If you are involved in business development, you may have heard the terms strategic planning framework and business plan. But what are the differences between them, and why do you need both? In this article, we will explore the main characteristics, purposes, and benefits of these two tools, and how to use them effectively for your business growth.
A strategic planning framework is a high-level, long-term vision of where you want your business to be in the future. It defines your mission, values, goals, and strategies, and aligns them with your external environment and stakeholder expectations. A strategic planning framework helps you to identify your competitive advantage, prioritize your initiatives, and allocate your resources. It also provides a basis for evaluating your progress and adjusting your course as needed.
Think of a business plan like your construction blueprint. It lays out the nitty-gritty - the materials, the crew, the timeline. It's HOW you'll build the damn thing. A strategic planning framework is more like your 'master vision'. Where do you want this building to be in 5 years? Are we making a skyscraper or a mall? This ain't about the details, it's about the BIG picture and making sure you're not wasting time building the wrong thing. Why does this matter? Too many businesses get bogged down in the day-to-day and forget to look up. Without that strategic framework, you're just a dude hammering nails, not sure if you're making art or a pile of junk.
As strategic planning will be the mid to long term vision, it not necessarily have to be equipped with the resource at short term. Example would be Investment or resource of skillset you would like the organization to have in the mid to long term. This cannot be achieved in the short term but would have benefit for an organization to agree on such plan.
As an expert in business strategies, I tend to differentiate between business plans and business strategies in the following way: business plans are typically written descriptions of immediate plans and goals, often including a minimum viable product and a SWOT analysis. This initial document serves as the foundation of your business and is often in your bylaws & articles of incorporation. Conversely, strategic planning represents a higher-level perspective; think a mastermind game plan. Here allocating internal and external resources is crucial. Strategic planning attempts to leverage all factors: stakeholders & resources for the purpose of growth. Think of it as a road map to success on an open highway full of all of your competitors.
A strategic planning framework establishes long-term goals, visions, and strategic priorities based on a comprehensive analysis of the external environment. It provides flexibility for changes and aligns with the organization's long-term orientation. In contrast, a business plan focuses on specific actions and operational details to achieve short- to medium-term goals. It includes resource allocation, budgeting, and measurable objectives to support strategy implementation.
Strategic planning sets the overall direction and goals for the organization, while business planning translates those goals into actionable plans and activities to be executed in the near term. Strategic planning provides the framework within which business planning occurs, ensuring that short-term activities are aligned with long-term objectives.
A business plan is a detailed, short-term document that outlines how you will achieve your strategic goals. It describes your products or services, your target market, your marketing and sales strategies, your financial projections, and your operational plan. A business plan helps you to communicate your value proposition, secure funding, attract partners, and manage risks. It also serves as a roadmap for implementing your action steps and tracking your results.
The description accurately captures the essence and significance of a business plan. By meticulously delineating key elements such as products/services, target market, marketing strategies, financial projections, and operational plans, a business plan offers a structured approach to achieving strategic goals. Its multifaceted utility in communicating value, attracting resources, mitigating risks, and providing a roadmap for implementation underscores its indispensable role in guiding organizational success.
Outlines the specific steps and actions needed to achieve your strategic objectives. Focusing on "How": Details marketing strategies, financial projections, operational plans, and resource allocation. More concrete and time-bound: Typically covers 1-3 years with specific milestones and metrics. And it is essential for securing funding or attracting investors.
A business plan is a detailed document outlining the specific operational and financial objectives of a business. It serves as a roadmap for how the organization will achieve its short-term and medium-term goals. It consists of description, market analysis, organization and management structure, product/service offerings, marketing strategy, and financial projections, with a purpose of providing guidelines for daily operations, and providing a detailed understanding of the business model.
The business plan is how the business operates - the goals are economically micro, the variables relate to internal outcomes, and the execution of a business plan are internal operations.
A strategic planning framework and a business plan are complementary tools that support each other. A strategic planning framework provides the direction and scope for your business plan, while a business plan provides the specifics and tactics for your strategic planning framework. You should start with developing your strategic planning framework, then use it to guide your business plan. You should also review and update both documents regularly, to ensure that they are aligned and relevant.
Effectively the strategic planning framework is the vision, and the business plan is the mission. A forecast of how the world will work is embodied within the strategic planning framework. An operating model of how to bring the value to market and sustain the offering is the business plan. The way a strategic planning framework and business plan work together is as the business plan is seen through and worked out, the strategic planning framework is as well. Aligned trajectories.
A strategic planning framework and a business plan work in tandem: the framework provides flexible vision and holistic alignment, guiding resource allocation and risk mitigation. The business plan details specific actions, fostering engagement, innovation, and efficient resource use. Together, they ensure adaptability, integration, and ongoing relevance through regular updates.
Although they differentiate from each other on the scope and length, the Business Plan, or short term plan, will be an integral component of a strategic plan. It will serve as the launching pad for your strategy. It is impossible to look 3-5 years into the future without first laying that foundation! In my career I have seen a significant number of Strategic Plans that are doomed to fail because the Business Plan does not align, or set up the long term plans!
When you've completed both the strategic plan and the business plan, a great exercise is to audit them from both ends. Here's how: 1) revert both back to an outline defining major items, goals & measurements 2) draw a line from each strategic element to the corresponding business plan item(s) 3) review for elements that don't match, items that could be dropped, any imbalance in resources dedicated to a business plan initiative that may not trace back properly to core strategy Remember the old grade school word matching worksheets? Yeah... "Everything I Need To Know About Business Development I Learned in Kindergarten" ?? *Pro Tip: I hold strategy sessions with giant post-it notes & smelly markers. It's a great way to lighten the mood!
Imagine our strategic framework as the sturdy skeleton of a building. It determines the shape and purpose of what we're creating. Our business plan acts like flesh and muscle – giving substance to that skeleton, defining HOW we achieve our aims. Without the framework, actions can feel sporadic, losing sight of the larger picture. Without the business plan, that inspiring vision stays theoretical, lacking a pathway to make it real.
By using both a strategic planning framework and a business plan, you can enjoy several benefits for your business development, such as clarifying your vision and mission, setting realistic and measurable goals, and identifying and leveraging your strengths, opportunities, threats, and weaknesses. Additionally, you can optimize your resource allocation and budgeting to increase efficiency and profitability. Furthermore, you can enhance your credibility and reputation by building trust and loyalty with customers and partners.
By utilizing both a strategic planning framework and a business plan, businesses can achieve adaptability, innovation, and continuous improvement. This integrated approach enhances employee engagement, customer satisfaction, market positioning, and financial resilience, fostering long-term success in a dynamic business environment.
The benefits of using a strategic planning framework and a business plan is that together they will provide you with an *aligned playbook for today, tomorrow, and on into the future, while defining success along the way. *Aligned is the key differentiator when using both.
One of the greatest benefits is ensuring your leadership team is working in the same direction. Also, remember (> greater than): * Aware of the plan > Part of the plan * Engaged in the plan > Aware of the plan * Contributed to the plan > Engaged in the plan * Ownership in the plan > Contributed to the plan Give some ownership to your leaders and teams, and watch how motivated they become.
Creating a strategic planning framework and a business plan may seem intimidating, however, it doesn't have to be. To make the process easier, involve your team and other relevant stakeholders in the process to gain their feedback and input. Additionally, conduct a thorough analysis of your internal and external environment using tools such as SWOT, PESTEL, or Porter’s Five Forces. Make sure to use a clear and simple format and language, avoiding jargon and ambiguity. Incorporate relevant data and evidence to back up your assumptions and claims, citing your sources. Be realistic and flexible while acknowledging the uncertainties and risks involved. Lastly, review and revise your documents periodically, celebrating successes while learning from failures.
When creating a strategic planning framework and business plan, anticipate diverse futures through scenario planning, set SMART goals for clarity, foster cross-functional collaboration for diverse perspectives, prioritize a customer-centric approach, include employee development plans, leverage technology and data for informed decisions, integrate sustainability and CSR initiatives, establish a clear communication plan for stakeholders, balance short-term tactics with long-term strategic goals, and incorporate crisis management and contingency planning.
Tips for creating a strategic planning framework and a business plan. 1. Remember you're dealing with people, include their journey. 2. Define variables at each stage and level, they can change later, having them helps the conversation start somewhere. 3. Start. You'll run into problems; problems are the pathway, you'll never run into them before your start. 4. There are templates, methods, and techniques abound! Like personal diets - not every one will work for you and your business, though one will work for you and your business.
- Be inclusive: The best frameworks and plans benefit from collaborative creation. Diverse stakeholders within the healthcare ecosystem bring invaluable perspectives. - Balance ambition with realism: Frameworks need an aspirational element, but overly idealistic targets can demoralize teams. Business plans should be grounded but retain an element of growth-oriented ambition. - Revisit often: This isn't a 'set it and forget it' task. Periodic review, especially in healthcare's rapidly evolving environment, ensures alignment between framework, plan, and shifting realities.
When it comes to strategic planning frameworks and business plans, there are many options to choose from. Popular frameworks include the Balanced Scorecard, which measures performance across four perspectives, OKR which sets and tracks objectives and key results, and SMART which ensures goals are specific, measurable, achievable, relevant, and time-bound. Additionally, a business plan should include an executive summary that outlines the mission, value proposition, goals, and key information; a market analysis that examines the industry, market, competitors, and customers; a marketing and sales plan that describes strategies, channels, activities, and metrics; a financial plan that projects income statement, balance sheet, cash flow statement, and break-even analysis; and an operational plan that outlines business structure, processes, systems, equipment, and personnel.
Examples of strategic planning frameworks and business plans are what works for you and your team. How I recommend you find examples of strategic planning frameworks and business plans that work for you and your team: 1. Understand your people: how they go about doing their best work, and their personal priorities. 2. Clarify what the business looks like when you're not part of it anymore, then reverse engineer that vision into smaller parts. 3. Ongoing: Conduct research on frameworks, choose what might fit, iterate.
Beware of false cheerleading and "yes men." If you don't have anyone challenging the strategy, calling for further assessment, and questioning the approach... you may have too many like-minded people in the room. This can be detrimental to growth, as you need new perspectives and insights to stay ahead of the curve and win. If this sounds like your board room, try bringing in some rising new leaders, the newest member of the company, and even someone who loves your competition. Ask what they think of your approach (without sharing the whole strategy), and you just might find a spark toward a winning idea.
Yes, send a follow up and thank you when requesting feedback on a proposal. The follow up and thank you are a kind gesture to the individual who took the time to consider you, your proposal, and gave you feedback.
Remember when utilizing strategic planning frameworks and business plans, the moment you make them, they're outdated. That's not an excuse to not have them; it's a realization that they're not final, they're ongoing working documents to be collectively poured into.