The need to use a formal strategic planning cycle, and the many apparent variations in planning process design, also reflects changes in the broader context in which organizations of all types operate.
The need to use a more systematic approach to corporate strategic planning has increased in recent decades.
Some may see strategic planning as a means of dramatically improving corporate performance through innovation, or grand disruptive ocean coloring master strokes in some great competitive battleground.
While I believe that a soundly managed cycle of strategic planning can help an organization to improve overall performance, I see it more as a means of defending against the rising penalty for error.
The cycles are linked by an arrow in one direction only, indicating that a strategy is selected only after the objectives have been decided.
A strategy is valid only to the extent that it achieves the objectives.Society has become keenly interested in the behavior and governance of organizations, and now requires clearer public statements of corporate intentions.Also because organizations have increased in size, complexity and geographic scope of their operations, rates of change, growing lead times on larger, more complex projects, there is a demand for more professional approaches to management at all levels.Objectives are not influenced by strategic decisions.It should be noted that the factors that affect the choice of corporate objectives are, or may be, wholly different from the factors that are taken into account when selecting a strategy; that is why I have separated them into two different elements in the chart.Yet the fundamental procedures required are few in number.I will approach the clarification of these procedures by first describing a minimal strategy development cycle; or rather pair of cycles, as shown in the following diagram.Sometimes there are different sector viewpoints that influence the design of the strategic planning cycle.For example some public sector organizations are governed by funding and budget cycle considerations, as well as the need to explicitly take into account a multiplicity of constituencies in the planning process.The planning cycle is subject to the setting of corporate objectives.These are the province of corporate governance rather than corporate management. With this clear we can look again at the simple form of planning process flow, or planning cycle, we have used elsewhere on this site.