers a comprehensive overview of their companies' operations on tight timelines. It considers both financial and operational metrics to provide valuable context about how a business has performed previously, is currently performing, and is likely to perform in the future.

The model plays on these concerns: time, quality, performance/service, and cost. The sum of those components amount to four specific reference points for goal-setting and performance measurement:

  • Customer: How customers view your business
  • Internal Process: How you can improve your internal processes
  • Organizational Capacity: How your business can grow, adapt, and improve
  • Financial: The potential profitability of your business

Those four categories can inform goals that are more thoughtful and focused while surfacing the most appropriate metrics with which you can use to track them. But the elements you choose to pursue and measure are ultimately up to you. As there's no definitive list, they will vary from organization to organization.

That being said, there‘s a universally applicable technique you can use when leveraging the model—creating a scorecard. This is a document that keeps track of your goals and how you apply them. Here’s an example of what a scorecard might look like:

Strategic Planning Model Balanced Scorecard

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The Balanced Scorecard is ideal for businesses looking to break up higher-level goals into more specific, measurable objectives. If you're interested in translating your big-picture ambitions into actionable projects, consider looking into it.

Example of the Balanced Scorecard

Let‘s imagine a B2B SaaS company that sells a construction management solution. It’s been running into trouble from virtually all angles. It‘s struggling with customer retention and, in turn, is hemorrhaging revenue. The company’s sales reps are working with very few qualified leads and the organization's tech stack is limiting growth and innovation.

The business decides to leverage a Balanced Scorecard approach to remedy its various issues. In this case, the full strategic plan—developed according to this model—might look like this:

  • The company sets a broad financial goal of boosting revenue by 10% year over year.
  • To help get there, it aims to improve its customer retention rate by 5% annually by investing in a more robust customer service infrastructure.
  • Internally, leadership looks to improve the company's lead generation figures by 20% year over year by revamping its onboarding process for its pre-sales team.
  • Finally, the business decides to move on from its legacy tech stack in favor of a virtualized operating system, making for at least 50% faster software delivery for consistent improvements to its product.

The elements listed above address key flaws in the company‘s customer perception, internal processes, financial situation, and organizational capacity. Every improvement the business is hoping to make involves a concrete goal with clearly outlined metrics and definitive figures to gauge each one’s success. Taken together, the organization's plan abides by the Balanced Scorecard model.

2. Objectives and Key Results

As its name implies, the OKR strategic planning model revolves around translating broader organizational goals into objectives and tracking their key results. The framework rests on identifying three to five attainable objectives and three to five results that should stem from each of them. Once you have those in place, you plan tactical initiatives around those results.

After you‘ve figured out those reference points, you determine the most appropriate metrics for measuring their success. And once you’ve carried out the projects informed by those ideal results, you gauge their success by giving a score on a scale from 0 to 1 or 0%-100%.

For instance, your goal might be developing relationships with 100 new targets or named accounts in a specific region. If you only were able to develop 95, you would have a score of .95 or 95%. Here's an example of what an OKR model might look like:

Strategic Planning Model Objectives and Key Results

It's recommended that you structure your targets to land at a score of around 70% — taking some strain off workers while offering them a definitive ideal outcome. The OKR model is relatively straightforward and near-universally applicable. If your business is interested in a way to work towards firmly established, readily visible standards this model could work for you.

Example of the Objectives and Key Results

Let's consider a hypothetical company that makes educational curriculum and schedule planning for higher-education institutions. The company decides it would like to expand its presence in the community college system in California, something that constitutes an objective.

But what will it take to accomplish that? And how will the company know if it's successful? Well, in this instance, leadership within the business would get there by establishing three to five results they would like to see. Those could be:

  • Generating qualified leads from 30 institutions
  • Conducting demos at 10 colleges
  • Closing deals at 5 campuses

Those results would lead to initiatives like setting standards for lead qualification and training reps at the top of the funnel on how to use them appropriately, revamping sales messaging for discovery calls, and conducting research to better tailor the demo process to the needs of community colleges.

Leveraging this model generally entails repeating that process between two and four more times, ultimately leading to a sizable crop of thorough, actionable, ambitious, measurable, realistic plans.

3. Theory of Change (TOC)

The Theory of Change (TOC) model revolves around organizations establishing long-term goals and essentially “working backward” to accomplish them. When leveraging the strategy, you start by setting a larger, big-picture goal.

Then, you identify the intermediate-term adjustments and plans you need to make to achieve your desired outcome. Finally, you work down a level and plan the various short-term changes you need to make to realize the intermediate ones. More specifically, you need to take these strides:

  • Identify your long-term goals.
  • Backward map the preconditions necessary to achieve your goal, and explain why they're necessary.
  • Identify your basic assumptions about the situation.
  • Determine the interventions your initiative will fulfill to achieve your goals.
  • Come up with indicators to evaluate the performance of your initiative.
  • Write an explanation of the logic behind your initiative.

Here's another visualization of what that looks like.

Strategic Planning Model Theory of Change

This planning model works best for organizations interested in taking on endeavors like building a team, planning an initiative, or developing an action plan. It's distinct from other models in its ability to help you differentiate between desired and actual outcomes. It also makes stakeholders more actively involved in the planning process by making them model exactly what they want out of a project.

It relies on more pointed detail than similar models. Stakeholders generally need to lay out several specifics, including information related to the company's target population, how success will be identified, and a definitive timeline for every action and intervention planned. Again, virtually any organization — be it public, corporate, nonprofit, or anything else — can get a lot out of this strategy model.

Example of the Theory of Change

For the sake of this example, imagine a business that makes HR Payroll Software , but hasn‘t been doing too well as of late. Leadership at the company feels directionless. They think it’s time to buckle down and put some firm plans in motion, but right now, they have some big picture outcomes in mind for the company without a feel for how they're going to get done.

In this case, the business might benefit from leveraging the Theory of Change model. Let‘s say its ultimate goal is to expand its market share. Leadership would then consider the preconditions that would ultimately lead to that goal and why they’re relevant.

For instance, one of those preconditions might be tapping into a new customer base without alienating its current one. The company could make an assumption like, “We currently cater to mid-size businesses almost exclusively, and we lack the resources to expand up-market to enterprise-level prospects. We need to find a way to more effectively appeal to small businesses.”

Now, the company can start looking into the specific initiatives it can take to remedy its overarching problem. Let's say it only sells its product at a fixed price point that suits midsize businesses much more than smaller ones. So the company decides that it should leverage a tiered pricing structure that offers a limited suite of features at a price that small businesses and startups can afford.

The factors the company elects to use as reference points for the plan's success are customer retention and new user acquisition. Once those have been established, leadership would explain why the goals, plans, and metrics it has outlined make sense.

If you track the process I‘ve just plotted, you’ll see the Theory of Change in motion. It starts with a big-picture goal and works its way down to specific initiatives and ways to gauge their effectiveness.

4. Hoshin Planning

The Hoshin Planning model is a process that aims to reduce friction and inefficiency by promoting active and open communication throughout an organization. In this model, everyone within an organization—regardless of department or seniority—is made aware of the company's goals.

Hoshin Planning rests on the notion that thorough communication creates cohesion, but that takes more than contributions from leadership. This model requires that results from every level be shared with management.

The ideal outcomes set according to this model are also conceived of by committee to a certain extent. Hoshin Planning involves management hearing and considering feedback from subordinates to come up with reasonable, realistic, and mutually understood goals.

Strategic Planning Model Hoshin Planning

The model is typically partitioned into seven steps:

  • establishing a vision
  • developing breakthrough objectives
  • developing annual objectives
  • deploying annual objectives
  • implementing annual objectives
  • conducting monthly and quarterly reviews
  • conducting an annual review.

Note: The first three steps are referred to as the “catchball process.” It's where company leadership sets goals and establishes strategic plans to send down the food chain for feedback and new ideas. That stage is what really separates Hoshin Planning from other models.

Example of Hoshin Planning

For this example, let‘s imagine a company that manufactures commercial screen printing machines. The business has seen success with smaller-scale, retail printing operations, but realizes that selling almost exclusively to that market won’t make for long-term, sustainable growth.

Leadership at the company decides that it's interested in making an aggressive push to move up-market towards larger enterprise companies. However, before they can establish that vision, they want to ensure that the entire company is willing and able to work with them to reach those goals.

Once they‘ve set a tentative vision, they begin to establish more concrete objectives and send them down the management hierarchy. One of the most pressing activities they’re interested in pursuing is a near-comprehensive product redesign to make their machines better suited for higher volume orders.

They communicate those goals throughout the organization and ask for feedback along the way. After the product team hears their ideal plans, it relays that the product overhaul that leadership is looking into isn‘t viable within the timeframe they’ve provided. Leadership hears this and adjusts their expectations before doling out any sort of demands for the redesign.

Once both parties agree on a feasible timeline, they begin to set more definitive objectives that suit both the company‘s ambitions and the product team’s capabilities.

Strategic Plan Example

The strategic plan above is for a fictitious shoe company and outlines the way in which it'll differentiate itself within the market. It effectively uses each step in the strategic planning model framework and is written in a way to give a brief overview of how the company will enter the market and sustain longevity.

If you're working on a strategic planning model for an existing business, your plan will look similar, but have a few tweaks to the goals, including more goals about improving sales and processes. When drafting the action plan and evaluation parts of the plan, be sure to think tactically about the actions that will help you achieve the goals, and use your mission, vision, and values to guide the choices you make.

Strategic Planning Tools

There are additional resources you can use to support whatever strategic planning model you put in place. Here are some of those:

1. SWOT Analysis

SWOT analysis is a strategic planning tool and acronym for strengths, weaknesses, opportunities, and threats. It's used to identify each of these elements in relation to your business.

This strategic planning tool allows you to determine new opportunities and which areas of your business need improvement. You'll also identify any factors or threats that might negatively impact your business or success.

Strategic Planning Tools SWOT Analysis

2. Porter's Five Forces

Use Porter‘s Five Forces as a strategic planning tool to identify the economic forces that impact your industry and determine your business’ competitive position. The five forces include:

  • Competition in the industry
  • Potential of new entrants into the industry
  • Power of suppliers
  • Power of customers
  • Threat of substitute products

To learn more, check out this comprehensive guide to using Porter's Five Forces .

Strategic Planning Tools Porter's Five Forces

3. Visioning

Visioning is a goal-setting strategy used in strategic planning. It helps your organization develop a vision for the future and the outcomes you'd like to achieve.

Once you reflect on the goals you‘d like to reach within the next five years or more, you and your team can identify the steps you need to take to get where you’d like to be. From there, you can create your strategic plan.

4. PESTLE Analysis

The PESTLE analysis is another strategic planning tool you can use. It stands for:

  • P: Political
  • E: Economic
  • T: Technological
  • E: Environmental

Each of these elements allow an organization to take stock of the business environment they're operating in, which helps them develop a strategy for success. Use a PESTLE Analysis template to help you get started.

Strategic Planning Tools: Pestle

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7 Proven Planning Techniques for Better Projects

ProjectManager

A project without a plan is like a car without a driver. The project plan is the guide that gets a project manager from concept through execution, and a finished product at its destination. There’s an argument that a project plan supersedes everything else in a project.

While that’s a bit of an overstatement, it does prove the rhetorical point that planning for a project is crucial. Therefore, whether you’re new to project management or a journeyman with years of experience under your belt, there’s always more planning tools and techniques to learn.

There are possibly as many planning methods as there are projects, so we boiled down the potential pot of planning techniques to seven essential ingredients that will make your next project plan a feast for your team and stakeholders.

what project planning techniques are best for you?

1. Critical Path Analysis

Planning a simple project has its hurdles to clear: but when that project is complex, then planning can feel almost insurmountable. That’s where a planning technique such as critical path analysis comes in handy. It is a planning method designed to address projects with many tasks, especially when there are those that are done at the same time and are dependent on one another.

Critical path analysis will help you determine if some tasks can run parallel, what the sequence of tasks should be, as well as prioritize them. This takes a complicated project and finds the most efficient path through it. That’s because critical path analysis follows a timeline that shows where tasks are in the schedule and what must be done when.

There are three steps to critical path analysis:

  • Write out all the tasks on a project timeline
  • Identify which of those tasks must occur at the same time
  • Note the task dependencies

This timeline will now expose the spots in the project that need more resources and those that are most important to keep the project on track.

2. Brainstorming

Brainstorming can be looked at as the plan before the plan. A plan for anything is a way to organize an approach. But before that can be done well, the project must be clearly understood and the various techniques to manage it examined. Brainstorming is a tool that uses the collective experience and skills of the project team in order to give project managers the full picture before they attempt to frame it in a plan.

Therefore, brainstorming should be the first step in any planning technique. It is a creative and lateral way of thinking that can help identify project risk and other concerns that are not immediately apparent. There will be time to formalize a plan and add the needed structure that every project rests on to reach a successful end. The creative nature of a brainstorming session, and the fact that it’s contrary to typical project management methodology, make it a highly revealing planning technique.

The only trouble is that people who excel in project management are often the types who work best within a template. Getting them to think “outside the box” can prove a challenge. But it will help your project and your team expand their own resources. Don’t forget to get stakeholders and other experts in on the brainstorming, too.

Related: How to Create a Project Plan

3. Work Breakdown Structure

Another great project planning method is the work breakdown structure (WBS), which is a way to rank tasks in the project. Again, when a project is great in scope it helps to get a handle on it, which is where the WBS comes in. As the name implies, the WBS breaks down the larger project into manageable tasks. It’s like putting something in a crucible and breaking it down to its primary elements.

Begin with the project, then start breaking it down: first into phases and then from those milestones, into tasks. In a sense, you’re starting at the end of the project and working backwards. The breakdown is considering the size of the task, how long it will take and who will be responsible for that task. You can use our free work breakdown structure template to get started.

Think of the WBS as a framework for planning. It provides a picture of all the pieces of the project puzzle. With this knowledge, a project manager has the big picture and the smaller parts that make it up, so they can now act to control the project over the course of its life cycle. From the WBS, a statement of work will develop, as well as scheduling, budget and other resources.

4. Gantt Chart

The old standby for project planning is the Gantt chart. For decades, the Gantt chart has been included in the feature set of a slew of project management software platforms, which has given it a flexibility that emphasizes its many positive attributes.

ProjectManager.com has an online Gantt chart that allows you to upload your task list from any Excel or CSV spreadsheet or even an MS Project file. Once that task list is uploaded, and you set the column names, the tasks populate the left-hand side of the Gantt chart, which is an outline for the entire project. Adding start and end dates create a line across that timeline illustrating the task’s duration.

gantt chart for procurement management

If a task is dependent on another, it can be linked, so that team members are aware of the task dependency and aren’t blocked. This also avoids bottlenecks in the schedule, as email notifications can be set to automatically alert team members of coming deadlines. That keeps the project on track.

Once the project has been planned, the Gantt chart keeps on giving. With ProjectManager.com, our online Gantt chart gives the project manager the ability to assign the tasks. It is also a collaboration platform, allowing those assigned team members to freely communicate in comments, where they can attach files and images. They are notified of these comments in real-time, so the team can communicate no matter where or at what time. Try this planning technique today with a free trial of ProjectManager.com.

5. Cause and Effect Diagram

This planning technique was created by Kaoru Ishikawa, a Japanese organizational theorist, to show the causes of an event. It is also called an Ishikawa or fishbone diagram.

It gathers and identifies issues that can develop over the course of a project. By doing so, this planning method helps project managers figure out solutions to those problems. There is risk inherent in every project, and planning against those risks is another way to make sure the project proceeds as planned, without costly interruptions.

The cause and effect diagram has a central backbone from which bones are drawn that represent any major factor that might impact the final outcome of the project. It can be used to take those issues that came up during a brainstorming session and organize them.

The factors that could impact the project (or the bones that come from the backbone) could be equipment or other resources, a legal problem, new technology, training, etc. Each of these bones is then divided into even smaller bones to get a full view of the cause and effect they might have on a project and its plan.

Program evaluation and review technique or PERT is a tool to help project managers estimate the amount of time a project will likely take. Scheduling is one of the pillars of planning techniques, so you can see the importance of having a planning method like PERT to make your schedule more accurate.

The more variables you can control, the better your outcome when estimating. But there are so many unknowns when dealing with a project that it can feel impossible to hit your target. But that’s just what PERT does: it manages the complex probability of a project with simple statistical methods.

With PERT, tasks are broken down like with the WBS, but adding these activities to a Gantt chart to link the task dependencies. This creates a map of the project’s interdependencies. Each of the task are then given a time-to-complete estimation: optimistic (O), being the quickest it will take to complete the task; mostly likely (M), the required deadline; or pessimistic (P), being the most time it will take.

E, being the expected time for each task, is derived by the equation: E = (O + 4M + P)/6. The variance is found by solving this equation: V= [(P – O)/ 6] ^2. When the E and V for every task is calculated, the total Es is an accurate time estimation for the project. The added Vs show the expected variance.

7. SMART Goals

Another acronym that can help with your planning methods is SMART, which stands for specific, measurable, attainable, relevant and time bound. What SMART does when in the planning process of a project is making sure, before you start, that your goals fit within the SMART criteria.

That means that they should be specific, as in clear and concise. They must also be measurable, so you can quantify your project. Attainable is obvious, in that if the project is a pie-in-the-sky impossibility then the odds are it’s going to fail.

The last two initials are for relevant, which speaks to the project’s goals being aligned with the overall business strategy of the organization, and time bound, as in having a deadline. If your project meets all these points, then you can start planning.

ProjectManager.com is a cloud-based project management software that makes planning a snap. It not only uploads spreadsheets and MS Project files, but once in the software, they’re easily shared and updated instantly, for a more collaborative platform. The real-time dashboard keeps project managers and teams updated and makes reporting to stakeholders easy. See for yourself by taking this free 30-day trial.

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  • What is strategic planning? A 5-step gu ...

What is strategic planning? A 5-step guide

Julia Martins contributor headshot

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. In this article, we'll guide you through the strategic planning process, including why it's important, the benefits and best practices, and five steps to get you from beginning to end.

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. The strategic planning process informs your organization’s decisions, growth, and goals.

Strategic planning helps you clearly define your company’s long-term objectives—and maps how your short-term goals and work will help you achieve them. This, in turn, gives you a clear sense of where your organization is going and allows you to ensure your teams are working on projects that make the most impact. Think of it this way—if your goals and objectives are your destination on a map, your strategic plan is your navigation system.

In this article, we walk you through the 5-step strategic planning process and show you how to get started developing your own strategic plan.

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What is strategic planning?

Strategic planning is a business process that helps you define and share the direction your company will take in the next three to five years. During the strategic planning process, stakeholders review and define the organization’s mission and goals, conduct competitive assessments, and identify company goals and objectives. The product of the planning cycle is a strategic plan, which is shared throughout the company.

What is a strategic plan?

[inline illustration] Strategic plan elements (infographic)

A strategic plan is the end result of the strategic planning process. At its most basic, it’s a tool used to define your organization’s goals and what actions you’ll take to achieve them.

Typically, your strategic plan should include: 

Your company’s mission statement

Your organizational goals, including your long-term goals and short-term, yearly objectives

Any plan of action, tactics, or approaches you plan to take to meet those goals

What are the benefits of strategic planning?

Strategic planning can help with goal setting and decision-making by allowing you to map out how your company will move toward your organization’s vision and mission statements in the next three to five years. Let’s circle back to our map metaphor. If you think of your company trajectory as a line on a map, a strategic plan can help you better quantify how you’ll get from point A (where you are now) to point B (where you want to be in a few years).

When you create and share a clear strategic plan with your team, you can:

Build a strong organizational culture by clearly defining and aligning on your organization’s mission, vision, and goals.

Align everyone around a shared purpose and ensure all departments and teams are working toward a common objective.

Proactively set objectives to help you get where you want to go and achieve desired outcomes.

Promote a long-term vision for your company rather than focusing primarily on short-term gains.

Ensure resources are allocated around the most high-impact priorities.

Define long-term goals and set shorter-term goals to support them.

Assess your current situation and identify any opportunities—or threats—allowing your organization to mitigate potential risks.

Create a proactive business culture that enables your organization to respond more swiftly to emerging market changes and opportunities.

What are the 5 steps in strategic planning?

The strategic planning process involves a structured methodology that guides the organization from vision to implementation. The strategic planning process starts with assembling a small, dedicated team of key strategic planners—typically five to 10 members—who will form the strategic planning, or management, committee. This team is responsible for gathering crucial information, guiding the development of the plan, and overseeing strategy execution.

Once you’ve established your management committee, you can get to work on the planning process. 

Step 1: Assess your current business strategy and business environment

Before you can define where you’re going, you first need to define where you are. Understanding the external environment, including market trends and competitive landscape, is crucial in the initial assessment phase of strategic planning.

To do this, your management committee should collect a variety of information from additional stakeholders, like employees and customers. In particular, plan to gather:

Relevant industry and market data to inform any market opportunities, as well as any potential upcoming threats in the near future.

Customer insights to understand what your customers want from your company—like product improvements or additional services.

Employee feedback that needs to be addressed—whether about the product, business practices, or the day-to-day company culture.

Consider different types of strategic planning tools and analytical techniques to gather this information, such as:

A balanced scorecard to help you evaluate four major elements of a business: learning and growth, business processes, customer satisfaction, and financial performance.

A SWOT analysis to help you assess both current and future potential for the business (you’ll return to this analysis periodically during the strategic planning process). 

To fill out each letter in the SWOT acronym, your management committee will answer a series of questions:

What does your organization currently do well?

What separates you from your competitors?

What are your most valuable internal resources?

What tangible assets do you have?

What is your biggest strength? 

Weaknesses:

What does your organization do poorly?

What do you currently lack (whether that’s a product, resource, or process)?

What do your competitors do better than you?

What, if any, limitations are holding your organization back?

What processes or products need improvement? 

Opportunities:

What opportunities does your organization have?

How can you leverage your unique company strengths?

Are there any trends that you can take advantage of?

How can you capitalize on marketing or press opportunities?

Is there an emerging need for your product or service? 

What emerging competitors should you keep an eye on?

Are there any weaknesses that expose your organization to risk?

Have you or could you experience negative press that could reduce market share?

Is there a chance of changing customer attitudes towards your company? 

Step 2: Identify your company’s goals and objectives

To begin strategy development, take into account your current position, which is where you are now. Then, draw inspiration from your vision, mission, and current position to identify and define your goals—these are your final destination. 

To develop your strategy, you’re essentially pulling out your compass and asking, “Where are we going next?” “What’s the ideal future state of this company?” This can help you figure out which path you need to take to get there.

During this phase of the planning process, take inspiration from important company documents, such as:

Your mission statement, to understand how you can continue moving towards your organization’s core purpose.

Your vision statement, to clarify how your strategic plan fits into your long-term vision.

Your company values, to guide you towards what matters most towards your company.

Your competitive advantages, to understand what unique benefit you offer to the market.

Your long-term goals, to track where you want to be in five or 10 years.

Your financial forecast and projection, to understand where you expect your financials to be in the next three years, what your expected cash flow is, and what new opportunities you will likely be able to invest in.

Step 3: Develop your strategic plan and determine performance metrics

Now that you understand where you are and where you want to go, it’s time to put pen to paper. Take your current business position and strategy into account, as well as your organization’s goals and objectives, and build out a strategic plan for the next three to five years. Keep in mind that even though you’re creating a long-term plan, parts of your plan should be created or revisited as the quarters and years go on.

As you build your strategic plan, you should define:

Company priorities for the next three to five years, based on your SWOT analysis and strategy.

Yearly objectives for the first year. You don’t need to define your objectives for every year of the strategic plan. As the years go on, create new yearly objectives that connect back to your overall strategic goals . 

Related key results and KPIs. Some of these should be set by the management committee, and some should be set by specific teams that are closer to the work. Make sure your key results and KPIs are measurable and actionable. These KPIs will help you track progress and ensure you’re moving in the right direction.

Budget for the next year or few years. This should be based on your financial forecast as well as your direction. Do you need to spend aggressively to develop your product? Build your team? Make a dent with marketing? Clarify your most important initiatives and how you’ll budget for those.

A high-level project roadmap . A project roadmap is a tool in project management that helps you visualize the timeline of a complex initiative, but you can also create a very high-level project roadmap for your strategic plan. Outline what you expect to be working on in certain quarters or years to make the plan more actionable and understandable.

Step 4: Implement and share your plan

Now it’s time to put your plan into action. Strategy implementation involves clear communication across your entire organization to make sure everyone knows their responsibilities and how to measure the plan’s success. 

Make sure your team (especially senior leadership) has access to the strategic plan, so they can understand how their work contributes to company priorities and the overall strategy map. We recommend sharing your plan in the same tool you use to manage and track work, so you can more easily connect high-level objectives to daily work. If you don’t already, consider using a work management platform .  

A few tips to make sure your plan will be executed without a hitch: 

Communicate clearly to your entire organization throughout the implementation process, to ensure all team members understand the strategic plan and how to implement it effectively. 

Define what “success” looks like by mapping your strategic plan to key performance indicators.

Ensure that the actions outlined in the strategic plan are integrated into the daily operations of the organization, so that every team member's daily activities are aligned with the broader strategic objectives.

Utilize tools and software—like a work management platform—that can aid in implementing and tracking the progress of your plan.

Regularly monitor and share the progress of the strategic plan with the entire organization, to keep everyone informed and reinforce the importance of the plan.

Establish regular check-ins to monitor the progress of your strategic plan and make adjustments as needed. 

Step 5: Revise and restructure as needed

Once you’ve created and implemented your new strategic framework, the final step of the planning process is to monitor and manage your plan.

Remember, your strategic plan isn’t set in stone. You’ll need to revisit and update the plan if your company changes directions or makes new investments. As new market opportunities and threats come up, you’ll likely want to tweak your strategic plan. Make sure to review your plan regularly—meaning quarterly and annually—to ensure it’s still aligned with your organization’s vision and goals.

Keep in mind that your plan won’t last forever, even if you do update it frequently. A successful strategic plan evolves with your company’s long-term goals. When you’ve achieved most of your strategic goals, or if your strategy has evolved significantly since you first made your plan, it might be time to create a new one.

Build a smarter strategic plan with a work management platform

To turn your company strategy into a plan—and ultimately, impact—make sure you’re proactively connecting company objectives to daily work. When you can clarify this connection, you’re giving your team members the context they need to get their best work done. 

A work management platform plays a pivotal role in this process. It acts as a central hub for your strategic plan, ensuring that every task and project is directly tied to your broader company goals. This alignment is crucial for visibility and coordination, allowing team members to see how their individual efforts contribute to the company’s success. 

By leveraging such a platform, you not only streamline workflow and enhance team productivity but also align every action with your strategic objectives—allowing teams to drive greater impact and helping your company move toward goals more effectively. 

Strategic planning FAQs

Still have questions about strategic planning? We have answers.

Why do I need a strategic plan?

A strategic plan is one of many tools you can use to plan and hit your goals. It helps map out strategic objectives and growth metrics that will help your company be successful.

When should I create a strategic plan?

You should aim to create a strategic plan every three to five years, depending on your organization’s growth speed.

Since the point of a strategic plan is to map out your long-term goals and how you’ll get there, you should create a strategic plan when you’ve met most or all of them. You should also create a strategic plan any time you’re going to make a large pivot in your organization’s mission or enter new markets. 

What is a strategic planning template?

A strategic planning template is a tool organizations can use to map out their strategic plan and track progress. Typically, a strategic planning template houses all the components needed to build out a strategic plan, including your company’s vision and mission statements, information from any competitive analyses or SWOT assessments, and relevant KPIs.

What’s the difference between a strategic plan vs. business plan?

A business plan can help you document your strategy as you’re getting started so every team member is on the same page about your core business priorities and goals. This tool can help you document and share your strategy with key investors or stakeholders as you get your business up and running.

You should create a business plan when you’re: 

Just starting your business

Significantly restructuring your business

If your business is already established, you should create a strategic plan instead of a business plan. Even if you’re working at a relatively young company, your strategic plan can build on your business plan to help you move in the right direction. During the strategic planning process, you’ll draw from a lot of the fundamental business elements you built early on to establish your strategy for the next three to five years.

What’s the difference between a strategic plan vs. mission and vision statements?

Your strategic plan, mission statement, and vision statements are all closely connected. In fact, during the strategic planning process, you will take inspiration from your mission and vision statements in order to build out your strategic plan.

Simply put: 

A mission statement summarizes your company’s purpose.

A vision statement broadly explains how you’ll reach your company’s purpose.

A strategic plan pulls in inspiration from your mission and vision statements and outlines what actions you’re going to take to move in the right direction. 

For example, if your company produces pet safety equipment, here’s how your mission statement, vision statement, and strategic plan might shake out:

Mission statement: “To ensure the safety of the world’s animals.” 

Vision statement: “To create pet safety and tracking products that are effortless to use.” 

Your strategic plan would outline the steps you’re going to take in the next few years to bring your company closer to your mission and vision. For example, you develop a new pet tracking smart collar or improve the microchipping experience for pet owners. 

What’s the difference between a strategic plan vs. company objectives?

Company objectives are broad goals. You should set these on a yearly or quarterly basis (if your organization moves quickly). These objectives give your team a clear sense of what you intend to accomplish for a set period of time. 

Your strategic plan is more forward-thinking than your company goals, and it should cover more than one year of work. Think of it this way: your company objectives will move the needle towards your overall strategy—but your strategic plan should be bigger than company objectives because it spans multiple years.

What’s the difference between a strategic plan vs. a business case?

A business case is a document to help you pitch a significant investment or initiative for your company. When you create a business case, you’re outlining why this investment is a good idea, and how this large-scale project will positively impact the business. 

You might end up building business cases for things on your strategic plan’s roadmap—but your strategic plan should be bigger than that. This tool should encompass multiple years of your roadmap, across your entire company—not just one initiative.

What’s the difference between a strategic plan vs. a project plan?

A strategic plan is a company-wide, multi-year plan of what you want to accomplish in the next three to five years and how you plan to accomplish that. A project plan, on the other hand, outlines how you’re going to accomplish a specific project. This project could be one of many initiatives that contribute to a specific company objective which, in turn, is one of many objectives that contribute to your strategic plan. 

What’s the difference between strategic management vs. strategic planning?

A strategic plan is a tool to define where your organization wants to go and what actions you need to take to achieve those goals. Strategic planning is the process of creating a plan in order to hit your strategic objectives.

Strategic management includes the strategic planning process, but also goes beyond it. In addition to planning how you will achieve your big-picture goals, strategic management also helps you organize your resources and figure out the best action plans for success. 

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3.14: Types of Plans and Common Planning Tools

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Learning Objectives

  • Differentiate between the uses of long-term plans, short-term plans, and operational plans.
  • Differentiate between standing plans and single-use plans.
  • Explain how policies, procedures, and regulations impact operational plans.
  • Explain the role of budgets in the planning process.
  • Differentiate between forecasting, scenario planning, and contingency planning.
  • Explain the use of “management by objectives” (MBO), SMART goals, and benchmarking in planning.

You can view the transcript for “Long term and short term planning animated” here (opens in new window) .

Watch the short animated video for a brief overview of the importance of long-term and short-term planning.

Long-term and Short-term Plans

When you decided to attend college, you had a long-term plan in mind. You would spend the next four or five years preparing to become a teacher, a businessperson, or perhaps an ecologist. Or, you may have committed two or three years to become a nurse, a medical technician, or an electrician. Your long-term goal was necessary to make sure that your daily activities would help you achieve your desired outcome. You could have just enrolled in a school and taken classes that looked interesting, but then where would you be in four years? You most likely would not have taken the courses required to qualify you for the job you want. An organization, especially a business, is not so different. It also needs a long-term plan to make sure that the daily activities of its employees are contributing to the mission and value statements of the organization.

A long-term plan is crucial to the ultimate success of the organization. A long-term plan for many businesses, such as construction, hospitality, or manufacturing, generally extends four to five years into the future. For other faster-changing industries, especially technology companies, a long-term plan may only look two or three years into the future. After that, it becomes too difficult to predict the future with any degree of certainty.

Top management is responsible for the development of the long-term plan. It is up to the CEO to make sure that changing conditions (both external and internal) are reflected in the organization’s long-term plan. The larger and more complex the organization, the larger and more complex the long-term plan will be to include all of the individual departments and functions.

Short-term plans generally allocate resources for a year or less. They may also be referred to as operational plans because they are concerned with daily activities and standard business operations. Like long-term plans, short-term plans must be monitored and updated, and this is the role of middle- and first-level management. Different managerial levels have responsibility for implementing different types of short-term plans. For example, a department manager may be comfortable implementing an operational plan for the entire year for her department. A marketing manager may direct a three- to four-month plan that involves the introduction of a new product line. A team leader may only be comfortable planning and implementing very specific activities over the period of a month.

Graphic showing organizational plan hierarchy with top management in charge of the long-term plan; middle management in charge of standing short-term plan and single-use short-term plan; and middle and first level management in charge of policies, procedures, and budgets

Practice Question

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Operational Plans: Standing Plans and Single-Use Plans

An operational plan describes the specific goals and objectives and milestones set by an organization during a specific period. ( Objectives are specific tasks undertaken to meet broader goals. A goal may be to increase product sales by 3 percent; an objective may be to hire two additional sales agents.) It will allocate the tangible resources (labor, equipment, space) and authorize the financing necessary to meet the objectives of the plan. There are two types of operational plans: standing plans and single-use plans.

  • Standing plans are plans designed to be used again and again. Examples include policies, procedures, and regulations. The advantage of standing plans is that they foster unity and fairness within an organization and help to support stated organizational values. Managers don’t have to make unique decisions already addressed by various organizational policies. Standing plans also save time because managers know in advance how to address common situations. Finally, standing plans aid in the delegation of work, because employees are already familiar with the procedures and regulations followed by the organization.
  • Single-use plans refer to plans that address a one-time project or event. The length of the plans varies, but the most common types are budgets and project schedules. The obvious advantage of a single-use plan is that it can be very specific in how it addresses the needs of a particular situation.

PRactice Question

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Policies, Procedures, and Regulations

As stated above, the most common examples of standing use plans are policies, procedures, and regulations. These plans are usually published and handed out to new hires or posted on the organization’s employee website for easy reference.

  • Policies provide broad guidelines for the smooth operation of the organization. They cover things like hiring and firing, performance appraisals, promotions, and discipline. For example, a company may have a policy to encourage recycling in the workplace or a policy that prohibits personal cell phone use in manufacturing areas.
  • Procedures are steps to be followed in established and repeated operations. Procedures should reflect the policies of the company and support the organization’s long-term goals. Procedures may also detail steps that should be followed to ensure employees are disciplined in a fair and unbiased manner. For example, if employees feel that other employees interacted with them in an inappropriate manner, then they should follow the procedure for bringing this to management’s attention. Or, the organization may establish procedures for what to do in cases of emergencies, such as a fire or toxic spill.
  • Regulations refer to what is allowable and what is strictly prohibited in an organization. In other words, a regulation is a kind of rule that addresses general situations. In many hospitals and laboratories, for example, there are safety regulations against wearing open-toed shoes or shoes with slippery soles. State and federal governments frequently issue regulations for industries that impact public safety.

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The Role of Budgets in the Planning Process

Refer back to Figure 1 and locate the box labeled “Budgets.” Notice that budgets are examples of single-use, short-term plans. An organization’s budget is a document that details the financial and physical resources allocated to a project or department. They are single-use plans because they are specific to a particular period or event. For example, departments may have a hiring budget that allocates a certain number of positions and a total salary value for a calendar year. Next year, that budget may be the same or it may change, depending upon conditions in the organization. But it cannot be assumed that the budget will stay the same. Zero-based budgets look at each budget as if it were brand new and require managers to justify each of the budgeted items. This process ensures that budgets are closely tied to the latest organizational goals.

Managers deal with a variety of budget types:

  • Financial budgets include balance sheets, income/expense statements, and statements of cash flow.
  • Operating budgets project revenue against expenditures.
  • Nonmonetary budgets allocate resources such as labor, workspace, and equipment use.
  • Fixed budgets are budgets that do not change with increased or decreased activities, such as sales revenue. They are also called static budgets.
  • Flexible budgets will vary with the level of activity (grow or be reduced according to changing conditions).

Budgets are a very important planning tool, and organizations take their budgeting process very seriously. Some managers spend most of their time making sure that the expenses and projects they control do not exceed authorized spending limits. To routinely “go over budget” is a sign of a poor planning—and planning is one of the basic management functions. In some cases, to routinely come in under budget is also viewed negatively, because with more accurate budgeting those committed resources could have been allocated to other projects. Often, projects compete for limited resources so the best budget is the one that most closely projects actual expenses and revenue.

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Forecasting, Scenario Planning, and Contingency Planning

Forecasting is simply making a prediction about the future. Anyone can make a forecast—the trick is to be right or close enough so that important planning decisions can be based on the forecast. Some “botched” forecasts by business leaders follow:

“This telephone has too many shortcomings to be seriously considered as a means of communication.” – President of Western Union, 1876

“There is a world market for maybe five computers.” – Chairman of IBM, 1943

“Television won’t be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night.” – Darryl Zanuck, president of 20th Century Fox, 1946

“There is no chance that the iPhone is going to get any significant market share.” – Microsoft CEO Steve Ballmer, 2012

A photo of a psychic’s display window

Scientific forecasting is using mathematical models, historical data, and statistical analysis to make predictions about what will happen in the future. Businesses use short-term forecasting all the time when creating budgets and anticipating expenses. Mostly, these forecasts are based on what they sold and what they paid providers in the recent past. Long-range forecasting requires both quantitative numerical data and qualitative data based on expert opinions and insights. Often, organizations will create a number of long-range forecasts based on “best-case” and “worst-case” scenarios. They will then make plans on how they would respond to each situation and, as time goes on, they will update and adapt the long-term plan.

One other important type of planning is the contingency plan . A contingency plan describes what will happen in a possible—but not expected—situation. Usually, contingency plans are designed to handle emergency situations. For example, airports have contingency plans for plane crashes on takeoffs or landings, and popular tourist attractions have begun developing contingency plans in case of terrorist threats.

An example of the critical importance of contingency planning involves the Deepwater Horizon oil spill in the Gulf of Mexico in 2010. Eleven people lost their lives and seventeen were badly injured when an explosion on an oil rig released almost five million barrels of oil into the Gulf of Mexico. It was the worst marine oil spill in history, and its effects were even more devastating because BP Oil did not have contingency plans in place for that kind of disaster. The spill went on for months while BP and its partners tried to figure out how to shut off the oil’s source. Even though BP spent $62 billion on the response and cleanup activities, there was extensive damage to marine and wildlife habitats and fishing and tourism industries. Getting employees involved in planning may help prevent tragedies similar to this one.

Practice QUestion

https://assessments.lumenlearning.co...essments/12172

Management By Objectives (MBO) and SMART Goals

Management by objectives , or MBO for short, is a tool that can be used to improve the performance of an organization by creating clearly defined objectives agreed upon by management and by the employees. Peter Drucker, a prolific author and a leader in management theory, coined the phrase “management by objectives” in 1954. The intent of MBO is to improve employee motivation and organizational communication by focusing on aligning individual goals to corporate objectives. In MBO, a manager and an employee do the following:

  • jointly set goals and objectives for a period.
  • together plan tasks that the employee performs with the support of management.
  • agree on the standards for evaluating performance of the task.
  • regularly meet to review progress.

MBO must be a top-down management tool, because organizational goals are cascaded down to create the various operational levels. Drucker showed that as long as employee goals support short-term and long-term organizational objectives, MBO will help move the company forward. Critics, however, charge that managers using the approach focus more on creating goals than on helping the employee achieve them.

SMART goals are a technique often paired with MBO. SMART stands for specific, measurable, achievable, realistic, and time-bound. The SMART goal paired well with MBO theory by

  • Providing incentives to employees by rewarding them when they meet key goals.
  • Empowering employees by allowing them to set their own objectives for achieving their individual goal.
  • Communicating honestly about what went well and what did not, and focusing on developing the missing skills.

The chart that follows summarizes the most important characteristics of each part of a SMART goal.

For example, let’s say you set a goal to become a recognized department expert in a subject relevant to advancement within the organization. How could you turn this into a SMART goal?

  • Specific: I will learn about the liabilities of six major nonprofit organizations.
  • Measurable: I will make presentations to the advertising, grant writing, and donor/client committees.
  • Achievable: I will interview one nonprofit organization every week for six weeks.
  • Relevant: This expertise will fill a current knowledge gap in the new client department.
  • Time-bound: I will fulfill this goal before my next scheduled annual performance evaluation.

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Benchmarking

The last planning tool we’ll discuss in this section is benchmarking. You may think that your organization has an excellent long-term plan and effective short-term plans, but how do you really know? Even if your company is showing growth, is it growing as fast as your competitor? A benchmark is a standard used for comparison purposes. Benchmarking is looking at performance levels outside of your organization, or sometimes across departments or divisions inside your organization, to evaluate your own performance. You can benchmark using several different criteria:

  • Industry: Let’s say you produce technology widgets. Benchmarking can answer questions about how your company is doing in comparison to other tech widget makers. This approach is a type of competitive benchmarking.
  • Geography: Your state is showing a lot of economic growth. You can use benchmarking to determine if your company is sharing in that wealth or underperforming compared to the regional economy.
  • Organization: You are a small business owner. Benchmarking can help answer questions about whether the economic climate is friendlier to big business than it is to small business, or whether nonprofits are failing whereas for-profits are succeeding.
  • Processes: You can use benchmarking to determine what processes other firms are using that are helping or hurting them. Are there lessons to be learned from them? This is also called strategic benchmarking or process benchmarking.
  • Innovation: Benchmarking can help you discover what partners or techniques your competitors are using that are missing in your organization. Are there functions in your products or programs that should be eliminated and others that could be added? Functional benchmarking is key in technology-related organizations.

Internal benchmarking means comparing a department’s performance with another department in your company or branch within the same larger organization. The important thing about benchmarking is that it gives you a standard against which to compare your progress.

Planning tools are designed to help you determine goals, guide behaviors within the organization, and help you evaluate your performance against external benchmarks. Plans are essential, but good managers know to be flexible when conditions demand.

Contributors and Attributions

  • Types of Plans and Planning Tools. Authored by : John/Lynn Bruton and Lumen Learning. License : CC BY: Attribution
  • Image: Organizational Plan Hierarchy. Authored by : Lumen Learning. License : CC BY: Attribution
  • Image: PsychicBoston. Authored by : John Stephen Dwyer. Located at : https://commons.wikimedia.org/wiki/File:PsychicBoston.jpg . License : CC BY-SA: Attribution-ShareAlike
  • Long term and short term planning animated. Authored by : Artem Nedoshepa. Located at : https://www.youtube.com/watch?v=De0HyiqRXIU . License : All Rights Reserved

The Peak Performance Center

The Peak Performance Center

The pursuit of performance excellence, seven management and planning tools.

Seven Management and Planning Tools are a set of tools and techniques used to help effectively plan and manage various types of business operations. These tools are intended to guide you in the planning, analysis, and decision making processes.

These tools were developed independently by different people for diverse purposes. However, they were assembled as a set of methods in order to achieve efficiencies in the planning and management of operations.

The Seven Management and Planning tools are:

  • The affinity diagram
  • The tree diagram
  • The interrelationship diagram
  • The matrix diagram

Prioritization Matrices

  • The process decision program chart (PDPC)
  • The activity network diagram

About The Seven Management And Planning Tools

The seven management and planning tools are collectively used by organizations to make better decisions and implement new solutions effectively. When used as individually, these tools provide a systematic and organized way of assessing ideas and making decisions. However, when used in combination with each other, they provide an extremely effective way to systematically solve complex issues an organization may face.

The Seven Management and Planning Tools

Affinity Diagram

An Affinity Diagram is a tool used for organizing a large amounts of disorganized information into groups based on their natural relationships and affinity (similarity of characteristics). It is often used for solving problems with issues that seem to be very complex and difficult to manage.

An Affinity Diagram is a type of brainstorming technique that allows you to generate, organize, and consolidate information concerning complex processes, issues, or problems.

Tree Diagram

A Tree Diagram (also referred to as a systematic diagram) is a systematic method to outline all the details needed to complete a given objective or process. It is used to break down broad categories or complex processes into minute details allowing you to examine the finer details.

The Tree Diagram is an orderly structure similar to an organization chart or family tree diagram. It helps in understanding a process by graphically breaking down complex processes to smaller levels of detail.

This technique encourages you to direct your thinking from generalities to specifics.

Interrelationship Diagram

An Interrelationship Diagram (also referred to as a relations diagram) identifies and displays all the interrelated cause-and-effect relationships among different concepts or ideas. Basically, it establishes links between ideas or concepts, and shows that they can be logically linked with more than one other idea or concept at a time.

The process of creating an Interrelationship Diagram allows you to systematically identify and analyze the cause-and-effect relationships that exist among all critical issues. This process helps you understand the natural links between different aspects of a complex issue so you can better develop an effective solution.

This technique encourages you to think in multiple directions ( lateral thinking ) rather than just thinking linearly.

Matrix Diagram

A Matrix Diagram is a tool that shows the connection or correlation between ideas or variables in a table format. It enables you to analyze relatively complex issues by revealing interactions and dependencies between different elements or variables.

The Matrix Diagram graphically establishes relationship between two or more sets of items in such a way as to provide logical connecting points between each item. The diagram displays the strength of relationships using a grid of rows and columns. A relationship is indicated at each intersection of rows and columns as either present or absent.  Thus, allowing you to identify the presence and strengths of relationships between two or more items.

prioritization matrix is a tool that sorts and ranks various options into an order of importance using weighted criteria. This technique helps identify which problems are the most important to work on solving first.

A Prioritization Matrix graphically displays options and criteria in row and column format. Weights are assigned to each criteria. The matrix allows you to identify an item's relative importance by deriving a numerical value for its priority. This allows you to select and prioritize some options over others.

Process Decision Program Chart (PDPC)

A Process Decision Program Chart (PDPC) is a tool for identifying and documenting the steps required to complete a process. It is intended to help you prepare contingency plans by mapping out every conceivable event that can occur when moving from a problem to possible solutions.

This technique allows you to systematically identify what might go wrong with a plan.  Therefore, you can create appropriate contingency plans to limit risks.

Activity Network Diagram

Activity Network Diagram (also referred to as an Arrow Diagram) is a tool used to map activities and tasks for a project in sequential order. Basically, it graphically depicts a project timeline.

This tool displays interdependent relationships between activities, tasks, and groups as they all impact a project. Boxes and arrows are used to depict these activities and the links between them as well as chart the sequential order of the entire process.

Additional Links

Process Decision Program Chart

SWOT Analysis

useful planning tools and techniques that are being used in business organization

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useful planning tools and techniques that are being used in business organization

13 Decision Making Techniques and Tools for Business

Updated on: 5 January 2023

In life, we make decisions everyday. And in the context of running a business, decision-making gets even more serious in nature, as the resulting outcome would affect a whole organization, its performance, its direction or its employees.

Following are visual decision making techniques that you can use during different stages of decision-making. Each technique is provided with an editable template that you can click and customize online during your decision making process.

Decision Making Steps and Decision Making Techniques

The decision-making process helps business managers find solutions to problems by exploring the different options available and selecting the best alternative out of them.

These decision-making techniques will help you accelerate the process by simplifying each step of the decision-making process.

Explore the Situation and Gather Information

Before you make a decision, you need to examine the situation or the issue that requires you to make a decision in the first place. See who is affected, what caused it, and how you should approach it.

Stakeholder Analysis

Using a stakeholder analysis you can see who you should involve in the decision-making process.

You might have to rely on other stakeholders for their input in making the decision, in which case it’s better to conduct a stakeholder analysis to identify who you should get help from.

Stakeholder Analysis Template

Vroom-Yetton Jago Decision Model

The Vroom-Yetton Jago decision-making model is another tool you can use to determine whether you should involve others in the decision-making process or you should do it alone.

There are situations where the leader is required to be the sole decision-maker while in some situations the involvement of the groups is necessary.

The Vroom-Yetton Jago model helps identify the best management style you need to use during various situations. Learn how you can apply the model in your decision-making process here .

Vroom-Yetton Jago Decision Model

Root Cause Analysis

Now you know who to involve in the decision-making, it’s time to understand the situation you are dealing with. Two tools that can help you with this are the fishbone diagram and the 5 whys analysis.

Both of these tools help in getting to the origin of an issue and finding the root cause of things.

  • Fishbone diagram or the cause and effect diagram is great with helping you isolate the root cause of a problem. Here’s how you can use this tool to solve business problems .   

Fishbone Diagram

  • 5 Whys Analysis helps you narrow down the information you have gathered and find the last few causes of your problem by asking ‘why’ 5 times.

5 Whys Analysis Template

Find Effective Alternatives

Once you have an idea about the situation or the issue, it is easier to generate alternative approaches to finding a solution. You can use the following decision-making tools to explore your options individually or in groups.  

Mind map is a powerful tool that helps you capture thoughts in your head or ideas thrown around during a group brainstorming session. You can also use it to categorize your options and further examine them by analyzing different related elements.

Decision Making Mind Map

Six Thinking Hats

Six thinking hats is another useful technique that provides direction to decision-making and group thinking.

It helps look at the situation you are analyzing from a range of perspectives and find alternative solutions from everyone involved.

Here’s how to use the six thinking hats technique .

Six Thinking Hats Diagram

Reframing Matrix

The reframing matrix is another tool that helps you look at business problems from a number of viewpoints.

It takes into consideration the different perspectives of several people with different experiences. This allows generating multiple creative solutions for the problem at hand.

You can use the 4 Ps approach when using the reframing matrix. When brainstorming solutions, look at the problem from these perspectives,

  • Product perspective: Is there anything wrong with your product or service? With its quality or the estimated price? Does it fulfill the needs of the customers?
  • Planning perspective: Is there anything wrong with your product plans, sales plans or marketing plans?
  • People Perspective: Who are the people affected by the problem? What do they think?
  • Potential Perspective: How can you increase the potential sales and marketing results? How can you boost productivity?  

Reframing Matrix

Affinity Diagrams

Now that you have gathered a lot of information about the situation, you can use an affinity diagram to organize them into categories.

By doing so you and your team can quickly identify patterns or themes that will help analyze the situation easily.

Affinity Diagram Example

Analyze Your Options

Now that you have come up with a number of different alternatives, it’s time to evaluate the desirability and the feasibility of the different options along with the risks that might be involved.

This is a simple tool that you can use to evaluate the pluses, minuses and implications or the Interesting things involved with your options. By comparing these aspects of each alternative option, you can decide which one is the best.

PMI Chart - decision making techniques

Risk Analysis

Most decisions you have to take involve risks, that’s why you need to assess the risks involved with them before you go ahead. This way you can take precautions.

Check out our post on Risk Management Techniques to get an idea about the types of tools you can use to evaluate the risks associated with your decisions.  

Force Field Analysis

Force field analysis is another powerful decision-making technique that helps identify and analyze the forces for and against change or the implementation of a proposed solution.

Check out our article on Change Management Tools to learn how to use the force field analysis along with other tools used to facilitate change management.  

Force Field Analysis

SWOT analysis

SWOT analysis is used to analyze the internal factors such as strengths and weaknesses and external factors such as opportunities and threats affecting an organization.

You can use this decision-making tool to analyze the strengths, weaknesses, opportunities, and threats related to your alternative options.

SWOT Analysis Template - decision making technique

Select the Best Solution

Even after evaluating the desirability and the feasibility of the options, you might still end up with several good alternatives at hand. While you can apply a combination of them as your solution, this might not be practical all the time.

You can use the following decision-making techniques to decide which is the best option to move forward with.

Decision Trees

Decision trees help visualize the alternative choices and every possible outcome related to them. It allows you to assess the value of outcomes and the possibilities of achieving them. This, in turn, helps make a better decision. Learn about using decision tree s in more detail here .

Decision Tree Diagram

Eisenhower Matrix

When you have different tasks to execute and you can’t decide which one to go ahead with, you can use the Eisenhower matrix to decide what is important and not and what is urgent and not.

It will help you make more productive decisions by eliminating options that do not help you accomplish your goals.

Eisenhower Decision Matrix

Flowcharts are considered to be a proven method for documenting processes, brainstorming, evaluating, and identifying the best alternative possible.

Below is an example of a typical flowchart used in decision-making. This would help us evaluate the consequences of each alternative.

useful planning tools and techniques that are being used in business organization

What Other Decision Making Tools Do You Use?

Here we have covered several decision-making tools that you can use during the different stages of decision making. Whether you are doing it alone or with the help of a group of stakeholders, you can rely on these decision-making methods to make well-informed decisions faster.

What other decision-making techniques do you use to solve problems and make business decisions? Do let us know in the comment section below.

Join over thousands of organizations that use Creately to brainstorm, plan, analyze, and execute their projects successfully.

useful planning tools and techniques that are being used in business organization

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Hey Amanda! This side is Riddhi Shah and I have just popped in one of your articles and really found it interesting. Running a business is a very difficult thing to do, as it requires the ability to make good decisions and to achieve spot at good rankings in the market. Business analyst are required to engage in as it is the main task that defines the current state of the business. One wrong decision can affect the entire company. Business intelligence tools help to structure the data and reveal important trends. The visual techniques and tools that has been mentioned in the article are very important and efficient. I have had a great time reading this informative article and definitely looking forward to reading more such blog posts from your end.

Hi Riddhi, Glad you found the post resourceful. Appreciate your feedback.

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Tools and Techniques for Effective Planning

  • Understanding Issues
  • Generating Ideas
  • Making Decisions
  • Managing Difficulties
  • Solving Problems

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Force Field Analysis

Evaluate the factors that will either support or hinder a change in an organisation or entity. 

SWOT Analysis

A SWOT Analysis is used in project planning, strategic planning and other processes where agreement is needed about the current situation of a project, team, department or organization. It stands for Strengths, Weaknesses, Opportunities and Threats.

Gap Analysis

Determine the gap between the present situation and a desired future state

Pareto Chart

This process is used to prioritize certain factors among others. It is also referred to as identifying the "critical few" that play a significant role in whatever issue is being examined.

Level of Influence

This is a simple method to prioritize actions as part of an action planning workshop, after a list of actions has been generated.

After Action Review

After Action Reviews are typically done during and after a project's lifetime to generate learning for the future

Organization's History

This technique helps to create a historical timeline for your organization with the collective work of your group members.

This activity can be a stand alone workshop or part of a planning workshop.

Task Definition Workshop

An annual review of work for the business support unit.

Sharing Vision

Articulating consensus on outcomes

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Painless operational planning

Turning strategy into an operational plan isn't about doing more things right – it's about doing more of the right things. In contrast to strategic planning, the goal of an operational plan is to see how you'll execute on your strategy month by month, week by week. And since you work in a vacuum, this means you'll need to coordinate people, time, and budgets across teams (and maybe across departments, too).

An actionable operational plan answers questions like: 

  • What milestones do we need to hit?
  • Who will work on what?
  • Where might we run into bottlenecks and how can we avoid them?
  • How will we define success?
  • What early indicators will tell us we're on the right track? 

Once you have an actionable plan drafted, be sure to gather and incorporate feedback from the core team involved, as well as stakeholders. Don't get discouraged if you go through a few iterations before landing on a plan everyone can get on board with. (They don't call operational planning a "process" for nothing!)

Ready to dig in? Let's do this. 

Top 6 plays for better operational planning

Whether you're planning for the quarter or for the fiscal year, operational planning is a team sport. This collection of plays is designed to help you collaborate and agree on goals, priorities, roles, and risks. 

graph with plotted points and bars

Goals, Signals, and Measures

Starting with your high-level objective in mind, you'll define a specific goal. Then you'll brainstorm signals you can listen for in the short-term that'll let you know you're making progress (think KPIs) and agree on how you'll measure success. Run this play at the beginning of the planning process. 

diagram of a network of people contributing to a shared goal

Roles and Responsibilities

Gather your core team to establish who is responsible for what on a day-to-day basis. This play is very effective for uncovering skill gaps or redundancies. (Efficient resourcing for the win!)

Prioritization Matrix

Real talk: you can't just implement your operational plan. You'll also need to support requests coming in from across the organization. Run this play with leads from adjacent teams to determine the right balance. 

Capacity Planning

Resource management is tricky. Does your plan require more time than you have? Will the right people be available when you need them? Use this play to take the guesswork out of estimating and prioritizing. 

Dependency Mapping

Use our handy template to visualize the web of dependencies lurking within your plan and develop your approach to managing them. You'll think through the various systems your plan will affect, risks, and how to create a feedback loop with stakeholders.

four sliding scales with markers placed at various points along each one

Trade-off Sliders

Take the frustration out of decision-making by agreeing on what you need to optimize for at all costs, and where you can be flexible. This sets your team up to make every-day decisions autonomously and keep implementation chuggin' right along. 

also recommeded

Leadership team health monitor.

Delivering a great operational plan requires a healthy team of planners. Use the Health Monitor to self-assess against eight attributes common amongst high-performing teams, then track your progress over time. 

Gather your operational planning team for an honest discussion about how you're working together.

Other resources

Because there's always more to learn 

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ELCOMBLUS

Planning Techniques and Tools and their Applications

For effective planning in today’s dynamic environments, different techniques and tools must be used, such as forecasting, contingency planning, scenario planning, benchmarking, and participatory planning.

Forecasting is an attempt to predict what may happen in the future. All planning types, without exception, make use of forecasting. Business periodicals like the The Economist , Business Week , and Fortune Magazine , publish forecasts such as employment and unemployment rates, increase or decrease of interest rates, stock market data, GNP/GDP data, and others. Forecasts used may either be quantitative or qualitative. Opinions of prominent economists are used in qualitative forecasts while mathematical calculations and statistical analyses of surveys/researches are used in quantitative forecasts. These, however, are just aids to planning and must be treated with caution. As the name implies, forecasts are predictions and may be inaccurate, at times, due to errors of human judgment.

Contingency factors may offer alternative courses of action when the unexpected happens or when things go wrong. Contingency plans must be prepared by managers, ready for implementation when things do not turn out as they should be. Contingency factors called “trigger points” indicate when the prepared alternative plan should be implemented.

Meanwhile, planning for future states of affairs is a long-term version of contingency planning and is also known as scenario planning . Several future states of affairs must be identified and alternative plans must be prepared in order to be able to meet the changes or challenges that may occur in each of the future scenarios. This is a big help for organizations because it allows them to plan ahead and make necessary adjustments in their strategies and operations. Some examples of changes or challenges that may arise in future scenarios are environmental pollution, human rights violations, climate and weather changes, earthquake damages to communities, and others.

Trigger Point

Trigger point is a change in an attribute, condition, factor, parameter, or value that represents I crossing a threshold and actuates or initiates a mechanism or reaction that may lead to a radically different state of affairs.

Benchmarking is another planning technique that generally involves external comparisons of a company’s practices and technologies with those of other companies. Its main purpose is to find out what other people and organizations do well and then plan how to incorporate these practices into the company’s operations. A common benchmarking technique is to search for best practices used by other organizations that enabled them to achieve superior performance. This is known as external benchmarking. Internal benchmarking is also practiced by some organizations when they encourage all their employees working in their different work units to learn and improve by sharing one another’s best practices.

Participatory planning is a planning process that includes the people who will be affected by the plans and those who will be asked to implement them in all planning steps. Creativity, increased acceptance and understanding of plans, and commitment to the success of plans are the positive results of this planning technique.

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Read more about the article The Different Types of Plans

The Different Types of Plans

Functions, roles, and skills of a manager.

  • CORE SUBJECTS
  • APPLIED SUBJECTS
  • TEACHER TRAINING
  • GENERAL EDUCATION
  • 17.2 The Planning Process
  • Introduction
  • 1.1 What Do Managers Do?
  • 1.2 The Roles Managers Play
  • 1.3 Major Characteristics of the Manager's Job
  • Summary of Learning Outcomes
  • Chapter Review Questions
  • Management Skills Application Exercises
  • Managerial Decision Exercises
  • Critical Thinking Case
  • 2.1 Overview of Managerial Decision-Making
  • 2.2 How the Brain Processes Information to Make Decisions: Reflective and Reactive Systems
  • 2.3 Programmed and Nonprogrammed Decisions
  • 2.4 Barriers to Effective Decision-Making
  • 2.5 Improving the Quality of Decision-Making
  • 2.6 Group Decision-Making
  • 3.1 The Early Origins of Management
  • 3.2 The Italian Renaissance
  • 3.3 The Industrial Revolution
  • 3.4 Taylor-Made Management
  • 3.5 Administrative and Bureaucratic Management
  • 3.6 Human Relations Movement
  • 3.7 Contingency and System Management
  • 4.1 The Organization's External Environment
  • 4.2 External Environments and Industries
  • 4.3 Organizational Designs and Structures
  • 4.4 The Internal Organization and External Environments
  • 4.5 Corporate Cultures
  • 4.6 Organizing for Change in the 21st Century
  • 5.1 Ethics and Business Ethics Defined
  • 5.2 Dimensions of Ethics: The Individual Level
  • 5.3 Ethical Principles and Responsible Decision-Making
  • 5.4 Leadership: Ethics at the Organizational Level
  • 5.5 Ethics, Corporate Culture, and Compliance
  • 5.6 Corporate Social Responsibility (CSR)
  • 5.7 Ethics around the Globe
  • 5.8 Emerging Trends in Ethics, CSR, and Compliance
  • 6.1 Importance of International Management
  • 6.2 Hofstede's Cultural Framework
  • 6.3 The GLOBE Framework
  • 6.4 Cultural Stereotyping and Social Institutions
  • 6.5 Cross-Cultural Assignments
  • 6.6 Strategies for Expanding Globally
  • 6.7 The Necessity of Global Markets
  • 7.1 Entrepreneurship
  • 7.2 Characteristics of Successful Entrepreneurs
  • 7.3 Small Business
  • 7.4 Start Your Own Business
  • 7.5 Managing a Small Business
  • 7.6 The Large Impact of Small Business
  • 7.7 The Small Business Administration
  • 7.8 Trends in Entrepreneurship and Small-Business Ownership
  • 8.1 Gaining Advantages by Understanding the Competitive Environment
  • 8.2 Using SWOT for Strategic Analysis
  • 8.3 A Firm's External Macro Environment: PESTEL
  • 8.4 A Firm's Micro Environment: Porter's Five Forces
  • 8.5 The Internal Environment
  • 8.6 Competition, Strategy, and Competitive Advantage
  • 8.7 Strategic Positioning
  • 9.1 Strategic Management
  • 9.2 Firm Vision and Mission
  • 9.3 The Role of Strategic Analysis in Formulating a Strategy
  • 9.4 Strategic Objectives and Levels of Strategy
  • 9.5 Planning Firm Actions to Implement Strategies
  • 9.6 Measuring and Evaluating Strategic Performance
  • 10.1 Organizational Structures and Design
  • 10.2 Organizational Change
  • 10.3 Managing Change
  • 11.1 An Introduction to Human Resource Management
  • 11.2 Human Resource Management and Compliance
  • 11.3 Performance Management
  • 11.4 Influencing Employee Performance and Motivation
  • 11.5 Building an Organization for the Future
  • 11.6 Talent Development and Succession Planning
  • 12.1 An Introduction to Workplace Diversity
  • 12.2 Diversity and the Workforce
  • 12.3 Diversity and Its Impact on Companies
  • 12.4 Challenges of Diversity
  • 12.5 Key Diversity Theories
  • 12.6 Benefits and Challenges of Workplace Diversity
  • 12.7 Recommendations for Managing Diversity
  • 13.1 The Nature of Leadership
  • 13.2 The Leadership Process
  • 13.3 Leader Emergence
  • 13.4 The Trait Approach to Leadership
  • 13.5 Behavioral Approaches to Leadership
  • 13.6 Situational (Contingency) Approaches to Leadership
  • 13.7 Substitutes for and Neutralizers of Leadership
  • 13.8 Transformational, Visionary, and Charismatic Leadership
  • 13.9 Leadership Needs in the 21st Century
  • 14.1 Motivation: Direction and Intensity
  • 14.2 Content Theories of Motivation
  • 14.3 Process Theories of Motivation
  • 14.4 Recent Research on Motivation Theories
  • 15.1 Teamwork in the Workplace
  • 15.2 Team Development Over Time
  • 15.3 Things to Consider When Managing Teams
  • 15.4 Opportunities and Challenges to Team Building
  • 15.5 Team Diversity
  • 15.6 Multicultural Teams
  • 16.1 The Process of Managerial Communication
  • 16.2 Types of Communications in Organizations
  • 16.3 Factors Affecting Communications and the Roles of Managers
  • 16.4 Managerial Communication and Corporate Reputation
  • 16.5 The Major Channels of Management Communication Are Talking, Listening, Reading, and Writing
  • 17.1 Is Planning Important
  • 17.3 Types of Plans
  • 17.4 Goals or Outcome Statements
  • 17.5 Formal Organizational Planning in Practice
  • 17.6 Employees' Responses to Planning
  • 17.7 Management by Objectives: A Planning and Control Technique
  • 17.8 The Control- and Involvement-Oriented Approaches to Planning and Controlling
  • 18.1 MTI—Its Importance Now and In the Future
  • 18.2 Developing Technology and Innovation
  • 18.3 External Sources of Technology and Innovation
  • 18.4 Internal Sources of Technology and Innovation
  • 18.5 Management Entrepreneurship Skills for Technology and Innovation
  • 18.6 Skills Needed for MTI
  • 18.7 Managing Now for Future Technology and Innovation
  • Outline the planning and controlling processes.

Planning is a process. Ideally it is future oriented, comprehensive, systematic, integrated, and negotiated. 11 It involves an extensive search for alternatives and analyzes relevant information, is systematic in nature, and is commonly participative. 12 The planning model described in this section breaks the managerial function of planning into several steps, as shown in Exhibit 17.3 . Following this step-by-step procedure helps ensure that organizational planning meets these requirements.

Step 1: Developing an Awareness of the Present State

According to management scholars Harold Koontz and Cyril O’Donnell, the first step in the planning process is awareness. 13 It is at this step that managers build the foundation on which they will develop their plans. This foundation specifies an organization’s current status, pinpoints its commitments, recognizes its strengths and weaknesses, and sets forth a vision of the future. Because the past is instrumental in determining where an organization expects to go in the future, managers at this point must understand their organization and its history. It has been said—“The further you look back, the further you can see ahead.” 14

Step 2: Establishing Outcome Statements

The second step in the planning process consists of deciding “where the organization is headed, or is going to end up.” Ideally, this involves establishing goals. Just as your goal in this course might be to get a certain grade, managers at various levels in an organization’s hierarchy set goals. For example, plans established by a university’s marketing department curriculum committee must fit with and support the plans of the department, which contribute to the goals of the business school, whose plans must, in turn, support the goals of the university. Managers therefore develop an elaborate network of organizational plans, such as that shown in Exhibit 17.4 , to achieve the overall goals of their organization.

Goal vs. Domain Planning

Outcome statements can be constructed around specific goals or framed in terms of moving in a particular direction toward a viable set of outcomes. In goal planning , people set specific goals and then create action statements. 15 For example, freshman Kristin Rude decides that she wants a bachelor of science degree in biochemistry (the goal). She then constructs a four-year academic plan that will help her achieve this goal. Kristin is engaging in goal planning. She first identifies a goal and then develops a course of action to realize her goal.

Another approach to planning is domain/directional planning , in which managers develop a course of action that moves an organization toward one identified domain (and therefore away from other domains). 16 Within the chosen domain may lie a number of acceptable and specific goals. For example, high-school senior Neil Marquardt decides that he wants to major in a business-related discipline in college. During the next four years, he will select a variety of courses from the business school curriculum yet never select a major. After selecting courses based on availability and interest, he earns a sufficient number of credits within this chosen domain that enables him to graduate with a major in marketing. Neil never engaged in goal planning, but in the end he will realize one of many acceptable goals within an accepted domain.

The development of the Post-it® product by the 3M Corporation demonstrates how domain planning works. In the research laboratories at 3M, efforts were being made to develop new forms and strengths of cohesive substances. One result was cohesive material with no known value because of its extremely low cohesive level. A 3M division specialist, Arthur L. Fry, frustrated by page markers falling from his hymn book in church, realized that this material, recently developed by Spencer F. Silver, would stick to paper for long periods and could be removed without destroying the paper. Fry experimented with the material as page markers and note pads—out of this came the highly popular and extremely profitable 3M product Scotch Post-it®. Geoff Nicholson, the driving force behind the Post-it® product, comments that rather than get bogged down in the planning process, innovations must be fast-tracked and decisions made whether to continue or move on early during the product development process. 17

Situations in which managers are likely to engage in domain planning include (1) when there is a recognized need for flexibility, (2) when people cannot agree on goals, (3) when an organization’s external environment is unstable and highly uncertain, and (4) when an organization is starting up or is in a transitional period. In addition, domain planning is likely to prevail at upper levels in an organization, where managers are responsible for dealing with the external environment and when task uncertainty is high. Goal planning (formulating goals compatible with the chosen domain) is likely to prevail in the technical core, where there is less uncertainty.

Hybrid Planning

Occasionally, coupling of domain and goal planning occurs, creating a third approach, called hybrid planning . In this approach, managers begin with the more general domain planning and commit to moving in a particular direction. As time passes, learning occurs, uncertainty is reduced, preferences sharpen, and managers are able to make the transition to goal planning as they identify increasingly specific targets in the selected domain. Movement from domain planning to goal planning occurs as knowledge accumulates, preferences for a particular goal emerge, and action statements are created.

Consequences of Goal, Domain, and Hybrid Planning

Setting goals not only affects performance directly, but also encourages managers to plan more extensively. That is, once goals are set, people are more likely to think systematically about how they should proceed to realize the goals. 18 When people have vague goals, as in domain planning, they find it difficult to draw up detailed action plans and are therefore less likely to perform effectively. When studying the topic of motivation, you will learn about goal theory. Research suggests that goal planning results in higher levels of performance than does domain planning alone. 19

Step 3: Premising

In this step of the planning process, managers establish the premises, or assumptions, on which they will build their action statements. The quality and success of any plan depends on the quality of its underlying assumptions. Throughout the planning process, assumptions about future events must be brought to the surface, monitored, and updated. 20

Managers collect information by scanning their organization’s internal and external environments. They use this information to make assumptions about the likelihood of future events. As Kristin considers her four-year pursuit of her biochemistry major, she anticipates that in addition to her savings and funds supplied by her parents, she will need a full-time summer job for two summers in order to cover the cost of her undergraduate education. Thus, she includes finding full-time summer employment between her senior year of high school and her freshman year and between her freshman and sophomore years of college as part of her plan. The other two summers she will devote to an internship and finding postgraduate employment—much to mom and dad’s delight! Effective planning skills can be used throughout your life. The plan you develop to pay for and complete your education is an especially important one.

Step 4: Determining a Course of Action (Action Statements)

In this stage of the planning process, managers decide how to move from their current position toward their goal (or toward their domain). They develop an action statement that details what needs to be done, when, how, and by whom. The course of action determines how an organization will get from its current position to its desired future position. Choosing a course of action involves determining alternatives by drawing on research, experimentation, and experience; evaluating alternatives in light of how well each would help the organization reach its goals or approach its desired domain; and selecting a course of action after identifying and carefully considering the merits of each alternative.

Step 5: Formulating Supportive Plans

The planning process seldom stops with the adoption of a general plan. Managers often need to develop one or more supportive or derivative plans to bolster and explain their basic plan. Suppose an organization decides to switch from a 5-day, 40-hour workweek (5/40) to a 4-day, 40-hour workweek (4/40) in an attempt to reduce employee turnover. This major plan requires the creation of a number of supportive plans. Managers might need to develop personnel policies dealing with payment of daily overtime. New administrative plans will be needed for scheduling meetings, handling phone calls, and dealing with customers and suppliers.

Planning, Implementation, and Controlling

After managers have moved through the five steps of the planning process and have drawn up and implemented specific plans, they must monitor and maintain their plans. Through the controlling function (to be discussed in greater detail later in this chapter), managers observe ongoing human behavior and organizational activity, compare it to the outcome and action statements formulated during the planning process, and take corrective action if they observe unexpected and unwanted deviations. Thus, planning and controlling activities are closely interrelated (planning ➨ controlling ➨ planning . . .). Planning feeds controlling by establishing the standards against which behavior will be evaluated during the controlling process. Monitoring organizational behavior (the control activity) provides managers with input that helps them prepare for the upcoming planning period—it adds meaning to the awareness step of the planning process.

Influenced by total quality management (TQM) and the importance of achieving continuous improvement in the processes used, as well as the goods and services produced, organizations such as IBM-Rochester have linked their planning and controlling activities by adopting the Deming cycle (also known as the Shewhart cycle).

It has been noted on numerous occasions that many organizations that do plan fail to recognize the importance of continuous learning. Their plans are either placed on the shelf and collect dust or are created, implemented, and adhered to without a systematic review and modification process. Frequently, plans are implemented without first measuring where the organization currently stands so that future comparisons and evaluations of the plan’s effectiveness cannot be determined. The Deming cycle , shown in Exhibit 17.6 , helps managers assess the effects of planned action by integrating organizational learning into the planning process. The cycle consists of four key stages: (1) Plan—create the plan using the model discussed earlier. (2) Do—implement the plan. (3) Check—monitor the results of the planned course of action; organizational learning about the effectiveness of the plan occurs at this stage. (4) Act—act on what was learned, modify the plan, and return to the first stage in the cycle, and the cycle begins again as the organization strives for continuous learning and improvement.

Concept Check

  • What are the five steps in the planning process?
  • What is the difference between goal, domain, and hybrid planning?
  • How are planning, implementation, and controlling related?

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  • > 12 Workplace Organization Techniques & Management Tools

12 Workplace Organization Techniques & Management Tools

Posted by Jeff Roussel

Oct 4, 2022 12:32:42 PM

Businessman's hand holding tools over gray background

Over the years, Six Sigma and Lean practitioners have developed a set of workplace organization techniques and tools that address control, problem-solving, and improvement to eliminate defects and waste. Here are a few of the most essential.

1. Standard Work

Standard work is the documentation of the best practices for any process or task at that given moment. It is created and updated by the people who do the work. It forms the baseline for improvement and ensures process consistency.

Standard work includes information about how the workplace is organized, including where equipment and materials are stored and secured.

2. 5S Workplace Organization

An organized and well-stocked workplace is essential in the quest to eliminate variation. The popular 5S technique involves doing five things that all start with S in both English and Japanese. 

The 5 S’s are:

Sort – Anything that isn’t required for performing operational tasks is removed from the area. Eliminating unnecessary clutter makes it easy for the items that are needed to be found quickly.

Set – Setting things in order involves ensuring that each item in the workplace has a specific place where it is stored and secured if needed. This approach minimizes the risk of something getting lost or misplaced and ensures that things aren’t damaged because they aren’t correctly stowed. 

Shine – Keeping equipment, tools, materials, and the facility in good working order eliminates many potential problems. Tasks associated with shine include standard maintenance, cleaning, and repairing items that need attention.

Standardize – As we mentioned above, every workplace should have standards in place that everyone follows. Standardization involves defining ownership of various assets and tasks to help make the work environment predictable.

Sustain - Sustaining an organized workplace is the most challenging step of all. Keeping the workplace in order should not be an afterthought. There must be a plan to revisit each of the other four items and someone who owns the responsibility.

3. Control Charts

Control Chart

A process control chart is a graph used to track how a process behaves over time. Data points are plotted in time order in a chart with a central line for the average (sometimes a median), an upper line for the upper control limit, and a lower line for the lower control limit. Process control charts help leaders avoid panicking over every up and down swing. They circumvent problems caused by only looking at average results instead of the variations of results.

4. Gemba Walks

The Japanese word “Gemba” means the real place. During a Gemba walk , the manager goes to where work is done to show respect for the employees, ask questions, and potentially identify opportunities for improvement.

Gemba walks are an excellent way to ensure that the workplace standardization results of 5S are maintained. Managers or operators often take a checklist that includes the various 5S items on their walks. They can identify anything that is not 5S compliant and document it to be fixed or improved later. When performing a 5S review, it is helpful to closely look at every step of each process and task to ensure all improvement opportunities are identified. Doing so regularly will help facilitate continuous improvement and serve to sustain workplace organization gains as they are made.

5. Hoshin Kanri

Hoshin Kanri, also known as Policy Deployment, is a strategic planning approach designed to align the organization and ensure that everyone is working toward the same goals. The approach balances the need to achieve daily incremental improvement while moving toward the organization’s three to five-year breakthrough objectives at the same time.

[WEBINAR} Using Hoshin Kanri to Align and Coordinate Lean Strategy

Kanban is a visualizing principle based on maximizing the flow of goods and work without unnecessary inventory or transportation. While initially used with physical cards at Toyota, Kanban has now moved to the cloud, and many organizations use digital Kanban boards to track the flow of work.

Kanban can also be used as a workplace organization technique by using signs, tape, and other marketings to indicate where items should be stored.

7. A3 Problem Solving

A3 is a structured problem-solving approach that gets its name from the size of paper that was used before digital tools became available. Thus, an A3 report is the result of an improvement cycle like DAMIC or PDSA. A3 thinking is a management approach that turns day-to-day management into a learning practice for the whole organization. A3 management creates a standard method for innovation, planning, problem resolution, and sharing knowledge. The approach centers on organizational learning in the work itself. Therefore, it is sometimes referred to as operational learning.

A3 Montage

8. Catchball

The Six Sigma technique of Catchball involves passing ideas from one person to another for feedback and action. The idea (ball) is set in motion when someone defines a challenge or opportunity. It then moves back and forth, up and down, or both until a plan is developed and agreed upon.

DMAIC is a five-phase improvement cycle; define, measure, analyze, improve, and control. It brings structure to the improvement process and makes sure that each change is based on careful analysis and useful data. It starts with the Standard Work and repeats whenever a new opportunity for improvement is identified.

PDSA is an alternative improvement cycle that stands for Plan, Do, Study, Act . It is a simplified version of DMAIC that works best for improvement projects that are not heavy on statistics.

11. The 5 Whys

The 5 Whys is a brilliantly simple method of getting to the root cause of a problem or workplace organization failure. By asking and answering the question “why?” the basis of a problem can usually be found in five iterations.

[Watch Now] How to Leverage Lean for Long-Term Success

12. Value Stream Mapping (VSM)

Value Stream Mapping is a tool for defining and assessing the movement of raw materials and work from the beginning of the process to delivery to the customer. It is how the current state of a function is documented and the basis for determining where waste can be eliminated or value-added.

This list doesn’t cover every workplace organization technique, but these are the necessities of the toolbox. You may find that you use all of them or only a few, but some combination will likely help you achieve less variation as a rule and know how to respond when challenges arise.

Topics: Six Sigma

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Module 3: Planning and Mission

Types of plans and common planning tools, learning outcomes.

  • Differentiate between the uses of long-term plans, short-term plans, and operational plans.
  • Differentiate between standing plans and single-use plans.
  • Explain how policies, procedures, and regulations impact operational plans.
  • Explain the role of budgets in the planning process.
  • Differentiate between forecasting, scenario planning, and contingency planning.
  • Explain the use of “management by objectives” (MBO), SMART goals, and benchmarking in planning.

Watch the short animated video for a brief overview of the importance of long-term and short-term planning.

Long-term and Short-term Plans

When you decided to attend college, you had a long-term plan in mind. You would spend the next four or five years preparing to become a teacher, a businessperson, or perhaps an ecologist. Or, you may have committed two or three years to become a nurse, a medical technician, or an electrician. Your long-term goal was necessary to make sure that your daily activities would help you achieve your desired outcome. You could have just enrolled in a school and taken classes that looked interesting, but then where would you be in four years? You most likely would not have taken the courses required to qualify you for the job you want. An organization, especially a business, is not so different. It also needs a long-term plan to make sure that the daily activities of its employees are contributing to the mission and value statements of the organization.

A long-term plan is crucial to the ultimate success of the organization. A long-term plan for many businesses, such as construction, hospitality, or manufacturing, generally extends four to five years into the future. For other faster-changing industries, especially technology companies, a long-term plan may only look two or three years into the future. After that, it becomes too difficult to predict the future with any degree of certainty.

Top management is responsible for the development of the long-term plan. It is up to the CEO to make sure that changing conditions (both external and internal) are reflected in the organization’s long-term plan. The larger and more complex the organization, the larger and more complex the long-term plan will be to include all of the individual departments and functions.

Short-term plans generally allocate resources for a year or less. They may also be referred to as operational plans because they are concerned with daily activities and standard business operations. Like long-term plans, short-term plans must be monitored and updated, and this is the role of middle- and first-level management. Different managerial levels have responsibility for implementing different types of short-term plans. For example, a department manager may be comfortable implementing an operational plan for the entire year for her department. A marketing manager may direct a three- to four-month plan that involves the introduction of a new product line. A team leader may only be comfortable planning and implementing very specific activities over the period of a month.

Graphic showing organizational plan hierarchy with top management in charge of the long-term plan; middle management in charge of standing short-term plan and single-use short-term plan; and middle and first level management in charge of policies, procedures, and budgets

Organizational Plan Hierarchy: The figure above summarizes the relationship between these types of management planning

Operational Plans: Standing Plans and Single-Use Plans

An operational plan describes the specific goals and objectives and milestones set by an organization during a specific period. ( Objectives are specific tasks undertaken to meet broader goals. A goal may be to increase product sales by 3 percent; an objective may be to hire two additional sales agents.) It will allocate the tangible resources (labor, equipment, space) and authorize the financing necessary to meet the objectives of the plan. There are two types of operational plans: standing plans and single-use plans.

  • Standing plans are plans designed to be used again and again. Examples include policies, procedures, and regulations. The advantage of standing plans is that they foster unity and fairness within an organization and help to support stated organizational values. Managers don’t have to make unique decisions already addressed by various organizational policies. Standing plans also save time because managers know in advance how to address common situations. Finally, standing plans aid in the delegation of work, because employees are already familiar with the procedures and regulations followed by the organization.
  • Single-use plans refer to plans that address a one-time project or event. The length of the plans varies, but the most common types are budgets and project schedules. The obvious advantage of a single-use plan is that it can be very specific in how it addresses the needs of a particular situation.

Policies, Procedures, and Regulations

As stated above, the most common examples of standing use plans are policies, procedures, and regulations. These plans are usually published and handed out to new hires or posted on the organization’s employee website for easy reference.

  • Policies provide broad guidelines for the smooth operation of the organization. They cover things like hiring and firing, performance appraisals, promotions, and discipline. For example, a company may have a policy to encourage recycling in the workplace or a policy that prohibits personal cell phone use in manufacturing areas.
  • Procedures are steps to be followed in established and repeated operations. Procedures should reflect the policies of the company and support the organization’s long-term goals. Procedures may also detail steps that should be followed to ensure employees are disciplined in a fair and unbiased manner. For example, if employees feel that other employees interacted with them in an inappropriate manner, then they should follow the procedure for bringing this to management’s attention. Or, the organization may establish procedures for what to do in cases of emergencies, such as a fire or toxic spill.
  • Regulations refer to what is allowable and what is strictly prohibited in an organization. In other words, a regulation is a kind of rule that addresses general situations. In many hospitals and laboratories, for example, there are safety regulations against wearing open-toed shoes or shoes with slippery soles. State and federal governments frequently issue regulations for industries that impact public safety.

The Role of Budgets in the Planning Process

Refer to the “Organizational Plan Hierarchy” figure earlier and locate the box labeled “Budgets.” Notice that budgets are examples of single-use, short-term plans. An organization’s budget is a document that details the financial and physical resources allocated to a project or department. They are single-use plans because they are specific to a particular period or event. For example, departments may have a hiring budget that allocates a certain number of positions and a total salary value for a calendar year. Next year, that budget may be the same or it may change, depending upon conditions in the organization. But it cannot be assumed that the budget will stay the same. Zero-based budgets look at each budget as if it were brand new and require managers to justify each of the budgeted items. This process ensures that budgets are closely tied to the latest organizational goals.

Managers deal with a variety of budget types:

  • Financial budgets include balance sheets, income/expense statements, and statements of cash flow.
  • Operating budgets project revenue against expenditures.
  • Nonmonetary budgets allocate resources such as labor, workspace, and equipment use.
  • Fixed budgets are budgets that do not change with increased or decreased activities, such as sales revenue. They are also called static budgets.
  • Flexible budgets will vary with the level of activity (grow or be reduced according to changing conditions).

Budgets are a very important planning tool, and organizations take their budgeting process very seriously. Some managers spend most of their time making sure that the expenses and projects they control do not exceed authorized spending limits. To routinely “go over budget” is a sign of a poor planning—and planning is one of the basic management functions. In some cases, to routinely come in under budget is also viewed negatively, because with more accurate budgeting those committed resources could have been allocated to other projects. Often, projects compete for limited resources so the best budget is the one that most closely projects actual expenses and revenue.

Forecasting, Scenario Planning, and Contingency Planning

Forecasting is simply making a prediction about the future. Anyone can make a forecast—the trick is to be right or close enough so that important planning decisions can be based on the forecast. Some “botched” forecasts by business leaders follow:

“This telephone has too many shortcomings to be seriously considered as a means of communication.” – President of Western Union, 1876
“There is a world market for maybe five computers.” – Chairman of IBM, 1943
“Television won’t be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night.” – Darryl Zanuck, president of 20th Century Fox, 1946
“There is no chance that the iPhone is going to get any significant market share.” – Microsoft CEO Steve Ballmer, 2012

A photo of a psychic’s display window

There are actually much better ways to predict the future than resorting to fortunetellers.

Scientific forecasting is using mathematical models, historical data, and statistical analysis to make predictions about what will happen in the future. Businesses use short-term forecasting all the time when creating budgets and anticipating expenses. Mostly, these forecasts are based on what they sold and what they paid providers in the recent past. Long-range forecasting requires both quantitative numerical data and qualitative data based on expert opinions and insights. Often, organizations will create a number of long-range forecasts based on “best-case” and “worst-case” scenarios. They will then make plans on how they would respond to each situation and, as time goes on, they will update and adapt the long-term plan.

One other important type of planning is the contingency plan . A contingency plan describes what will happen in a possible—but not expected—situation. Usually, contingency plans are designed to handle emergency situations. For example, airports have contingency plans for plane crashes on takeoffs or landings, and popular tourist attractions have begun developing contingency plans in case of terrorist threats.

An example of the critical importance of contingency planning involves the Deepwater Horizon oil spill in the Gulf of Mexico in 2010. Eleven people lost their lives and seventeen were badly injured when an explosion on an oil rig released almost five million barrels of oil into the Gulf of Mexico. It was the worst marine oil spill in history, and its effects were even more devastating because BP Oil did not have contingency plans in place for that kind of disaster. The spill went on for months while BP and its partners tried to figure out how to shut off the oil’s source. Even though BP spent $62 billion on the response and cleanup activities, there was extensive damage to marine and wildlife habitats and fishing and tourism industries. Getting employees involved in planning may help prevent tragedies similar to this one.

Management By Objectives (MBO) and SMART Goals

Management by objectives , or MBO for short, is a tool that can be used to improve the performance of an organization by creating clearly defined objectives agreed upon by management and by the employees. Peter Drucker, a prolific author and a leader in management theory, coined the phrase “management by objectives” in 1954. The intent of MBO is to improve employee motivation and organizational communication by focusing on aligning individual goals to corporate objectives. In MBO, a manager and an employee do the following:

  • jointly set goals and objectives for a period.
  • together plan tasks that the employee performs with the support of management.
  • agree on the standards for evaluating performance of the task.
  • regularly meet to review progress.

MBO must be a top-down management tool, because organizational goals are cascaded down to create the various operational levels. Drucker showed that as long as employee goals support short-term and long-term organizational objectives, MBO will help move the company forward. Critics, however, charge that managers using the approach focus more on creating goals than on helping the employee achieve them.

SMART goals are a technique often paired with MBO. SMART stands for specific, measurable, achievable, realistic, and time-bound. The SMART goal paired well with MBO theory by

  • Providing incentives to employees by rewarding them when they meet key goals.
  • Empowering employees by allowing them to set their own objectives for achieving their individual goal.
  • Communicating honestly about what went well and what did not, and focusing on developing the missing skills.

The chart that follows summarizes the most important characteristics of each part of a SMART goal.

For example, let’s say you set a goal to become a recognized department expert in a subject relevant to advancement within the organization. How could you turn this into a SMART goal?

  • Specific: I will learn about the liabilities of six major nonprofit organizations.
  • Measurable: I will make presentations to the advertising, grant writing, and donor/client committees.
  • Achievable: I will interview one nonprofit organization every week for six weeks.
  • Relevant: This expertise will fill a current knowledge gap in the new client department.
  • Time-bound: I will fulfill this goal before my next scheduled annual performance evaluation.

Benchmarking

The last planning tool we’ll discuss in this section is benchmarking. You may think that your organization has an excellent long-term plan and effective short-term plans, but how do you really know? Even if your company is showing growth, is it growing as fast as your competitor? A benchmark is a standard used for comparison purposes. Benchmarking is looking at performance levels outside of your organization, or sometimes across departments or divisions inside your organization, to evaluate your own performance. You can benchmark using several different criteria:

  • Industry: Let’s say you produce technology widgets. Benchmarking can answer questions about how your company is doing in comparison to other tech widget makers. This approach is a type of competitive benchmarking.
  • Geography: Your state is showing a lot of economic growth. You can use benchmarking to determine if your company is sharing in that wealth or underperforming compared to the regional economy.
  • Organization: You are a small business owner. Benchmarking can help answer questions about whether the economic climate is friendlier to big business than it is to small business, or whether nonprofits are failing whereas for-profits are succeeding.
  • Processes: You can use benchmarking to determine what processes other firms are using that are helping or hurting them. Are there lessons to be learned from them? This is also called strategic benchmarking or process benchmarking.
  • Innovation: Benchmarking can help you discover what partners or techniques your competitors are using that are missing in your organization. Are there functions in your products or programs that should be eliminated and others that could be added? Functional benchmarking is key in technology-related organizations.

Internal benchmarking means comparing a department’s performance with another department in your company or branch within the same larger organization. The important thing about benchmarking is that it gives you a standard against which to compare your progress.

Planning tools are designed to help you determine goals, guide behaviors within the organization, and help you evaluate your performance against external benchmarks. Plans are essential, but good managers know to be flexible when conditions demand.

  • Types of Plans and Planning Tools. Authored by : John/Lynn Bruton and Lumen Learning. License : CC BY: Attribution
  • Image: Organizational Plan Hierarchy. Authored by : Lumen Learning. License : CC BY: Attribution
  • Image: PsychicBoston. Authored by : John Stephen Dwyer. Located at : https://commons.wikimedia.org/wiki/File:PsychicBoston.jpg . License : CC BY-SA: Attribution-ShareAlike
  • Long term and short term planning animated. Authored by : Artem Nedoshepa. Located at : https://www.youtube.com/watch?v=De0HyiqRXIU . License : All Rights Reserved

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