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âStrategic frameworks are designed to help organizations develop an action plan to achieve their goals. There are a lot of strategic planning models out there, which is why we pulled together a list of 20 of the most popular ones and describe the scenario that they are most useful.
ClearPoint Strategy offers an innovative platform that simplifies the process of implementing these models, ensuring that your organization can effectively plan, execute, and monitor its strategies.
A strategic framework is a structure designed to help organizations develop an action plan to achieve their goals. This entails using various strategic planning models to guide the organization toward effective strategy implementation and goal realization, tailored to specific scenarios where they are most effective.
Essentially, it serves as a blueprint that organizations follow to map out their strategic direction and actions required to achieve their objectives.
Do any of these situations sound familiar?
If you can identify with one of these scenarios, this article is for you!
Read through each of the models or find the ones you're looking for from the list below and jump right to them. Then stick around for some insight on how you can make the most of whatever strategic framework you chooseâand increase the likelihood of its success. (Hint: Itâs all about performance tracking.)
The Balanced Scorecard is a strategy management framework created by Drs. Robert Kaplan and David Norton.
It takes into account your:
There are many ways you can create a Balanced Scorecard, including using a program like Excel, Google Sheets, or PowerPoint or using reporting software. For the sake of example, the screenshot below is from ClearPointâs reporting software.
This is just one of the many âviewsâ youâd be able to see in scorecard software once your BSC was complete. It gives you high-level details into your measures and initiatives and allows you to drill down into each by clicking on them.
At a glance, you can tell what the RAG status of each objective, measure, or initiative is. (Green indicates everything is going as planned, while yellow and red indicate that there are various degrees of trouble with whatever is being looked at.)
All in all, a Balanced Scorecard is an effective, proven way to get your team on the same page with your strategy.
Read our blog on A Full & Exhaustive Balanced Scorecard Example.
A strategy map is a visual tool designed to clearly communicate a strategic plan and achieve high-level business goals.
Strategy mapping is a major part of the Balanced Scorecard (though it isnât exclusive to the BSC) and offers an excellent way to communicate the high-level information across your organization in an easily-digestible format.
A strategy map offers a host of benefits:
Read our blog on A Strategy Map Template For Medium-Sized Companies.
A SWOT analysis (or SWOT matrix) is a high-level model used at the beginning of an organizationâs strategic planning. It is an acronym for âstrengths, weaknesses, opportunities, and threats.â Strengths and weaknesses are considered internal factors, and opportunities and threats are considered external factors.
Below is an example SWOT analysis from the Queensland, Australia, government:
Using a SWOT analysis as part of your strategic business model helps an organization identify where theyâre doing well and in what areas they can improve.
If youâre interested in reading more, this Business News Daily article offers some additional details about each area of the SWOT analysis and what to look for when you create one.
With ClearPoint Strategy, you can use AIÂ to perform a SWOTÂ analysis on your company. Try our SWOT AIÂ tool here.
Like SWOT, PEST is also an acronymâit stands for âpolitical, economic, sociocultural, and technological.â Each of these factors is used to look at an industry or business environment, and determine what could affect an organizationâs health.
The PEST model is often used in conjunction with the external factors of a SWOT analysis. You may also run into Porterâs Five Forces (see #7 below), which is a similar take on examining your business from various angles.
Youâll occasionally see the PEST model with a few extra letters added on. For example, PESTEL (or PESTLE) indicates an organization is also considering âenvironmentalâ and âlegalâ factors. STEEPLED is another variation, which stands for âsociocultural, technological economic, environmental, political, legal, education, and demographic.â
Gap planning is also referred to as a âNeed-Gap Analysis,â âNeed Assessment,â or âthe Strategic-Planning Gap.â It is used to compare where an organization is now, where it wants to be, and how to bridge the gap between. It is primarily used to identify specific internal deficiencies.
In your gap planning research, you may also hear about a âchange agendaâ or âshift chart.â These are similar to gap planning, as they both take into consideration the difference between where you are now and where you want to be along various axes. From there, your planning process is about how to âclose the gap.â
The chart below, for example, demonstrates the difference between the projected and desired sales of a mock company:
Blue Ocean Strategy is a strategic planning model that emerged in a book by the same name in 2005. The bookâtitled âBlue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevantââwas written by W. Chan Kim and RenĂ©e Mauborgne, professors at the European Institute of Business Administration (INSEAD).
The idea behind Blue Ocean Strategy is for organizations to develop in âuncontested market spaceâ (e.g. a blue ocean) instead of a market space that is either developed or saturated (e.g. a red ocean). If your organization is able to create a blue ocean, it can mean a massive value boost for your company, its buyers, and its employees.
For example, Kim and Mauborgne explain via their 2004 Harvard Business Review article how Cirque du Soleil didnât attempt to operate as a normal circus, and instead carved out a niche for itself that no other circus had ever tried.
Below is a simple comparison chart from the Blue Ocean Strategy website that will help you understand if youâre working in a blue ocean or a red ocean:
Porterâs Five Forces is an older strategy execution framework (created by Michael Porter in 1979) built around the forces that impact the profitability of an industry or a market. The five forces it examines are:
The amount of pressure on each of these forces can help you determine how future events will impact the future of your company.
The VRIO framework is an acronym for âvalue, rarity, imitability, organization.â This strategic planning process relates more to your vision statement than your overall strategy. The ultimate goal in implementing the VRIO model is that it will result in a competitive advantage in the marketplace.
Hereâs how to think of each of the four VRIO components:
Once you answer these four questions, youâll be able to formulate a more precise vision statement to help carry you through all the additional strategic elements in your plan.
The Malcolm Baldrige National Quality Award is âthe highest level of national recognition for performance excellence that a U.S. organization can receive.â Created in 1987, the goal of Baldrige is to help organizations innovate and improve, while achieving their mission and vision.
The award is currently open to manufacturing, service, small business, nonprofit, government, education, and healthcare sectors.
When applying to win the Baldrige award at the national level, organizations undergo a competitive process that involves the implementation of the Baldrige framework.
The framework outlines the âBaldrige Criteria For Performance Excellence,â where organizations must demonstrate achievement and improvement to an independent board of examiners in these seven areas:
To implement the Baldrige framework in your organization, start with two questionnaires that help you self-assess based on the seven Baldrige Criteria categories, and get a snapshot of your strengths and opportunities for improvement.
The strategic planning model of choice for Google, Intel, Spotify, Twitter, LinkedIn, and many other Silicon Valley successes, the OKR framework, is one of the more straightforward strategic planning tools. Itâs designed to create alignment and engagement around measurable goals by clearly defining:
The strategic planning model of choice for many businessesâincluding Google, Intel, Spotify, Twitter, LinkedIn, and many other Silicon Valley successesâ the OKR framework is also effective because goals are continually set, tracked, and re-evaluated so organizations can quickly adapt when needed. This is a fast-paced, iterative approach that flips the traditional top-down strategic models. The RACI matrix is a helpful visual for defining the role each person in your organization has for projects and processes, ensuring it aligns with their OKRs.
The Hoshin Planning approach aligns your strategic goals with your projects and tasks to ensure that efforts are coordinated. This strategic management model is less focused on measures and more on goals and initiatives.
Some sources cite up to seven steps in the Hoshin Planning model, but the four most critical are:
You visualize your objectives, measures and targets, measure programs, and action items in a Hoshin Planning matrix. Four directional quadrants (north, south, east, west) inform each other and demonstrate alignment.
The issue-based strategic model is oriented in the present and projects into the future. It aims to identify the major challenges your organization faces nowâin other words, you start with the problems to iron out issues before expanding, shifting your strategy, etc.
This is typically a short-term (6-12 months), internally-focused process. Issue-based planning is ideal for young or resource-restricted organizations.
The leadership team or stakeholders identify the major issues and goals as a first step. Next, your organization will create action plans to address the issues, including budget allocation.
From there, you will execute and track progress. After an issues-based plan has been implemented and the major issues you identified are resolved, then your organization might consider shifting to a broader, more complex strategic management model.
Goal-based strategic planning is the reverse of issue-based. This approach works backward from the future to the present. It all starts with your organizationâs vision.
By nature, vision statements are aspirational and forward-thinking, but they need specifics in order to be realized. Goal-based planning tackles that challenge by setting measurable goals that align with your vision and strategic plan.
Next, you define time frames for goal achievement. This is a long-term strategic planning tool, so goal time frames are typically about three to five years.
From there, stakeholders will create action plans for each goal and begin tracking and measuring progress.
Similar to issue-based planning, the alignment model focuses on first looking internally to develop a strategy. This model is designed to sync the organizationâs internal operations with its strategic goals.
Your strategic planning will start by identifying a goal and analyzing which operations or resources need to be aligned with that goal.
Then youâll identify which parts of operations are working well and which are not, brainstorming ideas from the successful aspects on how to address problems.
Finally, youâll create a series of proposed changes to operations or processes to achieve goals that will create the desired strategic alignment.
The alignment strategic planning model is particularly useful when a company needs to refine its objectives or address ongoing challenges or inefficiencies that are blocking progress.
The organic model takes an unconventional approach because it focuses on the organizationâs vision and values, versus plans and processes. With this model, a company uses ânatural,â self-organizing systems that originate from its values and then leverages its own resources to achieve goals, conserve funds, and operate effectively.
In the simplest form, there are three basic steps to follow when implementing the organic model of strategic planning:
What type of company would the organic strategic planning model work best for? If your organization has a large, diverse group of stakeholders that need to find common ground, a vision that will take a long time to achieve, and a strong strategic emphasis on vision and values (instead of structure and procedures), this may be the right model for you.
It would also be beneficial for younger organizations that need to gain funding without presenting a formal strategic plan.
Similar to the organic model, real-time strategic planning is a fluid, nontraditional system. Itâs primarily used by organizations that need to be more reactive, and perform strategic planning in âreal time.â
For these companies, detailed, long-term plans tend to become irrelevant within the typical three- to five-year planning cycle because the environment they operate in rapidly changes. Many nonprofits use this modelâfor example, a disaster relief agency needs the ability to respond quickly and adapt its strategy to immediately address a crisis.
Real-time strategic planning involves three levels of strategy: organizational, programmatic, and operational. For the first level, youâll define the organizationâs mission, vision, market position, competitors, trends, etc. Then, the programmatic strategy requires research into the external environment to identify approaches and offerings that would help the organization achieve its mission.
The research should cover opportunities, threats, competitive advantages, and other points to spur strategic brainstorming.
The final operational level analyzes internal processes, systems, and personnel to develop a strategy that addresses âin-houseâ strengths and weaknesses. Looking at all three levels as a whole, strategy leaders can form criteria for developing, testing, implementing, and adapting strategies on an ongoing basis, allowing for quick and thoughtful responses when needed.
In planning for their own future, too few organizations take the time to consider the multitude of external changes that could take place that would impact their plans.
A healthcare company that fails to anticipate certain regulatory actions, an energy company that ignores the possibility of rising oil prices, and a global organization that hasnât examined the potential for supply chain disruptions may all be impacted by those changes to some degree if they happened. And it isnât just about mitigating the possible risks; itâs also about pursuing potential opportunities.
Scenario planning involves examining the variable elements of your environment, evaluating them for plausibility and impact, and factoring those scenarios that are most relevant into your decision-making. Two to five scenarios is the ideal numberâthis lets you explore a variety of themes without getting mired down in too many possibilities.
Other frameworks (like SWOT or PESTLE) can be useful in developing those scenarios.
You can use scenario planning at the individual and departmental levels, but it is especially useful for organizational strategy planning. If your company is part of an industry that tends to be volatile or your organization itself has had to navigate costly, unexpected changes in the past, scenario planning is an excellent tool for developing your strategic vision.
It can also be used to foster managerial thinking, encouraging leaders to consider the broadest range of future possibilities, and provide guidance when evaluating new projects or investment proposals.
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The Ansoff Matrix was developed to help organizations plan their strategies for growth. It is a 2x2 matrix with product on one axis and markets on the other axis. Depending on the box you are in, you may choose a different strategy for growth:
The level of risk increases with each strategy, with market penetration being the least risky and diversification being the most risky.
The Ansoff Matrix is useful for organizations that are actively trying to grow. Not only does it help you analyze and clarify your current strategy, but it also helps evaluate the risks associated with moving to a new strategy.
SWOT and PEST are often used in combination with the Ansoff Matrix; business strengths and weaknesses as well as external factors should all play into your choice of growth strategy.
Developed by McKinsey consultants, this strategic business planning model emphasizes the importance of aligning an organizationâs key internal elements to achieve strategy. Those key elements are:
The first step in applying the 7S model is to examine the current interconnectedness of these elements within your own organization; are there areas of weakness or inconsistencies? For example, you might discover that your skills training for employees is hindered by antiquated workflows and technology.
Once you understand the relationships between these elements, you can work toward creating synergies that better support your strategy, whatever it may be.
The 7S model is best used during a strategy change, or whenever a major shift is occurring in any one of the seven areas.
Constraints analysis is predicated on the idea that there are clear obstacles to strategy execution within your organization. Eliminating the weak link (or at least improving performance in that area) is the key to better results.
To apply constraints analysis correctly, you must first identify the constraint, or the main factor that limits your success. Process bottlenecks, faulty thinking, labor shortages, an unhealthy company culture, market conditions, or any number of other issues could be the culprit.
While you might identify more than one problem area, constraints analysis focuses on improving one area at a time to achieve quick, impactful results.
Thatâs a great questionâand the answer isnât cut and dried. Some of these frameworks have been around longer than others, or have been used in various case studies in different ways. And sometimes managers are more comfortable with one over another, for any number of reasons.
âWe recommend determining which of these strategic planning models applies most to your organizationâs way of thinking. For example, if you still need to work out your vision statement, it may be wise to begin with the VRIO framework and then move to something like the Balanced Scorecard to track and manage your ongoing strategy.
If you are set on pitching a particular strategic planning model to management, be prepared to give your boss or board of directors an example of another successful company that has utilized that particular model. An actual demonstration of success will make a somewhat abstract concept become more concrete.
If you are evaluating different approaches, I would recommend thinking about both creating your strategic plan and also executing on your plan. It doesnât do you any good to have a strategic plan and not put it to use.
Yes. As your organization grows and changes, the frameworks you use to manage your strategy will change too.
There are a lot of options out thereâeven more than the 20 weâve explored above! Itâs reasonable to expect that the framework you use today won't necessarily match your organizationâs needs 10 or even five years from now.
The added complexities of a growing business may make it necessary to rethink your approach to strategy planning. For example, the Balanced Scorecard might work well for tracking organizational and departmental plans, but you may eventually want a system that easily extends to the individual level. For that, you might add OKRs to your management framework.
You can also combine strategic planning models. Some organizations use elements of two or more frameworks to create a custom approach. Great! Every organization manages differently; your planning model should reflect your approach. But itâs always easier to have a starting point, which is why these frameworks exist in the first place.
Framework choicesâand even strategies themselvesâare flexible, but whatâs not flexible is the need for software to track your performance.
Tracking is the only way to know if your strategic plan is workingâif the data shows your actions arenât making an impact, you need to make a change. While most organizations understand that tracking itself is a necessity, theyâre using the wrong tools to do it.
âThe most common alternative to strategy software is Excel. Excel may be a familiar and affordable tool, but itâs costing your organization dearly in ways you may not have thought of:
âFor decision-makers, Excel-based reports are difficult to digest, which negatively impacts decision-making. Excel was built for numbers but it wasnât built to easily show analysis and recommendations or real-time data, all of which are essential components of tracking. On top of that, spreadsheets simply make it harder to understand performance data. As a result, your leadership team isnât getting all the information they need to make strategic decisions.â
For the strategy and reporting teams, the use of spreadsheets and the manual collection and updating they require is a tremendous waste of time and a constant headache. There is also inherent riskâeven with the most meticulous and careful managementâin manual updating and version control across large and elaborate spreadsheets.
No doubt about it, Excel is, in fact, a somewhat costly tool. There is a better wayâsoftware exists that automates data updating and collects everything in one place for faster, safer, and better reporting.
Strategy software like ClearPoint was built exclusively for strategy performance reporting. So not only does it solve the above issues but it actually improves the likelihood of executing your strategy successfully.
Hereâs why:
Another important benefit: ClearPoint will improve your strategy teamâs productivity by simplifying the strategy reporting process. (One ClearPoint customer was able to reduce the cost of its monthly management board reporting by 70%!) To learn more about how ClearPoint addresses the day-to-day challenges of strategy reporting, read our Ultimate Guide on the subject.â
Youâve probably already invested in some type of specialized software for your finance team, HR, marketing, and other departmentsâall of which are likely using the software to good effect. But if an investment in strategy software has the potential to improve your organizationâs overall performance even slightly, imagine the impact it would have on your effectiveness or profitability. Isnât that an idea worth exploring?
If youâd like to learn more about ClearPoint, weâd love to talk with you! ClearPoint works with any and all of the strategic planning models mentioned above (the same canât be said for other strategy software tools), so no matter which direction youâre planning to go, we can go with you. See how ClearPoint can help you achieve moreâreach out to us today!
Ted is a Founder and Managing Partner of ClearPoint Strategy and leads the sales and marketing teams.