In order to succeed in its industry or field, a corporation, institution or organization has to know where it is going. A strategic plan can help define and set the course.
A strategic plan is the result of strategic planning. It is during this process that the organization decides, in finite, simple terms, its place in the world right now, and where it ultimately would like to go [source: McNamara]. In other words, a business provides a certain service, let's say high-speed Internet access. The plan defines what the institution does, for whom, and how they intend to excel and beat the competition. But how will it adapt to the changing world and marketplace to deliver the same service (or not) in the future? Most importantly, why does the organization want to go where it's going, and how is it going to get there? This is strategic planning. It's a survival method, the cornerstone of an organization, and the voice that informs the company culture, or overall "feel," philosophy and code of an organization.
Strategic planning is essentially the "why" that drives an operation. Once it knows the "why," it can figure out the "how" by outlining the requirements to get there, including where to place financial resources, how to forecast human resource needs, and where to place investments, otherwise known as financial planning. Financial planning is all about allocating finite resources -- such as money, employees and equipment -- over time, to reach the broad goals set out in strategic planning. To do so involves measuring current performance against past data and trends for the future.
Read on to find out more about how a strategic plan comes together.