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Create an organization plan: types, steps, and examples

If you want to start or grow your business – or make it more profitable – you need an organization plan. It’s no secret that the most successful companies have the best organizational goals and the right strategies for attracting top talent to achieve their objectives.

Planning plays a vital role in any business organization. As such, the right organizational plan will help make your business a titan in its industry, whereas a poor one will allow your competitors to pull ahead of your company.

Read on to discover creative ways an organizational plan will bring value to your business and can improve your revenue.

Table of contents

What is an organizational plan, why is an organizational plan important , what are the 4 types of organizational planning, what are some examples of organizational planning, 5 steps to develop an effective organizational plan, strengthen your recruitment process with testgorilla.

An organizational plan is how businesses prepare their affairs to achieve success in their industry. It may include daily business operations, organizational goals, and potential expenses. 

An organizational plan usually begins with big, long-term objectives but is then broken down into smaller, attainable goals. This makes it easier for your organization to define success, plan ahead, and achieve its goals.

Organizational plans are crucial for businesses because they enable you to create an effective, realizable method to achieve your business goals. 

A solid organizational plan will therefore improve your company’s performance. Research shows that businesses with good plans are 16% more likely to succeed .

Organizational plans may also clarify the roles, expectations, and responsibilities of employees in your organization. And they are a great way to highlight the areas in which your business has shortcomings or issues.

Effective planning relies on a firm understanding of the four types of organizational planning. Knowing which organizational plan to apply to your business is crucial to steer your company toward a profitable and prosperous future. 

1. Strategic planning

A strategic plan involves the creation of broad, long-term goals for your company. Senior management will usually oversee these kinds of plans; however, smaller companies tend to involve other employees.

Typically, strategic planning considers controllable and non-controllable variables and how to adjust them. The objectives must align with your company’s general mission, vision, and values.

2. Tactical planning

These shorter-term goals show how your company plans to achieve its longer-term strategic plan. Tactical plans typically take a year to complete, with middle managers establishing these goals and overseeing the actions.

3. Operational planning

Operational plans include department-specific objectives and targets and are focused on executing the tactical plan. Thus, for example, your company should have a working plan for the finance, marketing, and IT departments.  

4. Contingency planning

Usually, contingency planning is associated with risk management, because a good contingency plan will address both known and unknown risks. Such planning enables your company to prepare for unforeseen circumstances that could harm your business.

Below are examples of organizational planning to help you understand the various forms a plan can take. With this knowledge, you can decide which kind of organizational plan suits your company.

1. Workforce development planning

Industry-leading companies do not become successful by chance. Instead, they earn their success through years of practical workforce training. Workforce development planning entails training your employees to increase their productivity and output.

By investing in your employees, you’ll create a loyal, diverse, and satisfied workforce focused on achieving your business’s ambitious goals.

2. Product and services planning

Product and service planning aims to make your organization’s products or services more appealing to its target market. This involves strategically creating schemes that set your business apart from competitors.

Being in a highly competitive industry can be difficult. That’s why the operations, finance, and marketing departments are tasked with developing innovative ways to keep your business ahead in its industry.

3. Expansion plans

A good business is always focused on growth. Hence, expansion plans identify growth opportunities and roadblocks your organization might face in its industry, helping you develop strategies to take advantage of those opportunities and overcome the obstacles.

4. Financial planning

Making plans to manage debt and utilize profits is one of the best ways to ensure your business is sustainable. Financial analysts are in charge of this, so they will analyze financial performance and give recommendations to help your business make better decisions.

Financial planning ensures you optimize every fund flow in and out of your business. You’ll also require employees with the right budget-management skills to draft the perfect plan. 

1. Come up with a strategic plan 

Identifying your company’s objectives will help you create more concrete strategic plans. But to identify these goals, you’ll need adequate data about your company.

Good data will guide you in making strategic decisions based on previous performance and other indicators, ensuring you can pave a clear path toward your goals.  

2. Transform the strategic plan into practical steps

Establishing practical steps for achieving your strategic goals is the focus at this stage. A good example is requesting quarterly reports to ensure that the IT department is hitting its quota.

It also involves implementing every action that contributes to hitting your targets, from sourcing raw materials to manufacturing the final product. 

3. Plan day-to-day operations

This stage focuses on individual employee performance. Managers set goals and targets to ensure employees convert their work hours into profit for your business and more effective functioning of your teams. HR, for example, can be tasked with ensuring that unconscious bias does not exist in the workplace.

Similarly, the quality assurance team can create schedules to inspect raw materials before manufacturing begins. 

4. Execute daily operations

At this stage, you should execute the theoretical strategies you set for daily operations. This requires applying all the planning from the previous steps to enable your organization to reach its strategic goals.

You can check these daily targets on your vision board as you progress, gradually allowing your longer-term objectives to materialize.

5. Monitor results and adjust plans

A plan is more likely to fail if you don’t monitor any progressive performance. To verify that your plan is complete, you should make provisions for adjusting and monitoring results to ensure they align with the goals you set.

Doing this will help your organization identify areas where your company didn’t meet its goals and inform you of any necessary changes. By extension, you should have the information required for performance management . 

Although organizational planning might be a long and complex process, it is vital for your company’s success. Why? The right strategy will ensure your employees are clear on your organization’s vision and the actions required to achieve these goals. 

A well-defined organizational plan will positively impact your workforce, since all employees will understand their day-to-day tasks and why they are needed. They’ll have explicit objectives to ensure they remain productive and focused.

TestGorilla facilitates your recruitment of skilled professionals who can help you develop a stellar organizational plan. Moreover, it helps you minimize any chance of unconscious bias creeping into your recruitment, helping you employ the best.

Create a free account with TestGorilla today to begin hiring.

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Business Plan Section 3: Organization and Management

This section explains how your business runs and who’s on your team. Learn how to present the information in this section of your business plan.

This section of your business plan, Organization and Management, is where you’ll explain exactly how you’re set up to make your ideas happen, plus you’ll introduce the players on your team.

As always, remember your audience. If this is a plan for your internal use, you can be a little more general than if you’ll be presenting it to a potential lender or investor. No matter what its purpose, you’ll want to break the organization and management section into two segments: one describing the way you’ve set up the company to run (its organizational structure), and the other introducing the people involved (its management).

Business Organization

Having a solid plan for how your business will run is a key component of its smooth and successful operation. Of course, you need to surround yourself with good people, but you have to set things up to enable them to work well with each other and on their own.

It’s important to define the positions in the company, which job is responsible for what, and to whom everyone will report. Over time, the structure may grow and change and you can certainly keep tweaking it as you go along, but you need to have an initial plan.

If you’re applying for funding to start a business or expand one, you may not even have employees to fit all the roles in the organization. However, you can still list them in your plan for how the company will ideally operate once you have the ability to do so.

Obviously, for small businesses, the organization will be far more streamlined and less complicated than it is for larger ones, but your business plan still needs to demonstrate an understanding of how you’ll handle the workflow. At the very least, you’ll need to touch on sales and marketing, administration, and the production and distribution of your product or the execution of your service.

For larger companies, an organizational plan with well-thought-out procedures is even more important. This is the best way to make sure you’re not wasting time duplicating efforts or dealing with internal confusion about responsibilities. A smooth-running operation runs far more efficiently and cost-effectively than one flying by the seat of its pants, and this section of your business plan will be another indication that you know what you’re doing. A large company is also likely to need additional operational categories such as human resources and possibly research and development.

One way to explain your organizational structure in the business plan is graphically. A simple diagram or flowchart can easily demonstrate levels of management and the positions within them, clearly illustrating who reports to whom, and how different divisions of the company (such as sales and marketing) relate to each other.

Here is where you can also talk about the other levels of employees in your company. Your lower-level staff will carry out the day-to-day work, so it’s important to recognize the types of people you’ll need, how many, what their qualifications should be, where you’ll find them, and what they’ll cost.

If the business will use outside consultants, freelancers, or independent contractors, mention it here as well. And talk about positions you’d want to add in the future if you’re successful enough to expand.

Business Management

Now that we understand the structure of your business, we need to meet the people who’ll be running it. Who does what, and why are they onboard? This section is important even for a single practitioner or sole proprietorship, as it will introduce you and your qualifications to the readers of your plan.

Start at the top with the legal structure and ownership of the business. If you are incorporated, say so, and detail whether you are a C or S corporation. If you haven’t yet incorporated, make sure to discuss this with your attorney and tax advisor to figure out which way to go. Whether you’re in a partnership or are a sole owner, this is where to mention it.

List the names of the owners of the business, what percent of the company each of them owns, the form of ownership (common or preferred stock, general or limited partner), and what kind of involvement they’ll have with day-to-day operations; for example, if they’re an active or silent partner.

Here’s where you’ll list the names and profiles of your management team, along with what their responsibilities are. Especially if you’re looking for funding, make sure to highlight the proven track record of these key employees. Lenders and investors will be keenly interested in their previous successes, particularly in how they relate to this current venture.

Include each person’s name and position, along with a short description of what the individual’s main duties will be. Detail his or her education, and any unique skills or experience, especially if they’re relevant to the job at hand. Mention previous employment and any industry awards or recognition related to it, along with involvement with charities or other non-profit organizations.

Think of this section as a resume-in-a-nutshell, recapping the highlights and achievements of the people you’ve chosen to surround yourself with. Actual detailed resumes for you and your management team should go in the plan’s appendix, and you can cross-reference them here. You want your readers to feel like your top staff complements you and supplements your own particular skill set. You also want readers to understand why these people are so qualified to help make your business a success.

This section will spell out the compensation for management team members, such as salary, benefits, and any profit-sharing you might be offering. If any of the team will be under contract or bound by non-compete agreements, you would mention that here, as well.

If your company will have a Board of Directors, its members also need to be listed in the business plan. Introduce each person by name and the position they’ll hold on the board. Talk about how each might be involved with the business (in addition to board meetings.

Similar to what you did for your management team, give each member’s background information, including education, experience, special skills, etc., along with any contributions they may already have had to the success of the business. Include the full resumes for your board members in the appendix.

Alternately, if you don’t have a Board of Directors, include information about an Advisory Board you’ve put together, or a panel of experts you’ve convened to help you along the way. Having either of these, by the way, is something your company might want to consider whether or not you’re putting together the organization and management section or your business plan.

NEXT ARTICLE > Business Plan Section 4: Products and Services

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How to Write a Business Plan: Organization Structure

How to write a business plan: organizational structure, what is the organizational structure for a business plan.

The organization structure section should discuss whether your business will be a sole proprietor, limited liability corporation, or corporation, who will run your business, each person’s responsibility, and how your business will expand if needed.  There are numerous benefits to a detailed assessment of the company’s structure.  First, examining the structure of the business will help for tax purposes.  For example, limited liability and corporations are considered excellent for protecting shareholders concerning liabilities.  However, tax-wise, these firms often are double taxed.  The second benefit of a detailed assessment of a company’s structure is to understand how each owner will contribute to the company.  In other words, if there is more than one owner, what are their responsibilities, and how are these responsibilities to be carried out.

Why is the Organizational Structure important? 

There are numerous reasons why the organizational structure is essential for a business plan. In this section, the business owner will lay out how the company will be structured.  For example, this section will include job titles and responsibilities, resumes from owners and management, showing expertise in the industry, and supporting accolades for expertise.  Through discussing job responsibilities and experiences for management, readers will better understand why this type of business structure, and this management team, will be successful in the proposed business.

A second important reason for the organizational structure is that the section introduces business owners.  The owners and management team should not only be introduced in this section, but their experiences in the industry need to be highlighted and thoroughly explained.  In doing this, a sound foundation for management competence will be established.

A final reason for its importance is the job responsibility segment.  Ownership and management need to have a written document showing specific duties for each owner, if applicable, and specific job responsibilities for each position within the company.  By having this document, readers will see how the business will function and better understand the breakup of management responsibilities.

When to write the Organizational Structure?

The organizational structure should be written after the company description.   In the company description, readers will be introduced to the problem that the company is going to solve and how they propose to solve this problem.  This is usually the product or service offered.  The logical next step is to show a business structure that will allow the company to supply that product or service effectively and efficiently.  Thus the need for the organizational section follows immediately behind the company description.

How to write the Organizational Structure?

When I write my organizational structure for a business plan, for the most part, I start the first paragraph by reminding the readers of the company name.  From this, I then introduce how the company will be held in ownership.  For example, will the company be a limited liability corporation?  Sole proprietorship?  Next, I briefly introduce the management team and owners.  Further, I also briefly introduce their experience in the industry.

By following this structure, the first paragraph is an excellent summation of the section. This allows the reader to understand the breadth of the ownership structure without gaining significant details.

Organizational Structure:  Ownership

In the ownership section, I usually start writing the section by introducing the CEO/founder/majority owner.  In this portion, I usually write the segment, almost like a brief biography.  I will discuss the CEO's history in the industry and the reason why they feel that they are best suited to start and run the operation.

Once this is complete, I then follow the same structure with the other management team members and minority stakeholders.  When this is done, the reader should walk away with an excellent understanding of the qualifications of the ownership team and how their skills will complement each other.

Need Help Writing an Organizational Structure for a Business Plan?

Call or Text Paul, Doctoral Candidate, MBA.

321-948-9588

Email: [email protected]

Organizational Structure:  Responsibilities

In the job responsibility section, I usually structure this portion as a bullet-pointed list.  At the top, I put the title such as CEO, project manager, or job title.  Following this, I list the responsibilities and expectations for each position.  Not only does this help show structure and foresight for the company.  But also, this will help management divvy up duties for the business.

Organizational Structure: Resume

The resume section is for senior managers and owners.  By including resumes, supporting documentation is available for claims made related to experience.  For example, if the CEO claims to have 20 years of experience in the industry, then the resume will show where this experience came from.  This adds credibility to previous claims made.

Organizational Structure: Compensation

Compensation is sometimes necessary to include in the organizational structure component.  Investors expect management to be compensated and employees as well.  However, excessive compensation is often an issue with startups and established businesses.  By showing reasonable compensation for each position, not only will a solid understanding of the pay for each position be shown, but restraint for compensation by the management team and ownership may be highlighted as well.

Organizational Structure: Achievements

This final section is almost like a cherry on top of the cake.  By this point, the reader should be well-versed in the experience and expertise of ownership and the management team.  Adding achievements highlights their expertise in their chosen industry.

Organizational Structure Example

Organizational structure.

Legal Structure

ABC Restaurant will be a limited liability corporation.

Management Summary

John Smith, Sr., MBA., is the founder and CEO of ABC Restaurant.  He has started and managed numerous successful small restaurants over the last ten years.  Restaurants started, and managed, including a breakfast cafe, food truck, and 24-hour diner.  For each business, he was responsible for all aspects of the organization, from marketing to strategic planning.

Job Responsibilities

• Create and execute marketing strategies for business growth.
• Align business strategies with the vision statement.
• Negotiating contracts with vendors.
• Ensure legal compliance for the business.
• Continually examine the firm’s external environment for new market opportunities.

General Manager:

• Control inventory to ensure optimal levels are attained.
• Manage day-to-day operations of the restaurant.
• Servers and cooks during high volume times.
• Interview and hire new employees.
• Assist in the onboarding process for new employees.
• Set up all workstations in the kitchen
• Prepare ingredients to use in cooked and non-cooked foods.
• Check food while cooking for appropriate temperatures.
• Ensure great presentation by dressing dishes as trained.
• Keep a sanitized and clean environment in the kitchen area.
• Stock dining area tables with needed items.
• Greet customers when they enter.
• Present dinner menus and help customers with food/beverages selections.
• Take and serve orders quickly and accurately.

Author: Paul Borosky, MBA., Doctoral Candidate, Published Author

Updated: 3/4/2022

Business Plan Organization and Management: How to Write Guide .

Sep 17, 2023 | Business Consulting , Business Plan , Organization and Management , Organizational Development , Strategy

Writing the Business Plan Organization and Management Section

It provides critical information for those looking for evidence that your staff has the necessary experience, skills, and pedigree to realize the objectives detailed in the rest of your business plan.

What Is the Organization and Management Section in a Business Plan?

The organization and management section of your business plan should provide details about your business structure and team. This section typically comes after the executive summary. However, some people have it further in the document after the market analysis section.

This section generally is separated into two parts. The first concerns the organization as a whole. It gives readers an overview of the company structure, which is an excellent opportunity for the reader to lift the roof off your office and peer into its inner workings. For your legal design, you may set up as a limited liability company (LLC) or nonprofit/ charity or form a partnership. It’s crucial to include this section. However, suppose you’re starting a home business or have an already operating business where you’re the only person involved. In that case, you can skip this section or show the company registration details from either the company’s house or the awarding .gov.

The second part focuses specifically on your management team and introduces readers to each member — your chance to impress them with the many accomplishments pinned to your organization’s management team.

This section may seem less important than some of the other parts of your business plan, but the truth is that your people are your business. If they’re highly competent and accomplished, the implication is that so is your business.

Of course, if you’re a sole proprietor with no management structure or any employees, this section is unnecessary other than to talk about yourself and your achievements.

The section on organization and management should outline the hierarchy, individual roles, and corresponding responsibilities. It should also highlight each person’s strengths and qualifications for their positions.

Business Plan Organization Section

The organizational section of your business plan outlines the hierarchy of individuals involved in your business, typically in a chart format. This section identifies the President or CEO, CFO, Director of Marketing, and other roles for partnerships or multi-member LLCs. If you’re a single-person home business, this section is straightforward as you are the only person on the chart.

Although this section primarily focuses on owner members, you can include outsourced workers or virtual assistants if you plan to hire them. For example, you may have a freelance web admin, marketing assistant, or copywriter. You may even have a virtual assistant who coordinates with your other freelancers. While these individuals are not owners, they hold significant responsibilities in your business.

There are various business structures, such as sole proprietorships, partnerships, LLCs, and corporations.

Detail the Legal Structure within the Business Plan Organization and Management Section

Here is an indicative list of business structures. It would help if you talked to your accountant and legal advisors to determine which legal form is the best for your business proposition.

Sole Proprietorship

When embarking on a business venture, it’s essential to consider the various structures available. A sole proprietorship is a structure whereby the business is not regarded as separate from its owner’s finances. The owner retains complete control and responsibility for the company. However, they are unable to sell stocks or bring in new owners. The business becomes a sole proprietorship if not registered under any other structure.

Partnership

When forming a partnership, it can either be a limited partnership (LP) or a limited liability partnership (LLP). One partner assumes most liability in a limited partnership (LP). In contrast, the other partners have limited liability and control over the business. Alternatively, in a limited liability partnership (LLP), all partners have limited liability from debts and actions of other partners, and there is no general partner.

Limited Liability Company

A limited company (LTD) or limited liability company (LLC) is a mixture of business structures that mixes aspects of partnerships and corporations. It offers limited personal liability to the owner and passes profits through to their tax returns.

Corporation

There are various types of corporate structures. A C-corporation enables the issuance of stock shares, pays corporate taxes instead of personal returns, and provides the highest level of personal protection from business activities. On the other hand, nonprofit corporations are similar to C corporations. However, they do not aim to make profits and are exempt from state or federal income taxes.

More information on company legal structures is available on UK.Gov and USA.SBA websites.

Describe Your Company’s Organizational Structure

This first step illustrates the positions in your organization’s employee hierarchy and how they all relate to each other.

This is usually done graphically as a guide, using an organizational chart, or “org chart” for short. People use a Microsoft tool, i.e., PowerPoint or Excel, to help.

Organization Charts typically follow a top-down hierarchy, starting with your CEO/ Managing Director in the top box at the top of the page. Lines extend down from that person’s name to boxes containing the terms of the CEO’s direct reports.

We have included an example organizational chart below for guidelines only.

Identify your business organization structure and list your team members’ strengths and skills.

Those managers then have lines extending to those who report to them, and so on, down to your lowest staff positions.

This section will give your readers a quick understanding of your management and governance structure, the size of your organization, and your lines of control and communication.

Describe your Team in your Business Plan Organization and Management Section

In your business plan’s Organization and Management section, please provide a detailed description of your team. Y ou will discuss the company’s management team, starting with the owners.

This section highlights who is involved in the running of your business and who are the support professionals. It also includes the roles and responsibilities of managers.

Suppose the company structure is a multi-owner arrangement or some other multi-owner arrangement. In that case, you’ll want to include information for every member and their percentage of ownership and ongoing involvement in the company.

It’s important to discuss how ownership interests are split, their responsibilities, what they did before securing their current position, and how they came to be involved with the company.

Here, it would help if you talked about some of your critical team members. These people are directly responsible for large portions of your business operations.

Owner/Manager/Members

Within your business o rganization and management section, y ou should introduce the team and talk about their experience, qualifications, previous companies and achievements, role in the company, and any special skills they bring with them. Please provide the following details for each owner, manager, or member of the business within your business plan:

• Percentage of ownership (if applicable)
• Level of involvement (active or silent partner)
• Type of ownership (e.g., stock options, general partner)
• Position in the company (CEO, CFO, etc.)
• Responsibilities and Duties
• Educational background
• Relevant experience and skills
• Previous employment history
• Skills that will benefit the business
• Awards or recognition received
• Compensation structure
• How each individual’s skills and experience will complement and contribute to the business’s success

Perhaps they’re an entrepreneur, business coach, exclusive advisor, or industry specialist to help you grow.

This is an ideal opportunity for companies with an Executive Board of Directors, Governance Structure, or Advisory Board to introduce them to your readers.

Executive Board

Having a board of directors is essential for your management team. Without one, you may be missing out on crucial information. This section includes details similar to those found in the ownership and management team sub-section, such as the names, areas of expertise, positions (if applicable), and involvement with the company of each board member.

Strategic Advisors

Suppose you’re looking for funding for your business or to fill a gap in your knowledge, or you may not have the funds to hire an executive board. In that case, you must inform potential partners and investors that you have a team of professionals assisting you. This includes lawyers, accountants, and any freelancers or contractors you may be working with. When listing these individuals, include their name, title, educational background, certifications, services they provide to your business, and their relationship with you (i.e., hourly rates, projects, retainer, as-needed, regular). Additionally, highlight their skills and experience that make them an asset to your team you need

Does anything else make them stand out as quality professionals (awards, past working with credible brands)?

Spotlight on the Wider Team Structure

Now, you’ve showcased the management team in its entirety. You can provide brief bios for hiring team needs or secondary members and talk at length about how the team’s combined skills complement each other and how they amplify the team’s effectiveness.

It’s also important to point out any gaps in the knowledge your team is currently suffering. Your readers will likely be savvy enough to pick up on existing holes.

Therefore, you’ll want to get ahead of these criticisms and demonstrate that you’re already aware of the positions and complementary skill sets your management team still requires and how you plan to address the knowledge gaps with future hires.

Do you need help writing your business plan o rganization and management section ? 

Every successful business plan should include the organization and management section, helping you communicate your legal structure and team.

Writing a business plan can seem overwhelming, especially when starting a small, one-person business. However, it can be a reasonably simple task. This section of the plan should be updated if there are any changes to the organization structure or team members, such as additional training, awards, or other resume changes that benefit the business.

Creating your comprehensive business plan takes planning, research, time, and a herculean effort. If, at any point, the work becomes too much to handle, we can step in to assist.

Do you want an expert “second opinion” before creating your business plan or financial forecasts? Let’s talk !

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How To Write the Management Section of a Business Plan

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

Ownership Structure

Internal management team, external management resources, human resources, frequently asked questions (faqs).

When developing a business plan , the 'management section' describes your management team, staff, resources, and how your business ownership is structured. This section should not only describe who's on your management team but how each person's skill set will contribute to your bottom line. In this article, we will detail exactly how to compose and best highlight your management team.

Key Takeaways

• The management section of a business plan helps show how your management team and company are structured.
• The first section shows the ownership structure, which might be a sole proprietorship, partnership, or corporation.
• The internal management section shows the department heads, including sales, marketing, administration, and production.
• The external management resources help back up your internal management and include an advisory board and consultants.
• The human resources section contains staffing requirements—part-time or full-time—skills needed for employees and the costs.

This section outlines the legal structure of your business. It may only be a single sentence if your business is a sole proprietorship. If your business is a partnership or a corporation, it can be longer. You want to be sure you explain who holds what percentage of ownership in the company.

The internal management section should describe the business management categories relevant to your business, identify who will have responsibility for each category, and then include a short profile highlighting each person's skills.

The primary business categories of sales, marketing , administration, and production usually work for many small businesses. If your business has employees, you will also need a human resources section. You may also find that your company needs additional management categories to fit your unique circumstances.

It's not necessary to have a different person in charge of each category; some key management people often fill more than one role. Identify the key managers in your business and explain what functions and experience each team member will serve. You may wish to present this as an organizational chart in your business plan, although the list format is also appropriate.

Along with this section, you should include the complete resumés of each management team member (including your own). Follow this with an explanation of how each member will be compensated and their benefits package, and describe any profit-sharing plans that may apply.

If there are any contracts that relate directly to your management team members, such as work contracts or non-competition agreements, you should include them in an Appendix to your business plan.

While external management resources are often overlooked when writing a business plan , using these resources effectively can make the difference between the success or failure of your managers. Think of these external resources as your internal management team's backup. They give your business credibility and an additional pool of expertise.

Advisory Board

An Advisory Board can increase consumer and investor confidence, attract talented employees by showing a commitment to company growth and bring a diversity of contributions. If you choose to have an Advisory Board , list all the board members in this section, and include a bio and all relevant specializations. If you choose your board members carefully, the group can compensate for the niche forms of expertise that your internal managers lack.

When selecting your board members, look for people who are genuinely interested in seeing your business do well and have the patience and time to provide sound advice.

Recently retired executives or managers, other successful entrepreneurs, and/or vendors would be good choices for an Advisory Board.

Professional Services

Professional Services should also be highlighted in the external management resources section. Describe all the external professional advisors that your business will use, such as accountants, bankers, lawyers, IT consultants, business consultants, and/or business coaches. These professionals provide a web of advice and support outside your internal management team that can be invaluable in making management decisions and your new business a success .

The last point you should address in the management section of your business plan is your human resources needs. The trick to writing about human resources is to be specific. To simply write, "We'll need more people once we get up and running," isn't sufficient. Follow this list:

• Detail how many employees your business will need at each stage and what they will cost.
• Describe exactly how your business's human resources needs can be met. Will it be best to have employees, or should you operate with contract workers or freelancers ? Do you need full-time or part-time staff or a mix of both?
• Outline your staffing requirements, including a description of the specific skills that the people working for you will need to possess.
• Calculate your labor costs. Decide the number of employees you will need and how many customers each employee can serve. For example, if it takes one employee to serve 150 customers, and you forecast 1,500 customers in your first year, your business will need 10 employees.
• Determine how much each employee will receive and total the salary cost for all your employees.
• Add to this the cost of  Workers' Compensation Insurance  (mandatory for most businesses) and the cost of any other employee benefits, such as company-sponsored medical and dental plans.

After you've listed the points above, describe how you will find the staff your business needs and how you will train them. Your description of staff recruitment should explain whether or not sufficient local labor is available and how you will recruit staff.

When you're writing about staff training, you'll want to include as many specifics as possible. What specific training will your staff undergo? What ongoing training opportunities will you provide your employees?

Even if the plan for your business is to start as a sole proprietorship, you should include a section on potential human resources demands as a way to demonstrate that you've thought about the staffing your business may require as it grows.

Business plans are about the future and the hypothetical challenges and successes that await. It's worth visualizing and documenting the details of your business so that the materials and network around your dream can begin to take shape.

What is the management section of a business plan?

The 'management section' describes your management team, staff, resources, and how your business ownership is structured.

What are the 5 sections of a business plan?

A business plan provides a road map showing your company's goals and how you'll achieve them. The five sections of a business plan are as follows:

• The  market analysis  outlines the demand for your product or service.
• The  competitive analysis  section shows your competition's strengths and weaknesses and your strategy for gaining market share.
• The management plan outlines your ownership structure, the management team, and staffing requirements.
• The  operating plan  details your business location and the facilities, equipment, and supplies needed to operate.
• The  financial plan  shows the map to financial success and the sources of funding, such as bank loans or investors.

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Business Plan - Management and Organization

Management and Organization Section of a Business Plan

Written by Jason Gordon

Updated at August 5th, 2023

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What is the Management and Organization Section of the Business Plan?

Outline your organizational structure and then tell about your primaries. How your business will be managed and who will be involved is an important consideration in your choice of business entity. For example, in a partnership, it is assumed that partners have equal control in managing the business. In an LLC you make the choice of whether it will be managed by members of the LLC or by hired managers. 

In a corporation, the owners/shareholders may or may not be a part of the management team. In any of the above situations, you will want to develop a plan for the roles of individual members. While individual member roles and responsibilities often change rapidly, you want to have a formalized chain of authority within the business. Remember, too many decision-makers and no single person with authority can be a major challenge to the success of a business.

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Business Management

This section should include the names, positions, and general biography of the key business personnel. This section will be incredibly important to outsider investors (angels or venture capitalists) who are assessing your business. Within the Business Management section you should include answers to the following questions:

• Name : Who are the key individuals involved in the management of your business?
• Title : What will be that person's title?
• Responsibilities : What primary responsibilities does that position entail?
• Qualifications : What is their background and qualifications for carrying out their intended responsibilities? (This will include work experience, educational degrees, and prior experience in startup ventures.)

Organizational Chart

I recommend that you create a formalized flow-chart demonstrating the hierarchy of authority within the business. This organizational chart should be cross-laid with the key core operational responsibilities of the business. For example, you may split the business responsibilities into: Operations, Sales & Marketing, and Administration & Governance. Outlining the business in this fashion will give individuals a clear sense of their responsibilities. Further, it will establish formal chains of authority that will become increasingly important as the business grows. As you add new employees you will want to integrate them within the organizational chart.Make clear the chain of authority and reporting. Outline both the responsibilities of each individual and their authority to represent the interests of the business. As the business grows you will gradually become more and more specific about the roles and responsibilities of individual members.You may also consider developing a plan for cross-training individuals for specific tasks? You don't want your business to hinge or become dependent solely on the presence of a single individual. This chart will also serve as credentials for business when approaching outside investors. These investors will want to see that the business is stable and that there is ample talent to perform all of the functions necessary to carry out the business's functions and grow goals.  

Professional and Advisory Support

When forming your business you will begin to forge relationships with outside parties who can provide advice and services to your business. Depending on your business organization, you may have professional advisors, such as a board of directors or you may have a less formal advisory board. Below are a list and explanation of some of the more common professional and advisory support for a startup business.

• Accountant - An accountant can be extremely valuable in 3 areas: Entity formation, business compliance, and tax strategy. An accountant will be able to help you understand the tax considerations that go into choosing an entity type. They can also help you understand the rules for business compliance state and federal income tax, tax deductions, tax credits, sales & use, transfer, deductions, capital gain loss, employee withholding, estimated tax payments, financial statements, auditing, etc.
• Small Business Attorney - A small business attorney is useful in a number of important areas. Entity selection and formation, contracts, intellectual property, employment law, securities regulation, business compliance & governance, collection efforts, etc.
• Insurance Agent - Depending on the nature of the business, you may require various types of insurance coverage. Common types of insurance includes casualty & damage on property, personal injury protection, professional liability, life insurance, health insurance in employee benefit plans, etc.
• Banker - I cannot express the importance of having a relationship with your bank representative. Many small businesses make the mistake of banking with large financial institutions, rather than choosing smaller, more intimate, local banks. When you are seeking loans to operate your business you will have a much easier time working with a banker who knows you personally and understands your business.
• Mentors - Find someone who you know and respect to serve as your mentor. Preferably, this is someone who has experience with startup ventures. Starting a venture can be nerve-racking. It helps to have someone close who has gone through this process before. This person will provide moral support more than expertise in a particular industry.
• Board of Advisors - A board of advisors is like a semi-formal group of mentors. Rather than providing moral support, these individuals help to guide you through the process of starting, managing and growing your business. You should try to assemble a diverse group with a variety of professional experiences. Preferably, these individuals will be a mix of knowledgeable entrepreneurs and industry experts.
• Board of Directors - If you choose the corporate form to do business, you will have a board of directors. Many closely held corporations don't have outside members on the board of directors; rather, the board consists of the owners and key members. As the business begins to grow, you may have directors who are either equity investors or experts who you compensate with equity ownership. In either case, you should seek investors and experts who can provide the greatest degree of guidance and support to your business.

You will want to detail the names, experience, and qualifications of these individuals within the business plan. The primary purpose is to demonstrate to outside investors that you have adequate support to handle your operations and intended growth path.

Related Topics

• Business Plan, Part 1 (Outline Overview)
• Business Plan, Part 2 (The Executive Summary)
• What is a Mission Statement?
• What is a Values Statement?
• Setting Company Goals
• Business Plan, Part 4 (Market Analysis)
• Business Plan, Part 5 (Competitive Analysis)
• Business Plan, Part 6 (Marketing Plan)
• Business Plan, Part 7 (Operations)
• Business Plan, Part 8  (Management and Organization)
• Business Plan, Part 9 (Financial Projections)
• Business Plan, Part 10 (Appendices)
• Business Plan , (Final Modifications)

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• Investor Pitch - Slide 2: The Business Team
• Industry Lifecycle Analysis - Explained
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Updated: September 29, 2023 |

Organizational plans: a quick primer (with examples)

Jake Ballinger is an experienced SEO and content manager with deep expertise in FP&A and finance topics. He speaks 9 languages and lives in NYC.

Every finance team needs a strong plan.

But organizational plans cover some broad territory. 

Strategic? Tactical? Contingency?

We're going to clear all that up (or give you a refresher) in this blog post.

But for now:

An organizational plan is where financial forecasts and budgets meet project management and goal-setting.

Let's get into the specifics. 

Jake Ballinger

FP&A Writer, Cube Software

What are organizational plans?

What are the benefits of organizational planning, types of organizational planning.

A 5-step organizational planning process

Conclusion: your strategic plan and organizational plans

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Organizational planning is strategizing and preparing for a business's future successes.

One of the big organizational planning goals is to create strategic and tactical plans to guide the entire organization forward.

The plan can cover an organization's operations, marketing, financials, staffing, etc. Its purpose is to ensure departments collaborate to reach company goals.

Organizational planning allows businesses to anticipate market fluctuations and weather economic change without suffering losses.

A clear roadmap of where the company wants to go better helps to focus its efforts on reaching desired outcomes.

If your company wants to grow, you need a game plan. This is the essence of an organizational plan.

Establishing and supporting organizational planning has many benefits beyond simply delivering on your company’s ambitions.

These are some of the ways the organizational planning process creates benefits for forward-thinking companies: 

Clear goals for the organization

Organizational planning helps define and set achievable targets for the organization and its teams.

It articulates the company's overall vision , provides a roadmap for how to get there, and creates measurable goals with time frames for achieving them. This built-in clarity gives teams clear and reasonable steps to align their efforts with the organization's larger objectives. 

Organizational planning also creates feedback loops to ensure that teams are making progress toward achieving their targets on schedule. This makes it easier to identify areas needing improvement or resources.

Organizations can ensure they are efficiently working towards their desired outcomes by setting clear goals.

Visibility into gaps or opportunities

Organizational planning breaks down data siloes and creates action plans, allowing the organization to identify areas of improvement or potential growth.

With this visibility, organizations can create better strategies and more clarity into the actions that lead to success.

Better employee morale and productivity

Well-informed and properly motivated employees have higher satisfaction and better retention rates than those without a clear roadmap to success.

Organizational planning allows every team member to see their role in the successful execution of plans and helps them stay engaged in the organization’s mission.

More resilience and agility

Organizational planning helps companies make quick decisions knowing that their goals will remain achievable through challenges.

Different types of organizational planning, such as financial planning, strategy implementation, and risk management, guide teams facing uncertainty or disruption. 

• Financial planning enables organizations to adjust their budgets according to changes in the market.
• Strategic implementation provides a practical roadmap for success.
• Risk management allows businesses to anticipate and mitigate risks before they become major problems. 

By using these different types of organizational planning, companies can adapt quickly to changing conditions and be better prepared for any eventuality.

Better cost savings and optimization

When you know what to do, you’re less likely to spend time and money trying things that may not work.

An organizational plan gives your teams a roadmap for conducting business, resulting in less waste and better outcomes.

This also translates to better profit margins due to the increased spending efficiency of a well-crafted budget and plans. 

Organizational planning covers several different approaches aimed at different facets of the business.

Some organizational planning examples include strategic planning, driver-based planning, and tactical planning.

Each of the below types of planning plays a different role in helping the company, and its team members do what they set out to accomplish.

Strategic planning

Strategic planning is a type of organizational planning focused on setting goals, developing strategies and tactics, and providing resources to get the job done.

It involves analyzing the organization's current situation or creating a vision for the future while considering factors such as external conditions, competitive landscape, customer needs and expectations, resource availability, and other internal considerations. 

Strategic plans are usually communicated in an organizational strategy document that outlines the key objectives and initiatives required to realize these objectives.

They create the larger framework and metrics for success. Teams then execute tactical plans to fulfill the requirements of the broader strategic approach.

Driver-based planning

Driver-based planning is a process of connecting financial plans to strategic and operational activities. It helps organizations to identify, prioritize and track the most critical actions to drive success. 

Driver-based planning incorporates financial goals and operational performance into the plan, allowing for comparing financial data with projected performance. It uses business drivers—core activities that produce results for the business—to build financial models and connect them to operational activities.

Using driver-based planning, organizations remain agile, adapt their plans based on changing conditions, and stay focused on results.

Tactical planning

If strategic planning provides the broad strokes of achieving your organization’s objectives, tactical add minor details.

Tactical planning involves identifying specific tasks and activities that must be done within a given timeframe to ensure overall strategic success. 

A tactical plan is created using information gathered during the strategic planning process and feedback from stakeholders , staff, and external advisors.

These plans are typically drawn up quarterly or yearly, including everything from budgeting to marketing strategies.

Operational planning

Operational plans are like user manuals for every area of your organization, from HR and hiring to financial planning and risk management. They help govern the day-to-day activities of your different business units.

Operational planning defines your organization’s goals and objectives and outlines the steps and procedures for achieving them.

It involves identifying specific tasks to be performed by each area of your business and setting out roles, responsibilities, timelines, and budgets. It's essential for successful organizational performance as it ensures that all processes are cohesive. 

Operational plans provide the framework for managing day-to-day operations while positioning your organization to meet longer-term goals.

A well-crafted operational plan will help keep your team focused and on track to achieve success. 

Contingency Planning

Life happens when you’re making other plans, which is also true of business life. Contingency planning aims to handle precisely those moments in your company’s journey. 

Contingency planning is a type of organizational planning used to prepare organizations for uncertain and unpredictable events.

It’s an important part of any organization's success, as it provides the flexibility and resilience needed to withstand and recover in an ever-changing business environment. 

Contingency planning focuses on preparing for potential risks and responding quickly when they occur, allowing the organization to make decisions confidently in the face of unexpected market changes.

The goal is to reduce disruption, mitigate losses, and ensure the continuity of operations.

Contingency plans typically include strategies for risk management, business continuity, disaster recovery, and crisis management.

Capacity Planning

Planning for future projects requires a keen view of the resources, people, and tools needed to achieve your goals. This is the goal of capacity planning .

It involves understanding the organization's current and future resources regarding personnel, infrastructure, technology, and other capabilities. 

Capacity planning also considers a range of potential scenarios to determine the optimal resource levels needed to handle them. This helps the organization proactively manage resources and avoid potential risks or disruptions.

By increasing its capacity ahead of time, the organization is better prepared to respond quickly and effectively when faced with unexpected events.

Workforce planning

Workforce development is a part of capacity planning, focusing on personnel and organizational structure.

It involves carefully monitoring and analyzing the organization's current and future employment requirements and skill sets. This helps identify talent, skills, or experience gaps that could be addressed through strategic recruitment or training initiatives.

Workforce planning also allows organizations to anticipate potential labor shortages or surpluses and adjust hiring plans to ensure optimal workforce utilization. 

A 5-steps organizational planning process

Every organizational plan addresses different needs but follows a repeatable pattern for success. Plan your next organizational strategy using the following steps:

1. Define your goals

Outlining your goals is essential to ensure you understand the challenge and have the resources and capabilities to solve it.

Allocate time for your team to discuss the most critical objectives and prioritize them accordingly.

Once your organization's main objectives are determined, you can start breaking down the tasks needed to achieve them into smaller, more manageable steps. 

2. Analyze your current process

Understanding your current organizational practices helps you decide on actions for future improvement.

Depending on the size of your organization and the complexity of its processes, conducting a thorough examination may require additional research and data analysis.

3. Seek stakeholder input

Soliciting input creates different perspectives on your processes and plan.

Through stakeholder contributions, you include valuable perspectives and identify resources.

It also better prepares teams to support the organization and its goals.

4. Develop a plan

Decide the specific, measurable actions departments will take to reach established goals. This includes: 

• Establishing deadlines
• Determining roles for key personnel
• Assigning tasks and activities 
• Setting project management milestones 
• Selecting and tracking key performance indicators (KPIs)

5. Measure results

Measuring and tracking KPIs lets you assess your progress and course correct where needed. KPIs provide a means of gauging the success or failure of specific actions. They can be used to inform and direct future strategies.

Organizations can make more informed decisions and stay ahead of challenges by establishing measurable goals and monitoring performance. Conclusion

Now you know all about organizational plans.

How to make them, how they're categorized, and why you should have them.

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• What is strategic planning? A 5-step gu ...

What is strategic planning? A 5-step guide

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. In this article, we'll guide you through the strategic planning process, including why it's important, the benefits and best practices, and five steps to get you from beginning to end.

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. The strategic planning process informs your organization’s decisions, growth, and goals.

Strategic planning helps you clearly define your company’s long-term objectives—and maps how your short-term goals and work will help you achieve them. This, in turn, gives you a clear sense of where your organization is going and allows you to ensure your teams are working on projects that make the most impact. Think of it this way—if your goals and objectives are your destination on a map, your strategic plan is your navigation system.

In this article, we walk you through the 5-step strategic planning process and show you how to get started developing your own strategic plan.

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What is strategic planning?

Strategic planning is a business process that helps you define and share the direction your company will take in the next three to five years. During the strategic planning process, stakeholders review and define the organization’s mission and goals, conduct competitive assessments, and identify company goals and objectives. The product of the planning cycle is a strategic plan, which is shared throughout the company.

What is a strategic plan?

A strategic plan is the end result of the strategic planning process. At its most basic, it’s a tool used to define your organization’s goals and what actions you’ll take to achieve them.

Typically, your strategic plan should include: 

Your company’s mission statement

Your organizational goals, including your long-term goals and short-term, yearly objectives

Any plan of action, tactics, or approaches you plan to take to meet those goals

What are the benefits of strategic planning?

Strategic planning can help with goal setting and decision-making by allowing you to map out how your company will move toward your organization’s vision and mission statements in the next three to five years. Let’s circle back to our map metaphor. If you think of your company trajectory as a line on a map, a strategic plan can help you better quantify how you’ll get from point A (where you are now) to point B (where you want to be in a few years).

When you create and share a clear strategic plan with your team, you can:

Build a strong organizational culture by clearly defining and aligning on your organization’s mission, vision, and goals.

Align everyone around a shared purpose and ensure all departments and teams are working toward a common objective.

Proactively set objectives to help you get where you want to go and achieve desired outcomes.

Promote a long-term vision for your company rather than focusing primarily on short-term gains.

Ensure resources are allocated around the most high-impact priorities.

Define long-term goals and set shorter-term goals to support them.

Assess your current situation and identify any opportunities—or threats—allowing your organization to mitigate potential risks.

Create a proactive business culture that enables your organization to respond more swiftly to emerging market changes and opportunities.

What are the 5 steps in strategic planning?

The strategic planning process involves a structured methodology that guides the organization from vision to implementation. The strategic planning process starts with assembling a small, dedicated team of key strategic planners—typically five to 10 members—who will form the strategic planning, or management, committee. This team is responsible for gathering crucial information, guiding the development of the plan, and overseeing strategy execution.

Once you’ve established your management committee, you can get to work on the planning process. 

Step 1: Assess your current business strategy and business environment

Before you can define where you’re going, you first need to define where you are. Understanding the external environment, including market trends and competitive landscape, is crucial in the initial assessment phase of strategic planning.

To do this, your management committee should collect a variety of information from additional stakeholders, like employees and customers. In particular, plan to gather:

Relevant industry and market data to inform any market opportunities, as well as any potential upcoming threats in the near future.

Customer insights to understand what your customers want from your company—like product improvements or additional services.

Employee feedback that needs to be addressed—whether about the product, business practices, or the day-to-day company culture.

Consider different types of strategic planning tools and analytical techniques to gather this information, such as:

A balanced scorecard to help you evaluate four major elements of a business: learning and growth, business processes, customer satisfaction, and financial performance.

A SWOT analysis to help you assess both current and future potential for the business (you’ll return to this analysis periodically during the strategic planning process). 

To fill out each letter in the SWOT acronym, your management committee will answer a series of questions:

What does your organization currently do well?

What separates you from your competitors?

What are your most valuable internal resources?

What tangible assets do you have?

What is your biggest strength? 

Weaknesses:

What does your organization do poorly?

What do you currently lack (whether that’s a product, resource, or process)?

What do your competitors do better than you?

What, if any, limitations are holding your organization back?

What processes or products need improvement? 

Opportunities:

What opportunities does your organization have?

How can you leverage your unique company strengths?

Are there any trends that you can take advantage of?

How can you capitalize on marketing or press opportunities?

Is there an emerging need for your product or service? 

What emerging competitors should you keep an eye on?

Are there any weaknesses that expose your organization to risk?

Have you or could you experience negative press that could reduce market share?

Is there a chance of changing customer attitudes towards your company? 

Step 2: Identify your company’s goals and objectives

To begin strategy development, take into account your current position, which is where you are now. Then, draw inspiration from your vision, mission, and current position to identify and define your goals—these are your final destination. 

To develop your strategy, you’re essentially pulling out your compass and asking, “Where are we going next?” “What’s the ideal future state of this company?” This can help you figure out which path you need to take to get there.

During this phase of the planning process, take inspiration from important company documents, such as:

Your mission statement, to understand how you can continue moving towards your organization’s core purpose.

Your vision statement, to clarify how your strategic plan fits into your long-term vision.

Your company values, to guide you towards what matters most towards your company.

Your competitive advantages, to understand what unique benefit you offer to the market.

Your long-term goals, to track where you want to be in five or 10 years.

Your financial forecast and projection, to understand where you expect your financials to be in the next three years, what your expected cash flow is, and what new opportunities you will likely be able to invest in.

Step 3: Develop your strategic plan and determine performance metrics

Now that you understand where you are and where you want to go, it’s time to put pen to paper. Take your current business position and strategy into account, as well as your organization’s goals and objectives, and build out a strategic plan for the next three to five years. Keep in mind that even though you’re creating a long-term plan, parts of your plan should be created or revisited as the quarters and years go on.

As you build your strategic plan, you should define:

Company priorities for the next three to five years, based on your SWOT analysis and strategy.

Yearly objectives for the first year. You don’t need to define your objectives for every year of the strategic plan. As the years go on, create new yearly objectives that connect back to your overall strategic goals . 

Related key results and KPIs. Some of these should be set by the management committee, and some should be set by specific teams that are closer to the work. Make sure your key results and KPIs are measurable and actionable. These KPIs will help you track progress and ensure you’re moving in the right direction.

Budget for the next year or few years. This should be based on your financial forecast as well as your direction. Do you need to spend aggressively to develop your product? Build your team? Make a dent with marketing? Clarify your most important initiatives and how you’ll budget for those.

A high-level project roadmap . A project roadmap is a tool in project management that helps you visualize the timeline of a complex initiative, but you can also create a very high-level project roadmap for your strategic plan. Outline what you expect to be working on in certain quarters or years to make the plan more actionable and understandable.

Step 4: Implement and share your plan

Now it’s time to put your plan into action. Strategy implementation involves clear communication across your entire organization to make sure everyone knows their responsibilities and how to measure the plan’s success. 

Make sure your team (especially senior leadership) has access to the strategic plan, so they can understand how their work contributes to company priorities and the overall strategy map. We recommend sharing your plan in the same tool you use to manage and track work, so you can more easily connect high-level objectives to daily work. If you don’t already, consider using a work management platform .  

A few tips to make sure your plan will be executed without a hitch: 

Communicate clearly to your entire organization throughout the implementation process, to ensure all team members understand the strategic plan and how to implement it effectively. 

Define what “success” looks like by mapping your strategic plan to key performance indicators.

Ensure that the actions outlined in the strategic plan are integrated into the daily operations of the organization, so that every team member's daily activities are aligned with the broader strategic objectives.

Utilize tools and software—like a work management platform—that can aid in implementing and tracking the progress of your plan.

Regularly monitor and share the progress of the strategic plan with the entire organization, to keep everyone informed and reinforce the importance of the plan.

Establish regular check-ins to monitor the progress of your strategic plan and make adjustments as needed. 

Step 5: Revise and restructure as needed

Once you’ve created and implemented your new strategic framework, the final step of the planning process is to monitor and manage your plan.

Remember, your strategic plan isn’t set in stone. You’ll need to revisit and update the plan if your company changes directions or makes new investments. As new market opportunities and threats come up, you’ll likely want to tweak your strategic plan. Make sure to review your plan regularly—meaning quarterly and annually—to ensure it’s still aligned with your organization’s vision and goals.

Keep in mind that your plan won’t last forever, even if you do update it frequently. A successful strategic plan evolves with your company’s long-term goals. When you’ve achieved most of your strategic goals, or if your strategy has evolved significantly since you first made your plan, it might be time to create a new one.

Build a smarter strategic plan with a work management platform

To turn your company strategy into a plan—and ultimately, impact—make sure you’re proactively connecting company objectives to daily work. When you can clarify this connection, you’re giving your team members the context they need to get their best work done. 

A work management platform plays a pivotal role in this process. It acts as a central hub for your strategic plan, ensuring that every task and project is directly tied to your broader company goals. This alignment is crucial for visibility and coordination, allowing team members to see how their individual efforts contribute to the company’s success. 

By leveraging such a platform, you not only streamline workflow and enhance team productivity but also align every action with your strategic objectives—allowing teams to drive greater impact and helping your company move toward goals more effectively. 

Strategic planning FAQs

Still have questions about strategic planning? We have answers.

Why do I need a strategic plan?

A strategic plan is one of many tools you can use to plan and hit your goals. It helps map out strategic objectives and growth metrics that will help your company be successful.

When should I create a strategic plan?

You should aim to create a strategic plan every three to five years, depending on your organization’s growth speed.

Since the point of a strategic plan is to map out your long-term goals and how you’ll get there, you should create a strategic plan when you’ve met most or all of them. You should also create a strategic plan any time you’re going to make a large pivot in your organization’s mission or enter new markets. 

What is a strategic planning template?

A strategic planning template is a tool organizations can use to map out their strategic plan and track progress. Typically, a strategic planning template houses all the components needed to build out a strategic plan, including your company’s vision and mission statements, information from any competitive analyses or SWOT assessments, and relevant KPIs.

What’s the difference between a strategic plan vs. business plan?

A business plan can help you document your strategy as you’re getting started so every team member is on the same page about your core business priorities and goals. This tool can help you document and share your strategy with key investors or stakeholders as you get your business up and running.

You should create a business plan when you’re: 

Just starting your business

Significantly restructuring your business

If your business is already established, you should create a strategic plan instead of a business plan. Even if you’re working at a relatively young company, your strategic plan can build on your business plan to help you move in the right direction. During the strategic planning process, you’ll draw from a lot of the fundamental business elements you built early on to establish your strategy for the next three to five years.

What’s the difference between a strategic plan vs. mission and vision statements?

Your strategic plan, mission statement, and vision statements are all closely connected. In fact, during the strategic planning process, you will take inspiration from your mission and vision statements in order to build out your strategic plan.

Simply put: 

A mission statement summarizes your company’s purpose.

A vision statement broadly explains how you’ll reach your company’s purpose.

A strategic plan pulls in inspiration from your mission and vision statements and outlines what actions you’re going to take to move in the right direction. 

For example, if your company produces pet safety equipment, here’s how your mission statement, vision statement, and strategic plan might shake out:

Mission statement: “To ensure the safety of the world’s animals.” 

Vision statement: “To create pet safety and tracking products that are effortless to use.” 

Your strategic plan would outline the steps you’re going to take in the next few years to bring your company closer to your mission and vision. For example, you develop a new pet tracking smart collar or improve the microchipping experience for pet owners. 

What’s the difference between a strategic plan vs. company objectives?

Company objectives are broad goals. You should set these on a yearly or quarterly basis (if your organization moves quickly). These objectives give your team a clear sense of what you intend to accomplish for a set period of time. 

Your strategic plan is more forward-thinking than your company goals, and it should cover more than one year of work. Think of it this way: your company objectives will move the needle towards your overall strategy—but your strategic plan should be bigger than company objectives because it spans multiple years.

What’s the difference between a strategic plan vs. a business case?

A business case is a document to help you pitch a significant investment or initiative for your company. When you create a business case, you’re outlining why this investment is a good idea, and how this large-scale project will positively impact the business. 

You might end up building business cases for things on your strategic plan’s roadmap—but your strategic plan should be bigger than that. This tool should encompass multiple years of your roadmap, across your entire company—not just one initiative.

What’s the difference between a strategic plan vs. a project plan?

A strategic plan is a company-wide, multi-year plan of what you want to accomplish in the next three to five years and how you plan to accomplish that. A project plan, on the other hand, outlines how you’re going to accomplish a specific project. This project could be one of many initiatives that contribute to a specific company objective which, in turn, is one of many objectives that contribute to your strategic plan. 

What’s the difference between strategic management vs. strategic planning?

A strategic plan is a tool to define where your organization wants to go and what actions you need to take to achieve those goals. Strategic planning is the process of creating a plan in order to hit your strategic objectives.

Strategic management includes the strategic planning process, but also goes beyond it. In addition to planning how you will achieve your big-picture goals, strategic management also helps you organize your resources and figure out the best action plans for success. 

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What Is Organizational Strategy in Business? (Examples Included)

The most successful companies always have one eye on the future so they can not only survive but thrive. That doesn’t happen without an organizational strategy to plan for the organization’s long-term success.

Organizational strategy has many layers. We’ll first define the term and then go into the organizational strategy levels, as well as explain its importance in business. Then we’ll detail the key components that make up a thorough organizational strategy and throw in some free templates to get you started.

What Is Organizational Strategy?

Organizational strategy is the long-term organizational planning a company does to operate and achieve its strategic goals in the future. It involves how the company will allocate its resources to support business activities that lead to achieving those long-term goals.

Another reason to have an organizational strategy is that it provides a roadmap that can be shared across the company and illustrates how those long-term goals will be met. It’s not only communicative but helps management develop strategic plans so the company can accomplish its goals.

ProjectManager is award-winning project and portfolio management software that has powerful roadmaps that help managers track their initiatives, allocate resources and ensure that they’re on track to meet their long-term plans. Our roadmap is a Gantt chart that visually represents all of your strategic goals and related projects, including the steps necessary to accomplish them.

Use our roadmap to tie your strategy to the work that must be completed to achieve your goals. You can group and organize your various projects, manage resources and generate reports to get valuable insights on your progress and performance. Get started with ProjectManager today for free.

Organizational Strategy Levels

Organizational strategy goes deep and a company can lay the groundwork for their strategy in many different areas. This is called organizational strategy levels. It’s something that must be thought through at the beginning of strategy creation or when a company is making a strategic plan . To do this successfully means understanding the three levels of strategy to align company goals from top to bottom. Let’s explore those three levels below.

Related: Free Strategic Planning Templates for Excel and Word

1. Corporate Level Strategy

The corporate-level strategy is the highest, which means it’s also the broadest. Leadership creates this multi-tiered company plan to define, outline and achieve specific goals. Smaller companies can use corporate-level strategies to increase profits, while larger companies with multiple divisions and businesses will have more complex corporate-level strategies, such as entering new markets.

Examples of Corporate-Level Strategies

Organizational strategy is all about finding the best way to allocate resources to meet long-term goals. Here are some examples of how that’s done on the corporate level.

• Diversification: When you want to expand your business, this strategy encourages growth by adding new products or services.
• Retrenchment: This is when you consider changing your business model and is used when taking protective measures to keep the solvency of your business.
• Profit: Here a company will outline plans to increase revenue while keeping costs down.
• Stability: When the company is doing well, it seeks incremental growth by working with clients in its industry.

2. Business Level Strategy

A business-level strategy is made up of the strategic planning and implementation activities that will direct the company’s business units. This is usually used to gain a competitive advantage and create customer value in the market where the business unit operates.

Examples of Business-Level Strategies

This level of organizational strategy creates roadmaps to guide resource allocation and aligns different departments with the goal of sustainable growth, profitability and long-term success.

• Cost Leadership: This involves offering products or services at a lower cost than competitors by improving facilities, investing in tools, reducing overhead, etc.
• Differentiation: Here the company focuses on developing and marketing products that provide greater value rather than cheaper costs for the customer.
• Focused Cost Leadership: This targets a niche market and narrows the focus, allowing the company to better understand customer needs.
• Focused Differentiation: Here companies want to stand out from the competition while focusing on a smaller subset of their customer base to better anticipate customer needs.

3. Functional Level Strategy

A functional-level strategy means that the actions and goals assigned to various company departments support both business and corporate-level strategies. These strategies specify the outcomes that the company’s business departments achieve through daily operations . Therefore, functional-level strategy means that the corporate-level strategy needs participation across departments. Each department manager is responsible for leading their teams on these initiatives.

Examples of Functional-Level Strategies

• Human Resources: This department seeks out and hires highly-trained employees to solidify the workforce.
• Marketing: Works toward improving brand identification through both paid and unpaid efforts.
• Finance: Various initiatives include reducing operational expenses or implementing a new budgeting system.
• Product: Helps to develop the product or service, working to create efficiencies.

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Strategic Roadmap Template

Use this free Strategic Roadmap Template for Excel to manage your projects better.

Importance of Your Business’ Organizational Strategy

Organizational strategy has many benefits. Without having a strategy to direct your company and its strategic initiatives , the chance of reaching whatever goals you’ve set for yourself is unlikely. Rather than bet on luck to achieve your long-term goals, an organizational strategy will have a far greater impact. Here are some reasons why.

Shapes the Structure of the Organization

Organizational strategy aligns companies to a singular goal by defining what departments and roles are needed in planning the organizational strategy of a business. This creates transparency in a company’s operations that assists with better resource allocation and decision-making.

Aligns the Efforts of All Areas of the Organization

Organizational strategy also aligns everyone in the company to the common strategic goal of the company. This not only puts everyone on the same page as to understanding what their target is, but all work processes will also align to make the individual work, department and entire company more efficient. You can use a strategic roadmap to map the activities that each department will execute to better understand how different initiatives across your company work together.

Defines How Your Business Will Operate

The functional aspect of organizational strategy refers to how each part of the business will operate. It also speaks to how the company will contribute to implementing the business-level strategies and accomplishing the long-term, strategic goals of the business.

Key Components of the Organizational Strategy of a Business

When you’re developing an organizational strategy, first you have to have an idea of where you want to see the company in the long term. This will lead to the actions that the company must take to get there. That’s just two components of how a business deals with its organizational strategy. Below are all the key components of an organizational strategy for a business.

• Mission & Vision: The mission of the company and its vision for the future of the company should be brief written statements focusing on customers, employees and investors and its aspirations for the future.
• Organizational Structure: Create a system that outlines how business activities are directed to achieve the long-term goals of the company, such as rules, roles and responsibilities.
• Organizational Change: These are the actions a company takes to alter a major component of its organization. This could be anything from its culture, underlying technology or infrastructure to its internal processes.
• Organizational Culture: This refers to how an organization conducts itself as a whole in a different way from how others do. For example, how meetings are run, how new hires are trained, communication, benefits, etc.
• Strategic Plan: Here’s where the sequence of steps are outlined that will lead to achieving the company’s vision or long-term goals and objectives.
• Tactical Plan: Breaks the strategic plan into smaller objectives and goals and how they will be achieved through actions.
• Operational Plan: This will break down the day-to-day activities of the company. It will be at the project, business unit, functional or departmental level. These plans are highly detailed and action-based.

This free strategic roadmap template helps you visualize the projects and initiatives that each business department in your organization will execute to contribute to the accomplishment of strategic goals.

Related Organizational Strategy Templates

There are many steps to creating and implementing an organizational strategy. The following free strategic planning templates can help you figure out what’s the best approach and then create a plan to help you achieve your long-term goals.

Organizational Chart Template

An organizational chart can help you define the roles and responsibilities of your organization, which is part of the larger organizational strategy. Our free organizational chart for Excel is a visual flowchart illustrating the internal structure of your company.

Strategic Plan Template

Use our free strategic plan template for Word to define your vision, mission and business goals. It will help you develop a marketing plan, if necessary, and an operational plan. There’s also space to define your team and financial projections.

SWOT Analysis Template

SWOT stands for strengths, weaknesses, opportunities and threats. Our free SWOT analysis template for Excel helps you evaluate each of these four things as they relate to your business. This will inform your organizational strategy.

How ProjectManager Helps Track Your Organizational Strategy

While these free templates are a great starting point for your organizational strategy, they’re only going to take you so far. They’re not going to be helpful when implementing the strategic plan. That’s because these are static documents that must be manually updated and aren’t useful for collaboration across the organization. Project management software connects your teams and makes executing your plan more efficient. ProjectManager is award-winning project and portfolio management software that has the portfolio features you need to plan, manage and track multiple projects.

Track Resource Usage Throughout Your Organization

Our roadmap tool allows you to plan and allocate resource s across multiple projects and different departments in your company. When you onboard your teams, set their availability, including PTO, vacation time and global holidays for those teams that are working remotely. This makes assignments easier. Then check the color-coded workload chart to make sure no one is overallocated. If they are, you can balance their workload right from the chart to keep them working at capacity and productive.

Monitor Resources, Schedule and Budget in Real Time

Once you’ve made a plan, you’ll need to keep an eye on its progress and performance to ensure that it’s meeting your schedules and staying within your allocated resources. Get a high-level overview of all your projects in one place with our real-time portfolio dashboard. It collects live data automatically and displays it on easy-to-read graphs and charts. Now you can stay updated on time, costs, workload and more. Best of all, there’s no time-consuming and complicated setup as you’ll find with inferior alternatives. Whether using a project or portfolio dashboard, it’s ready when you are.

When you need more detailed information, use our customizable reporting features. You can get portfolio and status reports, as well as reports on variance, timesheets, workload and more. You can filter the reports as needed to show only the data you want to see. From there, share them with stakeholders in a variety of formats to keep them updated.

ProjectManager is online project and portfolio management software that connects teams whether they’re in the office, out in the field or anywhere in between. They can share files, comment at the task level and stay updated with email and in-app notifications. Join teams at Avis, Nestle and Siemens who use our software to deliver successful projects. Get started with ProjectManager today for free.

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Six Steps to Creating a “Must-Have” Organizational Plan

Do you have an organizational plan? Everything starts with planning. Whether you want to start a business, grow the business, or simply perform the necessary tasks to keep the business profitable. Without proper planning, all you have is an unfruitful idea.

All business plans require Organizational Planning. It is an integral part of defining your business module and your objectives. For business owners It is extremely important to have an organizational plan in place in order to navigate the daily progress efficiently. It should delineate not only your organizational structure of departments, managers, and staff but also the functions, tasks, and processes they regularly execute.

Your organizational plan should flow from your strategic plan. The strategic plan defines your long-term goals for the business, which can only be accomplished by achieving your organizational plan’s benchmarks.

These concepts may seem highly cumbersome, but let’s take a look at why you need Organizational Planning and how best to manipulate it for your business’s success.

What Is Organizational Planning?

Organizational planning is a process of defining goals for an organization, developing strategies for achieving those goals, and identifying the resources needed to carry out those strategies. It allows organizations to have direction in pursuing their mission and vision. It also assists in identifying risks, setting priorities, and using available resources effectively.

At the same time, organizational planning is an important part of the strategic management process. In this way, it helps organizations make decisions and allocate resources to ensure that they meet their goals. The organizational plan typically includes goals, objectives, strategies, action plans, budgets, and performance measures. It should also include a timeline for completing tasks and a system for monitoring and evaluating progress.

How Effective Organizational Planning?

Organizational planning can become more effective when it is done collaboratively with stakeholders from all levels of the organization. Ensuring that everyone understands the organization’s goals and strategies is important for achieving success. Additionally, different perspectives and insights can be shared to promote a productive dialogue about how everyone can contribute to achieving the desired results.

When done effectively, organizational planning can help organizations become more efficient and effective in achieving their goals. It is a necessary tool for any organization seeking to thrive and grow in the long term.

Types Of Organizational Plans

Organizational plans come in a variety of forms. The most common types are as follows:

•   Strategic Plan: A strategic plan is an overall long-term plan for the organization, usually covering multiple years. It sets forth the organization’s mission, goals, and objectives and outlines how those goals will be achieved. It is typically developed at the top level of management, with input from all departments.
•   Operational Plan: An operational plan focuses on day-to-day operations and activities necessary to achieve the strategic goals of the organization. It provides details about how resources will be allocated to support specific tasks and initiatives, as well as timelines for completion and performance metrics to measure progress.
•   Tactical Plan: A tactical plan is a highly specific and short-term guide to activities that need to be completed to reach an organization’s goals. Usually, department or team leaders create it and lay out how their resources will support the more general strategy.
•   Budget Plan: A budget plan is a financial document that details how the money will be spent in order to achieve the goals of the organization. It includes both short-term (e.g., monthly or quarterly) and long-term expectations, such as capital investments.

Organizational plans can also include plans for marketing, human resources, risk management, and other areas. An organization’s success depends on its ability to create and adhere to a regularly updated plan. This helps the company stay on track while also being able to anticipate and overcome any issues.

Importance of an Organizational Plan

A comprehensive organizational plan is crucial for the success of any small business . This plan lists all duties, functions, and objectives for a department or area and assigns a responsible person to each task. Additionally, formalizing power structures with designated supervisors creates accountability and clarifies relationships between employees.

Besides, a well-crafted plan is the best way to clearly and concisely communicate what needs to be done by each individual and how it will benefit the company.

Here Are A Few Things You Can Accomplish With A Well-Defined Organizational Plan  

Clarifies the role and function of each staff member.

A clear Organizational Plan helps ensure that every team member understands their precise roles and responsibilities. Having crystal clear roles ensures clarity and understanding about specific tasks. This helps you work more efficiently to finish projects or achieve goals sooner and more effectively.

Shows How The Staff Is Contributing To The Goals Of Your Business

By tracking your employees’ progress, you can better understand how they fit into and contribute to your organization as a whole. This is especially helpful during annual performance reviews or if you ever need to let someone go.

Displays Managerial And Team Relationships

An organizational plan is beneficial for figuring out the relationship between management and teams. Each manager can see how every team member contributes to the business, which then helps with knowing who needs more training or support. Additionally, this method is good for revealing employees that can take on a bigger workload.

Can Reveal Gaps, Issues, And Liabilities

The incredible opportunity to track the progress of each task, team, project, and target actually provides insight into any shortcomings as well. Organizational planning helps identify any inadequacies or limitations that may be hindering the growth of your business.

Clarifies The When’s, How’s, And Who’s In Your Processes.

Each member of your business has a strength, unlike others, and can handle specific types of tasks. With proper organizational planning, you can delegate the appropriate tasks at the right time to the most efficient member of the team for elevated output.

It Makes It Quick Work To Know Whom To Turn To When There Is A Problem.

Organizational planning invariably provides a detailed account of everyone’s strengths and weaknesses. Therefore, when you are faced with a difficult situation, you know exactly which member of your team can effectively solve the problem.

Everyone working with you needs to be aware of this information. Define the roles and expectations of your employees, whether entry-level or in management, by posting these responsibilities in a place where everyone will see them, like a bulletin board or internal website. Each team member will be on the same page with the company vision.

Six Steps to Create Your Organizational Plan

If you already have an organizational plan, then it is good to verify and update all the necessary information. However, if you don’t already have an organizational strategy, it is not too late to start one now.

Following are the steps for creating your own organizational plan .

• Pick Your Team – Choose an efficient team based on their skills, strengths, and determination for success.
• Draw a Chart Showing Your Organizational Structure – Share your company’s progress and the targets you have set for short-term and long-term goals.
• Drive Out Goals & Objectives – Define the company’s goals and objectives in detail to help them understand the vitality of their roles.
• List All Tasks and Functions – Predefine team member roles and focus on their tasks and functions so they know what is expected of them.
• Review Current Business Processes – Go over the business’s current situation so everyone is aware of the current state and how they can contribute to the company’s growth.
• Compile Findings into Organizational Plan – Invite their input and design an effective organizational plan.

Let us take a detailed look at these steps to create an Organizational Plan.

#1: Drive Out Goals & Objectives

All organizational plans need to include what the business wants to accomplish and how to get there. Clearly, state what you want your business to become – which drives out your goal/destination and the objectives/measurements for reaching it.

Common goals include:

• internal stability > reducing staff turnover, promoting consistency
• creativity > inspiring innovation, ingenuity, and improvements
• uniformity > consistent delivery of goods and services; branding
• security > protecting data of customers, vendors, and the business
• quality control > focusing on excellence
• accountability > identifying who’s responsible
• integrity > transparency, honesty, fairness
• rapid delivery of goods > improving turnaround
• excellent customer service > exceeding expectations
• efficiency > refinements that lead to optimum operations

#2: Pick Your Team

While you may prefer to do everything yourself, it is imperative to engage with others when creating a plan for their knowledge, ideas, and perspectives. Every member of your team has strengths, unlike others. Some may be talented with development, while others have an innate sense of design.

You must ensure that each member has a vision for the company and their personal progress that aligns with your drive.

Look at your team and select your key players – that is, those staff members:

• who understand the current systems, processes, values, and goals
• who can offer worthwhile suggestions for improvements
• who can visualize and evaluate the effects that changes may have within the business (as changes typically occur during this process)

This team can lend a helping hand in the future as you work to implement plans for business growth and development.

Note that while most small business owners develop the organizational plan on their own, there may be time, staffing, or deadline constraints that make hiring an outside consultant a better choice.

#3: Review Current Business Processes

Write out each of your processes in detail. Look at what it does and how it does it . Then, list all the functions and tasks it performs as well as who does what.

An often surprising result of this step is you will most likely realize there are differences in how the processes actually work versus how you thought they worked.

This step can be extremely time-consuming and, therefore, is why many small businesses hire a business consultant or business coach . It helps them realize a clear vision of what to expect instead of nurturing a delusion.

Thus a business consultant can actually help you formulate a more substantial and realistic organizational plan and make the necessary changes to accomplish your targets.

#4: List Tasks and Functions

Capture all the tasks and functions that your business is and should be performing. Include those things in your vision that you want the organization to do.

This process should drive out the gaps. You’ll see what is missing: perhaps where your company is lacking key pieces such as documentation, training, or analysis. It can also reveal issues and vulnerabilities (ex. insufficient safety practices or improper workarounds).

Once you have identified the factors hindering the company’s growth, you can look for viable solutions to address them. You can discuss these problems with your team and get their input.

#5: Draw Out Your Organizational Structure

Now would be a good time to draft an organizational structure chart. Map the current progress, your vision, the targets, all the shortcomings, and the viable solutions. Visual aids can help you, and your team determines exactly what needs to be done.

Include all the departments, roles, staff, and reporting structure. Define each section with clarity so each team, and the members consisting of them, are well aware of their responsibilities and their roles.

Simplicity and precision are the keys to defining an effective organizational plan. So you must pay attention to the details without complicating the plan.

#6: Compile Findings into Organizational Plan

The last step is to gather the collected information into one document. To do this, you create designated folders of the collected documents or use some best free personal document organizer .

Everything you have discussed and planned with your selective team should be compiled for posterity. This helps you track the progress of your organizational plan and make necessary updates or changes along the way.

Remember that your organizational plan is a part of your strategic plan for the company. It will be affected by external factors and subjected to change as per current business standards. Therefore you must prepare for such contingencies and leave room for errors or fallbacks.

Share the organizational plan with your entire staff. This might be an excellent opportunity to call a “town hall” or all-staff meeting.

Organizational Planning Examples

Organizational planning is a process in which organizations set out the goals, objectives and strategies that they need to achieve their business objectives. This includes identifying key operational areas, setting performance metrics and developing plans to ensure success.

Some Common Examples Of Organizational Planning Include:

•   Setting financial targets: Organizations will identify what their revenue and expenses should be and set a budget to stay on track.
•   Developing workforce plans: Organizations need to identify the roles they require in order to meet their objectives and then develop training programs or recruitment strategies to fill those roles.
•   Establishing operational procedures: Companies need to establish processes for how tasks will get done so that it will ensure that performance remains consistent and efficient.
•   Establishing organizational structures : Similarly, organizations need to determine the structure of their teams and divisions, including who is responsible for each area.
•  Crafting marketing strategies: Companies need to create a plan for how they will reach customers and promote their products or services.
•   Planning for growth and expansion: Lastly, Organizations need to have an idea of where they would like to be in the future, and develop plans for reaching those goals.

Once the organizational plan is in place, it’s important to review it periodically to ensure that strategies are updated as necessary. Companies need to assess progress against goals, identify areas of improvement and adjust plans accordingly.

The grave importance of an effective organizational plan cannot and should not be ignored.

If you are a new business owner, you can consult professional business consultants to devise a beneficial operational plan for your company. Even if you are a freelancer or a small business owner, an organizational plan goes a long way to help you establish your trade as a force to be reckoned with.

If you have an established business, but you know that there is room to grow and expand, you can start making an organizational plan now. You can use the steps that we have defined and seek professional help from business consultants to expand your company and increase your profits in multifold.

It is never too late to make an efficient and effective organizational plan to elevate and expand your business for betterment.

We hope you find this blog helpful in designing an organizational plan for your business.

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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, how often should a business plan be updated, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and well-established companies. For startups, a business plan can be essential for winning over potential lenders and investors. Established businesses can find one useful for staying on track and not losing sight of their goals. This article explains what an effective business plan needs to include and how to write one.

Key Takeaways

• A business plan is a document describing a company's business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives.
• There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include.

Investopedia / Ryan Oakley

Any new business should have a business plan in place prior to beginning operations. In fact, banks and venture capital firms often want to see a business plan before they'll consider making a loan or providing capital to new businesses.

Even if a business isn't looking to raise additional money, a business plan can help it focus on its goals. A 2017 Harvard Business Review article reported that, "Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs."

Ideally, a business plan should be reviewed and updated periodically to reflect any goals that have been achieved or that may have changed. An established business that has decided to move in a new direction might create an entirely new business plan for itself.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. These include being able to think through ideas before investing too much money in them and highlighting any potential obstacles to success. A company might also share its business plan with trusted outsiders to get their objective feedback. In addition, a business plan can help keep a company's executive team on the same page about strategic action items and priorities.

Business plans, even among competitors in the same industry, are rarely identical. However, they often have some of the same basic elements, as we describe below.

While it's a good idea to provide as much detail as necessary, it's also important that a business plan be concise enough to hold a reader's attention to the end.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

• Executive summary: This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services: Here, the company should describe the products and services it offers or plans to introduce. That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that could go into this section include production and manufacturing processes, any relevant patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
• Market analysis: A company needs to have a good handle on the current state of its industry and the existing competition. This section should explain where the company fits in, what types of customers it plans to target, and how easy or difficult it may be to take market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep customers, including any anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will use to get its products or services to consumers.
• Financial plans and projections: Established businesses can include financial statements, balance sheets, and other relevant financial information. New businesses can provide financial targets and estimates for the first few years. Your plan might also include any funding requests you're making.

The best business plans aren't generic ones created from easily accessed templates. A company should aim to entice readers with a plan that demonstrates its uniqueness and potential for success.

2 Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean startup. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These plans tend to be much longer than lean startup plans and contain considerably more detail. As a result they require more work on the part of the business, but they can also be more persuasive (and reassuring) to potential investors.
• Lean startup business plans : These use an abbreviated structure that highlights key elements. These business plans are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of plan, it should be prepared to provide more detail if an investor or a lender requests it.

Why Do Business Plans Fail?

A business plan is not a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections to begin with. Markets and the overall economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All of this calls for building some flexibility into your plan, so you can pivot to a new course if needed.

How frequently a business plan needs to be revised will depend on the nature of the business. A well-established business might want to review its plan once a year and make changes if necessary. A new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers to give a quick explanation of its business. For example, a brand-new company may feel that it doesn't have a lot of information to provide yet.

Sections can include: a value proposition ; the company's major activities and advantages; resources such as staff, intellectual property, and capital; a list of partnerships; customer segments; and revenue sources.

A business plan can be useful to companies of all kinds. But as a company grows and the world around it changes, so too should its business plan. So don't think of your business plan as carved in granite but as a living document designed to evolve with your business.

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

U.S. Small Business Administration. " Write Your Business Plan ."

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How to Write a Professional Business Plan in 10 Easy Steps

Home » Blog » How to Write a Business Plan in 10 Easy Steps

During financial uncertainty, many of us press pause on our entrepreneurial aspirations.

Wondering if now’s the right time to start our business . Doubting our ideas and worrying about the what-ifs and maybes! 

A business plan removes the uncertainty and what-ifs from the equation. It validates our business ideas, confirms our marketing strategies, and identifies potential problems before they arise.  

Replacing our doubts with positivity, ensuring we see the complete picture, and increasing our chances of success.

Because you could be starting and running your own business . But you’ll only know for sure it’s the right move for you when you write your business plan.

Here’s everything you need to know to create the perfect business plan.

What is a business plan?

A well-written business plan contains the recipe for your new business’s growth and development. 

It’s your compass. 

It describes your goals and how you’ll achieve them by infusing the ingredients you need to turn your dream into a reality. 

• Your business description- Tells readers about your idea, why it'll succeed, and how you'll make it happen.
• A market analysis- That backs up your company description.
• Your management and organization plan- Includes employees or contractors because even a one-person show may need a team's help on a contract basis, like bookkeeping services, graphic design, research, and if your business grows, with time, also full-time employees.
• Your products or services descriptions- Explaining how they work, where you'll get them, and how much they`ll cost.
• A target audience analysis- So, you know exactly who you`re selling to and what makes them buy what you`re offering.
• Your marketing and sales plan- Proving your chosen niche is profitable and how you'll reach your customers.
• A financial funding request/projections - What you need and how you'll get it.

Your business plan is like a GPS, guiding your business to its destination for the next 3 to 5 years. 

Why is a business plan important?

Here’s the short answer.

A business plan enables you to convey your vision to those who can help you make it a reality.  

It does it in 2 ways:

• It empowers you to evaluate your goals and confirm their viability before entering a marketplace.
• And equips you with the information, using a proven outline, that convinces others to help you achieve them.

A business plan does it by explaining who you are, what you are going to do, and how you’ll do it. It clarifies your strategies, identifies future roadblocks, and determines your immediate and future financial and resource needs.

Let’s look at what that means and why each part is important.

A business plan helps you evaluate your ideas

Do you have over one business idea or a range of products or services you believe you could bring to a single marketplace? 

If so, a business plan helps determine which is worth focusing on and where to apply your energy and resources by evaluating your idea’s possible market share and profitability before investing.

Clarifies your costs

Your chosen market determines your initial investment and future revenue. And it would be best if you knew those before you invest a dollar in your business idea.

With your chosen idea, your business plan can help you understand your set-up and running costs, the resources you’ll need, and the time it’ll take to get started.

It’s also where you’ll calculate your future sales and revenue goals to ensure they fit your budget and required breakeven point.  

And those are essential because every business needs a consistent cash flow to stay afloat!

Steers your business in the right direction

Your business plan guides you through every stage of starting and running your business . 

It acts as your GPS, giving you a course to steer. Ensuring your business stays on track, helping you achieve your goals every step of the way.  

Acts as your financial guide

As your new business grows, you might need to expand. 

But with expansion come big spending decisions, such as purchasing expensive equipment, leasing a new location, or hiring your first employees.

Your business plan’s financial forecast gives you a solid foundation to build on by clarifying when you’re ready to make those investments, ensuring you don’t overreach.

And when you are ready to employ staff, it helps you with that too!

Helps recruit the people you need

Your business is often only as good as its employees. A business plan helps you communicate your vision and pitch your dream to the best candidates. Building their confidence in your venture and encouraging them to join you.

It's essential if seeking a loan or investment

Do you need a loan from a bank or a venture capitalist/angel investor?

If so, you’ll need a business plan that shows your past and future financial trajectory so potential investors can evaluate your business’ feasibility to determine whether you’re worth the risk.

It's an asset if you want to sell your business

Owners of legal entities, such as LLCs, can sell all or part of their business to raise funds for other business ventures or expand their existing ones.

A solid business plan with proven financial recordings and realistic forecasts based on current performance can make your business more attractive to potential investors. 

And it makes sense because when buyers understand your business model and its potential growth, they’ll see the value in it for them.  

All great reasons to write a business plan, don`t you agree?

Okay, here’s how you do it: 

The steps for creating a business plan

Most business plan templates are similar, containing several steps for writing a conclusive plan. If you’re interested in a very short plan, we prepared a lean (one-page) version, including a template . 

The perfect business plan isn’t one or the other; it’s the plan that meets your business needs.

That said, every business plan should contain crucial elements and essential details . And a rhythm to your outline that encourages action, growth, and investors to read it from start to finish. Our step-by-step guide, along with our template, will help you achieve both. 

But first, you must choose the style that works for you:

Pick a business plan format that works for you

You can tackle creating a business plan in different ways; one could be a long-form, more traditional approach or a one-page business plan that acts as a summarized road map.

Traditional business plans use a standard, industry-expected structure, with each section written in great detail. They require a lot of research because businesses often use them to gain investment, and they can be anywhere from 10 to 50 pages long. 

A one-page business plan uses a similar structure but summarizes each step by highlighting the key points. 

You can write a one-page plan in an hour and use it as a personal blueprint for running your business or as a guide to writing a future traditional plan.

Here are the core component that create a great business plan:

1.  An executive summary

2.  Your company’s description

3. Market analysis

4. management and organization outline, 5. products and service description, 6. target audience analysis, 7. marketing and sales plan.

8. Financial funding request 

9. Financial projections

10. an appendix, 1. an executive summary.

The first section of your business plan’s an executive summary that tells anyone reading in simple terms what your business is and why you believe it’ll be successful.

It’s the most crucial part of your plan because anyone reviewing it often decides whether to continue reading based on what’s in your executive summary.

Your executive should contain your mission statement (why you’re starting your business). A product/service description. Your leadership team and financial information.

Even though the first thing people read is your executive summary, it’s the last section you write. 

The next step is about you:

2. Your company's description

Here you sell yourself and your business by telling readers why you’re starting your business and know it’ll succeed.

You must be realistic, business-like, and detailed.  

Begin by explaining who you are, what you plan on doing, and how you’ll do it. Describe your future market, your target audience, and why they need your product/service. 

Elaborate on your unique selling point (USP) and how your competitive advantage will ensure your success. 

Describe your team, highlight their skills and technical expertise, and if you`re a brick-and-mortar business, discuss your location and why it’s right for your target audience or logistics. 

Now your market:

A great business idea is only as good as its future marketplace. Enter a declining market with an insufficient or uninterested audience, and you’ll be toast.

Choose one on an upward trajectory with people you understand and need your product, and you’ll be in business. 

That makes your market analysis a crucial step in your business plan outline. Here’s where you identify your target audience, competitors’ performance, strengths and weaknesses, and whether the market can sustain your business needs.

Your market analysis should include the following:

• Your market description and outlook- Provide a detailed outline defining your market, including its size, trends, growth rate, and outlook.
• Target Market- Describe your ideal customers, including their demographics such as age, gender, employment status, income level, and lifestyle preferences. Also, include your market size, what motivates your ideal clients, and how you'll reach them.
• Competitive Analysis- Identify your main competitors and list their strengths and weaknesses. Also, highlight any potential roadblocks that might prevent you from entering your chosen marketplace.

Step 4 is where you tell readers how you’ll construct your business and who’ll run it.  

Describe your business’s legal structure, whether you’re a sole proprietor intending to form an LLC or a limited/general partnership with dreams of incorporating an S or C corps. 

Include your registered business name and any DBA brand name you have. And any member’s percentage ownership and managerial duties per your operating agreement.

And consider using a chart to show who runs what section of the business. Explain how each employee, manager, or owner’s experience and expertise will contribute to your venture’s success. And if you have them, include your team’s resumes and CVs.

Now you must get technical about what you plan to offer.

List your products or services and explain how they work. If in the development stage, describe the process and when you’ll be market ready.

Include the following product/service information:

• Describe how your product/service will benefit your target audience.
• Provide a breakdown of costs per unit made/sold, life cycle, and expected profit margins.
• Explain your supply chain, order fulfillment, and sales strategy.
• Include your plans for intellectual property, like trademarks and patents.

Your product and service description brings you to those who matter most. Your target audience:

The target audience section of your business plan is the most important one to get right. After all, your customers are your business. And the better you know them, the easier it’ll be to sell to them. 

To gain a clear picture of your ideal clients, learn about their demographics and create a client persona.

Those include: 

• Their location
• Education level
• Employment status
• Where they work
• How much they earn
• How they communicate
• Preferred social media platforms
• Common behavior patterns
• Free time interests
• And what their values and beliefs are

You need your target audience’s demographics to create a branding style that resonates with them. To build marketing strategies that engage their interest. And to identify where to spend your advertising dollars.

Target market’s persona in place, your next step is to describe how you’ll reach and sell to them:

Your marketing plan outlines your strategies to connect with and convert your ideal clients. 

Here’s where you explain how you’ll reach your audience, describe your sales funnel, and develop customer loyalty to keep customers.

Your business plan doesn’t require your complete marketing/sales plan but should answer basic questions like:

• Who's your target market?
• Which channels will you use to reach them? (Social media, email, website, traditional marketing, etc.)
• What sales strategies will you use?
• Which resources do you need to implement those strategies?
• Do you have the resources, and if not, where will you get them?
• What are the potential marketing obstacles, and how you'll overcome them?
• What's your initial marketing campaign timeline and budget?
• What your success metrics are, and how you'll measure them?

8. Financial funding request

This step applies if you require funding to start or grow your business.

Similar to the marketing plan step, including your entire financial plan is unnecessary. However, you’ll need to answer specific questions to explain how much investment you require and how you’ll use it.

The following financial funding outline will suffice:

• Your current capital balance and how much future capital you'll need.
• Specify whether you want equity or debt.
• The terms and conditions you need and the duration of any loan repayments.
• Provide a detailed description of why you need investment, IE., to pay salaries, buy equipment or stock, and what percentage will go where.

Start-ups that need investment must rely on something other than past sales and balance sheets. Here, you’ll need to use financial projections to persuade lenders you’ll generate enough profit to repay their loans. And that investors will get a worthwhile return. 

Your goal is to convince potential lenders or investors that your business will make enough profit to repay any loans or fulfill your equity promises.

Depending on your loan requirements and market, these projections can vary from 3 to 5 years. 

Financial projections aren’t an exact science; you’re forecasting the future! However, accuracy is essential (meaning your projected numbers must add up correctly). And while your goals should be positive, they must also be realistic.

What to include in your financial forecast:

• Forecasted income statements.
• Capital expenditures, fixed and variable.
• Quarterly and annual balance sheets.
• Projected cash flow statements.

Be specific with your projections and ensure they match your funding requests. And if you have collateral to put against a loan, include it at the end of your financial projections to improve your chances of approval. 

Also, consider using charts and graphs to tell your financial story, as visuals are great for conveying your message.

Use your appendix to list and provide supporting information, documents, or additional materials you couldn’t fit in elsewhere.

If the appendix is lengthy, start it with a table of contents.

What to include:

• Key employee resumes.
• Letters of reference.
• Licenses and permits.
• Intellectual property - patents or trademarks.
• Legal documents.
• Any current contracts.
• Product pictures and information.
• Bank statements/credit history.

Financial uncertainty shouldn`t stop you from following your dreams. In fact, recessions are often the best time to start a business . 

And your business plan is one of the main things that can help you make your dream of owning a business a reality.

Take it one step at a time, do your research, and use your business plan to remove the uncertainty of the unknown. 

Because then you’ll know if the time is right to start your business.

This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness.

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Learning and Development | 8 Min Read

Organizational planning: The ladder to an organization’s success

Table of contents, what is organizational planning.

Organizational planning is a set of strategies and activities to streamline a business’s day-to-day operations. It includes setting priorities and goals, mapping the utilization of resources and assets, evaluating and modifying the organization’s business path to keep up with the changing environment, and ensuring that all employees/stakeholders work toward a common objective- more extensive organizational success. Organizational planning is among the critical practices necessary to guide a company in the right direction and prevent fatal blunders that could jeopardize business in the long run.

This blog delves deep into the various nuances of the topic, elaborating on the fundamentals, offering a sneak peek into case studies that prove the importance of this business development activity, and highlighting the necessary tools and methods to help you formulate your strategies for success.

Components of an organizational plan

A typical organizational plan comprises four key components, each with its sub-components:

• Workforce planning includes leadership development, high-potential identification and succession planning.
• Financial planning covers budget decisions and strategic resource utilization across departments.
• Products and services planning ensures that the organization is at par with industry trends and upgrades catering to the target market’s needs.
• Expansion planning envisions a sustainable future for the organization across geographies and product lines/offerings.

Workforce planning

Workforce planning is all about analyzing and planning the future of your workforce. As the people-centric part of the organizational plan in business plan, workforce planning comprises three critical elements:

• Leadership development
• High-potential identification
• Succession planning

These elements are vital to the success of other organizational planning components. So, let’s take a detailed look at the way they impact business.

1. Leadership development

A leadership culture is one where everyone thinks like an owner, a ceo or a managing director. it’s one where everyone is entrepreneurial and proactive., robin s. sharma.

Leadership development is fundamental to the long-term success of organizations . An effective leadership development strategy helps organizations achieve the following objectives.

a. Achieving business goals: It helps nurture leaders who can acquire new abilities to realign strategies relevant to developing business scenarios.

b. Improving the work environment: Dedicatedly curating behavioral patterns of leaders is imperative to promote a culture of learning and development.

c. Futureproofing: Leadership development helps organizations appropriately adjust to changes in people, procedures and innovation that could influence them in a not-so-distant future.

Areas of focus in leadership development

A positive culture impacts the organization in the long term. Keeping employees updated with workplace technology, providing them greater flexibility and a clear career trajectory, recognition and appreciation all count in building a positive work culture.

Leaders should have astounding vision and instinct about where the market is going, how client inclinations will develop, every bit of product knowledge, its updates and how to impress clients with greater usability.

Organizations and the people within them, particularly the leaders, must constantly re-invent and recalibrate themselves to remain competitive in the industry. Sustaining success does depend on a company’s ability to adapt to a changing environment.

2. Succession planning

The Cambridge Dictionary defines succession planning as the “Process of finding suitable people and preparing them to replace important executives in an organization when these executives leave or retire.

Succession planning is a strategic organization planning approach to ensure that necessary talent and skills will be available when needed. It has been identified as a key initiative for addressing several critical human resources issues, including increasing turnover rates, fast-paced changes in work, and a need for a diverse workforce at all levels. With the help of succession planning , an organization recruits superior employees, develops their knowledge, skills, and abilities, and prepares them for promotions into more challenging roles within that organization.

3. High- potential identification

High–potential identification refers to assessing and recognizing employees who have the potential to learn fast, grow consistently and do justice to the new roles and responsibilities with which they are trusted. The process helps cut hiring costs, saves time and ensures lasting organizational success with a loyal workforce working more dedicatedly. Therefore, high-potential identification is crucial to the overall organizational plan in business plan.

Financial planning

Financial Planning is estimating the capital required in business initiatives and procedures and determining its competition. It involves framing monetary policies around an enterprise’s procurement, investment and administration of funds.

The objectives of this organizational planning component are to:

• Determine the total capital requirements during a specific time.
• Work out how to raise and allocate the required funds.
• Explore various investment opportunities and formulate a feasible capital expenditure plan.
• Ensure that the business has sufficient funds to run its operations smoothly.
• Reduce uncertainties which can be a hindrance to an organization’s growth.
• Ensure stability and profitability in business.
• Facilitate growth and expansion programs.

Products and services planning

The products and services section of your organizational plan in business plan outlines your product or service, its need and demand in the market, and how it will compete with other similar businesses.

Products and services planning includes:

• Key features, advantages and sales/performance of the product/service portfolio.
• Required upgrades and modifications based on competitor analysis, trends research and market changes.
• Strategies to improve marketing and boost demand and sales of the offerings.
• Reasons to launch, relaunch or discontinue specific products/services based on performance/sales data and relevant information.
• Predictions and the way forward.

Expansion planning

Expansion planning is a futuristic, growth-driven component of the organizational planning process. It helps create a roadmap for product development, market penetration and diversification.

However, you should initiate expansion planning if the business is already successful and profits in its current market. In addition to new product/service launches, this component of an organizational plan could also include strategies to conquer foreign markets.

Why is organizational planning important?

The importance of organizational planning is evident in the way it helps a company uncover approaches to enhance performance . It can, for instance, unveil insights about how to restructure the organization so it can perform to its maximum capacity. In addition, developing new products and expanding operations- a comprehensive strategic organizational plan helps a company react to various circumstances and challenges better.

Planning is choosing ahead of time, what anyone can do. At the point when a manager plans, he anticipates a strategy for the future, endeavoring to accomplish a reliable, facilitated structure of operations aimed at the desired results.

According to the author theo haimann.

The importance of organizational planning extends to how it helps prepare a company to respond to changes in the workplace better. Furthermore, it clarifies the roles, responsibilities and expectations for everyone in the company. Finally, it helps management make sure they’re meeting the determined benchmarks.

Furthermore, organizational planning:

Increases the efficiency of an organization

It focuses on the work and resources of the entire organization, creating a clear and convincing vision that the team and board wish to progress with proper coordination.

Identifies genuine client needs

It involves getting input from clients to guarantee that their requirements are understood and fulfilled. Again, it helps companies expand and enhance their services.

Reveals what not to do

A strategic plan uncovers what an organization needs to quit doing to be more effective and client-focused.

Enables optimum resource utilization

A well-articulated organizational plan shows to the general public, funders and key partners that the company is making the ideal utilization of its assets to the advantage of the clients it serves.

Enhances decision-making

A good organizational plan in business planning reveals what you want to accomplish in the given time frame, what the future holds and what your goals should be.

A robust organizational plan is essential to understanding the:

Case studies to demonstrate the need for organizational planning

Why did sun microsystems fail.

Java, one of the best programming languages for development, run in more than 3 billion devices in some form, was introduced by Sun Microsystems in 1995. But did you ever hear about the company thereafter?

Well, Sun Microsystems, the computer startup started constructing high-end servers just as the computer revolution was accelerating. Its Java programming language turned into an industry standard just as the internet arrived, helping make Sun an industry monster by the late 1990s. But the dot-com bust wiped out many of its customers and changed the way organizations meet their technology needs.

Former CEO of Sun Microsystems, Scott McNealy’s loyalty to Sun’s hardware culture scammed its software initiatives and eventually, destined the organization for fading into oblivion.

As PCs (Personal Computers) turned out to be all the more capable, fewer clients required Sun’s costly servers and the company spent most of the decade scaling back and saving. With Sun’s fairly estimated worth, only a fraction of what it had been once, Oracle bought the company later.

Software talent is constantly overwhelmed by and made to fill the needs of its hardware rulers. To do what’s depicted above at the right time would have required proactive software leadership inside Sun, someone willing to confront the hardware culture.

McNealy, the one figure who could have given the nod to such an activity, was himself instilled with the hardware culture.

In this case, there was a need for strategic organizational planning to maintain someone at the top position, be it the CEO or other empowered software leaders, aware of the competitors and the changes in the technique an organization needs to work on for success.

The unfortunate case of Motorola

Motorola, the world’s first mobile phone seller dominated the industry in 2003 when it introduced the trendy Razr- one of the largest-selling mobile phones ever. However, the brand failed to focus on futuristic planning around expansion and product upgrades. As a result, it lost its supremacy to competitors like Apple, LG and Samsung.

Strategic planning among the concerned officials of the organization, considering all aspects of transformation around the product/industry, would have made the scenario different.

Types of organizational plans

There are four major types of organizational plans that help pivot a business toward growth. Moreover, each of these plans is interconnected, and the success of one depends on the success of the others.

Strategic plans

A strategic plan defines the company’s objectives for a set period and ensures that those objectives align with the organization’s mission, vision and values. It is the foundation for dictating long-term organizational decisions.

Tactical plans

These plans are the precursor to strategic planning. Usually devised for a short duration, tactical plans involve several short-term goals that support the related strategic plan. The purpose of tactical planning is to break down the larger strategic plan into actionable chunks, carried out by mid-level managers.

Operational plans

Operational plans cover what needs to happen continually, on a day-to-day basis, to execute tactical plans. Operational plans could be single-use or ongoing. While the former could include time-bound marketing campaigns, the latter covers policies for approaching problems, rules and regulations to meet specific objectives, task assignments within a tactical strategy, etc.

Contingency plans

Contingency planning covers alternative courses of action for unusual circumstances and crises. Contingency plans suggest a range of possible scenarios and appropriate responses for issues ranging from personnel planning to advanced preparation for unexpected occurrences that could negatively impact the business. For example, organizations may have contingency plans for responding to a natural disaster, malfunctioning software, or the sudden departure of a C-level executive.

Organizational planning process

The steps in an organizational planning process correspond with the four types of organizational plans explained in the previous section. In addition, the method includes effective communication and performance monitoring of every aspect.

Step 1: Strategize

The strategy stage of organizational planning should include the following steps.

a. Begin with the goals and objectives of the company: Analyze where do you want to be in the short- and long-term. Then, assemble a team to lead the plan’s execution, tracking and progress.

b. Define the company goals and objectives to help everyone understand them and their part in realizing them.

c. Ask questions to review the company’s current position: What processes are in place now? It would allow the workforce to see what they need to do to meet targets.

d. Gather what you’ve collected and put it in a document: Use this to track progress when executing the organizational plan.

Step 2: Translate strategy into tactics and plan daily operations

Based on the strategies formulated in the first stage of your organizational planning, you can create specific tactics and procedures broken down into actionable steps. The latter would help move toward implementing the long-term strategies at constantly.

Prepare a task list with roles for everyone on your team: Then, assign the tasks and ensure the team understands what is expected of it.

Step 3: Communicate the organizational plan to your workforce

If you implement a program without everyone understanding it, you may face problems that could derail the whole idea. Hence, it is vital to call a company-wide meeting to explain your plans’ nuances and predicted success. It is also a great idea to get feedback from those in attendance and fine-tune the details of your plan before executing it.

Illustrate the organizational structure of the plan: Share it with the whole company and keep everyone updated on progress as you hit milestones.

Step 4: Execute the plan

After the communication stage, the plan should be finalized, including the tactical and operational steps. Then, once there is absolute clarity regarding the short-term and long-term goals, you should put all of it to work.

Step 5: Monitor performance and progress

At the end of each short-term goal period, managers should review if they met the targets established in step two. Then, they should submit data-backed reports to C-level executives. Depending on the reviews, you can make necessary adjustments to improve the efficacy of the plans at any stage.

Tips for creating a successful organizational plan

Once you understand the various organizational planning examples, types, processes and objectives, you must familiarize yourself with organizational planning best practices. This section enlists valuable tips to help design and implement an effective organizational plan.

• Assess the weaknesses and strengths of each department in your business. Find the co-dependencies of departments and plan to resolve deficiencies.
• Go through the legal weaknesses and strengths of your organization. Find all the possible options to legally tackle the disadvantages and turn them into advantages for your business.
• Understand current relationships in the market and plan to maintain existing relationships and build new ones.
• Develop a structural approach to work for higher productivity and employee satisfaction.
• Predict a growth pattern you want in the long run. Also, align this long-term plan with short-term growth strategies.
• Define an ideal number of employees in every department and compare it with the current availability of human resources.

Organizational planning tools

Organizational planning tools are the methods used to implement strategies that help improve the various components and phases of the organizational plan. These tools enable an objective and comprehensive approach to the process and strategy.

Assessment and development centers (ACDCs/ADCs)

ADCs are platforms for conducting advanced professional assessments. They utilize a series of innovative projects , including case study simulations, presentation exercises and various activities to assess leadership styles, motivators and work-oriented personality traits. As a result, they help leaders and potential leaders to improve their efficiency, optimize their strengths and develop their areas of improvement.

Application in organizational planning: Leadership development and hiring, workforce planning, futureproofing, succession planning and performance management.

Psychometric tests

Psychometric tests are essential for measuring cognitive abilities, personality traits, demonstrated behaviors and function knowledge/skills. They generate relevant proof of skills/competencies required for succeeding in specific professional roles and industries. Moreover, they help formulate targeted L&D (Learning & Development) and prepare and initiate the advancement of effective succession planning and administration. They are also efficient in evaluating the productivity and success of current strategies/processes.

Psychometric tests offer advantages like objective information on employee efficiency and behavioral competencies suited to the organizational system.

Application in organizational planning: Talent acquisition, organizational restructuring, IJPs (Internal Job Postings/Promotions), HR (Human Resource) allocation, etc.

Three-sixty-degree feedback

Three-sixty-degree feedback refers to holistic reviews and honest ratings about professionals and professional spaces. A robust 360-degree feedback tool helps strengthen organizational planning by highlighting the strengths, hidden strengths, blind spots and areas of development at every level of the organization.

Application in organizational planning: Leadership assessment , performance management , L&D, strategic planning for various areas of the organization: finances, products and services, expansion plans, etc.

Employee engagement evaluation

An advanced evaluation of employee satisfaction in a company is vital to organizational planning success. Therefore, using an employee engagement evaluation tool enables HR managers, administrators and decision-makers to improve the company’s work culture, environment, people policies, growth initiatives, feedback cycles and a lot more.

Application in organizational planning: Gauging the workforce’s satisfaction with current company structure and policies, career opportunities within the company, employees’ opinions and approaches toward various types of organizational plans, etc., to make improvements based on varied perspectives/experiences/ideas.

The organizational planning process is essential for maintaining order, success, discipline and sustainability in every area of an organization’s functions. It is imperative when it incorporates employees in all departments and at all levels of responsibility, potential, and skills, considering how they fit into the bigger picture.

Originally published April 18 2018, Updated July 11 2022

D'ipanjenah Ali

About this topic.

Succession planning is a systematic process through which organizations build a leadership pipeline to preserve its future. The process involves identifying and developing potential successors for a seamless transition.

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Business Continuity Planning: Ensuring the Resilience of Your Organization

Let’s explore the intricacies of business continuity planning, from understanding its importance to implementing a robust strategy that safeguards your enterprise.

Published by Orgvue   November 20, 2023

Home > Resources > article > Business Continuity Planning: Ensuring the Resilience of Your Organization

In an unpredictable world, the ability to sustain your business’s essential functions and operations, even in the face of disruptions, is paramount.

Business continuity planning is the framework that ensures your organization can weather storms, both literal and metaphorical.

What is Business Continuity Planning?

At its core, business continuity planning is the process of developing a proactive strategy to ensure an organization’s critical functions and operations can continue in the face of unforeseen disruptions.

It encompasses a range of activities, from risk assessment to the creation of detailed recovery plans, with the ultimate goal of minimizing downtime and ensuring the organization’s resilience.

The Importance of Business Continuity Planning

The importance of being prepared for various external and internal factors cannot be overstated. While many businesses have a standard business plan, not all of them consider the potential disruptions caused by natural calamities, economic downturns, or other unexpected events. Business continuity planning is the key to ensuring a company’s sustained operation, regardless of the challenges it may face.

Business continuity planning goes beyond the traditional business plan. While a business plan outlines goals and strategies for growth, a continuity plan focuses on how the organization will continue to function in the face of adversity. It involves identifying potential risks and developing strategies to mitigate and recover from them. Whether it’s a natural disaster, a cyberattack or an economic recession, having a well-thought-out strategic plan is essential for business survival.

One of the most significant threats to businesses is an economic downturn, such as a recession. During these challenging times, consumer spending often decreases, and businesses may face financial instability. A recession can have a ripple effect on companies of all sizes, causing decreased revenue, layoffs, and even closures.

For a detailed look at the impact of recessions on businesses, read how to prepare for a recession , which delves into strategies for navigating these challenging economic conditions.

Business strategy planning is not just about surviving during tough times; it’s also crucial for capitalizing on periods of growth. When businesses experience an upturn, they often need to scale rapidly to meet increased demand. Having a continuity plan in place allows for a smoother transition during periods of growth, ensuring that the infrastructure, resources and workforce can adapt effectively.

The financial consequences of not having a business continuity plan can be devastating. Without a plan in place, businesses are more vulnerable to unexpected disruptions, which can result in significant financial losses. These losses may come from increased downtime, lost revenue, legal liabilities, reputational damage and the costs associated with recovery efforts.

Considerations for Business Continuity Planning

Creating a robust business continuity plan is a complex task that involves a multitude of factors. Among these considerations, three key aspects stand out: cultural differences, limited resources and alignment with business objectives. A successful business strategy plan takes these factors into account to ensure that an organization can effectively respond to disruptions while maintaining its core values and strategic direction.

1. Cultural Differences

Cultural diversity is a significant consideration in business strategy planning, especially for multinational companies or organizations with a diverse workforce. Cultural differences can influence how employees perceive and respond to crises. When developing a business continuity plan, it is important to consider the following aspects:

• Communication Styles : Different cultures have varying communication norms and hierarchies. Understanding how employees from various cultural backgrounds communicate during a crisis can help in crafting effective crisis communication strategies.
• Decision-Making Processes : Some cultures prioritize consensus-driven decision-making, while others lean towards hierarchical authority. A business continuity plan should acknowledge these differences and provide flexibility in decision-making approaches during disruptions.
• Crisis Response Expectations : Cultural expectations can shape how employees expect the organization to respond to a crisis. Your business strategy plan should be sensitive to these expectations and ensure that response strategies align with cultural norms.

2. Limited Resources

For many businesses, resource constraints are a reality. When developing a business continuity plan, it’s crucial to consider the organization’s resource limitations, such as budget, personnel and technology. Here are some key considerations:

• Resource Allocation : Prioritize critical functions and allocate resources accordingly. Not all business processes are equally important, and a business continuity plan should identify and protect the most essential ones first.
• Efficiency and Scalability : Develop strategies that focus on efficiency and scalability. Efficient resource use is critical, and a business strategy plan should outline how to adapt to changing resource constraints during a crisis.
• Collaboration : Collaboration with external partners, such as suppliers, can be a resource-saving strategy. Establishing relationships with partners who can provide support during disruptions is a valuable aspect.

3. Business Objectives

A business continuity plan should align with the broader business objectives to ensure that it doesn’t hinder growth or innovation. Consider the following aspects:

• Market Expansion:  If the organization’s objective is to expand into new markets, the business strategy plan should accommodate this goal. It should address the challenges and opportunities that come with market expansion, including regulatory compliance and logistical considerations.
• Relocation or Migration : If there are plans to relocate or migrate operations, the business continuity plan should include strategies for a seamless transition. This may involve considerations such as data migration, employee relocation and continuity of customer service.
• Competitive Landscape : Changes in the competitive landscape, such as the emergence of new competitors, can impact the organization’s continuity. The business strategy plan should be flexible enough to adapt to shifts in the competitive environment.
• The COVID-19 pandemic forced companies to adapt rapidly, with remote work becoming the norm for many, reshaping entire industries like healthcare and e-commerce.
• The global recession of 2008 had long-lasting effects on financial institutions and prompted regulatory changes that influenced business operations.
• The rise of the internet transformed countless businesses, from retail to media, and required adaptation to online platforms.
• Looking ahead, emerging technologies like artificial intelligence have the potential to disrupt industries in unprecedented ways, with automation and data-driven decision-making reshaping the future of work. These events emphasize the critical importance of adaptable and comprehensive business continuity planning to navigate the unpredictable landscape of our ever-evolving world.

Developing a Strategic Business Plan

A well structured business plan serves as a roadmap for your organization, guiding actions and decisions while enabling effective response to a dynamic business environment.

• Conduct a comprehensive assessment of the current state of the business.
• Review financial statements, market positioning and operational performance.
• Identify strengths, weaknesses, opportunities and threats.
• Evaluate the company’s internal resources and capabilities.
• Analyze micro-environment factors such as competitors, customers, suppliers and regulatory changes.
• Examine macro-environment factors like economic trends, technological advancements and political factors.
• Use tools like PESTEL analysis and Porter’s Five Forces to assess the external business environment.
• Clearly define short-term and long-term business objectives.
• Make objectives specific, measurable, achievable, relevant and time-bound (SMART).
• Align objectives with the company’s mission and vision.
• Identify key operational processes that drive business success.
• Evaluate the efficiency and effectiveness of these processes.
• Prioritize improvements in critical areas to align with strategic objectives.
• Plan for potential risks and uncertainties that could impact the business.
• Create contingency and crisis management strategies.
• Establish a risk management framework to mitigate and respond to unforeseen events.
• Implement key performance indicators (KPIs) to track progress.
• Regularly review and revise the business plan based on changing market conditions.
• Adapt to emerging opportunities and challenges.
• Ensure that the strategic plan is communicated effectively throughout the organization.
• Secure buy-in and commitment from employees at all levels.
• Ensure that all team members understand their roles in achieving the plan’s objectives.
• Allocate resources, including finances and manpower, in alignment with the strategic priorities.
• Develop a budget that reflects the financial requirements of the plan.
• Monitor spending and adjust budgets as needed.
• Develop a timeline and action plan for the execution of the strategic initiatives.
• Assign responsibilities to specific teams or individuals.
• Regularly review progress and make adjustments to stay on track.
• Periodically evaluate the effectiveness of the strategic plan.
• Solicit feedback from employees, customers and stakeholders.
• Use feedback to make continuous improvements and refine the plan.
• Establish a system for measuring and reporting progress.
• Create dashboards or reports to communicate key metrics to stakeholders.
• Ensure that performance data aligns with the defined objectives.
• Incorporate sustainability and responsible growth practices into the plan.
• Address social and environmental impacts as part of corporate responsibility.
• Seek opportunities for sustainable growth and innovation.
• Develop scenarios that explore alternative future situations.
• Consider various outcomes and their implications on the business.
• Prepare for different scenarios to enhance adaptability.
• Leverage technology for data analytics, automation, and efficiency.
• Stay updated on emerging technologies that can support the strategic plan.
• Integrate technology solutions to enhance business processes.

Implementing a Business Continuity Plan

 Importance of Training and Awareness:

• Awareness:  Create awareness about the business continuity plan across the organization to foster a culture of preparedness. This includes educating employees on the potential risks and the importance of the plan.

 Consistent Review of the Plan:

• Conduct post-incident reviews to assess the BCP’s performance after a real event and make necessary adjustments.

 Address Cultural and Technological Issues:

• Technological Challenges: Recognize and mitigate technological hurdles that can hinder the plan’s execution, such as infrastructure limitations or cybersecurity threats. Ensure that IT systems are resilient and can support the plan.

 Software Integration:

• Organizational design software like Orgvue can assist in visualizing and optimizing the organizational structure, enabling efficient allocation of resources and responsibilities during a disruption.

Business continuity planning is not merely a precaution but a strategic imperative for any organization. It provides a structured approach to safeguarding business operations in the face of unforeseen disruptions, thereby minimizing downtime and potential financial losses.

By fostering a culture of preparedness, training employees, regularly reviewing and adapting the plan, addressing cultural and technological issues, and leveraging software solutions like Orgvue for organizational design, businesses can ensure their resilience and adaptability in an ever-changing landscape.

For businesses with specific 1-5 year plans, the integration of business strategy planning is paramount. It aligns seamlessly with forward-looking strategies by fortifying the organization’s ability to execute those plans in the face of unexpected events.

By weaving business continuity considerations into your strategic framework, you not only protect your investments but also demonstrate your commitment to long-term success, customer trust and stakeholder confidence. The benefits of such foresight extend far beyond mitigating risk; they empower your business to thrive in an increasingly unpredictable world. Therefore, it is recommended that businesses of all sizes prioritize and integrate business continuity planning as an integral part of their strategic vision and ongoing operations.

Business Continuity Plan FAQs

● where does business continuity planning belong in an organization.

Depending on the organization’s culture, the department your business continuity plan falls under varies. IT is usually one of the most vital components of any business strategy plan, in which case it could belong under the IT department. Or, if financial impacts are your organization’s main concern, the finance department may need to run the plan.

● Who Is Responsible For the Business Continuity Plan?

The business continuity plan usually falls under the responsibility of a dedicated role or department, often led by a Business Continuity Manager, who reports to senior leadership. This individual or team is responsible for creating, implementing, and regularly updating the plan to ensure the organization’s resilience in the face of disruptions.

● Is Business Continuity Planning a Legal Requirement?

It is not always a legal requirement, but certain industries and jurisdictions may have regulations or standards that mandate organizations to have such plans in place to ensure operational resilience and preparedness for emergencies.

● What Role Can Business Continuity Planning Play In Recovering From an Incident?

It plays a crucial role in helping organizations recover from incidents by providing a structured framework to assess, respond to and mitigate the impact of disruptions, minimizing downtime and financial losses. It outlines clear procedures and responsibilities, ensuring that essential operations can resume swiftly and efficiently, thus safeguarding the organization’s reputation and maintaining stakeholder trust.

● When Should a Business Continuity Plan Be Activated?

A business continuity plan should be activated as a preventative measure in the event a disruptive incident occurs. Triggers may include natural disasters, cyberattacks, supply chain disruptions or any event that threatens the continuity of critical business functions.

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Annual Operating Plan: How to Build One in 8 Easy Steps

Creating an effective annual operating plan (AOP) is important for any business, whether it’s a bustling startup or a well-established small business. This strategic planning tool serves as a roadmap, guiding your company toward its business objectives and fiscal year goals. Learn more about annual operating plans and how to make one to get your year started on the right foot.

1. Conduct a Business Review

Kick off your planning process by reviewing the previous year. Examine your financial statements, business goals and key performance indicators (KPIs) to understand where your business stands. Reflect on both the successes and the shortcomings, considering metrics and actuals to gain a comprehensive view. This step is crucial to informed decision-making by both CFOs and business owners.

2. Check In With Stakeholders

Your stakeholders, including department heads, team members and investors, play a vital role in the planning process. Their feedback can provide valuable insights into the operational and strategic needs of your business. This collaborative approach ensures that your AOP is aligned with the company’s goals and addresses the needs and expectations of all parties involved.

3. Set Your Goals and Key Performance Indicators

Define clear, achievable business goals and establish key performance indicators (KPIs) for the upcoming year. These goals should be SMART (Specific, Measurable, Achievable, Relevant, Time-bound) and directly tied to your strategic vision. KPIs will serve as quantifiable metrics to track progress and gauge the success of your initiatives.

4. Identify Obstacles

Anticipate challenges that might hinder your progress. Whether it’s cash flow issues or the challenges of launching a new product, preparing for obstacles ensures a more resilient plan. Consider internal and external factors such as market trends, competition and resource limitations.

5. Plan a Strategy

Craft a strategy that includes the initiatives necessary to achieve your business goals. This should include a blend of financial planning, marketing strategies, human resources allocation and operational tactics. Ensure that your strategy is flexible yet focused, with clear milestones for monitoring progress.

6. Create a Realistic Budget

Your operating budget is a key component of your AOP. It should realistically reflect your anticipated revenue, expenses and cash flow. Utilize financial planning tools, such as Excel or specialized SaaS platforms, to create a detailed and accurate budget. This budget should align with your strategic goals and provide a clear financial roadmap for the year.

7. Assign Roles and Responsibilities

Clarify roles and responsibilities within your team. Ensure everyone understands their part in achieving milestones and business objectives. This clarity helps to keep your team focused and aligned with the AOP’s goals.

8. Check In and Adjust as Needed

An effective AOP is not set in stone. Regular check-ins allow you to compare actual performance against your plan and make necessary adjustments. This flexibility allows your business to adapt to changes and unexpected challenges, ensuring that your AOP remains relevant and effective throughout the year.

What Is an Annual Operating Plan?

An annual operating plan is a detailed outline of a company’s projected activities over the upcoming year. It includes budgets, projected revenue, goals and strategies.

Why Do You Need an Annual Operating Plan?

An AOP provides clarity and direction. It helps in aligning the efforts of different departments towards common business goals, thereby improving the bottom line.

Where Can I Find Tools to Help Create an Annual Operating Plan?

There are numerous tools available, from Excel templates to sophisticated SaaS platforms. Microsoft offers resources for step-by-step planning, while various online platforms provide AOP and SOP (standard operating procedure) templates. These tools can help streamline the planning process and ensure accuracy and consistency.

What Are Some Common Mistakes People Make When Creating an Annual Operating Plan?

Common mistakes include setting unrealistic goals, neglecting stakeholder input, inadequate risk assessment and failing to adjust the plan as needed. It’s important to be aware of these pitfalls so you can avoid them when creating your AOP.

What Experts Say

“There were several critical steps I needed to consider when I created my annual operating plan. I started by looking at what I felt I needed to achieve to run a successful travel blog/website. This included increasing website traffic, generating revenue and growing my email subscriber list. I needed a way to understand my target audience, their behaviors, interests and preferences. Then I outlined my services.

“I did comprehensive market research on my possible competitors and the current state of the travel industry, and planned how I would make money, whether it be through advertisements, sponsor content, or affiliate marketing. I then created a content schedule, a thought-out plan on when I would release what type of content, what topics I would cover and when it would be published.

“This is a simplified overview of how I created my annual operating plan for my new business venture. The actual process did involve more steps, for instance, marketing and promotion, my financial plan and what my KPIs will be to determine my progress. Remember to stay flexible when creating your operating plan since any industry has the possibility to change rapidly.”

Saya Nagori, CEO & Travel Expert WanderDC

WanderDC is a travel hub curated by Saya, a resident of Washington DC since 2018. Since her adventures to DC as a teen, she’s loved the city and the surrounding areas. Now, she aims to give the best recommendations and insights to travelers looking to wander DC. She also shares her recommendations for the surrounding areas including Maryland and Virginia.

The Bottom Line

An annual operating plan is not just a financial document; it’s a strategic tool that guides your business through the fiscal year. Building an effective annual operating plan is a process that requires careful thought, collaboration and strategic planning. By following these steps and leveraging the right tools, you can create an effective AOP that aligns with your business needs and helps achieve your goals.

This content is for educational and informational purposes only, and is not intended as financial, investment or legal advice.

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How effective leaders achieve organizational alignment.

Last Updated: March 11, 2024 | Read Time: 10 min

One-Minute Takeaway

• Organizational alignment is when your company’s vision matches up with the way you do business.
• It starts at the top but requires employee buy-in.
• Follow these steps to achieve organizational alignment.

At first, organizational alignment might sound like a mouthful. But this term is more than a buzzword or a trend. Here’s a quick definition:

Organizational alignment (or corporate alignment) is when your company’s creative vision matches up with the way you conduct business, at every level.

Think of it like integrity, but for a business instead of a person. When everyone in your company is on the same page, working toward shared goals, and making measurable progress, your organization is probably aligned.

Why is Organizational Alignment Important?

Aligned companies have a competitive advantage, especially when it comes to HR. When your whole team feels aligned with company culture, you improve retention and job satisfaction. Alignment also impacts your bottom line.

According to one study, “when people understand and are excited about the direction their company is taking, the company’s earnings margin is twice as likely to be above the median.” ( McKinsey ). In other words: emotional investment matters. When your team buys into the company’s mission, vision, and strategy, your profit margins will probably go up.

The Role of Leaders in Corporate Alignment

Just like company culture, organizational alignment starts at the top. Leaders set the tone for the rest of the team. That means everything from defining clear values to creating a strategy – but more on that in a minute.

After leaders get the ball rolling, team alignment gets more and more important. That’s where recruiting comes in. You can’t build a strong culture by micromanaging relationships between your employees. It’s better to hire people who are already aligned with your company’s values, so you can trust them to work toward common goals.

Alignment doesn’t end there. Once you assemble a great team, they’ll need the right tools to do well at work. For example, do your managers have enough training? Do your employees have a psychologically safe way to share feedback? Organizational alignment is an ongoing process, and it can impact every part of your business. 

How do You Achieve Corporate Alignment?

Alignment means something slightly different for every business, just like integrity means something different for every person. To achieve corporate alignment in your company, start by following these steps:

• Define Core Values

What guiding principles does your company follow? There’s no wrong answer to this question, but it’s important to be specific. For example, one of Paycor’s values is “Take Care of Each Other.” Employees look out for each other, which inspires people to do their best work. When you feel supported and valued at work, it’s easy to align with your team members.

• Set Organizational Goals

Before you can achieve success, you have to know what it looks like. Make sure your KPIs include business goals and internal, cultural goals. Your annual revenue is important – and so is the number of women in leadership. (And in fact, they’re related. A study by the Peterson Institute for International Economics found that companies with women leaders are more profitable.)

• Communicate Your Strategy

If you want to achieve alignment, you need to get your team on board. Share your strategic priorities with employees to help them see the big picture. Being transparent shows that you trust them and value their expertise. It also empowers them. When your team understands the why behind the why, they can think outside the box and come up with better solutions.

• Develop Your Leaders

Over 50% of managers have no training at all ( HRDive ). That not only lowers their job satisfaction; it also lowers engagement. Chances are, your leaders want to support their teams, but most of them don’t know how. They need better tools to align with their own bosses and their direct reports. HR solutions like the COR Leadership Framework empower everyone to get on the same page.

• Engage Employees

Organizational alignment means everyone in your company – from the CEO to the summer intern – shares common goals, and knows it. Encourage your team to connect with each other. Cross-functional collaboration makes a huge difference here. When people work together across departments and job descriptions, they’ll feel more aligned with your larger vision, and therefore more engaged. And of course, employee engagement drives retention ( Forbes ).

• Optimize Workload

Optimization is a balancing act. To meet financial goals without burning anyone out, you need to keep your finger on the pulse of employees’ needs. When you push too hard, you increase turnover. On the other hand, if you let go completely, your business could suffer. When you find the right balance and employees will feel supported, you’ll see a rise in loyalty and morale. This can also give them a sense of camaraderie and improve company culture.

To find the right balance, you need to understand your team’s needs, in and outside of work. Employee surveys are a great place to start.

• Track Your Progress

Strategic priorities are dynamic. They change along with industry trends, technological innovations, and the ups and downs of the economy. Your values will probably stay the same for years, but your short-term business objectives could be different every quarter. To meet your long-term goals, you need clear, specific data. Metrics like turnover rate and the total cost of absenteeism can tell you if your employees are aligned. Analyze these numbers to find issues before they become problems, and use that information to make an action plan.

• Celebrate Wins

69% of employees would work harder if they felt more valued ( Forbes ). Celebrating your team’s success makes them feel seen and appreciated at work. It’s also a chance to connect socially, talk about how their efforts support your vision, and dream about the future. Celebrations might seem like a distraction, but they’re actually an important way to boost employee engagement.

How Paycor Helps

Paycor’s COR Leadership Framework is purpose-built for leaders. This suite of tools empowers you to connect with your team and become a better leader , with exactly the right skills to support them.

• Start by launching a Pulse survey to learn about their needs, and get employee feedback in a psychologically safe environment.
• Then, the COR Leadership Dashboard lets you analyze results, track your team’s progress, and connect directly with employees.
• Use those insights to choose learning tracks on Paycor Paths, which gives managers the training they need.

With these tools, you can develop your team and your own leadership skills at the same time. Everybody wins.

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Product Strategy: What It Is, How To Build One, and Examples

Published: June 01, 2023

To create innovative and beloved products, companies have to understand their buyers, identify the problems they want to solve, and then develop and launch the solution successfully.

An important part of the process: having a product strategy that integrates different aspects of  product development , and serves as a compass for the entire organization.

What Is Product Strategy?

Product strategy is the overarching plan explaining what your business aims to achieve with a product or feature. It includes how you plan to create the product, how it will impact buyers, and how it helps achieve your business goals.

It guides the ideation, creation, and launch of your product. Though some products — such as the microwave and super glue — happen accidentally, the majority of successful products have an underlying, high-level product strategy to back it up.

Having a cohesive strategy helps different teams stay on track, and they will refer to it when they have questions or need to make decisions. Once you have a solid strategy set, you can then build out a product roadmap and, eventually, the actual product.

Product Strategy Framework Components

A product strategy often includes three core components: your market vision, product goals, and product initiatives.

Market Vision

Your market vision includes two aspects: the target audience and the business opportunity. It highlights how you plan to position the product and how it compares to competitors. Your vision should also explain how you plan to deliver a competitive offer that solves customers’ problems.

For example, a software company that creates a product management tool, similar to Asana or Trello, might include the following in their market vision:

• Audience: executive-level product managers
• Product positioning: an intuitive, easy-to-use interface for less technologically savvy users
• Competition: existing products are unspecialized, clunky, and hard to use

Product Goals

When measuring the success of a strategy, you need time-bound, measurable goals. For example, you could set a goal of having a customer retention rate of 97% or driving $50m+ in revenue in three years.

A goal addresses a specific problem you aim to solve, usually with a tangible way of measuring progress.

Product Initiatives

Alongside specific goals, your product strategy should have a complementary big-picture component. An initiative should explain your company’s focus and areas of investment. For example, you might set an initiative to improve the responsiveness of an app.

Unlike a goal, an initiative involves complex planning that brings together multiple stakeholders to achieve long-term success, often spanning the entire product life cycle.

Many use goals as the foundation for their initiatives. For example, you might set a goal of reducing the churn rate by 15% in one year. An initiative, then, might be improving the performance and responsiveness of the app.

Product Strategy Examples

Consider a company that creates time management software. When crafting their product strategy, they might include:

• Market vision: Create time management tools for senior managers in the software-as-a-service industry by providing an intuitive, easy-to-use interface — unlike competitors with clunkier software
• Product goal: Maintain a retention rate of 98% in the first year
• Product initiative: Improve the product's user experience and interface

Their market vision explains their target audience (senior management) alongside their competitive offering (an easy-to-use, UX-friendly interface).

Their product goal has a time constraint and a specific, measurable objective. The initiative — which has a more high-level aspect — complements the product goal, as improving user experience will likely increase retention rate.

Using another example, an artificial intelligence writing startup might have the following components in their product strategy:

• Market vision: Create an easy-to-use AI writing tool for small-business owners looking to save money on SEO and content creation — unlike competitors with unfocused writing tools
• Product goal: Acquire 500 users in the first three months
• Product initiative: Measure and optimize marketing campaigns promoting the AI tool

The company’s market vision explains both their audience and their differentiating factor. Similarly, their goal of acquiring a certain number of users goes hand in hand with their initiative — optimizing their product’s marketing.

The Importance of Having a Product Strategy

A product strategy gives teams direction — 35% of product teams reported wishing they had a clearer vision and purpose. It can also help your company increase collaboration, improve communication, and create better products.

Communicates Organizational Goals

A product strategy centers different stakeholders — including customer service, marketers, salespeople, and engineers — on one goal.

Although product managers , engineers, and developers may handle the day-to-day aspects of executing a product strategy, other departments need to know the product’s direction. For example, marketing and sales need to understand the most valuable features to create targeted promotions and advertisements.

Given that almost nine in 10 professionals blame a lack of communication for workplace failure, a product strategy can keep everyone aligned.

Defines Your Product’s Place in the Market

It’s near impossible to serve everyone in a market — and many startups fail because they misread market demand.

A product strategy helps set you apart from competitors because it answers the why behind your product. Creating a detailed plan forces you to spend time thinking about how to differentiate it from your rivals.

Enables the Creation of a Product Roadmap

As a result of creating a product strategy, you’ll set goals — both big-picture and specific ones. You can then use them as the basis for a detailed product roadmap . Since organizations waste 12% of resources due to ineffective product management , a solid product strategy optimizes that process.

Types of Product Strategies

Cost Strategy: Creating the best product for the lowest possible cost. This strategy works well in industries where customers put little thought into purchases, such as household cleaning products or toothbrushes.

Differentiation Strategy: Creating a product with a unique, standout feature. This can include a never-before-seen feature on a product or creating a product with whacky branding.

Focus Strategy: Creating a product that targets one specific buyer persona. This means focusing all your energy on a small set of people. You end up creating highly personalized products that gain significant brand loyalty .

Quality Strategy: Creating a product only using high-quality materials. This strategy naturally targets customers who have limited concern for price. To them, the quality or prestige justifies the high price — such as a luxury handbag.

Service Strategy: Creating a product complemented by high-quality customer service . Though the product still has to meet customer needs, this strategy leverages effective customer service to help build brand loyalty.

How To Create a Product Strategy

Creating a product strategy comes down to figuring out your market vision, product goals, and product initiatives.

Create Your Market Vision

Your market vision is a high-level overview of your company, competitors, your buyers, and your concept. To create it, consider jotting down bullet points for the following:

• Competitors : What companies currently dominate the market?
• Company weaknesses: Where does your company struggle?
• Company strengths: Where does your company excel?
• Buyer personas : Who is your target audience?
• Marketspace: What does the industry look like?
• Go-to-market plan : How will you promote your solution?

Set Product Goals

Next, set product goals for your strategy. Make them both time-bound and numbers-oriented, so you can measure progress and success throughout the process. To start, write down a few notes for the following:

• Timeline: Is it flexible or rigid? How volatile is the market?
• Metrics: What metrics does your business care the most about? What does your business hope to achieve with the product?
• Teams: What internal stakeholders should be in the know? How can you best keep them informed?

Create Product Initiatives

Product initiatives require less specificity than product goals — but they complement each other. You want to understand your company’s big picture. So, look through your goals and see how they relate to more high-level aspirations.

To help you get started, try these different methods:

• Collaborate with stakeholders: Ask others in the organization. What areas do they want to prioritize? Where do they see the company investing its time and resources in?
• Look at buyer personas: What do they care about most? Where do you foresee them having problems using your product?
• Analyze your company: What does your company need the most? Money? Users? Publicity?

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