Strategic Planning to Improve Organizational Performance: 2025 Guide

Strategic planning is a popular management strategy that integrates an organization's values, environment, and goals through a strategic analysis to identify and create plans to solve problems. As a corporate model, strategic planning rose to prominence in the 1960s as a way to design and implement business strategies effectively between all departments. As a strategy, it looks to improve organizational performance through goal-setting and constant strategic assessment. 

Continue reading to examine strategic planning in more detail, including how to measure organizational performance, how to improve organizational performance through strategic planning, and how different organizations can approach strategic planning. 

Leaders at 4,300+ companies develop their talent with Coursera

Learn more

What is strategic planning?

Strategic planning is a continual assessment of organization goals, resources, and data to track the efficiency and efficacy of current business strategies. This process works by analyzing the external and internal environmental factors that affect an organization. External factors include:

• Economy

• Organization competition

• Political situations

Internal factors include:

• Financial resources

• Employees

• Technology 

With environmental factors analyzed through situational analysis, organizations can develop their mission statement, objectives, values, and strategies. Part of this process involves using a SWOT (strengths, weaknesses, opportunities, and threats) analysis. 

Read more: Data Literacy for Business: Your 2025 Guide

Strategic planning to improve organizational performance

It’s essential to maintain strategic thinking in your organization’s approach. Organizations can have a tendency to focus solely on creating a strategic plan and only analyzing it from the inside instead of synthesizing all aspects around the plan. 

Creating a strategic plan

A strategic plan varies from organization to organization depending on several environmental factors. Below are some components that are often present in strategic plans:

• Mission statement

• SWOT analysis

• Goals and objectives

Let’s take a closer look at each component. 

Mission statement

A mission statement combines your industry, audience, and products into a coherent statement that defines your business. For example, if you are an AI company providing chatbots for higher education, your statement might look as follows: 

At [Your Company], our mission is to provide higher education institutions with high-performing chatbots to help them with administrative tasks and student learning through advanced AI solutions. 

SWOT analysis

As mentioned above, SWOT analysis examines your organization’s strengths, weaknesses, opportunities, and threats. This analysis helps you find a competitive advantage within controllable factors in your organization. Anyone can conduct this analysis. For the hypothetical AI company above, it might look like this:

• Strengths: Great reputation among institutions, high customer service satisfaction

• Weaknesses: No brand awareness, lack of marketing strategies

• Opportunities: Hiring more employees to increase sales, creation of effective marketing

• Threats: New competitors in the market, rising interest rates

To determine how to tackle your SWOT analysis findings, start by grouping each part as an internal or external factor to distinguish those that are controllable. For example, the strengths and weaknesses here show internal factors within the organization, while the opportunities and threats are external factors many companies might face. 

Goals and objectives

Goal-setting is crucial in creating a strategic plan so that all departments and employees know the short-term and long-term objectives to hit. A common acronym for goals is the SMART acronym, which sets standards for achievable goals as follows:

• Specific: General goals create confusion and a lack of vision within an organization, while specific ones allow for effective planning. 

• Measurable: Using key performance indicators (KPIs) allows you to measure progress. Non-measurable goals make progress an arbitrary measurement. 

• Achievable: Taking inventory of your resources and capabilities allows you to set goals within the reach of your organization.

• Relevant: Goals should align with your mission statement and progress logically. For example, if you want more sales but don’t have enough employees to drive growth, you need to hire first. 

• Time-bound: Timelines and deadlines motivate teams to act instead of potentially failing to meet goals due to a lack of focus. 

Having intentional goals is a key aspect of effective strategic planning as it creates places to look towards and develops strategies to get there. A short-term goal for the AI firm would be to hire five new sales employees to meet a long-term goal of raising sales numbers by ten percent at the end of the fiscal year. 

Putting a strategic plan into action

You can put strategic planning into action using your mission statement, SWOT analysis, and goals. Let’s use the AI firm as an example from above. 

Goal: Increase sales numbers by ten percent at the end of the fiscal year. 

From the SWOT analysis, you know that you need more sales employees and better marketing strategies to attract new clients, and competition is increasing in your market. Doing this creates action plans your organization can take to meet your goal. 

1. Hire more sales employees.

This plan requires the human resources (HR) team to create a job posting, which means you need to allocate funds for the hiring process and new employees. The budget for new employees tells you how many new employees the company can afford, which also dictates how many new clients you can reach. 

2. Create three new marketing campaigns.

This plan involves the marketing director and others in the marketing team performing competitive analysis and other market research to create new strategies that reach potential clients. By spending on marketing and advertising, you have the potential to increase sales numbers.  

How to measure organizational performance

Measuring organizational performance is vital to using strategic planning to improve it. The data you generate when measuring organizational performance tells you if you need to pivot from your current strategies to just one or a new approach altogether. One way to do this is through tracking key performance indicators (KPIs). While many different KPIs exist depending on what your organization needs to track, some common ones include:

• Profit: A basic KPI that shows performance and efficiency

• Costs: A measurement of total costs in the organization, helping you find ways to minimize them

• Cash flow: Measure of the flow of cash in financing from either debt or cash paid

• Customer acquisition cost: Determines the costs of acquiring new customers through marketing efforts

• Employee turnover rate: A metric that shows the number of employees who left versus those who stayed, helping you examine company culture

It is essential to track the right KPIs for the right problem; otherwise, you save time and energy monitoring only the indicators that fit your goals. For the AI firm example, some KPIs the company might track include profit, customer acquisition costs, and employee turnover rate. These metrics will provide information about the current financial numbers, how much it costs for new customers with the latest marketing campaigns, and why the company needs more employees to achieve its sales targets.  

Build your team’s analytical skills with Coursera

Utilizing strategic planning to improve organizational performance is one of the most effective ways to drive growth for your organization.

Enable your employees to analyze and interpret data, and drive faster, better business decisions with the Data & Analytics Academy from Coursera. Offering hands-on learning and expert instruction from leading organizations like Stanford, Google, Microsoft, Meta, the University of Michigan, and more, Coursera’s Data & Analytics Academy empowers employees at every level to build foundational data literacy while also equipping existing data teams with expert-level training in machine learning, AI, and other emergent fields.

Explore Coursera for Business to learn how we can work together to build data proficiency across your organization.