Companies plan every day. From how many employees a retail store might need on a given day to how a Fortune 500 company will invest its profits, Planning is one of the fundamental functions of business. The highest level of planning is developing a strategic plan. Strategic planning is one of the most important functions of a company's leaders. This is the process in which a company's leaders outline its future goals and detail the ways in which they will achieve these goals. Think of it this way: success in business is an on-going journey. A strategic plan is the road map for this journey, highlighting what is coming down the road next and suggesting routes for getting to your goal.
Each company has different methods of strategic planning. Commonly, a company's leadership assembles once a year to discuss their past successes and their future goals. From this discussion, an outline of what they want to achieve emerges. Sometimes, the strategic plan is extremely formal and hundreds of pages long, and other times, the plan will be informal and take only a few pages.
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Beyond simple business planning
Executives and project managers that have had success in getting an organization up and running may feel tempted to apply the same planning principles to their strategies, but this is a no no. Business plans are designed to get your organization or new project up and running, while strategic plans are management tools used to communicate your vision to staff, and get projects accomplished with greater efficiency. Here are some of the many key differences between the two:
Business planning – assesses how much funding your project requires, who to go to
Strategic planning – determines how and where funding should be spent during the project
There are a number of similar sounding phrases that mean different things. To help understand key success factors, you also need to understand:
Key Factors Of Difference (KFD) – performance dimensions that make individual successful businesses in an industry unique and distinct from each other
Critical Success Factors (CSF) – performance factors which are individually necessary and together sufficient for your business to succeed in its defined mission.To summarise in less formal terms:
Key Success Factors are common across firms within a product-market or industry.
Key Factors Of Difference are the factors a particular business chooses to differentiate itself on.
Critical Success Factors are the essential elements of a strategy for success in a particular business in a particular industry at a particular time. Your CSFs should vary every time you make significant changes to your strategic plan and the emphasis may change with minor tweaks in strategy.