The word strategy derives from the Greek strategia, which means “office or command of a general.” Since the days of Alexander, usage of the word has expanded considerably from its original military context. Today, strategy generally refers to plans, methods, or activities for obtaining desired results. In other words, strategy is about creating successful futures—however such success might be defined.

Strategy development typically is viewed as the process used to determine where an organization is attempting to go over the next three to five years—although some large organizations favor 10- and 20-year plans. In the past, many organizations have survived and even thrived without explicit strategies. This occurred during times of relative stability and little competition for customers or resources. Unfortunately, such conditions are all but nonexistent these days.

Ways to Conceive of Strategy

The concept of strategy often confuses people, because even experts use the term in so many different ways. Mintzberg, Ahlstrand, and Lampel have framed various conceptions of strategy as the 5 P’s. From this vantage, strategy can be seen as a:

Plan—a guide for a course of action or a path from a current state to a desired future state

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Pattern—a consistency of behavior over time.

Position—the location of particular products and services in particular markets.

Perspective—the theory of the business, that is, its philosophy about interacting with customers or supplying products and services.

Ploy—a means of gaining competitive advantage through specific maneuvers designed to outwit competitors or opponents.

What’s Strategic Planning—and Why Do It?

Strategic planning is the process many organizations use to prioritize their action plans. In simple terms, strategic planning helps groups choose what to do and what not to do. The aim is to focus the whole organization on executing the same game plan. Strategic planning can also provide an outline for resource allocation and decision-making.

A Basic Strategic Planning Model

Hundreds of strategic planning models have been proposed over the ages, yet most of the strategic plans that resulted answered four basic questions:

• Where are we now?
• Where do we need to be?
• How will we close the gap?
• How will we monitor our progress?

As these simple questions suggest, the thrust of good strategic planning is to be proactive about the future. When it’s done well, strategic planning holds the potential to improve performance and counter internally focused, short-term thinking. Equally important, it enables organizations to address major issues at the big picture level and to communicate what matters most to its members.