Strategic Planning Models – Get to Know the Basics

It’s easy to get overwhelmed by all the different strategic planning models out there. And yes, there are many potential approaches—with upwards of 20 strategic planning models! So how can you know which one is right for your business or nonprofit?

In this article, we break down the basics of what you need to know to choose a strategic planning model that will deliver results for your organization.

 

Strategic Planning Models: Brief Overview

A strategic planning model is about how an organization approaches creating long-term goals and developing strategies to achieve those goals. Strategic planning models may also be interchangeably referred to as methods, frameworks, techniques, or tools. In practice, a strategic planning process usually combines multiple models and tools.

Luckily, if you’re going to be working with a strategic planning consultant, you don’t need to understand the pros and cons of every single model. But it’s still worth taking the time to become familiar with the terms consultants may use to describe their approach

 

Snapshot of strategic planning models and terms

One way to understand core differences between strategic planning models is by looking at process, outcomes, and stakeholder engagement.

 

Defining the actual planning process

Several models you may encounter are focused on laying out a clear and distinct process. For example:

• Classic Model: Also called the basic or simple model, this method lays out five clear steps. The process begins with refining your mission statement, then helps you articulate long-term goals, design strategies to achieve those goals, create action plans to put those strategies into action, and establish tools to monitor progress.
• Issue-based Model: Also called a goal-based model, this approach builds on the classic model by adding in tools like an environmental scan or SWOT analysis These help organizations identify internal and external strengths, weaknesses, opportunities and threats.
• Alignment Model: This model adds a deeper focus on internal operations, ensuring that internal processes and technology are aligned to support an organization’s strategic goals.
• Inspirational Model: The inspirational model starts with vision and inspiration. Stakeholders are encouraged to think big and bold. You first envision the future you want to achieve, then figure out how to get there.
• Balanced Scorecard: This approach was originally designed to help companies measure impact beyond financial performance. The scorecard is a structured format that guides businesses in setting goals and outcomes related to finances, customers and clients, internal processes, and organizational capacity.
• Porter’s Five Forces: Also focused on the for-profit sector, Porter’s Five Forces model is all about identifying and assessing the “five factors” that influence the profitability of your company’s products and services.

 

Driving toward specific outcomes

Organizations undertake strategic planning for a variety of reasons. You might be looking to create a long-range vision to guide your organization’s decision-making. Or you could be facing a sudden change in operating environment (like decreased funding, local policy changes, or sudden market shifts). In each scenario, your strategic planning needs, timelines, and desired outcomes will be different. Here are some examples of approaches designed for specific situations:

• Scenario Planning: The scenario model often comes into play when an organization is facing new and unexpected external changes. For example, during the early days of the COVID-19 pandemic, many organizations needed to take a step back to understand how the health and economic effects of the pandemic might affect their stability, income, operations, and goals in the short and medium term.
• SWOT Analysis: More of a tool than a model, a SWOT analysis guides your organization to quickly assess internal and external Strengths, Weaknesses, Opportunities and Threats. SWOT focuses more deeply on internal analysis than a tool like an environmental scan or PESTLE analysis, which brings in a greater focus on external factors that may affect future decision-making.
• Real-time Model: As its name suggests, the real-time model is designed to help organizations navigate through challenges in real time. It combines classic planning elements, such as starting with revisiting your organization’s vision and mission, with tools like a SWOT analysis to understand needed strategy adjustments and, ultimately, how to operationalize these changes.
• Theory of Constraints: This method is about figuring out what is not working within your organization. It’s designed to help identify the biggest “bottlenecks” holding your organization back from achieving its goals and fix them.
• Blue Ocean Strategy: Whereas many of the tools above focus on helping an organization be responsive in the moment, a model like the Blue Ocean Strategy is focused on long-term vision. Similar to Porter’s Five Forces, the Blue Ocean Strategy helps businesses identify and create new markets (rather than compete in crowded markets).
• OKRs: If your organization has a clear vision but is struggling with deliverables, using OKRs as part of your strategic planning can be especially valuable. OKRs—which stand for Objectives and Key Results—provide concrete metrics to evaluate progress toward long-term goals on an ongoing basis.

 

Guiding how you engage stakeholders

One of the key benefits of strategic planning is the opportunity to build consensus across organizational stakeholders. However, many organizations still default back to top-down planning. By being intentional about how stakeholders are engaged in strategic planning, organizations can drive long-term success.

Strategic planning models that are more explicit about stakeholder participation include:

• Theory of Participation Model: The Theory of Participation (or TOP) model of strategic planning is premised on the idea that facilitating authentic participation from people who are going to be involved in executing a plan will build buy-in and better long-term results. This is critical, as one of the top reasons Funding for Good sees strategic plans fail is because the right people weren’t part of the planning process.
• Hoshin Planning: Also known as Hoshin Kanri, this model does start with top-down strategy development but adds an intentional process of feedback and iteration to get all levels of an organization onboard.
• Organic Planning Model: Also called the self-organizing model, organic planning is a much looser and more communal approach to strategic planning. Like many models, it starts with clarifying vision, values, and organizational culture. But from there it diverges as stakeholders or teams create more individualized workplans accompanied with regular sessions to assess progress and discuss strategies.

 

Choosing the Right Model for Your Organization

When you’re considering different strategic planning models—and the consultants who use them—you’ll want to keep a few things in mind:

• Values-alignment: Does the proposed model align with your values. For example, many nonprofit staff expect much more participation in strategy and planning than staff at large corporations. So if you’re a small or medium-sized nonprofit or mission-driven business, a top-down approach won’t be as successful. Models like the Theory of Participation, however, can help you balance the need for substantive stakeholder input with building consensus around a unified strategy.
• Current internal and external challenges: If you’re heading into strategic planning with a list of challenges you’re grappling with, your model should reflect that. You’ll want to be sure to integrate tools like a SWOT analysis, scenario planning, or environmental scans.
• Implementation capacity: Some organizations may be great at planning but struggle with implementation. If that’s the case for your organization, you’ll want to select a model that explicitly prepares your organization for these challenges. Methods like the classic model or OKRs can be especially helpful.

 

Collaborating with Your Consultant

When you’re evaluating strategic planning consultants and facilitators, make sure the consultant understands what your organization is looking to achieve and challenges you may be experiencing. Based on that, a qualified consultant will recommend the models and tools that will best position your planning process for success.

Here at Funding for Good we work with many nonprofit organizations and small businesses, as well as larger institutions. We’ve seen firsthand how critical stakeholder engagement is to ensure a strategic plan is successful, rather than a document forgotten in a drawer. That’s why our approach generally combines a SWOT analysis and environmental scan with the Theory of Participation model.

If your consultant isn’t clear about what model they use and why, that’s a clear red flag to look elsewhere. Every organization deserves a strategic planning process that can position them for success.