What is strategic planning?
Strategic planning is an essential business process that helps align your teams to achieve a common goal. Discover the benefits of strategic planning with edX.
By: Shelby Campbell, Edited by: Valerie Black
Published: June 5, 2025
Does your team have a clear roadmap for how their work contributes to your organization's overarching goals? Strategic planning is a process that aligns everyone in a company on institutional initiatives, long-term objectives, and organizational challenges.
Discover how strategic planning can transform your business's operations, and sign up for a leadership course on edX today.
Why strategic planning is important
Strategic planning is how organizations create priorities and actionable strategies to achieve long-term goals. A strategic plan outlines what success looks like for a business, identifies barriers to that success, and guides employees toward making day-to-day work decisions that support organizational goals.
While strategic planning can't help you predict the future, it can guide your team as they navigate business challenges. However, a strategic plan generally isn't permanent — it's an ongoing process that should respond to evolving challenges and business landscapes.
At a moment in time, a properly configured strategy is a mixture of policy and action designed to surmount a high-stakes challenge,
writes Richard P. Rumelt, professor emeritus at UCLA Anderson School of Management, in a 2022 McKinsey & Company article. It is not a financial goal, or a plan for hitting a financial goal, or a wished-for end state, or a long list of priorities.
Components of strategic planning
Long-term goals
Where do you want your organization to be in a year, two years, five years? The answer will guide your strategy. Think outside the limits of financial success.
Barriers to progress
What limits your organization from accomplishing those goals? Your strategy should focus on overcoming the significant obstacles to progress.
Feasible solutions
How should your organization move forward to break down the barriers to success? Consider what you need from stakeholders (e.g., employees, investors, and customers) to overcome obstacles.
Available resources
How can your organization allocate its resources to accomplish long-term goals? Determine what your stakeholders need from you to drive success.
Facilitating strategic planning
The strategic planning process isn't uniform for every organization. However, organizations often take the following steps to formulate a strategic plan:
- Review mission: Align the strategic planning process with your organization's mission, purpose, and values.
- Analyze landscape: Analyze the organizational environment for social, economic, political, and competitor trends.
- Ideate goals: Create several overarching goals that align with your mission and fit within the possibilities of the current business landscape.
- Identify barriers: Determine what is stopping your organization from progressing.
- Strategize how to meet goals: Prioritize each objective and work with your team to understand what it will take to overcome obstacles. Objectives may have several actionable strategies that teams can use to accomplish them.
- Write an executive summary: Draft a one- to two-page document that outlines the general priorities and strategies your organization can take to meet its objectives. This document may be the only part of the strategic plan that external stakeholders, such as investors, review.
- Communicate strategy: Before you can enact your plan, communicate with the employees who will carry out the day-to-day operations outlined in your plan. Ensure your communication provides actionable strategies rather than vague priorities.
3 Tips for improving strategic planning
Tip 1: Employ SWOT analysis
Created by the Stanford Research Institute from 1960-70, the SWOT method helps business leaders identify tangible results from their strategic plans. It consists of the following assessments:
- Strengths: What is your business doing that's working?
- Weaknesses: Where can your organization improve?
- Opportunities: How can your business capitalize on ideal conditions for growth and progress?
- Threats: How can you plan for and mitigate external forces that threaten your organization's progress?
Tip 2: Look past the easy or obvious solutions
When developing a strategy to overcome a specific problem, there may be solutions that seem obvious. However, these solutions may not always take you as far in your plan for progress as other solutions that require more critical business analysis, creative thinking, and problem-solving. Make sure your team thinks beyond what's obvious or easy when creating a strategic plan.
Tip 3: Identify important KPIs
Once you've formulated your strategic plan, you must assess its effectiveness. You can do this using key performance indicators (KPIs) such as:
- Revenue
- Spending
- Social media interactions
- Website visits
- Sales leads
The KPIs that make sense for one business may not apply to another. For example, if you're operating a nonprofit, you likely won't consider revenue as a relevant KPI. Instead, you may review the difference in the amount of donors or grants you receive.
Learn more about strategy and discover new strategic planning techniques by taking a strategy executive education course on edX.