Core Components of the Strategic Plan: The Strategic Structure

With a sound conceptual foundation in place, I will move on to the heartbeat at the center of the strategic plan, the strategic structure. This consists of a hierarchy of statements organized in a specific taxonomy (how things are organized and classified). Other important matters are the granularity, or level of detail, planning horizon, or timeframe, and level of visualization required.

Taxonomy and Hierarchy. My experience is that there is no single correct way to name the elements of the hierarchy of a strategy. In fact, the highest level can have many interchangeable names from this list: strategy – priority – direction – goal – objective – pillar – foundation – initiative – aim – you fill in the blank. The same goes for the next layer down. Is a goal composed of multiple objectives? Or is a objective composed of multiple goals?  If anyone tries to convince you there is one right answer to this, ignore them. Any combination works as long as everyone in the organization agrees to the taxonomy and it is used consistently throughout the strategic plan.

An important consideration in the planning process is to determine which taxonomy and hierarchy will work best for the organization in the coming planning period. Some considerations for this decision may be what does past practice suggest, what regulatory agencies may require, what competitors are doing, what may be the latest fad, or what language may have benefits beyond the taxonomy.

I like to start with the following: strategies —> goals —> actions —> outcomes which leads to the image below.

Whatever the decision at the time, the taxonomy and hierarchy needs to accomplish certain things. The taxonomy needs to be understandable and reasonable. I have seen strategic structures that were unwieldy and didn’t allow for a reasonable person to connect a long list of actions and resources to the highest level strategy. The hierarchy must adequately connect strategy to action. If that leap cannot be made, some strategies may be left unobtainable. I like to recommend an easy to understand number system that allows for multiple layers of goals, actions, and outcomes to be quickly understood.

Granularity. Once the labels are known the next important decision in the strategic structure is the level of granularity. How much detail is contained in the plan? How long should the document be? How many layers of goals are there? Are names named, units or departments named? A sound organizational structure allows for the necessary cross-referencing later the process from connecting multiple goals to a strategy, to allocating resources for implementation, to ensuring outcomes can be tracked years down the road. It is important to choose the right number of layers in the hierarchy. Too few and the organization ends up with many actions tied to a broad strategy. Too many layers and it is hard to discern between the layers and to deal with prioritization of actions during implementation.

Planning Horizon. The planning horizon is the period of time from the beginning of the strategic plan to the end. Important questions include… When does the planning period start? When does it end? Are there segments along the way? How often are strategies and goals updated? What can change during the planning period, such as goals and actions? What cannot, such as the top level strategies? In practice I have observed that most strategic plans have a beginning and ending date or year, but in reality different parts of the plan move at different speeds during implementation. I now recommend that even though the overall plan may have start and end dates, that the planning process fully considers a unique planning horizon for each strategy. We live in a dynamic environment and forces continually act on our organizations. Some forces slow us down – I call these decelerators. Other speed us up – I call these accelerators. In a dynamic strategic plan, the organization continually monitors internal and external forces and adjusts actions and resources within each strategy to optimize impact.

Visual Elements. I have seen strategic plans that are fully text with long narratives and lengthy lists. These are probably the worst as they are difficult for anyone to understand but the plan’s authors. I have also seen plans that are just a few pictures that may be equally as bad as the lack details and are open to interpretation. While there may be organizations that require one or the other, most strategic plans should be a combination, blending clear, concise narratives with neatly organized lists, tables, and spreadsheets with appealing visual elements. My recommendation is to get as visual as possible, especially at the early stages of planning, and add required text and table details as necessary until the optimal blend is achieved. There is no right answer here, so it depends on the organization's needs, practices, and culture.