Table of Contents
The big picture perspective
Is strategic planning still relevant?
We’re here with an enthusiastic yes, strategic planning is more important now than ever. We also understand and agree with the thought behind the question – with the pace of change, multi-year long term strategic plans that look 3-5 years or longer into the future are losing their relevance. While it’s good to maintain a long term view the word “plan” evokes the concept of an actionable approach and that’s hard to do more than one year out. As the complexity of the world increases, and change accelerates, the need for strategic planning is more acute than ever - it's a rare organization that can succeed without adapting to change.
What are strategic planning models?
When someone says they are using a strategic planning model or framework, think of it like using a template – no need to start from scratch as you build and execute a strategic plan when it’s possible to build on the successes of frameworks that have seen consistent success for decades. The organized science of strategic planning really started with the SWOT model in the 1960s - still one of the premier planning tools available.
What is the best strategic planning framework?
A little bit of context to answer that question…. When organizations embark on strategic planning, the process entails generally three separate stages, with options within each – so there isn’t one overall best strategic planning model.
- Ideation: Assessing current state, environment and generating ideas
- Goal Setting: Setting Direction and Goals
- Execution: Tracking progress towards the plan
What are the major frameworks for assessing your current state, operating environment, and idea generation?
As we see it, there are six major frameworks for assessing the current state, environment, and ideation:
1) SOAR (Strengths, Opportunities, Aspirations, Results)
- Who & When: Developed by Jacqueline M. Stavros and Gina Hinrichs, early 2000s
- What is it?: SOAR is a strategic planning framework that focuses on an organization's strengths and potential to envision and achieve future aspirations, emphasizing a positive approach to strategic development.
- Learn More: https://www.soar-strategy.com/what-is-soar
2) SWOT (Strengths, Weaknesses, Opportunities, and Threats)
- Who & When: Albert Humphrey in the 1960s during his work at the Stanford Research Institute.
- What is it?: SWOT is a strategic planning tool used to identify and analyze the internal strengths and weaknesses of an organization, as well as external opportunities and threats.
- Learn More: https://corporatefinanceinstitute.com/resources/management/swot-analysis/
3) PESTLE (Political, economic, social, technological, legal, environmental)
- Who & When: The framework has evolved over time, with the PESTLE version becoming popular in the late 20th century.
- What is it?: PESTLE is an analytical tool for assessing the macro-environmental factors impacting an organization, aiding in strategic decision-making.
- Learn More: https://pestleanalysis.com/what-is-pestle-analysis/
4) Blue Ocean
- Who & When: Created by W. Chan Kim and Renée Mauborgne, introduced in their 2004 Harvard Business Review article and the 2005 book "Blue Ocean Strategy."
- What is it? Blue Ocean Strategy encourages organizations to create new market spaces or "blue oceans" that are uncontested by competitors, focusing on innovation and value creation.
- Learn More: https://www.blueoceanstrategy.com/what-is-blue-ocean-strategy/
5) Porter's Five Forces
- Who & When: Developed by Michael E. Porter and introduced in his 1979 Harvard Business Review article "How Competitive Forces Shape Strategy."
- What is it?: Porter's Five Forces is a framework for analyzing an industry's competitive forces to assess the potential for profitability and strategic positioning.
- Learn More: https://www.isc.hbs.edu/strategy/business-strategy/Pages/the-five-forces.aspx
6) VRIO (Value, Rarity, Imitability, Organization)
- Who & When: The framework was developed by Jay Barney as part of the resource-based view of the firm, becoming prominent in the 1990s.
- What is it?: VRIO is a tool for assessing the resources and capabilities of an organization in terms of their value, rarity, imitability, and the organization's ability to exploit these resources for competitive advantage.
- Learn More: https://www.clearpointstrategy.com/blog/vrio-framework
Which strategic planning assessment/ideation framework is best?
While there is no right answer, by reviewing the data on Google searches, we can see which are the most popular. For assessment and ideation frameworks, SOAR comes to the top, followed right behind by SWOT:
What are the major frameworks for setting direction and goals?
1) EOS (Entrepreneurial Operating System)
- Who & When: Developed by Gino Wickman, introduced in his book "Traction: Get a Grip on Your Business" published in 2007.
- What is it?: EOS is a comprehensive business system that uses a set of simple, practical tools to help entrepreneurs get what they want from their businesses. It focuses on six key components: Vision, People, Data, Issues, Process, and Traction.
- Learn More: https://www.eosworldwide.com/
2) OKR (Objectives and Key Results)
- Who & When: The concept was introduced by Andy Grove at Intel in the 1970s and popularized by John Doerr, especially with its adoption at Google and through his book "Measure What Matters."
- What is it?: OKR is a goal-setting framework that helps organizations establish clear, measurable goals. Objectives define what is to be achieved, and Key Results track the progress towards these objectives.
- Learn More: https://www.whatmatters.com/
3) Balanced Scorecard (BSC)
- Who & When: Developed by Robert S. Kaplan and David P. Norton, introduced in the early 1990s through a series of articles in the Harvard Business Review.
- What is it?: BSC is a strategic planning and management system that allows organizations to translate their vision and strategy into a coherent set of performance measures across four perspectives: Financial, Customer, Internal Process, and Learning and Growth.
- Learn More: https://hbr.org/1992/01/the-balanced-scorecard-measures-that-drive-performance-2
Which strategic planning goal setting framework is best?
Again – no concrete right answer, but looking at popularity again we can see EOS with a commanding lead and OKRs in position #2.
Just like assessment frameworks – EOS and OKRs are not opposed to each other, and in fact when integrated, their respective strengths can come together to benefit an organization using both.
Strategic Alignment and Focus
EOS helps to establish a clear vision and direction for the company with a focus on entrepreneurial firms. OKRs are a light weight goal setting framework that can be used to align and focus efforts at all levels of the organization towards achieving the strategic priorities set within the EOS framework, ensuring everyone is working towards common objectives.
At the highest level both frameworks are trying to help answer the same fundamental questions:
- What do we need to change?
- How will we do it?
- When will it be accomplished and how will we know?
Accountability and Measurement
Both systems emphasize accountability, but they approach it differently. EOS establishes roles, responsibilities, and processes to ensure that the organizational structure supports the achievement of its vision. OKRs provide a framework for setting measurable goals (key results) that hold individuals and teams accountable for specific outcomes, complementing the EOS accountability component.
In summary, there are a wealth of frameworks available to kick start your strategic planning efforts – but at the highest level they are all simply assorted flavors of the same fundamental pattern:
- Assemble a team of people who care about your organization’s success
- Ask thoughtful questions to spur creative thinking
- Align on the reality/environment you are operating in
- Diagnose the challenges for the organization
- Propose solutions to enact the change needed
- Build structured and measurable goals
- Layout a concrete and specific action plan to get it done
- Build an organization culture around tracking and accountability
If you are ready to tackle those steps, then you are ready for world class strategic planning, and StratSimple is here to help you do it.
