Project Management: How To Develop a Strategic Plan

Without an effective strategic planning process, it’s difficult to achieve success in project management.¹ Strategic planning focuses on a business’s future by understanding operational priorities and resource availability, setting out clear strategic objectives for desired business results, and developing an action plan on how to achieve them.² The process creates and implements decisions that guide an organization’s direction, ensuring that it’s adaptable to a changing business environment.³

What is a strategic plan?

Ultimately, strategic planning allows a business to take control of its vision and turn projected results into reality. This emphasizes its importance for project managers, who are responsible for the success or failure of a project, and for ensuring an organization operates at optimal efficiency.⁴

Five steps of the strategic planning process

Strategic planning provides a sense of organizational direction and assists in the creation of realistic business objectives. A KPMG survey found that 27% more projects are executed successfully when an organization’s structure and resources align with its strategy.⁵ A one-page strategic planning document improves the decision-making process and allows organizations to be more proactive, which aids the ability to prepare for unfavorable situations and minimize any risks involved. The benefits include:

1. Projects are completed more efficiently
2. Project communication is increased⁶
3. Resources are managed more effectively⁷
4. Ensures project managers make informed decisions
5. Chances of success are improved⁸

While the initial creation task may seem overwhelming at first, simplifying it into a step-by-step process will ensure you target each business goal and reach your proposed business outcome. Try this five-step approach:

Step 1: Understand your company’s mission and objectives

This first step focuses on understanding your organization’s current business strategy. Without a clear outline of your mission statement and long-term goals, creating a successful strategic plan is nearly impossible.⁹ Review past and present performance to critically assess your strategic position and identify how to:

• Build on your strengths
• Combat weaknesses
• Take advantage of growth opportunities
• Recognize potential threats¹⁰

The University of Cape Town (UCT) Advanced Project Management online short course, with a firm focus on strategic skills, will also help you align project management activities with your organization’s overarching aims to bring about real change.

Step 2: Assess resources and capabilities

Analyzing the business’s resources is incredibly important, as it determines whether you can execute an effective strategic plan.¹¹ The plan should assess all available assets, including finances, employees, and equipment. In addition, it should examine business capabilities, and identify any organizational vulnerabilities.¹² This allows management to advocate for the appropriate type and amount of resources to accurately support the goals of the organization.¹³

Step 3: Establish future projections

The first two steps will help you establish the strategic priorities of your business and the corresponding resources for addressing them, but how do you determine the short-term goals to achieve your overall objectives? Consider this list as a starting point:

• Establish clear and specific goals
• Track the progress of each goal to remain motivated
• Remain realistic and set goals that are challenging, but attainable
• Ensure that the goals are relevant and beneficial to your overall business objectives
• Include a time target for each goal to create maximum efficiency

This process allows organizations to establish a vision statement. While the future is impossible to predict, ensuring there is a unified vision within the company will help define the prospective outlook of your business.¹⁴

Step 4: Determine the method to meet business strategic objectives

Once you have established your business’s vision statement, the next step is to develop an action plan. Determining the course of action you will take to reach your short-term goals can be the most significant step within a strategic plan and can directly influence the time it takes to achieve your business’s strategic objectives.¹⁵

The action plan should outline the short-term tasks that need to be completed in order to achieve each of your business goals, and effectively communicate how to budget time, human capital, and finances.¹⁶ This plan will ensure that each person is held accountable for their contribution to achieving the overarching goals.

If at this point it is discovered that strategic planning has been implemented incorrectly, your organization’s strategy will need to be reanalyzed further down the line. The 2018 PMI Pulse of the Profession survey found that 82% of project management directors believe it is extremely important to incorporate the lessons learned from failed strategy implementation back into strategy formulation to ensure your business stays competitive over the next three years.¹⁷

Step 5: Ensure the plan evolves

It’s important to recognize that a strategic plan is not set in stone. It’s more beneficial to assume that the plan is a continuous work in progress or a “living, breathing document”.¹⁸ To ensure the strategic plan continues to function in the intended manner, it’s important to review it regularly and make necessary adjustments as needed.¹⁹

Benefits of robust strategic planning in project management

There are numerous benefits to robust strategic planning, for both the organization and the project manager. Strategic planning:

• Helps to ensure that everyone in an organization is aware of the company’s vision and objectives, and knows how their work contributes to these goals
• Gives direction and focus to project managers, who can use strategic objectives as a guide when making decisions about priorities, resources, and risks
• Facilitates better communication between the organization and its stakeholders, as everyone is aware of the strategic direction and how it will be achieved
• Improves decision-making by providing a framework for evaluating options and trade-offs
• Increases the likelihood of success by identifying and addressing risks early on
• Helps to ensure that resources are used efficiently and effectively, as project managers can align their projects with strategic objectives

The success of a strategic plan relies on the people and systems involved in its creation. Thus, it’s vital that the right people are involved in the strategic planning process and that business objectives, as well as how they will be achieved, are clearly communicated. To do this, there should be a greater sense of accountability. Lessons learned in strategic plan development should be incorporated into future planning processes, while continuously redefining the plan to ensure you keep working towards achieving your vision and overall priorities.