Do we need a strategic plan if our organization already has an annual plan?
This is a common question we hear from organizations that are deciding whether to invest in a strategic planning process. So, let’s take a look at the difference between these two types of planning—and how they can work together to help your organization achieve its goals.
What Is an Annual Plan?
An annual plan details the goals and objectives for an organization, department, or even individual team member over a 12-month period.
What Is a Strategic Plan?
A strategic plan provides an overarching vision for an organization and a roadmap to achieve that vision over a 3-5-year period.
Annual Plans vs Strategic Plans: Similarities and Differences
Annual plans and strategic plans include many of the same elements, such as goals, objectives, and outcomes. These tools may go by different names, such as SMART goals, KPIs, or OKRs. But they’re all designed to set measurable and achievable goals that can be regularly assessed to evaluate progress.
Despite these similarities, annual plans and strategic plans serve very different purposes for organizations. Key differences include:
Planning period: The most obvious difference between annual plans and strategic plans is the timeframe. An annual plan, by definition, covers a 12-month period. A strategic plan traditionally covers 3-5 years.
Planning process: Annual plans are designed to coordinate work across and within departments. That means individual departments come up with goals and share those across teams for awareness and feedback. Strategic planning, however, should be a true consensus-building process. It’s not about information sharing, but rather co-creating a shared vision. As well, strategic planning often involves working with a specialized consultant who facilitates the planning process.
Planning level: Organizations can create annual plans at the organization-level, department-level, and individual-level. These plans should all nest together to create a clear guide for who will be responsible for doing what in order to achieve an organization’s goals for the year. A strategic plan, on the other hand, should be an organization’s north star. It paints a vision for where an organization wants to be in 3-5 years—and the strategies that can get it there.
How Annual Planning and Strategic Planning Fit Together
A strategic plan combines the long-range vision and roadmap that, together, drive your annual planning. When your organization’s annual plans flow from your strategic plan, it ensures your annual goals are not just about one single year.
With a strategic plan as a guide, annual goals can more effectively build toward the organization’s long-term vision.
Yes, organizations without a strategic plan can and do undertake annual planning. But when your annual planning starts from the basis of a strategic plan, there’s a kind of magic that happens.
That’s because strategic planning:
- Creates a mindset shift, encouraging us to think beyond our current day-to-day reality and instead imagine what’s possible.
- Increases ambition by providing a clear vision for the type and scale of impact our organization can have in the future.
- Invites curiosity and creative thinking, challenging us to find new ways to both solve thorny problems and cover baseline operations.
- Encourages evaluation not as a tool to make sure everyone is doing their job, but as a way to discover the most effective strategies to accomplish shared goals.
- Builds buy-in through the process of co-creating a shared vision for your organization’s future and a comprehensive strategy to achieve it.
In other words, creating a 3-5-year strategic plan sets the stage for more effective and more strategic annual planning.
More Support for Strategic Planning
Here at Funding for Good, we’re passionate about strategic planning. We facilitate high-impact strategic planning for nonprofits, public agencies, and government organizations. We also offer extensive free resources for those interested in strategic planning, including our free Strategic Planning QuickStart Kit.
If you’re considering strategic planning for your organization, you can book a free exploratory call with our team.
